Crypto, Stocks, and Impact

This Week: A New Twist on the Financial News You Care About

This week’s newsletter is a little different from the usual. While we’re still bringing you the most impactful financial news that matters to you, we’re also diving deep into some topics your fellow millennials have asked us to explore.

Ever wondered how to balance the excitement of crypto with the stability of traditional investments?

Curious about what the top financial minds really think about mixing things up in your portfolio?

Or maybe you’re looking to invest in ways that align with your values and make a positive impact.

We’ve got all that covered and more. Let’s jump in and explore how to make your money work smarter and with purpose!

7 THINGS WE CAN LEARN FROM DAVE RAMSEY

Dave Ramsey says: "Live like no one else now, so later you can live like no one else."

1. The Power of Budgeting: Consistently tracking income and expenses is crucial for financial stability.

2. Avoiding Debt: Staying clear of debt or paying it off quickly can prevent financial stress.

3. Emergency Fund: Having a safety net is essential to handle unexpected expenses.

4. Investing Early: Starting to invest as soon as possible maximizes the benefits of compound interest.

5. Living Below Your Means: Spending less than you earn is key to saving and building wealth.

6. Financial Discipline: Staying disciplined with spending and saving habits is necessary for long-term success.

7. Financial Education: Continuously learning about finance helps make informed decisions.

Smart Money Moves: How Millennials Can Balance Crypto and Traditional Investments

Alright, let's talk about how we, as millennials, can balance our love for the new and exciting world of cryptocurrencies with good ol’ traditional investments like stocks, bonds, and real estate. With more of us jumping into the financial markets, it's important to find the right mix that lets us enjoy the potential high returns from crypto while still managing the risks. Here’s a breakdown of some smart strategies and things to keep in mind if you want to integrate crypto into your diversified portfolio without going overboard.

Diversify, Diversify, Diversify

First off, let's talk about how we can build a balanced portfolio. A good mix usually includes different types of assets—think stocks, bonds, real estate, and some cash. If you're into crypto, treat it as a smaller, more speculative part of your overall investment pie. Most financial experts suggest keeping your crypto investments to around 5-10% of your portfolio. Of course, this depends on your personal risk tolerance and investment goals, but you get the idea. One strategy you might consider is the “core-satellite” approach. Here, the “core” of your portfolio comprises stable investments like index funds and blue-chip stocks, while the “satellite” part is where your crypto and other high-growth, high-risk assets live.

Managing the Rollercoaster of Risk

We all know that crypto is notorious for its volatility—one minute, you’re up, the next, you’re way down. The key here is only to invest what you can afford to lose and not let emotions drive your decisions. To balance that volatility, pair your crypto investments with more stable, income-generating assets like bonds or dividend-paying stocks. This way, you have a cushion if things go south. Also, it’s smart to regularly rebalance your portfolio, especially after the crypto market has a wild ride, to ensure your risk levels stay where you want them.

Think Long-Term, Not Just Quick Wins

Before diving headfirst into crypto, set some clear investment goals. Are you looking for short-term gains, long-term growth, or maybe even a hedge against inflation? Your strategy will differ depending on what you’re aiming for. Given how unpredictable the crypto market can be, a long-term perspective might be the way to go. Instead of trying to time the market, consider a dollar-cost averaging (DCA) strategy—investing a fixed amount at regular intervals. This can help smooth out the bumps of volatility over time. And hey, it doesn’t hurt to write down your plan! A clear investment policy statement (IPS) can help keep you on track with when to buy, hold, or sell your crypto.

Don’t Put All Your Crypto in One Basket

Like traditional investing, putting all your eggs in one basket is never a good idea. If you’re into crypto, make sure to diversify within that space, too. Spread your holdings across different types of cryptocurrencies, like Bitcoin, Ethereum, and stablecoins. Understand that not all cryptos carry the same risk—Bitcoin and Ethereum might be considered safer bets, while lesser-known altcoins could offer higher growth but come with more volatility. Do your homework, and choose a mix that aligns with how much risk you’re comfortable taking.

Explore Safer Ways to Get Crypto Exposure

If the idea of buying cryptocurrencies directly feels too risky, you can still get exposure without going all-in. Look into exchange-traded funds (ETFs) or funds that track blockchain companies or even cryptocurrency futures. This approach offers a bit more regulation and oversight, which can feel safer for some investors. For example, options like the Grayscale Bitcoin Trust (GBTC) or Bitcoin futures ETFs provide a way to ride the crypto wave without having to buy and hold digital currencies yourself.

Learn from Others—Good and Bad

There are plenty of real-life examples to learn from. Take the case of a millennial investor who allocated 7% of their portfolio to cryptocurrencies, split between Bitcoin, Ethereum, and some promising altcoins. The rest was spread across low-cost index funds (60%), bonds (20%), and real estate investment trusts (REITs) (13%). This balanced approach allowed them to enjoy the high returns from crypto without compromising their overall portfolio's stability and income generation. But there are also cautionary tales—folks who got burned by going too heavy on crypto without proper risk management. Don’t let that be you; stick to the basics of diversification and managing risk.

The Bottom Line

Finding the right balance between crypto and traditional investments isn’t a one-size-fits-all deal. It takes some careful planning, a good grasp of risk management, and a steady hand to avoid the temptation of making impulsive moves. By diversifying your portfolio, setting clear goals, and keeping a long-term view, you can enjoy the potential growth of cryptocurrencies while still protecting your financial future.

Bold or Reckless? Experts Weigh in on Adding Crypto to Traditional Portfolios

Several well-known financial experts have shared their opinions on balancing cryptocurrency investments with traditional assets like stocks, bonds, and real estate. Here are a few perspectives from reputable voices in the financial world:

1. Ray Dalio - Founder of Bridgewater Associates

Ray Dalio, a billionaire investor and founder of the world's largest hedge fund, Bridgewater Associates, has spoken extensively about the importance of diversification in investment strategies. While Dalio has been somewhat skeptical about cryptocurrencies in the past, he recognizes Bitcoin's potential as a store of value, similar to gold. He often emphasizes a balanced portfolio approach:

"I think that Bitcoin's greatest risk is its success. There’s a lot of risk to cryptocurrencies in general, but there is also potential for diversification. You don't want to own too much of anything… and diversification is key."
(Source: Yahoo Finance)

Dalio suggests including a small percentage of assets like Bitcoin alongside more traditional assets to hedge against inflation and economic instability.

2. Cathy Wood - CEO of ARK Invest

Cathy Wood, the CEO of ARK Invest and a strong proponent of disruptive technologies is known for her bullish stance on cryptocurrencies. Wood suggests a strategic allocation of cryptocurrencies within a diversified portfolio, especially for younger investors who have a longer time horizon:

"Young investors have a huge advantage. They should allocate 5-10% to cryptocurrencies and balance it with growth-oriented stocks and ETFs that offer exposure to other disruptive technologies."
(Source: CNBC)

She believes millennials and Gen Z, in particular, have the potential to capitalize on the growth of cryptocurrencies while maintaining a diversified portfolio with traditional assets.

3. Raoul Pal - CEO of Real Vision Group

Raoul Pal, a former hedge fund manager and CEO of Real Vision Group, is an outspoken advocate for a larger allocation to digital assets. Pal argues for a "barbell strategy," where investors can hold both very safe assets (like bonds) and very risky assets (like cryptocurrencies), depending on their risk tolerance:

"You can put together a barbell portfolio. One side is Bitcoin and Ethereum, the other side is cash and bonds, and you let them do their job. But you can’t have all your eggs in one basket." (Source: Real Vision Finance)

Pal sees a significant upside for millennials willing to take calculated risks by balancing cryptocurrencies with safer, more stable investments.

4. Warren Buffett - CEO of Berkshire Hathaway

Warren Buffett, one of the most famous investors in history, is known for his skepticism of cryptocurrencies. However, his principles of value investing and diversification still apply to those considering adding crypto to their portfolios:

"It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price. Diversification is a protection against ignorance."
(Source: Berkshire Hathaway Annual Letters)

Although Buffett himself isn't a fan of cryptocurrencies, his advice on diversification and risk management serves as a guiding principle for those looking to balance speculative investments like crypto with more reliable assets.

5. Mark Cuban - Entrepreneur and Investor

Mark Cuban, the billionaire entrepreneur, and investor, is more open to cryptocurrencies and suggests a balanced approach where digital assets can complement a traditional portfolio:

"A small percentage allocation in crypto makes sense as part of a diversified portfolio. You’ve got to know what you’re investing in and be willing to lose that investment, but also not miss out on potential opportunities."(Source: Twitter, various interviews)

Cuban recommends a cautious but optimistic approach, acknowledging both the potential rewards and risks involved.

Summary

These financial experts, ranging from cautious traditionalists like Warren Buffett to enthusiastic crypto advocates like Cathy Wood, generally support a balanced approach that aligns with an investor's risk tolerance and long-term goals. Most suggest a small allocation to cryptocurrencies within a well-diversified portfolio, underlining the importance of understanding risks and being prepared for volatility.

Investing with Purpose: A Millennial’s Guide to Sustainable and Ethical Wealth Building

Alright, let's dive into something that’s becoming a big deal for a lot of us—investing with impact. As millennials, we’re not just thinking about making money; we’re also thinking about how our money can make a difference. Whether it's combating climate change, promoting social justice, or supporting companies that actually give a damn about people and the planet, sustainable and ethical investing is more than just a trend—it’s becoming a must for our generation. And the best part? You don’t have to choose between doing good and doing well financially. You can have both if you play your cards right.

Why Millennials Care About Sustainable Investing

Honestly, it's not surprising that millennials are leading the charge when it comes to sustainable investing. We grew up in a time when the headlines were filled with news about environmental disasters, economic inequalities, and corporate scandals. So, it makes sense that we’d want to put our money where our values are. Unlike older generations, who often focus solely on returns, we look at the bigger picture. It’s not just about how much we can make but also about what kind of world we’re building. And companies are catching on—many are now trying to be more ethical, sustainable, and transparent, knowing it’s what we want.

How to Build a Sustainable Investment Portfolio

So, how do you actually get started with this whole sustainable investing thing? It’s not as complicated as it sounds. The first step is understanding what ESG (Environmental, Social, and Governance) investing is all about. ESG is basically a set of standards for a company’s behavior used by socially conscious investors. From investing in renewable energy companies to supporting brands that push for gender equality, there are many ways to go about it. One popular route is through ESG-rated ETFs (Exchange-Traded Funds) or mutual funds, which are essentially bundles of stocks and bonds that meet certain ethical criteria. You can also look into green bonds, which are specifically used to fund eco-friendly projects. The idea is to diversify, just like you would with a traditional portfolio, but with a focus on impact.

Can You Still Make Money?

Now, I know what some of you might be thinking—sure, it feels good to invest in something positive, but does it actually pay off? Good news: sustainable investments have been performing well and, in some cases, even outperforming traditional investments. And let’s be real—when you invest in companies that are prepared for the future (like those addressing climate risks or with good governance practices), you’re probably looking at a more stable investment. The numbers back this up; studies have shown that companies with strong ESG practices often have lower volatility and better risk management. So, don’t buy into the myth that you have to sacrifice returns to invest ethically. The key is to do your homework and pick the right mix of investments that match your risk tolerance and goals.

Blending Crypto, Traditional, and Sustainable Investments

Here’s where things get interesting—there’s no reason why you can’t mix it all up. For those of us already dabbling in crypto or holding onto traditional investments like stocks and bonds, adding a sustainable twist could make your portfolio even more robust. Imagine a portfolio where you’ve got your Bitcoin or Ethereum, a solid lineup of blue-chip stocks, and then some ESG-focused funds or green bonds to balance things out. There are even some cryptocurrencies designed to be eco-friendly or support specific causes, like clean energy. The key is to stay balanced and not go all in on one thing. Diversification is still the name of the game.

Watch Out for Greenwashing

Of course, not everything with a “green” label is legit. Greenwashing, where companies make themselves appear more sustainable than they are, is real. It’s like when a company says, “We’re committed to the environment,” but their supply chain is causing all sorts of harm. So, be vigilant. Look for genuine impact and transparency. Use tools and platforms that help you dig deeper into a company’s practices. There are apps and websites that can help you screen for ESG factors and ethical considerations, so make use of them.

Real-Life Examples and Case Studies

Look at someone like Jessica, a 30-year-old millennial who started out just investing in low-cost index funds but decided to shift 20% of her portfolio to ESG-focused investments. She chose a mix of renewable energy ETFs, stocks from companies with strong social and governance practices, and some sustainable real estate funds. In the past few years, she’s not only seen decent returns but also feels good about where her money is going. On the flip side, there’s Mike, who got burned by falling for greenwashing traps without doing his homework. Lesson learned: invest with your eyes wide open.

Tools to Get You Started

If you’re ready to dip your toes in, there are plenty of resources to help you get started. Robo-advisors like Betterment and Wealthsimple offer portfolios that are ESG-friendly. You can also check out platforms like Swell Investing or Aspiration, which focus entirely on sustainable and ethical investments. The good thing is these tools make it easy to align your money with your values without needing a finance degree.

The Bottom Line

At the end of the day, investing isn't just about building wealth; it’s about building the future we want to see. As millennials, we have the power to drive change not just through our voices but also with our wallets. By blending sustainable investments with more traditional and even crypto assets, we’re not only diversifying our portfolios but also putting our money where it matters. So, let’s keep making smart money moves, but let’s also make them count for something bigger.

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More Money Now: A Millennial’s Guide to Financial Freedom and Security 
by Nicole Victoria

"More Money Now: A Millennial’s Guide to Financial Freedom and Security" by Nicole Victoria is a practical guide aimed at helping millennials achieve financial independence and stability. The book emphasizes the importance of shifting one’s mindset around money, advocating for a proactive approach to personal finance.

OPINION
The book’s got some solid advice, especially when it comes to flipping the script on how we think about money. Victoria's all about ditching that old-school mentality and embracing strategies that actually make sense for us millennials—because, let’s be real, our financial landscape is nothing like what our parents dealt with.

However, at times, it feels like she's a bit too optimistic about how quickly we can turn things around, especially if you’re knee-deep in student loans and juggling three side gigs just to make rent. That said, her approach to making financial literacy accessible and even fun is refreshing. It’s a great starting point if you’re looking to get your financial life in order, but just know that some of the steps might require more time and patience than the book lets on. Overall, it's worth the read—just don’t expect a magic wand to fix everything overnight.

"Beware of little expenses; a small leak will sink a great ship." – Benjamin Franklin