How Cryptocurrency Could Catapult You Over the Retirement Finish Line
By: Kim Snider
Tags: Retirement Planning, Cryptocurrency, Cryptocurrency Investment, Investing, Bitcoin

And there are a lot of big Ifs baked into that number. The first is a joint life expectancy of only 30 years.

Did you know, according to the United Nations, there were nearly half a million centenarians (meaning people ages 100 and older) in 2015, more than four times as many as in 1990? And this growth is expected to accelerate: Projections are there will be 3.7 million centenarians worldwide in 2050!

I read something recently that said centenarians might end up being the fastest growing segment of the workforce in some year in the not too distant future! This is not your great grand-parents retirement, I can tell you that!

Another assumption is that you are healthy. I have my own hour stories about how my grandmother was diagnosed with Alzheimer’s at around 72, and had already run through a two million estate to pay for her care, before she died.

There is the sequence of returns problem, which refers to the detrimental effect of taking permanent losses of capital later in a portfolio’s life compared to earlier. I could go on…

Saving enough to live well in retirement, which is the goal for all of us, is hard. And the later you start, the harder it is.

For most of us, to get to these sorts of savings numbers, requires a 10–12% return, over our investing lifetimes.

And sadly, the U.S. stock market has typically returned more like 8%, over long periods of time. The typical diversified portfolio across stocks and bond somewhat less.

This is a big, big problem for a whole lot of people. One that I have thought about and worked on for over 20 years. I invented an investment method, in the late 1990s, designed to produce double digit cash flow from stocks, that helps to solve this problem.

Which is exactly why cryptoassets caught my attention.

In his book, Zero To One, the billionaire entrepreneur and investor, Peter Thiel talks about the question he likes to ask when interviewing someone:

“What important truth do very few people agree with you on?”

Most people believe cryptoassets are too risky for a retirement portfolio. But the truth is the opposite. I believe NOT investing in Bitcoin is the risk.

And I believe that so strongly, I came out of retirement to start Sane Crypto, to spread that message, and help Baby Boomers do it. Let me explain…

Here is what you have to know about Bitcoin…

The first thing is there is a legitimate range of future outcomes, anywhere from Bitcoin going to zero, to Bitcoin replacing gold and offshore banking, giving it a fair value of $1 million or more per Bitcoin. And everywhere in between.

And no one knows which it will be. No one. Not Warren Buffet who says its “rat poison squared”. Not billionaires, like Peter Thiel and Mike Novogratz, who own it mass quantities. No one.

Admittedly, when I say Bitcoin could go to $1 million, the first time you hear something so seemingly crazy, reasonable brains just dismiss that as impossible. Heck! It still sounds crazy to me every time I say it.

But do the research, like I have done, and you realize that is possible. Maybe not likely. Certainly not next year. But within the realm of real possibility.

At the moment, Bitcoin is selling for $7290. Whatever that number is when you buy it represents your maximum downside risk. That’s the most you can lose by owning Bitcoin.

Your upside, on the other hand, is basically unlimited. Forget a million dollars, if that makes you queasy. There are many scenarios where Bitcoin just supplants a reasonable percentage of the physical gold holdings and you can make a case for it being worth six figures. Regardless of the number, this is what we call an asymmetric bet. A lopsided upside:downside skew.

Ask any asset manager and they will tell you these sorts of bets only come along once in a lifetime. At least one’s that you and I can participate in. Because we typically don’t have the chance to be early round investors in Facebook or AirBnb.

So, Bitcoin has these massively skewed upside potential. And no way of predicting the outcome. No one knows. Everything everyone says is just a guess. Flip a coin. Heads it goes to $1 million. Tails it goes to zero.

What I have just described to you is a modern day version of what, in probability and game theory, is known as Pascal’s Wager.

As you read this description of Pascal’s Wager, when it says God, just think million dollar Bitcoin and you’ll see what I mean…

“Pascal’s Wager is an argument in philosophy presented by the seventeenth-century French philosopher, mathematician and physicist Blaise Pascal about belief in God. The gist of the Wager is that, according to Pascal, one cannot come to the knowledge of God’s existence through reason alone, so the wise thing to do is to live your life as if God does exist because such a life has everything to gain and nothing to lose. If we live as though God exists, and He does indeed exist, we have gained heaven. If He doesn’t exist, we have lost nothing. If, on the other hand, we live as though God does not exist and He really does exist, we have gained hell and punishment and have lost heaven and bliss. If one weighs the options, clearly the rational choice to live as if God exists is the better of the possible choices. Pascal even suggested that some may not, at the time, have the ability to believe in God. In such a case, one should live as if he had faith anyway. Perhaps living as if one had faith may lead one to actually come to faith.”

God and religion aside, I think we can all agree, Bitcoin going to $1M would the financial equivalent of gaining heaven. And being 90 years old, broke, living under a bridge, eating cat food is the financial equivalent of hell.