I was discussing with my wife recently on buying Bitcoin...
Hey why not right? It could be a bubble or it could be a piece of the future.
And I was asking her, any interest to buy 1 Bitcoin? It's around S$10,000.
And she was pretty much. Ok sure, we can afford it. It was quite flippant. She didn't think much about it.
That's one of the things I don't like about her, she doesn't think too much about things. But then I think too much about things, so we even each other out...
To me, there are many ways to invest, high risk, low risk, somewhere in between, hope for the best kind, etc etc...
Bitcoin would be a hope for the best kind. If I buy Bitcoin, I'm not hoping for it to become S$20,000. I'm hoping for it to become S$500,000. Else I would rather make other investments.
Anyway, the topic today isn't about Bitcoin...
Rather, when she said, "It's only S$10,000... we can afford it..."
I wondered and explained it to her...
We can't look at this investment as only $10,000. Our AUM is made out of X number of S$10k. Means if we make X investments, all our AUM will be deployed. And I showed her how easy it is to find X relatively good companies to buy.
So I told her, it's not about being able to afford it. But whether it is worth it. It's very easy to deploy all the funds to "small" S$10k investments here and there and in the end it could all be wasted.
So the thing about it is... it all adds up. Cos there are so many investment options. High risk, high return, low risk lower return, passive investments, friend's businesses, jackpot bets, etc...
So for example...
S$100k is only 10 x S$10k
S$500k is only 50 x S$10k
S$1m is only 100 x S$10k
Can I find 10 or 100 good companies to invest in? YES.
Is it easy to spend or deploy 100 frivolous investments or spend 100 "sets" of S$10k? YES.
So that's the whole idea... S$10k isn't a very bit amount.
But yet... if we look at it in groups. S$1m is made out of only 100 "S$10k-s".
We don't have S$1m so we don't even have 100 choices to make.
When we get to S$10m... Ok then it gets a lot better. There's 1000 choices to make. At this point, yes, I think it is more ok to make a S$10k bet. I could put 90% into safe investments and make stupid bets on jackpot investments with the remaining S$1m, and I can play with 100 choices of stupid bets.
But actually if I had S$10m, I'll just buy passive investments and live off the dividends...
The above is just an example...
Ok, some people would say... Just split up the blocks into S$5k groups. Then basically I could double my choices that I can make. Yep, that's do-able... Generally I make my investments in S$8k-S$10k blocks. Anything less, I find that the transaction costs is just not worth it and it's pretty much not worth the trouble.
But hey... what do I know... I could have bought 100 Bitcoin when it used to be S$1 each and I would be a millionaire now. And the initial overlay would have been only S$100. So maybe these jackpot bets are supposed to be played in super small amounts like in blocks of S$100.
Anyway... this post is pretty much to highlight... that S$10k is not a small investment. Cos there aren't many S$10k investments we can make when we add it up in total... A little here, a little there... in the end, it's all gone. It's very fast...
I think that's also why many lottery winners spend their money very quickly. Toto is only S$1m... unless there's snowballing.
But let's look at S$1m... it's only 100 decisions. Buy a watch here, buy a car, go on a nice Europe trip... etc etc... It just adds up really quickly.
In the end... am I betting on Bitcoin... I dunno... I haven't concluded yet. I'm in no rush. If it runs without me then so be it. There are other investments for me to make anyway.
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Did you like this post? If so, could you "blanjah" me 1/4 cup of my morning coffee pls.
Many thanks for continuing to come to this blog to read my posts.
Hey why not right? It could be a bubble or it could be a piece of the future.
And I was asking her, any interest to buy 1 Bitcoin? It's around S$10,000.
And she was pretty much. Ok sure, we can afford it. It was quite flippant. She didn't think much about it.
That's one of the things I don't like about her, she doesn't think too much about things. But then I think too much about things, so we even each other out...
To me, there are many ways to invest, high risk, low risk, somewhere in between, hope for the best kind, etc etc...
Bitcoin would be a hope for the best kind. If I buy Bitcoin, I'm not hoping for it to become S$20,000. I'm hoping for it to become S$500,000. Else I would rather make other investments.
Anyway, the topic today isn't about Bitcoin...
Rather, when she said, "It's only S$10,000... we can afford it..."
I wondered and explained it to her...
We can't look at this investment as only $10,000. Our AUM is made out of X number of S$10k. Means if we make X investments, all our AUM will be deployed. And I showed her how easy it is to find X relatively good companies to buy.
So I told her, it's not about being able to afford it. But whether it is worth it. It's very easy to deploy all the funds to "small" S$10k investments here and there and in the end it could all be wasted.
So the thing about it is... it all adds up. Cos there are so many investment options. High risk, high return, low risk lower return, passive investments, friend's businesses, jackpot bets, etc...
So for example...
S$100k is only 10 x S$10k
S$500k is only 50 x S$10k
S$1m is only 100 x S$10k
Can I find 10 or 100 good companies to invest in? YES.
Is it easy to spend or deploy 100 frivolous investments or spend 100 "sets" of S$10k? YES.
So that's the whole idea... S$10k isn't a very bit amount.
But yet... if we look at it in groups. S$1m is made out of only 100 "S$10k-s".
We don't have S$1m so we don't even have 100 choices to make.
When we get to S$10m... Ok then it gets a lot better. There's 1000 choices to make. At this point, yes, I think it is more ok to make a S$10k bet. I could put 90% into safe investments and make stupid bets on jackpot investments with the remaining S$1m, and I can play with 100 choices of stupid bets.
But actually if I had S$10m, I'll just buy passive investments and live off the dividends...
The above is just an example...
Ok, some people would say... Just split up the blocks into S$5k groups. Then basically I could double my choices that I can make. Yep, that's do-able... Generally I make my investments in S$8k-S$10k blocks. Anything less, I find that the transaction costs is just not worth it and it's pretty much not worth the trouble.
But hey... what do I know... I could have bought 100 Bitcoin when it used to be S$1 each and I would be a millionaire now. And the initial overlay would have been only S$100. So maybe these jackpot bets are supposed to be played in super small amounts like in blocks of S$100.
Anyway... this post is pretty much to highlight... that S$10k is not a small investment. Cos there aren't many S$10k investments we can make when we add it up in total... A little here, a little there... in the end, it's all gone. It's very fast...
I think that's also why many lottery winners spend their money very quickly. Toto is only S$1m... unless there's snowballing.
But let's look at S$1m... it's only 100 decisions. Buy a watch here, buy a car, go on a nice Europe trip... etc etc... It just adds up really quickly.
In the end... am I betting on Bitcoin... I dunno... I haven't concluded yet. I'm in no rush. If it runs without me then so be it. There are other investments for me to make anyway.
<<PREVIOUS POST // NEXT POST>>
Did you like this post? If so, could you "blanjah" me 1/4 cup of my morning coffee pls.
Many thanks for continuing to come to this blog to read my posts.
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