Other People's Money: A Risky Crypto Way to Get Rich

last month
68 in money

opm.jpg

"The idea is to use the bank's money. Because you'll never get rich using your own money."

That's what my landlord said to me five years ago when I asked him about real estate. While I don't agree entirely with his statement, the point is, you can become wealthy by using leverage - through technology, other people's time, and other people's money.

If you're young, it's worth taking risks with your money. If you do end up ruined, you still have plenty of time to recover, so it makes sense to go for a long shot. Here are some scenarios that I imagined, for you to consider. Of course, this information is purely for entertainment, and not intended as financial or legal advice.

Get credit

cocaine_cutter_hi.jpg

For a lot of young people it's not easy to get credit. However, in times like these, when central banks and treasuries are keeping the printing presses running hot, banks tend to loosen their restrictions. The best form of credit is normally a line of credit - it's easy to access as cash, you can take more if you need it, and they also tend to have lower interest rates. Naturally, it's the hardest to get - some banks will only provide it with property as collateral.

The next best is a personal loan, and the worst is a credit card.

Multiple credit cards

When you get a new card, it's common for a bank to give you an interest free period on balance transfers. This means that, in some cases, you can roll a debt around to new cards indefinitely, only paying fees and not a lot of interest. Similarly, if you do a balance transfer to an existing card, they may give you a reduced rate of interest.

If you keep rolling the debt onto new cards, you may need to cancel your old ones, as, in the banks' credit assessments, they will always treat the accounts as if you owe the maximum amount.

Get cash to buy crypto

If you have a line of credit or personal loan, it's normally easy to get cash. With credit cards, it's not that simple.

When I found out that some insurance companies accept credit card payments with a ten day cooling off period, and return the money not as a reversed transaction, but by cheque, I was confused, as it seemed to be a big risk if the card happened to be stolen. As it turns out, the processors normally charge for a reversed transaction, which means that many insurers will return the money by cheque. If you happen to need some insurance, and your insurer offers a cooling off period, and you decide the policy is not for you, you can cancel and have access to cash, without having to pay fees for an advance. Then you can deposit that money on a digital currency exchange, and make some purchases.

It's also possible to send money to yourself using two different PayPal accounts, avoiding the cash advance fees. They tend not to like it, and if you do it more than a couple of times, they'll probably shut down your account. I've also heard a rumour that you can use a Square as a payment processor, again sending money to yourself, to avoid those fees. Some banks will even allow you to withdraw cash from a credit card without a fee.

coinmama.png

Alternatively, you can buy digital currency at a premium, using sites such as Coinmama or Cex.IO. So far, Coinmama is the cheapest site I've found so far for this service, selling Bitcoin with only a 5% surcharge.

Buy and hold

Now you have purchased the Bitcoin, you can hold it, or trade it for other digital currencies. Research them carefully, and decide which has a good chance of long-term success.

If you did this a year ago...

dash chart.png

Say you purchased $10,000 worth of bitcoins a year ago and hodl'd. At $700, you would have bought about 14 BTC, and today you would have about $38,000.

If you bought $10,000 of Steem a year ago at $0.30, you would have more than 33,000 Steem, worth about $66,000.

If you bought $10,000 of Dash a year ago at $7, you would have 1250 Dash, or $230,000.

As you can see, the potential upsides are huge.

(Prices as of 21/6/2017)

Money makes money

Of course you can use the money to actively trade digital currencies, or even trade on the traditional stockmarket, though that can be stressful.

If you purchase a lot of Steem, you can leverage it by earning curation rewards and giving your own posts a boost. Set up SteemVoter to automatically vote on contributors who consistently create high value content, or curate manually, and your investment might make you hundreds of dollars a month - easily covering your credit repayments.

With 25 Dash, you can buy a share in a masternode, which at time of writing, produces $30 a month. With 1000 Dash, you can buy a full masternode, returning about 11% per year in Dash.

Potential downside

The risk of doing this would be if your chosen digital currency fails, or falls close to zero. In that case, you might be stuck working hard for a couple of years to pay off your loans, with your fantasies of becoming a crypto millionaire drifting away like so many daydreams. As I said in the beginning - you are young, you have time to recover. So even one of the worst cases, things don't look so bad.

In the unlikely event of you defaulting on the debt, in some jurisdictions, you can be put in jail, so take the time to become familiar with the law. The good news is, in many places, though debt collectors may call you and threaten you, their actions are normally limited by law, and after 7 years of not acknowledging the debt, it is possible that your default will not even appear on your credit file. When dealing with debt collectors, they will normally comply with a request to contact you in writing, rather than by telephone.

The other risk with this method is that you fail to secure your digital currencies appropriately. Crypto is still in its early days, and to secure it properly you need to treat it as cash. Don't send it to any exchange or individual without researching their reputation first. Don't leave the cash on an exchange any longer than necessary, as exchanges can disappear. Treat security seriously. Consider purchasing a Trezor to secure your digital cash.

Conclusion

It might seem very irresponsible to borrow money in order to gamble. It naturally seems scary, especially when you factor in what your high school finance teacher told you - "don't get into debt, pay off your credit cards as soon as you can," and so on. The reality is, gambling is not irresponsible of itself, nor is using someone else's money. What makes gambling irresponsible is when the risks are unknown or unlimited, and outweigh the potential benefits. In this case, the risks are known - 2-3 years paying off a credit card because you picked the wrong crypto - and the potential benefits are known and unlimited - hundreds of thousands of dollars in profits, and the chance to find a life of prosperity.

Disclaimer: I am not a financial advisor, nor a lawyer, and this is not intended as financial or legal advice. This information is for entertainment purposes only. Only you know what is best for your money. I make no guarantees for the accuracy or currency of this information. Do your own research, and don't believe what some guy told you on the Internet.


About me

kurt robinson in the mountains of puebla

My name is Kurt Robinson. I grew up in Australia, but now I live in Guadalajara, Jalisco. I write interesting things about voluntaryism, futurism, science fiction, travelling Latin America, and psychedelics. Remember to press follow so you can stay up to date with all the cool shit I post, and follow our podcast where we talk about crazy ideas for open-minded people, here: @paradise-paradox, like The Paradise Paradox on Facebook here, and subscribe to The Paradise Paradox on YouTube, and on iTunes

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Sort Order:  trending
51
  ·  last month

When it comes to something as volatile as crypto, it's wise to use only that part of your OWN money you can walk away from if you end up losing all of it.
As much as it's nice to be rich, it's nicer not to be in debt to anyone.

Be the master of your own ship, not a passenger in someone else's.

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68
  ·  last month

Have you ever heard this joke? If you owe the bank $100, they've got you in a tricky position. If you owe the bank $100,000, you've got them in a tricky position.

Debt doesn't make you slave; it's merely a tool. I am very much in favour of tools that make me money. And you can walk away if you really want to - that's what bankruptcy is for.

As much as it's nice to be rich, it's nicer not to be in debt to anyone.

I don't agree. It is nice to be rich, yes. It can be nice to be in debt, depending on the situation. If your debt makes you money, then that is agreeable. If your debt means that you can't afford to put beans and rice on the table, then you have a problem.

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51
  ·  last month

It's all well and good if by some miracle you're able to get an unsecured debt but it's going to be very likely you'll be required to put up some security for it, perhaps the roof over your family's head?
If the only person who will suffer from a worst case financial mistake is you then it's something you'll have to weigh up and take the consequences for....if others will suffer, you really don't have a right to take an unnecessary risk.

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47
  ·  last month

Spot on. Very poor advice here and younger people could be easily influenced. Having been Bankrupt for getting sucked into the property boom I have now learned easy money does not exist.

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51
  ·  last month

Amen ...

44
  ·  last month

An amusing thing nobody ever talks about is what the banks do to you if you don't pay them back. They call a lot. They ruin your credit. They go after your wages. It's more difficult to get into someone's bank account than their wages. If you don't have traditional "wages," say because you do business directly with your customers, then they have a hard time taking anything from you other than your credit rating. It's true that landlords care about credit ratings, but in my experience they care more about whether or not you've ever fucked another landlord over. If you've never been sued by a former landlord, never had an eviction, never been late on rent, landlords don't seem to care about your situation with the banks. You might not be able to live in the nicest place in town, but you'll be able to find a decent enough place. What they don't do is send armed enforcers to your house ready and willing to kill you for what you owe. If you risk a bunch of borrowed money and lose it, so what? Either pay them back, file bankruptcy, or ignore them until you have enough money to do something about it. You only have one shot at this life. When you're gone, you're gone. Prudence is for the meek. Take big risks, go for broke, don't take no for an answer, and keep on trying until you either drop dead or have everything you ever wanted out of this life. This isn't advice most people should take, but, if it resonates with you... you do what you have to do.

64
  ·  last month

Great post as always! But I don't think I'm bold or brave enough to take these kinds of risks. Haha

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68
  ·  last month

Yes... I also tend to be risk-averse. That's the thing though, many times I look back and wonder why I didn't really take a shot at something. I'd probably be a lot richer and a lot wiser if I had.

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64
  ·  last month

That's probably true.

43
  ·  last month

I'd say buy steem power with your credit so that you have a bigger influence. Then, you get more followers because of your influence. Then, you make more money on steem to pay off the debt.

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68
  ·  last month

Yes, that's a good way to go about it.

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54
  ·  last month

Thanks for that tip.

53
  ·  last month

Informative post! You are right! It is always good to start young. I wish I had started when I was still a teenager.

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46
  ·  last month

Ha, you shouldn't!
I started when I was a teenager but because I was a teenager I literally lost millions of dollars due to the inability to transfer capital into and out of the market.

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53
  ·  last month

Ooops! This is sad. Having learnt your lessons, I believe you'll excel if we can turn the hands of clock back.

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46
  ·  last month

Only lessoned I learned was I should have been born 5 years sooner so I could have had a bank account of my own and not been dependent on my parents.

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68
  ·  last month

Wait, does that mean you made millions of dollars first? Better to have won and lost than never played at all.

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46
  ·  last month

Nope, I wanted and gave my parents $100 when btc was 80cents, and ever day thereafter I updated them on my moves and just quite how much they fucked me.
I was on point with almost every peak, cashing out a few days prior to the crashes on average.

I've wanted to cash in for years since, but again I had no bank account. Now that I'm legally an adult all my money is in the game.

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68
  ·  last month

Ah... So you never actually lost millions, you just lost $100 and missed the opportunity to turn it into more - a lot more.

If you're good at picking peaks you shouldn't have any problem making another fortune.

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46
  ·  last month

Millions in my mind, but yes, I'm just glad the markets are still volatile. That's my specialty :)

54
  ·  last month

I am using my own money and increased 300% in 2 months. Not bad but yes I can start taking money from others and trade to get even more profits.

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68
  ·  last month

Well done

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54
  ·  last month

Thanks mate and I believe this is just the start.
I am aiming for 100 btc portfolio.
Started with 1 btc. Currently at 4 btc.

31
  ·  last month

well said, no risk no gain. i had a chance to buy £1.20 apx per bit coin. now over £2000

53
  ·  last month

Great post! :) I'm a bit older and STILL going for the long shot. hahah I think the best crypto to invest in is right here and with Steem, because you can actually use your investment to generate income AND you can see the value of the coin go up.

29
  ·  last month

Really enjoyed the post, it was a great read. Imo, the potential rewards greatly outweigh the risks in this case. Traditional advice such as working a 9-5 and putting money into a savings account will definitely never make you "rich".

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68
  ·  last month

Thanks. Yeah, that's right. Rich people do things that don't seem sensible according to conventional wisdom. Gotta think outside the box to get that cash.

35
  ·  last month

Please check out the Lykke Wallet app if you wish to purchase BTC or ETH with a credit card. There is no upcharge and there are no fees to trade. I will write a post about Lykke and why they are credible and actually going places within the crypto space. But long story short, if you are purchasing crypto with a credit card there is no better option that I've found.

54
  ·  last month

Another method anyone can use is to get loan or capital from Family and Friends. But please be warned, do not spend what you can't afford to loose. Thank you

48
  ·  last month

Nice
Technical Analysis is key of financial markets prediction
I love your sentence in Article
That ( MONEY MAKES MONEY)

56
  ·  last month

Excellent post.

I suffered through the 2001 tech/web crash.

I'm still scared of using borrowed money to invest.

55
  ·  last month

Great post.
And, you're right, you need money to make money...

47
  ·  last month

Interesting post,
thank you for good posting

50
  ·  last month

In order to gain, you need to take risks. However, I am generally more of a person that takes calculated risks. How to decide on which Cryptocurrency is the next winner?

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68
  ·  last month

That's a complicated question. One thing I think about, is the potential for mass adoption. Dash's focus on user experience is one key reason I'm so bullish.

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50
  ·  last month

Helpful nevertheless. Gathering input from some people. If you have good resources you wish to share, please do :)

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68
  ·  last month

Certainly.



25
  ·  last month

Cool post , give me a follow ?

25
  ·  last month

Very interesting article.

59
  ·  27 days ago

hi Kurt!! what a great post!! give you a full upvote and follow your blog. Man i hope to keep in touch through this channel!! :)

62
  ·  25 days ago

Hope you're out of Mexico City soon, Kurt.

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68
  ·  15 days ago

Thank you sir. All good, I'm free and safe now

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62
  ·  15 days ago

That's great, Kurt.
Glad to hear this. @churdtzu
All the very best.

56
  ·  23 days ago

Congratulations @churdtzu! You have received a personal award!

Happy Birthday - 1 Year
Click on the badge to view your own Board of Honnor on SteemitBoard.

By upvoting this notification, you can help all Steemit users. Learn how here!

28
  ·  yesterday

Makes you think about how stupid the whole money system is actually... It's pretty stupid and corrupt, it should be exploited until something better comes along and destroys it completely.

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68
  ·  21 hours ago

Perhaps. I suppose you're familiar with this case

https://www.theguardian.com/world/2014/apr/20/spain-robin-hood-banks-capitalism-enric-duran

This guy was on steemit for a little while at least