Do you need to learn about crypto?
Cryptocurrency is a hot topic right now in the world, but many of us parents are not comfortable with the subject. Are you one of those parents? Do you feel like people are talking a foreign language when they are speaking about cryptocurrency? Is your teen wanting to invest in crypto but you don’t want them to because you are afraid it’s not safe? I totally understand. For a long time, I just avoided the topic, even though my husband Keith has been studying crypto for many, many years. However, let’s be honest. The potential of cryptocurrency is huge! And it definitely looks like it is not going anywhere. It’s will probably become a huge part of your children’s lives so it would probably be a good idea to learn at least some basics so that you can help your kids.
But first a disclaimer…
Just want to throw in a disclaimer here. I am not a financial or tax advisor. I am just sharing what I have learned myself. Before you make any decisions involving your finances, you should consult a financial professional.
I don’t like new stuff
Anything new is always scary. I totally get that, but the way to conquer fear is to start educating yourself. So here is your first crash course on crypto. There are so many different cryptocurrencies-thousands of them. Most of them are fads, only a few of them seem to have an intelligent plan or design. Research the ones that you are thinking of investing in, don’t just invest in something because everyone else is doing it and the prices are going up. Well, you can put money in something like that but don’t call it investing. Think of it more like a fun gamble.
Why was crypto invented?
Crypto has actually been around for quite a few years. It was designed to make it easier to handle money transactions and eliminate the middleman, such as the need to go to a bank or Western Union to transfer money. There are so many people in the world who are considered unbanked – they have no access to a personal bank account. They have no way to save money or do business transactions. Crypto is revolutionary for them. They can send money back to relatives. Some countries have even begun to make cryptocurrency legal tender in their countries.
However, remember that this is still new and things are still being figured out. Just invest a bit of time into educating yourself and your teens about what is going on in the crypto world. Just like in any other kind of investing, don’t put all your eggs into one basket. Don’t put all your crypto into one currency or exchange. Like a pile of manure in a garden, your money grows best when you spread it around a little.
The Benefits of Crypto
- Eliminates the middle man and fees
- Makes it easier for the unbanked to send money
- Some currencies are inflation resistant
- Way to build long-term wealth
The Cons of Crypto
- It is still new and risky
- It can be overwhelming
- The government is still figuring out regulations
If your teen is wanting to buy crypto, sit down and talk with them about it. Find out what they know, what currencies they want to buy and why. Just because you don’t understand it yet, doesn’t mean it’s a bad thing. Remember when the internet first came out and it was all so new and scary? Crypto is at that stage in its development. Spend some time educating yourself; it really is quite interesting.
To hear us talk more about this subject, check out our latest podcast!
For even more in depth cryptocurrency discussions, check out Generational Wealth with Cryptocurrency.