I Wanted to Kill Myself – Lost $163,500 in Bitcoin
I didn’t want to share this with the world because it’s embarrassing and a bit too personal; but as I was working out at the gym with my best friend today, he encouraged me to share it. So here’s why I think it’s important for me to blog about this: I think it’s my responsibility to share not only the wins and highlights of my life, but the losses and painful times. Because life is full of ups and downs, twists, and turns. We’re all so used to seeing only peoples’ highlight reels on their instagrams and snapchats that we forget that no one’s living a picture perfect life.
The journey from being anti-bitcoin/cryptocurrency to being a fanatic convert
If you’ve been following me a while, you know that at first I was very against investing in bitcoin and other cryptocurrencies. I was so against bitcoin that I’ve even written a post called Invest in Bitcoin? You’re Safer in Tulips. But isn’t it ironic how easily people’s minds change? Especially when greed is involved? It goes to show that no one’s immune to greed and the allure of fast money.
Let’s face it: talking about bitcoin, litecoin, ethereum and the other alt coins was fun and exhilarating. There were days I would be up and down $20,000, $30,000 in a time span of just 30 minutes. I would literally take a shower and check my phone while I was drying off and I’d be up or down what most people make in a whole year. I think that’s what was so addicting about it all. The roller coaster feel of the cryptocurrency market. It was different than the stock market.
I had met too many people who got rich from Bitcoin – the “new money”
Many of my mentors and people I met at business conferences were talking about bitcoin and other cryptocurrencies. I’ve met people who built their fortunes on bitcoin, driving lambos and living in luxury villas. It was hard to resist the pull, when all around me it seemed like everyone was making easy money and here I was playing in the “old school” boring stock market wishing for 10% gains year over year.
I felt dumb not participating and it felt like the sky was the limit. It couldn’t possibly tank right? Bitcoin hit an all time high of $20,000 so buying at $7,000 – $9,000 was a steal right? These were the types of things I said to myself as I was weighing the pros and cons of buying into Bitcoin. It’s funny how the human brain is. Where all rationale goes right out the window when you start fantasizing about the “what if’s” and the feeling of fear of missing out.
I kept pouring water into a bucket with a hole in it
As the cryptocurrency market was tanking, I kept buying more. It’s what I always did when it comes to investing. It’s probably the biggest factor of me becoming a millionaire, since I was so used to buying up cheap assets (equities) overseas in emerging markets, so I felt very confident that it would work with Bitcoin.
If you’re an investor you’re probably familiar with dollar cost averaging. In essence, that’s what I was doing with cryptocurrency. I kept buying as the markets were going lower, so that my position in it would be more favorable as it kept hitting new lows by averaging out my holdings. But what was happening was that I was doing what people refer in the market as “catching a falling knife.” And bleed I did.
Related (Investopedia) – Dollar Cost Averaging
Related (Investopedia) – Falling Knife
But you can’t lose what you haven’t yet sold right? That’s not really how it works and here’s why
A lot of investors try to make themselves feel better by reassuring themselves that they haven’t lost any money since they haven’t sold yet. That’s actually not true. The reason being, that’s real money with real value at any given time. So for example if I buy something worth $500,000 and it falls to $100,000 I can try to tell myself that I didn’t just lose $400,000 to try to make myself feel better but that’s not reality. Because there would also be people right then buying the same thing that you bought for $500,000 for only $100,000.
Now if it goes back up to $500,000, you would be back to zero gain (recouping original investment) whereas these other investors who played it smarter would be up 5x their investment!
So again, this is real money we’re talking about so I don’t think it makes much sense when people try to trick themselves into thinking that they hadn’t really made a dumb move. It was a dumb move, so you gotta own up to it and move on. So I guess I’m preaching to myself at this point!
I was getting depressed and had suicidal feelings
I felt pretty bad losing so much money. I got depressed and had suicidal thoughts. Seriously, it wasn’t fun watching this ship sink. There was also a time earlier on in my career when I was only making $12 an hour. So looking back, $163,500 would’ve taken 13,625 hours of work!
Another way to look at this would be to divide the amount of hours (13,625) by 2080 because that’s what amounts to working a typical full time job of 40 hours a week for 52 weeks (a whole year). This would come out to be 6.5 years of work (if we don’t factor in anything like taxes).
No matter how you slice it, that’s a lot of money for most people. And before this, my worst investment mistake was investing in coffee futures and losing $20,000. So this is my new record loss that I get to carry with me going forward.
In life, you win some and you lose some
At the end of the day, it goes back to this saying: you win some you lose some. The fact of the matter is, no matter who you are, you’re going to lose at some point. Even the best of the best in all fields lose from time to time. And I’m not even the best of the best, so it kinda goes with the territory.
But here’s how I feel about this: if anyone really wants complete safety, then they can’t risk ever playing big. It is what it is. If you never try, you’ll never know. And if you never take risks, you’ll guarantee your safety; but on the flip side of that, you’re also guaranteeing mediocrity.
Boasting about tomorrow
Having said all of that, this experience reminded me of this bible passage:
“Come now, you who say, “Today or tomorrow we will go into such and such a town and spend a year there and trade and make a profit”— yet you do not know what tomorrow will bring. What is your life? For you are a mist that appears for a little time and then vanishes. Instead you ought to say, “If the Lord wills, we will live and do this or that.” As it is, you boast in your arrogance. All such boasting is evil” – James 4:13-16
There’s not a whole lot else I need to explain about this passage because it’s already fairly self explanatory. I think it’s a good reminder that at the end of the day, God orders our steps. It doesn’t matter how awesome I think I am or prideful I become because of my past wins and successes. When all is said and done, tomorrow is not guaranteed and our lives are short-lived.
So what now?
Where do I go from here? After taking such a huge L, what do I do? Live I suppose. And count my blessings. I know at the end of the day, I came from nothing. So if I lose a lot of money, I should be thankful that I even had the money to lose in the first place. I think it helps to re-calibrate my mind because it’s crucial to not forget where I came from: having immigrated here to the USA in 2004 with $500 in my pocket and starting my career working in the warehouse making $12/hour.
It also makes me think that I should focus back on what worked for me in the first place. I made most of my wealth from the stock market. It’s what I’m most familiar with and what has worked for me in the past. Digital tokens and currencies may come and go but it’ll take a lot more to eliminate all the companies from the face of the earth. So I think everyone, before taking any big risks, make sure they invest into businesses with real assets and real products that have a global reach, since those aren’t going away any time soon.
Am I exiting Bitcoin for good?
I think it’s normal for someone who gets burned so bad to run completely in the opposite direction; that said, I’ve been around the block a few times and such drastic measures usually don’t end well. I think moderation, like anything, is key here. I still think that crypto-currencies have a future. It’s not all going away any time soon.
I’m big on asset allocation, so that means I have fractions of my money in many different things (i.e. stock market, bonds, real estate, cryptocurrency, precious metals and commodities, etc). So because of this reason, I’m going to maintain a 10% allocation towards bitcoin and cryptocurrencies going forward.
Conclusion and Take-aways
- So I lost a lot of money. I got super depressed and wanted to kill myself at times. But at the end of the day, it was my fault and my mistake so I can’t blame anyone else other than me. I got too prideful and greedy, looking for a fast profit. It clouded my judgement. But it is what it is. That’s life and there’s absolutely no point on continuing to live life looking at the back mirror. I’ve done the moaning and the complaining and the kicking myself, so now it’s time to look in front of me towards the future.
- Only God knows the future. Not me or anyone else can predict what happens in life. So it’s important to stay humble and not let pride cloud my judgement. It’s also important for those of you who are reading this to know that no one’s living a perfect life, so don’t believe what you see on social media. What you see are the highlights of peoples’ lives. You rarely see what’s happening behind closed doors. So don’t beat yourself up and don’t compare yourself to others. It’ll only harm you mentally and emotionally.
- Learn from your mistakes, and try again. As long as it’s not a fatal mistake (in other words, one that results in death), you’re still alive right? You’re breathing and you still have your abilities. That means you can try again! And don’t forget that everyone wins some and loses some. No one can win all the time, so letting mistakes and losses control your life is fruitless.
- From an investing standpoint, I will refocus my efforts back onto the stock market, which is what I’m good at and is also where I made most of my money. That said, I will continue to maintain a 10% allocation towards bitcoin and other alt-coins going forward to keep a balanced portfolio. Anything too extreme towards any side of the spectrum usually spells trouble; so denouncing all of crypto and saying that there’s no future in crypto and blockchain technology would be reckless as well.
- Lastly, God is good. He’s been good to me and my family. I don’t deserve anything and all that I have is His anyways. And guess what? I can’t take any of this money to my grave, right? So when I think about it that way, it again reminds me the important things in life. I have God, my friends and family, and my health. These are huge blessings. Many people don’t even have these things, so it would be short-sighted to not feel grateful.
I’ll end this post with this video.
I recently came across it and it’s really blown my mind and reminded me how blessed I am and how much poverty there is in this world.
I highly recommend you give it a watch. If this doesn’t change your mindset, I seriously don’t know what will.
BBC News video: Would you eat recycled landfill meat?