Few investors use the words “cryptocurrency” and “retirement” in the same sentence. But as an asset class, it has plenty of bulls — and history hasn’t proven them wrong yet.
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If you’re crypto-curious and wonder how the notoriously volatile asset class could help you retire early, consider the following unconventional investing ideas.
Can Crypto Help You Retire Early?
Over the last decade, the price of Bitcoin has risen 13,438% (from around $488 to around $66,054). The price of Ether has risen 1,027,903% (from $0.31 to around $3,187).
The math alone proves that cryptocurrencies could help you retire early. No other asset class has even come close to these returns over the last decade.
Of course, “could” doesn’t always mean “will.”
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Is Crypto a Reliable Retirement Investment?
Cryptocurrencies come with enormous price volatility. It’s precisely what’s enabled those astronomical returns in the first place.
And volatility is one of the main measures of risk in investments. Sure, your investment could double in a week. Or it could be cut in half, or worse.
Bear in mind that cryptocurrencies don’t generate income of any kind — your returns solely rely on price growth. Without revenue, there’s no underlying value to measure, which makes them speculative investments.
No matter how bullish your feelings on crypto, you shouldn’t bet your entire financial future on it.
That doesn’t mean you can’t put any bets at all on it, however.
How To Invest in Crypto To Retire Early
If you dream of early retirement with the help of a cryptocurrency rally, keep the following tips in mind.
Know your retirement target numbers
To hit a target, you need a target to aim for.
How much do you actually need to retire early? You need to know when to cash out your coins and walk away, having bet and won.
Financial experts write entire books about calculating your retirement numbers. But as a shorthand, start with the 4% Rule. It states that if you withdraw 4% of your nest egg in the first year of retirement, and adjust your withdrawals for inflation thereafter,…
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