Written by: Jennifer Gattinger, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
If your TikTok FYP is anything like mine, in the midst of all the whiteyy18 videos, you’ve seen a good number of videos promoting cryptocurrencies such as Dogecoin, Cardano, and the like pop up.
Despite Bitcoin having started in 2009, cryptocurrencies have really exploded in 2021. Furthermore, upon seeing that Dogecoin has increased by over 7,000% this year alone, you may be asking yourself if investing in cryptocurrency is a good idea. Well, my short answer would be that, like with many financial questions, it depends.
Before getting into cryptocurrencies themselves, let’s ask some other important questions. Do you currently have a 6-12 month emergency savings fund? Are you at least contributing up to your company match in your 401K? Are you making contributions to a Roth IRA, or do you have other investments helping you grow your money?
If you’ve already got a solid financial base, are interested in investing in cryptocurrencies, and find yourself in a place where you can take more risks, it may be your time. After all, it is an additional way to diversify your portfolio. Not to mention, it’s oftentimes claimed that cryptocurrencies are the next big thing, so if that is indeed the case, you will be part of it. I know people who have done very well in the earlier Bitcoin days, for example, and are now reaping the benefits of traveling the world without a financial worry in sight.
On the other hand, if you do not have your finances in order and are hoping to simply strike it big in crypto, you may want to rethink your strategy. Cryptocurrencies are extremely volatile, meaning that just as easily as they can go up in value, they can crash. Just this spring, after reaching an all-time high of around $65,000, Bitcoin fell around 40% in the following month. The truth is, nobody knows whether the values will rise or fall, or even for how long cryptocurrencies will be around. Are they really the next big thing, or will they die out over the next few years? Due to the speculative nature of crypto, investing a significant amount of money and simply betting on great gains is not a recommended strategy to follow, especially for those who find themselves on shaky financial grounds. If you are interested in investing in crypto, CryptoRunner is a great site to visit to learn more!
The ultimate question that you should ask yourself before deciding if you want to invest with crypto is this, “Would you be ok with losing all of your investment?” If the possibility of losing your entire investment wouldn’t have much effect on your overall financial situation and wouldn’t stress you out, you have an extra playroom. On the other hand, if the possibility of you losing every penny of your investment could have a great negative impact on your finances and/or cause a great deal of stress, then staying with more traditional investments, such as those listed above, may very well be in your better interest.
If you’d like to learn more about making your money work for you, I invite you to sign up for my upcoming group coaching course.
Read more from Jennifer!
Jennifer Gattinger, Executive Contributor Brainz Magazine
Jenny is a personal financial coach with a passion for helping millennials reach their financial goals. Having completed a degree in Economics, along with Dave Ramsey’s Financial Coach Master Training, she teaches them how to organize their money and put it to work so that one day, sooner rather than later, they won’t have to. A millennial herself, Jenny’s financial savviness has allowed her to follow her dreams of travel and visit 50+ countries as well as compete internationally in two different sports, all while maintaining a sense of financial wellbeing.
