Bitcoin and other digital assets vs real estate. An open dialogue

My friend replied to my pro crypto post, illustrating how with a $35 000 mortgage downpayment invested in BTC instead of real estate two years ago could now buy you two houses outright, with the following-

Invest in things that produce real goods. Buying bitcoin is speculation that one day someone will pay more for it. It's a gamble. If you don't want to buy real estate, invest in companies that produce real things that pay dividends. Real estate is always a good investment if you have cash flow coming off from rentals. If you're buying real estate in the hopes that you can sell it for more at a later date, it's just as much of a risk as buying bitcoin. I love the idea of crypto's, but speculating is risky. If it's part of a diversified portfolio, sure, why not, but don't put your eggs in one basket. That's my generic investment opinion... As your long time friend of 20 years; $35,000 on bitcoin? Are you crazy. There are so many other things you could do with that money that could probably increase your quality of life, get you cash flow potential and actually produce something of value in the real world. Not an algorithm that you hope will sell for more than you paid.

My response-

We clearly have different views. I would call someone crazy for signing a Mortgage with the bankers (biggest crooks in the world) for a 25-30 year debt obligation on close to half a million dollars. $35 000 is peanuts compared to that. How is agreeing to pay someone close to half a million dollars for one single asset diversification? Yeah maybe you can charge rent and make a profit while we are at record low interest rates but real estate bought at record high prices is more of a liability than an asset in my opinion. Not to mention the greedy tax man can come in at any point and demand you claim that rental income and take a healthy 30-40% of that profit. On top of that you have yearly taxes (that the government can increase to any rate they want, even after you 'own' your home outright), interest payments (that can also increase at any point over the term) that you will never get back, and an ever-increasing cost of maintaining an aging asset. Real estate is also not liquid. When rates went up in the 80's people were selling their homes for $1 just to get out of it. Very few would touch it. At least with stocks and crypto assets you can sell within the matter of minutes if you decide. 70% of Canadians own their homes (or more precisely- have agreed to a debt obligation for decades to come) with an average price of $500 000 dollars. Now if that's not all your eggs in one basket I don't know what is. Moreover, by borrowing from the bankster and paying high taxes you are actually helping fund more of their corruption and manipulation while being at the mercy of their market manipulation. I see crypto as an asset of value because it will change the world and help get rid of the leaches (banks and Governments) that continually drain the peoples wealth. tell me, How is carrying a mortgage 'Investing in things that produce real goods'?

Then he replied with the following:

Dude, I get a mortgage is a scam, but so is income tax and fiat money, but it's the world we live in. Because I've taken a mortgage and bought my own property, also buying another right now, I've been able to employ people, build infrastructure that produces food on a daily basis. It's also rooted me in a community and fostered relationships that have intrinsic value. Of course all of those things are possible without a mortgage, I'm living testament that it can be done, but buying a place, allows you to invest in the long term. Harder, but not impossible to do in this economy. To answer your question on how a mortgage can produce real goods, well it's quite simple; if you buy a house to rent, you're providing the value of shelter for people, yourself or family or whoever you might rent to. If you buy land to farm, you're growing food and building permanent infrastructure that will be there for a long time and can be used by future people. If you buy a building to start a business, you produce goods that people can use. You don't have to convince me of the evils of the state or financial system, I get it more than most, but it sounds like you're trying to vocally justify your enthusiasm about gambling. Ok, I get it. But you're not producing anything that creates value in the world. You're speculating on the hope that something will increase value for you doing no work. I understand that from a high risk investment perspective, but don't put yourself on a moral high ground, thinking that you're doing anything else besides gambling. I don't think there's anything wrong with that, but if you're going to virtue signal about the value, I'm calling BS. Bitcoin is a a very cool thing, but at the end of the day, it's just another means of exchange. that's what it should be used to do. I'll happily take bitcoin for any service or product I provide, but I'm not going to waste my time, hoping that I can buy something and make a profit for doing nothing on the spread. You've seen how that can go, ie like gold and silver.

Here is my response and views on why I strongly disagree.

You have always been one to contradict yourself. You said in your first comment that your investment advice is to not put all your eggs in one basket while you're in the middle of buying a second house in an artificially inflated real estate market that is in worse shape than the US's before the '08 crash? With home prices in Kelowna you are probably in real estate for close to $1 000 000. If that's not all your eggs in one basket then you must be killing it with the farming because that is huge exposure to one single market. I owned real estate for 8 years and believe that long term it is a great investment, I'm just more of a buy low sell high kinda guy. I've have studied the history and this is an orchestrated cycle; make the money easily accessible to everyone, let them renovate all the homes and make them more valuable, then increase rates and shake everyone out of the market so they can come back in and buy at a fraction of what the buyers paid. Now the buyers are stuck carrying debt that even selling their home can not pay off. Now they have exactly what they want, another slave.

As for your comment about gambling I do not see owning cryptocurrency as gambling what so ever. I am investing in a technology that I believe in. I'm not in it to simply make money but rather diversifying into assets to protect the wealth that has taken me a life time to build. I am invested in it because I believe it has the potential to replace the banking system. I am investing in it because I believe getting rid of the banking system and their debt money. As you are aware, central banking and fiat money has robbed the people of their wealth and enslaved them since its infancy. I am honestly shocked that you aren't invested in crypto at all when you are often claiming to be an anarcho-capitalist. The free market has finally found a way around their debt money and created a new debt free currency that can not be inflate away. It is a decentralized, peer to peer medium of exchange without the massive overhead of big fancy banks and CEOs who are paid in the millions. Without this overhead the currency will thrive as well as the wealth of the people who use it.

You claim that I am merely gambling and that I am not producing anything of value in the world. In my eyes investing in a technology that can potentially rid the world of the banksters, with all of their corruption and wealth theft, is a tremendously valuable thing. By purchasing a second home so that you can tell people you 'own' it (when really you just pay a mortgage on it) is actually funding more of their corruption and transferring more wealth out of the peoples hands and into the banks hands. In my eyes 'buying a home' isn't creating anything of value. If you built a home from the ground up with money you earned, that is another story. Simply carrying a mortgage and buying at over inflated prices is actually fuelling the problem of affordability for Canadians(renters and home owners). Not to mention funnelling more money into these crooks hands by renting it out at exorbitant prices so that you can afford the mortgage.

I have been posting about the price of BTC to peak people's interest because that is what people seem to care about. I am invested for the long haul because I am a believer in its potential and think it will foster amazing change. I am invested because I want to save my money in a currency that will not devalue year after year. I am avoiding real estate because I don't want to be a part of driving prices higher and making Canadian's even more strapped for cash. I will buy real estate when it is back to fare market value.

As a friend of twenty plus years I highly advice against over exposure to Canadian real estate and suggest getting at least a little crypto. The more of us that adopt it, the more power we take away from government terrorists and the banking cartels. All government issued fiat currency essentially is fuelling more war, greed, and violence. Stop using their debt money and we take that power back and invest the wealth in to the projects and innovations we want to see flourish.

That's my two cents.

I'm super stoked on your farm and the essential services that you provide. You are doing great work. But please don't bash blockchain, call it gambling, and claim investing in it produces nothing of value. Once I buy my house for cash I will have a lot more free time to help the less fortunate and will not be bogged down by a lifetime of mortgage (latin for death contract) payments. I will also be avoiding funding anymore of their corruption.

What are your thoughts?