My crypto story - #12

Airing my dirty washing, and an insight into being human...

Ever been tempted to take a punt? Get rich quick? Follow the herd? Invest in crypto? Me too.

The irony being I was a regulated financial planner for about 30 years.  My investment philosophy based on a number of steadfast principles including; take a long term view, no crystal ball gazing, transparency and focus on what has always worked, not the latest fad.¹

So, when chatting with a financial planner friend of mine whose mate was having great ‘success’ with crypto, my curiosity, and (let’s be honest) greed, was piqued.

After a couple of shady conversations with ‘Dick from Dodge’ (the crypto broker), I transferred my £5,000 and became the proud owner of 4,000,000 Dodge ‘tokens’. Naturally I dressed this up as an important educational opportunity to ensure I understood this new alchemy. 

My £5,000 rose quickly to £9,000 before predictably crashing to c£2,500, at which point I lost interest, forgot about my adventure into crypto and softly berated my stupidity. 

The phoenix rises

Until, my friend texted me 18 months later asking, ‘have you looked at Dodge recently?’ My ‘investment’ was now £10,000 and rising. 

Like any good financial planner I immediately sold down my initial stake, mightily relieved to find my sale proceeds arrive promptly in my UK bank account.  Not a scam then!

What followed was a seemingly magical 14 day ride.  As I sold more, the remaining tokens kept going up, peaking at about £45,000! I had the Midas Touch.  My crypto ‘fortune’ the topic of discussion over dinner with friends.  Naturally, dinner was on me (well you can’t spend all night, chest puffed out, talking about magic money and not cough up can you).

And then, the slow, painful decline began, until I find my crypto fortune, at time of writing, at c£3,500. 

Learnings and uncomfortable observations

I’ve been fascinated to watch my all too human reactions and as my crypto peaked, fell, raced up, and up and up, then fell again:

• Greed - ‘why didn’t I invest more?’

• Excitement – ‘how far can this go?  Bloody hell, I could end up a crypto millionaire…’

• Pride – ‘how clever am I!’

• Lucky – ‘actually, this is nothing to do with me, my friend told me and I just copied.’'

• Remorse – ‘buggar, why didn’t I sell when the price was high rather than holding on for more?’ (back to greed)

• Fear – ‘I should just sell what’s left and forget about it…but what if it rallies again?  What riches could I miss out on? ‘Dodge’ could be the next BIG thing…’ (back to greed)

• Acceptance – ‘hey ho, it’s been a fun ride, it hasn’t cost me anything and I learned a bunch about my totally fallible human instincts’

Not irrational, just human

What a mis mash.  My cocktail of behavioural biases a behavioural scientists dream - over confidence, loss aversion, anchoring and endowment effect to name but a few.²

I was lucky. I ended up, up. But it could have been very different. When it comes to investing, sensible, strategic and practical investment advice is where it’s at. It may feel boring, but accept it, and get your kicks elsewhere.

Have fun, bet, experiment, gamble, but only with money you can 100% afford to lose.  Not your house deposit (as I came across when presenting financial planning tips to a group of young women one of who’s boyfriend was doing just that), not your emergency fund, your kids uni fees or your retirement income.

What has this got to do with 1000Weeks?

What has this got to do with 1000Weeks? On first glance not a lot!  Suffice to say, age and experience is no insulation from flights of fancy.  Even Chartered Financial Planners are human.  And experiments can be fun.

I’ve aired my dirty investment washing in public.  Over to you. What investments have you made that didn’t quite work out as you’d hoped?  What did you feel?  What did you learn?

Do drop me a line, I’d love to hear from you. 

And don’t forget, you are never going to be any younger than you are today so if there’s something you are thinking about doing, take a ‘risk managed’ first step and go for it!

Until next week

Ruth x

If you enjoyed my musings please do leave me a ❤️, a comment or share with your friends (or all three!). It helps other people find my work and makes me smile, thank you.

1. If you want my full investment philosophy, drop me a line.

2. Hat Tip to the lovely Neil Bage of Shaping Wealth for his learnings into behavioural biases, insights and dog stories :-). If you’d like an explanation of these fancy behavioural bias terms, just drop me a line.