To start, this is NOT an investment recommendation.
With the release of the first-ever bitcoin ETFs yesterday, it’s worth reviewing the 4 rules of Funny Money (aka investment gambling).
RULE #1: NO MORE THAN 10%
If you blow up 10% of your investable assets, you won’t be thrown irreversibly off course.
RULE #2: SEE RULE #1
RULE #3: TAKE THE GAINS
If it does well and your funny money grows >10%, take the gains to trim it back to 10%. Funny money is for betting on outsized returns. It’s not an investment strategy.
RULE #3: USE A ROTH IRA
If the goal is outsized returns, then – fingers crossed – you’ll have outsized capital gains. If it’s in a Roth IRA, you’ll never pay taxes on those gains.
And that’s that.
Most of my funny money is for picking stocks, but as there’s a limited supply of bitcoin it makes for an interesting funny money trade.
