When it comes to investments, I am a bit more conservative than most. I follow the Warren Buffet philosophy. Keep it simple and don’t chase what’s in fashion now. And don’t invest in things you know little about. And if you know Warren Buffett you also know he is a smart man.
And generally, this philosophy was worked well. I have lost some serious money in the past but this is down to investments I failed to learn or research about so I guess I deserved it.
This meant I missed the Crypto hype. But I don’t really regret that because I still don’t get it. But now we have a non fungible token
What is it? I thought I kind of knew. But then I wasn’t so sure.
That’s because Alfa Romeo said its latest car would be available with a non-fungible token and immediately, I was stumped. Curious too. I was not sure how one of these can be attached to a car because in my mind a non fungible taken is when you pay for something that doesn’t exist, and in return you get nothing at all.
Except maybe an email saying you own the thing that doesn’t exist. And if you are really lucky it might get a login to some register that sits somewhere in a cloud.
What to do? Well, I thought I would be super clever and IT Geeky and ask ChatGP. It regurgitated Wikipedia “A non-fungible token is a unique digital identifier that is recorded on a blockchain.”
Now if you have read my book, you know I explain what a blockchain is but I thought I would ask ChatGP to confirm. It responded by telling me “A blockchain is a distributed ledger with growing lists of records that are securely linked together via cryptographic hashes.”
What’s a cryptographic hash? Well, when I asked that all hell broke loose. Now I like to think I am an intelligent guy in the finance world. I am very proud that I have written 2 finance books but I was a bit discombobulated because a “hash algorithm”, per Wikipedia is “any function that can be used to map data of arbitrary size to fixed-size values”.
WTF? Anyway, after about 30 minutes (which I will never get back) of more research I’d been right all along. Non-fungible tokens are stupid. And crap. And nonsensical.
I am not sure how you can buy a piece of art that hasn’t been made. And if you have bought a piece of art that has not been made how can own and subsequently sell it because, well, it does not exist because it has not been made.
But that does not mean it is not right for you.
There are lots of investments out there. Most are absolute scams run by unscrupulous people. What is left is a mix between risky, medium or conservative risk and non risk.
Low risk we know does not build wealth. This is basically money under the mattress. High risk works but only if:
a) You do extensive research and totally and utterly understand what it is you are investing in and
b) You know i) exactly what the downside is AND ii) you are happy to live with that downside should it happen.
Being in the middle is boring. You can’t tell your mates you made or lost thousands in a day and it is a long drawn out process that takes years to grow so is not interesting.
Here is what I will tell you from dealing with thousands of people we work with. The Warren Buffett way produces the best long-term results. It does not mean you do not invest in Crypto or non fungible tokens. You can. it just means you do it as part of a larger boring portfolio.
And that is probably why I will stay away from non fungible tokens. And though Alfa’s make the most beautiful cars in the world (they can make me go weak at the knees) I will stay away from them too not because of the non fungible token bit but just knowing the company is incapable of connecting a gearbox to an engine.
When it comes to investing know what you want. Is it instant thrills? Is it slow and steady? Is it to be safe at all costs? Then create a portfolio that allows you to do that but still invest the bulk of your investments the Warren Buffett way.
Investing is step 7 of our 9 step system to create more time, more money freedom and more wealth. If you would like to know about our 9 step process call us on 07 3161 9548 or email hitesh@wowadvisors,com.au