{"id":267432,"date":"2021-06-05T17:02:00","date_gmt":"2021-06-05T14:02:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/opinion-whats-a-better-investment-bitcoin-or-a-roth-ira\/"},"modified":"2021-06-05T17:02:00","modified_gmt":"2021-06-05T14:02:00","slug":"opinion-whats-a-better-investment-bitcoin-or-a-roth-ira","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/opinion-whats-a-better-investment-bitcoin-or-a-roth-ira\/","title":{"rendered":"#\n  Opinion: What\u2019s a better investment? Bitcoin or a Roth IRA?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3f3f2fa61dd\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3f3f2fa61dd\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-whats-a-better-investment-bitcoin-or-a-roth-ira\/#Paul_A_Merriman\" >Paul A. Merriman<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  Opinion: What\u2019s a better investment? Bitcoin or a Roth IRA?<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\">\n<\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\">\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000292881\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       More and more these days, I\u2019m getting questions \u2014 mostly from young people \u2014 about investing in bitcoin and similar products.<\/p>\n<p> They hear about quick, huge profits. They think they should hop on board. Of course they have also heard of huge losses in cryptocurrency.<\/p>\n<p>But for many young people, the lure of fast, easy money is much more compelling than the risk of losing your shirt.<\/p>\n<div class=\"paywall\">\n       Read: How to have more money for retirement without saving $1 more<\/p>\n<p>I understand. More than half a century ago I was just getting my feet wet in the investment business. I made what I thought was an investment (now I realize it was really a speculation) on a commodities futures contract.<\/p>\n<p>I doubled my money in less than a week. Man, did I feel smart! I had started to understand (I thought) how investing worked.<\/p>\n<p>I knew what to do: I took all that money and reinvested in another contract. And quickly lost it all. In the process, I learned a more valuable lesson about how investing <strong>really<\/strong> works: Losses can come as quickly and easily as profits.<\/p>\n<p>I remembered all this recently as I was talking (separately) with a couple of investors who seemed about to take the plunge into cryptocurrency. One was 28, the other 30.<\/p>\n<p>The amounts of money they proposed to invest were relatively small \u2014 $40 in one case and $400 in the other. Each one told me it was money they could afford to lose.<\/p>\n<p>To get a handle on their mind-set, I listened to <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nytimes.com\/2021\/05\/14\/podcasts\/the-daily\/dogecoin-cryptocurrency-bitcoin.htmlstr\" class=\"icon none\">an interview<\/a> with an investor in dogecoin who said he parlayed his first investment into several million dollars.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>Read: The best way to have plenty of money in retirement<\/p>\n<p>As I listened, part of my mind became anxious about the losses he could encounter; another part of my mind wanted to cheer him on as he fought what he regarded as a battle against Wall Street.<\/p>\n<p>The two investors I spoke to each seemed to want to show Wall Street how investing should really work. I recognized that feeling.<\/p>\n<p>I knew better than to tell these two what to do. Instead, I tried to educate them.<\/p>\n<p>Bitcoin, dogecoin and many other varieties of digital currencies don\u2019t have any long-term histories. They aren\u2019t regulated. They aren\u2019t legal tender. Their value is determined purely by supply and demand.<\/p>\n<p>Both of these young people have jobs. Neither had set aside any money in an IRA, which would certainly save them taxes.<\/p>\n<p>So I painted an alternate picture: Inside a Roth IRA, their money could grow tax-free. I described an established investment with a history of above-average long-term returns: small-cap value companies.<\/p>\n<p>As an asset class, small-cap value has some of the volatility these young people crave. But it also has a history of rewarding investors with patience.<\/p>\n<p>When you examine the U.S. small-cap value stock index back to 1928, you will find that the average 40-year compound return was 16.2%. (The best 40-year period\u2019s return was 19%; the worst was 11.6%.)<\/p>\n<p>Toward the low end of that scale, at 12% a one-time investment of $400 would become $37,220 if it were left alone for 40 years.<\/p>\n<p>Over the years, most young people could afford to invest much more than $400, of course. But let\u2019s trace the results of just this very modest one-time investment.<\/p>\n<p>If you retired with $37,220 in a Roth IRA and began taking 5% annual withdrawals, you\u2019d have $1,861 to spend in your first year of retirement.<\/p>\n<p>If the investment continued to earn 12% and you continued to take out 5% a year based on the increasing balance, you would have $8,248 to spend in your 25<sup>th<\/sup> (and perhaps final) year of retirement.<\/p>\n<p>During 25 years of retirement you would have taken out $108,045. Your account at that point would be worth about $156,712, which presumably would go to whatever individuals or entities you designated as beneficiaries in your IRA.<\/p>\n<p>The math in this scenario is impressive. For only $400 (probably less than the cost of a weekend beach getaway) you would have generated $264,757 \u2014 all of it tax-free.<\/p>\n<p>Just imagine what would be possible if you did that with $400 every year before you retired.<\/p>\n<p>Of course there\u2019s a downside to this plan compared with putting $400 into a cryptocurrency.<\/p>\n<p>The Roth IRA I described won\u2019t dazzle your friends or give you bragging rights. It won\u2019t let you thumb your nose at Wall Street or old guys who think people should be sensible with their money. It won\u2019t make you a quick millionaire or let you lose a fortune overnight.<\/p>\n<p>In short, it\u2019s pretty boring. Worse still, it requires a lot of patience. What a drag.<\/p>\n<p>I think there\u2019s a middle ground that could make sense for many people.<\/p>\n<p>Start by maximizing your Roth IRA at $6,000 for one year. (Multiply the numbers above by 15 and you\u2019ll see the impressive payoff.)<\/p>\n<p>After that, if you can still \u201cafford to lose\u201d $400, go ahead and invest it in cryptocurrency and see what h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ens.<\/p>\n<p>Better still, sock that $400 away toward next year\u2019s Roth IRA contribution.<\/p>\n<p>Like many people, I\u2019ve been curious about cryptocurrencies, and I have talked to many investing experts. Not even one has been able to explain why it could make a lot of money for me over the long term. The best rationale I\u2019ve heard for investing in bitcoin is some variation of \u201cIt\u2019s going up.\u201d<\/p>\n<p>This reminds me of a quote often attributed to Will Rogers: \u201cDon\u2019t gamble. Take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don\u2019t go up, don\u2019t buy it.\u201d For more on this topic, here\u2019s <a rel=\"nofollow noopener\" target=\"_blank\" href=\"http:\/\/paulmerriman.com\/sex-food-money-and-the-impact-of-emotional-decisions\/\" class=\"icon none\">a recent podcast<\/a> I recorded called \u201cSex, food, money\u2026 and the impact of emotional decisions.\u201d<\/p>\n<p><em>Richard Buck contributed to this article<\/em>.<\/p>\n<p><em>Paul Merriman and Richard Buck are the authors of\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.amazon.com\/Were-Talking-Millions-Supercharge-Retirement\/dp\/1736119605\/ref=sr_1_1?crid=3BA3IVOXW372H&amp;dchild=1&amp;keywords=we%27re+talking+millions+merriman&amp;qid=1606681437&amp;sprefix=merriman+talkin%2Caps%2C200&amp;sr=8-1\" class=\"icon none\">We\u2019re Talking Millions! 12 Simple Ways To Supercharge Your Retirement<\/a><\/em>.<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Paul A. Merriman\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Paul_A_Merriman\"><\/span>Paul A. Merriman<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<div class=\"mw-author-contributor\">MarketWatch Contributor Network<\/div>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-7478-117F737D0F7D%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Opinion: What\u2019s a better investment? Bitcoin or a Roth IRA? &#8221; More and more these days, I\u2019m getting questions \u2014 mostly from young people \u2014 about investing in bitcoin and similar products. They hear about quick, huge profits. They think they should hop on board. Of course they have also heard of huge losses&#8230;<\/p>\n","protected":false},"author":1,"featured_media":267433,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-267432","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/267432","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=267432"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/267432\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/267433"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=267432"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=267432"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=267432"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}