I bought an obscure cryptocurrency yesterday.
It was obscure enough that I couldn’t buy it in my Coinbase account… or on any mainstream crypto exchange, for that matter. I had to create a local wallet on my phone, move some ethereum out of my Coinbase account and into the local wallet, and then swap it out for the new coin. The last step was to create a backup in the cloud lest I break the phone with the wallet on it.
I don’t have a lot of experience doing things like this, but with enough hunting and pecking I managed to knock the transaction out in about an hour.
I won’t tell you the name of the crypto. It’s far too speculative for me to recommend in any official capacity, and I don’t want you to get burned. The whole process felt so dodgy, it wouldn’t come as much of a surprise if the “coin” I bought is worthless. Some hacker in a Siberian bunker is probably laughing hysterically at the American idiot he just bamboozled.
You’re probably wondering why I spent perfectly good money on something of such questionable legitimacy. (Or, why I spent good dollars on ethereum and then exchanged that well-established crypto for the dodgy coin in question.)
The answer? My drinking buddy from high school mentioned it, and I thought it was cool.
Yes, my answer is that shallow. Please, don’t think less of me.
I tell you this story to make a point about “play money.”
Play Money: Have Fun, Learn and Maybe Win Big
I didn’t invest a large sum of money. I invested roughly the amount of my monthly bar tab. (OK, so in that case, maybe it was a large sum of money. Maybe I need to start making better lifestyle choices. We’ll just let that one go.)
Trading can be a lot of fun. It’s enjoyable to learn about something new — even something way out there like no-name cryptos. And it’s a lot more fun when a trade like that pans out.
But this is for play money. If it works out and rises by 10,000%, as nutty, speculative cryptos have been known to do, I’ll pay off my house and buy my wife some nice jewelry. I’ll also have a good laugh with my buddy that first mentioned it to me. It will be something we joke about when we’re old.
But if I lose the entire investment in the new crypto, it won’t affect my life. The money I spent was part of my entertainment budget, not my retirement savings.
I’ve worked too hard and made too many sacrifices over the years to blow my nest egg on hunches, or worse, on degenerate gambling. But I’m still entitled to have a little fun.
Your Real Money
This isn’t to say that your nest egg has to be conventional. Mine certainly isn’t.
I’ve been writing for months that it makes sense to take at least a little money out of your buy-and-hold investment portfolio and invest in a diversified mix of proven short-term trading strategies.
My own retirement portfolio combines long-term dividend payers, short-term trading strategies, real estate and a handful of smaller investments. It’s a portfolio I’ve built to win by not losing. This is the money that will support me when I decide to hang up the cleats, and I expect it will take care of my wife and children long after I’m gone.
Your portfolio will (and should) look different than mine. No two investors have the same preferences.
The takeaway here is the same, though.
Bottom line: Once you have your “real” portfolio in place and properly allocated, I encourage you to cut loose and have fun with some wildly speculative and irresponsible garbage investments. You might hit a homerun that changes your tax bracket. Even if you don’t, you will learn some valuable lessons to apply to your real nest egg.
More than anything, you’ll have fun doing it, and I encourage anything that builds enthusiasm for investing.
To safe profits,
Charles Sizemore
Co-Editor, Green Zone Fortunes
Charles Sizemore is the co-editor of Green Zone Fortunes and specializes in income and retirement topics. He is also a frequent guest on CNBC, Bloomberg and Fox Business.
