A Deep Dive Into a New World
I always try to be intellectually open and honest, plus let you know when I’m experimenting with new things, so here’s an update:
I recently jumped into the world of blockchain technology, DeFI (decentralized finance), smart contracts, NFTs and even a bit of cryptocurrencies to a degree that surprises even me.
Simply put, I am 100% certain this technology is going to change the world in a manner similar to how the internet changed everything. So, I’m just trying to learn, learn, learn at this point.
If you aren’t paying attention to this space, you need to start at least becoming aware of it.
I’m still unclear how cryptocurrencies are invented out of thin air, most do nothing productive and just seem to be speculative. That will never add up and I suspect most will vanish. And I could spout Warren Buffett quotes at you like, Bitcoin is “probably rat poison squared.”
But then I listened to smart people I respect like Mark Cuban and the potential of the underlying technology became clear. This CNBC article on Cuban said, “If Cuban were to start a company today, he would also utilize new technology — he would center the business around blockchain technology, smart contracts and NFTs, or non-fungible tokens, which reminds him of the early days of the internet.”
Cuban said, “Gen Z value digital goods more than anything, other than maybe a house, maybe a car [and] their phone. After that, it’s digital. They’re going to respect something that’s digital before they buy something that’s physical.”
And most importantly, this technology makes everything digital ownable. This cannot be overstated: Blockchain and NFTs make everything that’s created, ownable.
From music, to art, to blog posts and podcasts, to virtual land and items in digital worlds, to digital membership tokens for communities. There’s no end to it, and that’s what excites me the most.
Suffice to say, there’s no way I can explain in a newsletter why I’m so excited (and I know less than 1% of what there is to know), so I’m going to leave you with some resources I found particularly useful as a jumping off point:
· NFTs Make the Internet Ownable
· Mark Cuban: The Store of Value Generation is Kicking Your @ss and You Don’t Even Know It
· NFTs and a Thousand True Fans
· Invest Like the Best Podcast with Chris Dixon “The Potential of Blockchain Technology”
· Bankless Podcast with Mark Cuban on “Why DeFi is the Future”
· Unchained Podcast with Mark Cuban
· Here Comes the Virtual Real Estate Boom
To summarize, I haven’t changed my thoughts about the inherent value of most cryptocurrency, but I think blockchain and smart contracts can significantly change (and make more secure) industries like accounting/auditing, real estate (3rd party helpers like escrow, title insurance, etc. will not exist), anything contract-based, plus real-world problems like voting and vaccine records.
Take my word for it and get started learning about this. We’re still ahead of 99% of people, and I think there are opportunities for level-headed people from the FI Community to take our knowledge and long-term mindsets and apply them here for big benefits.
On Complaining…and Gratitude
Greg McKeown, author of Essentialism and the new book Effortless, was on Episode 510 of the Tim Ferriss podcast, and this quote on the insidious nature of complaining and the antidote of gratitude really hit me:
“What I learned about gratitude was this: If you focus on what you have, you gain what you lack. And if you focus on what you lack, you lose what you have.”
“This is the specific habit recipe: After I “X”, I will “Y.” That’s the format. So, I started saying okay, well after I complain, I will say something I’m thankful for. And here’s what I learned immediately was, I complain a lot more than I realized. And I think of myself as a positive person and I actually think I am, even now, but, my goodness, I just have these subtle complaints all the time.
You can have so many good things happening, but you focus on something that isn’t going right. And so that was the first thing I noticed. The second thing I noticed was how fast you can change the mood if you either say something you’re thankful for afterwards or you catch yourself (complaining) and doing it anyway.”
ChooseFI Community Taking Action This Week
- Ivonne said, “Hi! I was finally able to hit that 3k min to invest into VTSAX! I needed to tell you guys because I am so happy and excited!”
- Shannon said, “Our “1 percent” better was we paid off all of our debt (last debt being our truck). It took us almost 4 years but we paid it all off finally ($200,000). We then maxed out our Roth IRA accounts and started a Christmas fund at our bank. After pursuing FIRE for the past year, we realized that Christmas consistently was a time that seemed to always trip us up in our financial pursuits. Not just presents but also get togethers, winter vacation, etc. We also refinanced our home to a 15-year loan at 2.14 %. Oh! And I almost forgot… we have been moving over retirement accounts with extremely high fees into Vanguard. I can’t wait to see how much money we have saved by doing this small change!”
- Ed said, “I made my three nieces lives 1% better by gifting them The Simple Path to Wealth book, and a little note in each book to give them $1,000 to start their respective Roth IRA’s. They are 19, 21, and 23 years old, so if they follow the simple path, they will be 10,000% richer!”
- Tracy said, “My 1% better this week was BUYING OUR FIRST HOME! In New Zealand this has become incredibly difficult due to simple supply and demand causing a 20% (and more in some places) rise in house prices even through the pandemic. It now means that average house prices where we were living were over $1m, about 5x our annual income – way over the affordability indicator of 2-2.5x. So, we moved towns! We headed back to our hometown (grandparents on our doorstep now also a bonus!) and bought a home there for $575k. We had great advice from our broker, who said have only 5 non-negotiable things you are looking for. Once you find those 5 things be prepared to move fast – and we did! Paying our deposit in 6 days and settling in less than a month. Our mortgage payments will be nearly 30% less than the rent we were paying!”
- Sanjeev said, “My 1% is planning to go to a lower tax bracket starting next year by maxing out the 401(k). Now that I have used the Mint app to a point that I know where every cent goes, I am feeling quite bold and my brain is exploring several scenarios in parallel. This year has been about saving that down payment for our home my partner and I would be moving into, which explains why I have not been intense with 410(k) yet, but as a consolation I maxed out the Roth IRA in 2020 and on track to do the same in 2021.”
- Danny said, “I really enjoy reading your weekly letter. It motives my FI journey 100%. My 1% is to pay my HELOC loan that has a balance of $77,000 within 11 months. I am very sure i will accomplish this goal because I have the Choose FI community by my side.”