As the sayings go: “Nothing ventured, nothing gained.”; “Fortune favors the bold.”, and “If there is no risk, there is no reward.” Name your maxim, quote, or rule of thumb about the benefits of putting something on the line in hopes of vast returns, the advice is worth taking to heart. However, that doesn’t mean financial decisions are all about striking it rich with one move.
Consider how some folks still idolize the family featured in a certain reality television series for building a fortune from a seemingly simple and straightforward business: selling duck hunting supplies and specializing in calls. Wealth amassed from niche markets is certainly possible, but the realities for most folks are not exactly fit for reality TV. For instance, the owners of Wing Supply, a competing duck hunting outfitter to the one run by the TV folk, are doing just fine selling high-quality duck calls and other supplies to savvy consumers. They aren’t superstars, but they’re certainly not in want for success.
Another example is cryptocurrency, the most popular being bitcoin. Bitcoin is probably one of the most commonly traded securities among today’s youth. Quite a few people have dealt with this cryptocurrency, either through buying many of them early and watching their value explode, getting involved in bitcoin mining, or using them to make everyday purchases. With that said, the number of those people that find themselves on top of this volatile market is quite slim. Still, we cannot say that those people don’t exist at all.
Keep in mind, the creator of Bitcoin, the mysterious Satoshi Nakamoto, released his masterpiece in 2009, roughly ten years ago. Given standard Wall Street trading practices, holding a stock for ten years is in fact quite common. The buy-and-hold strategy might seem scary for quite a few novice investors, but it has proven to be very effective and is the driving force behind most bitcoin success stories. In the year 2010, one Bitcoin sold for less than a penny each. In contrast, we’ve currently seen the security trade almost higher than $20,000 USD. That sort of growth, though fantastical and unreliable, could have made literally anybody a multimillionaire with patience and a very modest investment using the buy-and-hold strategy.
To be fair though, Bitcoin hasn’t worked out for everybody. Lily Allen, a famous singer from the United Kingdom, was once offered an extremely massive amount of money in Bitcoin. According to one of her Twitter posts from 2014, she was once offered to live stream a gig for hundreds of thousands of bitcoins. That number today would net her a tidy sum of fourteen billion dollars. At the time, the stock wasn’t taken as seriously as a form of payment. This likely had more than a little to do with the solicitor’s interest in spending such a massive amount of the cryptocurrency just for a live stream. Unfortunately for her, she decided against the deal. Understandably, she didn’t really want to take the gig in the first place, and she wasn’t sure how reliable her potential client was. Still, it’s disconcerting to think about how decisions like that could have such potentially life-altering consequences. To contrast this rather uninspiring story, we can take a look at how people have made their careers with long-shot investments.
Take Kingsley Advani as an example. This man started off in 2012 as a young software engineer in his early 20s. At the time, he had little idea of what Bitcoin was or how it worked. Ultimately, he had a good hunch and ended up getting very lucky off of it. After investing nearly $35,000 into cryptocurrency and crypto startups after taking a tip from his friend, he found his net worth slowly growing into a massive sum of money. To be fair to him, working as a software developer is definitely not a bad job to have in the first place. But today, he’s currently enjoying his life as an angel investor in possession of over $1,000,000 at the incredibly young age of 24. This is just one of the lessons of long-shot success. Fluctuations in Bitcoin value can be really unnerving, and short-term and long-term trading absolutely haven’t worked out for everyone. We should all be mindful that the vast majority of investments merely match the market instead of beating it. Most people really can’t expect to become multi-millionaires overnight.