Join Matt McCall today for a special event to discuss a “tsunami of wealth” in the crypto sector … why altcoins aren’t as risky as you might think … a numbers-based comparison
It would be great if we could hit our financial goals by squirreling away a percentage of our salaries into a safe bank account.
Well, perhaps you could if you’re earning a huge salary. But unless that’s the case, you can’t. And there’s a simple reason for this …
Savings accounts actually make you poorer.
The chart below shows what the average savings account has actually been returning to savers, after inflation, since 2009. In simple terms, it’s answering the question “how much is the purchasing power of your savings-account-wealth growing?”
As you’ll see, with the exception of two brief periods, this number has been negative. We could title it “You’re Getting Poorer.”
Below, I’ve highlighted the 0-line in red. The latest reading in 2021 is coming in at -1.63%.
The chart above points to a reality for investors …
***Being able to reach our financial goals requires an investment vehicle that can compound savings at higher rates
This is not groundbreaking stuff.
It’s why most investors have turned to stocks over the decades. The long-term inflation-adjusted return for stocks is about 7%. At this rate, investors will double their money in about 10.3 years.
Now, broadly-speaking, this is good return. For most of us, a 7% average return over several decades, combined with regular additional deposits to our portfolio, would lead to savings for a comfortable retirement.
But the benefits of diversification, as well as the desire to generate returns higher than 7%, suggest we should look at additional asset classes.
And for our money, there is no asset class better able to compound your wealth at greater rates, in as short of a period, as top-tier cryptocurrencies.
***To illustrate, let’s look at Matt McCall’s altcoin portfolio from Ultimate Crypto
For newer Digest readers, Matt is one of our crypto specialists. It was January 2020 when he launched Ultimate Crypto, a service in which he recommends elite altcoins.
As I write Wednesday morning, the 13 positions in Matt’s portfolio are averaging a return of 844%.
Last week, that average return nearly touched 1,000% before the sector pulled back to consolidate.
I’m looking at the portfolio as I write, seeing zero money-losing positions. Perhaps even more impressive is that there’s only one position that’s not up triple digits (it’s up 63%). Six of the positions are up more than 500%.
Now, let’s be clear …
This is not a hypothetical.
This is what Ultimate Crypto subscribers, who acted on Matt’s recommendations, have seen in their own accounts in about 14 months.
It’s, call it, $20,000 turning into more than $168,000 in a little over a year.
Most importantly, it’s what Matt believes is going to happen again.
***This afternoon at 4 p.m. ET, Matt and fellow crypto-expert, Charlie Shrem, are going to be discussing the next wave of explosive profits in the crypto sector
The purpose of today’s event is simple …
Matt and Charlie believe the crypto universe is on the verge of printing a new batch of millionaires and billionaires.
In short, they see a fuse being lit under the altcoin market — one that will set off one of the most significant explosions of wealth in the modern era. Modest investments in the right altcoins stand to turn into millions of dollars.
Now … why?
Let’s take the skeptic’s perspective. What’s the actual value that’s inherent to altcoins that will drive such massive gains?
… to truly understand the magnitude of this opportunity, you must understand that altcoins aren’t really cryptocurrencies in the way most people think of them.
Altcoins aren’t “fantasy internet money” … they are actually investments in one of the most valuable, most revolutionary technologies every created.
And they will create a multi-trillion-dollar tsunami of wealth for their owners.
Remember, the underlying technology behind bitcoin and altcoins is the blockchain. You’ve probably heard all the buzzwords surrounding it.
Blockchain is a “virtual ledger” … it’s capable of recording, verifying, and securing digital transactions … it’s a series of confirmed and encrypted data spread across many geographic locations.
Now, you can think of the blockchain and cryptocurrencies like that …
But to truly convey their stunning wealth-creation power, I prefer to say that blockchain technologies are just really, really, really valuable software programs.
Matt goes on to write how software has become a part of our everyday lives over the last few decades, so we sometimes overlook what that means.
But software programs are one of the greatest forces for wealth creation on earth. They make our lives and our businesses easier and vastly more efficient.
Think Microsoft, Adobe, Uber, Alphabet … All of the businesses have seen mind-boggling growth from software.
Back to Matt:
Just like the software programs that have changed our lives over the last 30 years … altcoins and the blockchain technology they run on are about to unleash an epic new wave of computer program wealth.
They’re about to mint the next generation of millionaires …
***But what about the volatility of the crypto space? Isn’t it too dangerous?
That depends on what you mean by “dangerous.”
Yes, absolutely, crypto can be volatile. And it can be flat-out money-losing. There are many worthless altcoins out there attracting capital.
This demands that investors be mindful about how much money they allocate to their crypto positions, as well as have a strict, thoughtful selection method.
But I’m going to suggest that playing it safe by avoiding crypto can actually be more “dangerous” to your long-term investment goals.
To illustrate, consider two investors.
Both have $100,000 portfolio.
Investor A will invest in altcoins. Because she understands the volatility, she will invest just 20% of her $100,000 into the sector, spread over 10 positions. Let’s say she parks the other 80% in cash.
Now, let’s assume that every single one of her 10 altcoins, except one, loses 99% of value. We’re talking a near-complete loss of capital … -99% … on nine of 10 positions.
However, on her 10th position, she gets a return of 3,030%.
This number is not picked out of thin air. It’s one of the returns that Matt’s subscribers are sitting on in his Ultimate Crypto service.
Put all of this together, and what is this investor’s return total return on her entire $100,000?
Here’s how that looks …
She only invested $20,000 of her $100,00.
She lost 99% of all of that, expect for one winner, which returned a bit more than $60,000.
Based on a $100,000 starting value, that’s a 42.8% return.
Now, compare that to the “safe” investor.
We know he won’t put his money into a savings account, because it will destroy his wealth. So, let’s not even entertain that as an option.
Instead, let’s say he invests his entire $100,000 into a blend of stocks and bonds. Let’s assume he gets the long-term average return for stocks (7%) plus the long-term average return for bonds (5.5%).
In a traditional 60/40-weighted portfolio, this would generate gains of $6,400 based on a $100,000-portfolio.
So, 6.4% return.
Which do you want … 42.8% returns or 6.4% returns?
By the way, if you think I’m cherry-picking the crypto return, consider this …
If we reverse-engineer our return-comparison, we might ask, “what’s the minimum return the crypto investor must get on her one profitable position to equal the 6.4% return the stock/bond investor got?”
After crunching the numbers, that answer is 1,210%.
Well, it turns out, Matt has five different positions in his Ultimate Crypto portfolio that have return more than 1,210%.
We’re not cherry-picking.
***Let’s also look at from the other side, meaning a crashing market
Now assume that the entire investment world implodes.
That one high-returning crypto? It also goes to -99%.
And over in the stock/bond portfolio, a bear market results in a 34% crash, similar to what we experienced last year.
How do these two investors hold up?
Well, the “risky” crypto investor lost 99% of invested capital — or $19,800. But because she invested only reasonable position sizes, she still has $80K over in cash.
So, she’s down 19.8% on her entire $100,000 portfolio.
Meanwhile, the “safe” investor who stayed away from crypto has suffered a $34,000 decline, so his total wealth comes in at just $66,000.
Bottom-line, the “risky” crypto investor suffered a drawdown of $19,800 in the crash-scenario while making 42.8% returns in the growth-scenario, while the “safe” stock/bond investor suffered a $34,000 loss and just 6.4% gains.
It might be time for everyone to rethink what “risky” really means.
***Join Matt and Charlie today at 4 p.m. to learn more about why they see triple- and quadruple-digit gains coming for the crypto sector
Here’s Matt on this note:
Read More: Why Crypto Is Safer Than You May Think