Are you logical or reasonable? - Jan 2024 (#4)

How we doin’ dear reader? Your dude Brent has added a revolutionary (OK NOT REALLY) feature to the newsletter. You can now ask me a question by simply replying to this email. If I think others might want to hear the answer I’ll use it in a future newsletter. Otherwise I’ll just send you a response back directly. Feel free to ask anything. No dumb questions, but I’m sure I’ll send some dumb answers. Fair warning!

Now let’s hop to it!

Motivation

Money

Are you logical or reasonable? That’s a question I’ve been wrestling with lately. I’ve been reading this AMAZING book called The Psychology of Money by Morgan Housel. In the book he talked about the difference between the two. Logic is cold and calculated, reason is well… more reasonable. He gave a great example that stuck with me.

There’s a study that says young people should borrow money in their 20s to invest in stocks. The borrowed money would juice their returns while young and end up with more money later. And if they get wiped out, they should just borrow more and do it again. Logically, the numbers work great. Perfectly logical. However is that REASONABLE? As in, if you had a friend who was doing this would you think them smart or crazy? You’d probably have a lot of reasonable concerns about them doing so right!?

What are the odds that a young person who’s gone into debt to buy stocks and gets wiped out goes and borrows again? Or even invests in stocks ever again? Investing is a long game and one of the best questions you can ask yourself along your journey is what is more likely to keep YOU in the game LONGER?

Let me give you a more tangible example. Lets say you have a choice between two jobs, one pays more, but you work WAY more hours. The other pays less, but your work life balance is much better. Which do you choose? Logically if you’re trying to make the most money possible you would choose the one that pays more. However, doing so risks burnout and/or hating your life. As such, it may be more reasonable to take the job with better work life balance for the long term.

In that same vein I have people ask me about Real Estate deals pretty regularly. Sometimes they send me some dilapidated, STUPID OLD property. However, the numbers look great. They can even look great when you take into account all the fixes it might need. But, if you get some old property thats an enormous pain and your constantly having to get it fixed, you are WAY less likely to buy your next property or stay stoked on investing in Real Estate in general. See the issue? So of course use logic, but don’t forget to be REASONABLE. You’ll be better off long term.

Alright, so lets shift gear here. So as many of you know, yours truly is a cheap bastage (can’t use that word folks, my dear sweet mother subscribed!). So cheap in fact, I once had a girl break up with me because I dropped her off at the front of a parking garage… so I wouldn’t have to pay the five bucks to go in the parking garage and drop her off at her car (for the record, I regret nothing!). Point is, I HATE spending money if I can avoid it.

But I’m not alone right? None of us want to pay more for the same service when we can pay less. Now I’m NOT going to wax poetic about value vs. cost and all that crapola. Let’s all agree that if you can buy two things that are the same you’d obviously pick the one that costs less right? Here’s where I bring it back to crypto:

This is part 2 of my series on crypto. You can read part 1 HERE.

As a reminder:

A cryptoasset needs to be:

1. Fast

2. Cheap

3. Secure

Today, lets talk about Cheap. The last two cryptocycles I was all about a much more widely known crypto called Ethereum. It’s smart contract features blew my mind with their potential. But alas, there was a problem. Anytime I went to use it in any standard decentralized way (as the good Satoshi intended) I’d pay an arm and a leg. It wasn’t uncommon for the fees to use the network to be above $20 US per transaction! I might as well have been sending bank wires like a normie sucker at those prices…. Then of course, I stumbled upon SOLANA. Although a younger cryptoasset, it already had a solid user base AND was many many times cheaper. How much cheaper? We’re talking fractions of pennies!

Ever since I’ve been hooked. And the secret is definitely out. As you can see below. Usage of Solana has at times surpassed even Bitcoin. Sometimes by nearly twice as many users! Not to mention beating the pants off Ethereum. Even though Ethereum is valued at near 10x what Solana is (in Market Cap terms). See why I’m so bullish!?

So here’s the deal. The user data is already showing that Solana is getting way more use from the nerds. However, the rest of the public hasn’t quite gotten the message. Otherwise Solana’s market cap value would be closer to cryptoassets like Ethereum and Bitcoin. It is my belief that it will in the near future. And THAT is why it’s my biggest position outside of Real Estate.

FINAL MEMES

That’s it, that’s all! Until next time!

Copyright (C) 2024 Ann Royal Advisors All rights reserved.
The information contained on this Newsletter and any resources available for download through this newsletter are not intended as, and shall not be understood or construed as, financial advice. I am not an attorney, CPA, or financial advisor, nor am I holding myself out to be, and the information contained on this newsletter is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation. Make your own choices and don’t sue me please.


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