Recently, a friend and fellow Dad told me how life was getting harder for him.
And for his family too…
That’s because both him, and his wife, were busting their butts saving up for the down payment to buy a house. But the longer his family looked for their dream house, the more house prices have gone up. And in the past few years of searching, he now feels priced out of everything except fixer-uppers.
And he doesn’t want a fixer-upper house!
This isn’t the exception either. Zillow recently reported that the income you needed to buy a typical home has soared 80% since 2020.
I don’t know about you, but I didn’t get an 80% raise in the past few years.
And if you are like me, and also didn’t get that big of a raise recently…I’m sorry to say, but life has gotten harder for you and your family too.
That’s what I want to talk about today.
Two paths in life
I see two very different paths parents can take in life. One in which life gets harder financially. And another where life gets easier (at least financially).
And why should you care?
I believe once you see where the harder path leads, you’ll realize, like I have, that it is not sustainable. And along the way, you’ll see that it will mean more pain and stress for your family too.
Seeing and feeling the pain is a good thing though. It encourages us to actually make change happen. So let’s look deeper into this pain that we’re all feeling.
And before we do, here’s what I mean by a “harder” life:
- one in which things get more expensive around you, and at a faster rate than you get pay raises (like how much additional income you need to buy a house according to Zillow!)
- one in which you spend more time stressing about how you’ll pay for things (like where to live, how to take your family on a nice vacation, covering the costs of an unexpected car repair, etc)
On the flip side, here’s what I mean by an “easier” life:
- one in which things around you get more affordable over time (I know I know, this claim sounds outrageous right now, but by end of this article, it’ll make sense!)
- one in which you spend less time stressing about how you’ll pay for things like tuition bills, after school activities, etc.
Food for thought
Given the choice, I would expect all parents would rather put their family on a path where life is getting easier instead of getting harder.
Right?
After all, no one wants to:
- feel like they can’t buy a good house in a safe neighborhood
- think twice about signing your kids up for extracurricular activities because of how much it costs
- freak out seeing a huge bill from an unexpected ER room visit
- work overtime shifts or start driving for Uber in the evenings (after already working a full day) to help make ends meet
And yet, the reality is, MOST families are currently on the harder path in life.
Not a good trend
As parents, when we are on the harder path, it means we are spending less time with our families (since we’re working more / picking up a second job). And even when we are at home, it means we’re not really present because our minds are still stressing about money related problems.
And as things continue to get more expensive, you can extend this out and quickly see it’s not sustainable.
And yet, it’s the path most of us are barreling down. Again, not a good trend.
Why I’m writing this
I think it is messed up that for most parents, life is getting harder and harder.
As a Dad of two, I know that parenting is hard enough as is. And I’m also not a genius, but I know that having ever increasing money related stresses on top doesn’t help.
So, I want to show you a different path. This is a path my family has been on for over 10 years now, and a path where we don’t have plans to get off anytime soon. And best of all, it’s a path that I believe all parents can move over to (sneak peek: yes, it involves owning some bitcoin in your portfolio).
Let me explain!
The bad news
As I said above, as parents, we find ourselves on the hard path.
There are two things happening that continues to make life harder (at least financially):
- obvious thing: each kid comes with a price tag (ie. diapers, clothes, medical expenses, tuition bills, etc) that you have to keep setting aside money to pay for
- not so obvious thing: the cost of everything is also going up – groceries, rent, insurance, tuition, the price for a house. All going up. And worst of all, now, it is going up faster than you are getting a raise / promotion.
Since the price of everything is going up, like for my friend who is house hunting, it means he can either:
- try to save more / faster for the downpayment (ie. but in the process, life is getting harder because he has to work harder)
- settle for a fixer-upper house (ie. life is still getting harder because there will be ongoing costs related to fixing up the house or potential costs for private school if he is zoned into a crappy public school system)
- continue renting (ie. life is still getting harder because rent prices keep going up too)
Simply put, life is getting harder…
The good news
The good news is that there is a different path we can switch over to.
In truth, there always has been. But previously, it required a lot of work.
Previously, it meant some combination of working a day job AND investing. This could include things like (a) buying rental properties, (b) stocks, or (c) starting your own side hustle.
Whether called “financial independence”, “FIRE”, etc, the goal has always been to get to a point where you don’t have to trade your time for money anymore (ie. working a 9-5 for a paycheck). Instead, more and more, you rely on your portfolio of assets to pay for your lifestyle.
For many years, I was diligently following this path, having worked up to two rental properties, a diversified portfolio of stocks, and maxing out my 401k each year.
And my goal was to get to the point where the dividends from my stock portfolio covered my mortgage. And for the income from my rental properties pay for other monthly expenses like grocery bills, doctor visits, etc.
Along the way though, I realized a major flaw – this path required a lot of work. And I mean, A LOT of work.
Effectively, in addition to working a full time job, in the evenings and weekends, I was now also moonlighting as a combination of a stock trader, property manager, and small business owner.
After all:
- AC units on rental houses love to break down in the middle of summer…and when an angry tenant calls, I have to drop everything and get it fixed
- Stocks take time to research and a portfolio takes time to re-balance…each with potentially complicated tax implications
- Owning / operating a side hustle is a full time job to get up and running
So yes, while I was “getting ahead”, I was also working around the clock.
Now, I see a much better path for my family. One in which our financial life becomes less stressful (a good thing!). But one without sucking up all my free time and energy to fielding tenant issues, reading up on 10K/10Q statements, or trying to constantly grow a side hustle (a good thing too!).
And as a Dad with two young kids, I believe this is a much better long term path to take!
Hopefully by now, I’ve at least piqued your interest enough to wonder, “what is this path and how do I get on it?”.
If so, keep reading!
Here comes bitcoin…!
To be transparent, I believe you’ll need to own bitcoin in order to move onto this easier life path in the long term.
And to be clear, I’m not saying that owning bitcoin will fix all of your problems. Far from it. But, at least, for financial related problems (like how you are going to afford to buy a house), it can help relieve some of that stress.
So, how does bitcoin exactly come into the picture?
Simply put, bitcoin is the thing I believe all parents should own in their long term portfolio.
Why? Because when you do own bitcoin, things will starting getting MORE affordable. (and to be clear, this is a good thing!)
I know, you are thinking, “this sounds too good to be true”. So let’s look at an example to make this all make sense.
Example:
Roughly 10 years ago (2014 time frame), the price of bitcoin ranged from $250 – $1,000. Let’s assume somehow back then, you bought ONE bitcoin.
If, during that same time frame, you decided to then sell that ONE bitcoin, you could roughly go out for a nice omakase sushi dinner date night with your spouse.
Yum!
But, if instead of spending that ONE bitcoin for dinner, let’s assume that you held on to it as part of your long term portfolio (I recommend you do for at least 5 years…more on that here).
Now, poof, in this example…a few years goes by and now it’s 2017.
By 2017, you would immediately notice that same ONE bitcoin can now buy you a lot more than just a sushi dinner. By 2017, the price of bitcoin ranged from a low of ~$5,000 and a high of ~$20,000. So, if somewhere in 2017, you decided to sell that same ONE bitcoin, you could now pay for something much bigger, like a nice vacation, a home renovation project, or maybe even one years worth of tuition bills.
Not bad, right?
Now, imagine you didn’t get the sushi dinner in 2014, and you also didn’t spend it in 2017. Instead, you continued to hold it all the way until 2024.
Now, in March 2024, one bitcoin is worth north of $70,000. That means, that same ONE bitcoin you bought back then can now pay for a new car, make a major dent in the down payment for a house, etc.
(I hope you see where this is going)
What’s going on? Over time, owning bitcoin means increasing your purchasing power.
Visually:
- 1 bitcoin in 2013 = sushi dinner
- 1 bitcoin in 2017 = nice vacation or home renovation project
- 1 bitcoin in 2024 = new car, big dent in downpayment for a house
- 1 bitcoin in 20xx = new house? early retirement?
Put another way, instead of feeling like everything is getting more expensive, things will start to feel more affordable for you and your family.
Of course, it doesn’t happen overnight. The rub is that you’ll need to commit to hold bitcoin for at least 5 years (read here for more background).
Looking ahead though, I would not be surprised if that same ONE bitcoin (that used to only be able to buy a dinner back in 2014) becomes enough to buy a HOUSE in the next decade!
Remember, still that same ONE bitcoin you bought back in 2014!
And also, remember that you are getting this upside without the additional work that you would’ve needed to do (ie. fixing broken AC units, researching stock reports, etc) in order to get ahead.
So, if it had been my friend (who is currently trying to buy a house), and back in 2014, he was the one who bought a bitcoin, this ONE bitcoin could now make a big dent in his downpayment and let him afford his dream house.
I’m sure you are thinking, “I don’t have a time machine though!”. No problem. The same thing applies in 2024. Over the next multi-decade time horizon, my bet is that things around me will continue getting more affordable…as long as my family keeps holding bitcoin in our portfolio.
Recap
By owning bitcoin, my family has noticed that we are moving into a different path in life (at least financially). That’s because instead of everything getting more expensive, things feel like they are getting MORE affordable and MORE within reach.
And along the way, I’ve found that I also have more free time / energy to focus on what really matters. My family!
This is why my family owns bitcoin. And it’s why we will continue owning bitcoin for the long term.
Next time
Here is where it gets really interesting!
Let’s say because you read this blog post and buy some bitcoin. And over the next 5 years (since that is the minimum time horizon you need to commit to own bitcoin in order to get the benefits), you also start feeling like life is getting easier too.
This is great, but…it’s only the beginning of how your life really starts to change (for the better). And it’s what I’ll talk about next time!
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