Should I pull the plug or should I double down?
In November 2022, this question kept me sweating and staring at my phone screen, day in day out.
Earlier that year, I made a “brilliant” decision. My wife wanted a house and I had more than enough bitcoin (BTC). But I did not want to sell. The simple and rational solution: post BTC as collateral for a loan and keep both. While this is not bad in and of itself, events turned against me. And I had no exit strategy or room to maneuver. A “rational” investing decision had turned into an emotional rollercoaster. In the end it was made for me.
I no longer owned my 30+ bitcoin, once valued at over $3m. BlockFi, the custodian I had trusted, filed for bankruptcy. To make it worse, I eventually lost the house too (though that is a story for another time).
An overnight 90% loss of my net worth.
Feelings of shame, doubt and fear dominating my waking hours. Many more hours spent lying awake worrying about the future. My whole identity as a saver and savvy investor put to question.
But there was a lesson in it. And all I had to do was pick up the pieces and move forward. Never again will I trust a significant part of my net worth to a single third party. Build the next phase of my life on one key principle: maximize the return on my investments while sleeping soundly.
This newsletter is for people building long-term wealth, especially those who paid tuition in losses.
Scar Wealth is born
In this weekly newsletter, I will share my systems and concrete investments. None of this is financial advice. It simply is what works for me, and might inspire similar approaches.
My goal is to share what I've learned so you can build a solid financial foundation, or take the pieces that fit and build your own.
The Velocity & Accretion System
Use a dollar more than once. Compound the cycle. Build long-term safety.
Build a personal bank, which funds short-term investments, providing cash to redeploy. Each cycle, your bank grows.
This system came from the wreckage. It’s not complicated, it has optionality built in and cash never sits idle.
Reply to this email with comments or questions. In the coming weeks, I'll break down each piece of the system and share more of the mistakes that built it.
What is the most expensive financial lesson you’ve learned?
Why Beehiiv
Easy: the simplicity convinced me that starting a newsletter was not that much work! Try it 🙂