Edition #31: Is it too late to get into crypto?

Plus: Long Term Thinking, 3 Layers of Success and Highly Paid Assholes.

written by oz chen

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Today’s compliment: you’re not only on time, you’re early.

Hallelujah! About 2 weeks after my Covid symptoms started, I’m happy to say I’m 80% back to normal. Last week really sucked. I could barely do anything of value – writing was harder than usual. Middle of this week, I returned to work and don’t feel like death. I can smell some things now! (Rosemary essential oil has helped.)

I’m just so fuckin’ grateful for my health. This experience has left a deep impression and I’m reevaluating my life. I want to be more active. I want to arrive on my deathbed with my body well used up. I hope I’d have walked many steps and danced many more. Because when I don’t have health, then nothing else matters.

And thanks for email replies telling me to get better. I’m grateful, and have yet to respond to many of you.

Things I’m reading:

  • Youtube: How to pay zero taxes on crypto using a “Charitable Remainder Trust”
  • Article: Kyla Scanlon on SPACs: “boiled down, its just a combination of FOMO, get-rich quick, and signaling propping up a product.” Oops, I’ve invested in some bad SPACs.
  • Tweet thread: Yield Farming explained, or how something like Yearn Finance works.
  • Book: On theme with feeling like I have a new lease on life, I started reading Designing Your Life.

Today’s edition will cover the Is it too late to get into crypto, Long Term Thinking, Success and Highly Paid Assholes.

⏳ Is it too late to get into crypto?

Crypto has been on a tear. Over this last year, Ethereum has 10x’d from a low of $350 to now close to $4000. And that’s not to mention all the other cryptos that have risen even more dramatically.

Rising prices suck attention – now that the market is back to all time highs, investors feel FOMO and wonder if they’ve missed the bus.

Here’s my strong opinion on crypto:

It’s still early days in crypto. You’re only late if you leave.

Here’s some context from a Gallup survey: only 6% of U.S. investors own Bitcoin. They define “investors” as adults with $10,000 or more invested in stocks, bonds, or mutual funds! This is happening in the U.S., in one of the world’s most developed economies.

The Bitcoin story is just getting started, and there’s still a ton of people who believe crypto is a scam (ahem Chinese government), or unnecessary (yes many projects are shit). That doubt means it’s still early days and leaves room for long-term upside.

But will it keep going up?

When prices are so high, you might be afraid of buying “at the top” when things feel expensive.

My take on that:

  1. It helps to have a price range. Do you believe that any given asset and continue to go up 2x, 5x or 10x more? The Winklevoss twins think so, like a $40,000 Ethereum or $500,000 Bitcoin. You don’t have to have the same predictions, but developing an idea of a price target is a useful exercise for holding onto any asset for the long term.
  2. Current prices don’t matter if you take a long term view. Based on what you research, if you believe that the crypto market will dramatically grow over the next 5-10 years, then it’ll make buying at current prices easier.

We’ve all heard of the phrase “Buy low and sell high.” It makes sense and sounds obvious, but it also promotes the belief that investors can time the market.

Here’s what I prefer: Buy high and sell higher.

I do this with a 50/50 Bitcoin Ethereum Strategy: Every Monday, my crypto apps automatically buy $100 worth of Bitcoin and Ethereum each.

This removes the decision making process and trying to time the market. If anything, the next decision I have to make is whether to increase this weekly buy amount.

💡 How to practice long term thinking

Long term thinking is a meta skill that I’m working on. I want to learn this to become a better investor and a better human being overall.

Here’s an observation I made about how I was able to take a long term view on certain topics:

How to practice long term thinking?

Literally, take a longer time to think through things.

If you’ve been curious about something, carve out an hour to just think about it. Or do other activities that foster long term thinking, like reading or having long conversations.

Long term thinkers are not prophets. They literally just make more time to think.

🍰 What success means to me

During a weekly accountability review I shared what success means to me. I do some of my best thinking when mansplaining to other men, so here’s a brief summary.

I think of my success in 3 layers:

  1. Unearned success: what is bestowed upon me
  2. Earned success: what I believe I’ve worked for
  3. Relative success: how I compare to other people

I try to focus on the first two. Recognizing my unearned success gives me gratitude. Recognizing what I’ve earned allows me to honor myself.

The last one – relative success – is tricky.

  • On one hand, I think think of myself as the 1% of humans who gets to live privileged, Californian life.
  • On the other hand, I think can of myself as an average Angeleno who stresses about the rising cost of housing.

People usually feel their success in relation to the people around them. You can be a thousandnaire and feel rich hanging around hundrednaires. You can be a millionaire and feel poor because your friend created the next hit product and became a billionaire.

While I keep my focus on unearned and earned success, I know that self comparison is nearly inevitable. So I employ the barbell strategy: compare up for inspiration, and compare down for gratitude. And I desperately try to avoid the middle – mindless self comparison that makes me feel like shit.

“Are you successful?” My answer is: I am, in at least 2 out of 3 ways. The last is relative.

🧠 Highly Paid Assholes

Let’s say that you have a pretty chill job. You’re don’t care to climb that corporate ladder. You’re chillin’.

You have a coworker with the same job title. Suddenly, that coworker gets promoted.

You won’t be chilling now. I’d bet half my salary that now you’d want to get promoted too. You have good reasons to: you do more than your coworker and know you’re the better performer. Why do they get a higher title and pay when you’re obviously more qualified than they are?

This is human nature.

At a distance anyone can pontificate away their problems. When they have to reckon with someone’s success it’s a different story.

Therapist Esther Perel guides two friends through exactly this scenario on the episode My Promotion Ended Our Friendship.

Here’s an example of emotions outweighing rationality in the housing market:

…Emotions will always matter more than interest rates or other fundamentals when it comes to the markets.

It’s not like rates hit some magical level that causes people to decide to buy a house all at once.

Watching your neighbors get rich is an experience you can’t quantify with a number.

Seeing someone in your neighborhood sell their house for more than you think it’s worth elicits feelings that don’t show up in economic data points.

My takeaways:

  1. Play your own game. It’s a lifelong exercise in defining your own values and version of success.
  2. Celebrate others. Do not blame people for having ambition.

Life is what you negotiate. And often, asking is free.

Just for fun:

Do you know why cows have hooves instead of feet? Because they LAC-TOES!

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