How to Diversify Your Investments with Crypto with Matthew Thompson

INTRO:

Hey hey, Kathryn here! I’m so glad you’re tuning in. If you’re new to the show, welcome. I’m so glad you’re here. If you’ve been around for a bit, you know I’m all about keeping it real with you. Showing you all the sides of entrepreneurship (& life). I mean it’s all connected, right? 

I shared one of my favorite Brene Brown quotes,  if you’re not in the arena getting your ass-kicked, I don’t want your feedback. Well, I want you to see me as your friend in the arena equally getting my ass-kicked but inspiring you to keep going because I get it. I’m living it too.

And that the perspectives I share on the show are real life, in the arena types of perspectives, like the one I’m going to share with you today.

But before I do, I want to share an exciting opportunity with you. On Sunday, February 6th I’m hosting another private training showing thought leaders, changemakers, coaches, and consultants how to create killer messaging in their business that not only sounds like them but sets them apart as a leading authority in their industry.

This training is money…and if there is anything a business owner should invest in, it’s their ability to articulate what they do in a unique and compelling way.

If you’re in business, you’re in the business of words! Words are what connect us and without connection, you’ll have a hard time selling let alone creating the change you want to see happen in the world.

So, if that sounds like something you’re wanting to learn, head on over to the link in the show notes and apply now, or visit creativelyowned.com/joinuslive

Now let’s dive into the good stuff for today. Who is ready to dive into blockchain and cryptocurrencies? I know my interest is definitely sparked. My little brother Matthew is joining us today to share how you can get your feet wet with crypto and start diversifying your investments. He’s been in the financial industry for over 10 years and is currently being certified at MIT in their Blockchain Technology. 

So without further adieu let’s welcome Matthew to the show.

PRE-RECORDED INTRO:

00:20 Kathryn

Hey, hey, I'm super stoked to have my younger brother on to talk all things crypto. I know it is a hot topic right now and I get lots of questions. My spouse has been asking him tons of questions. And so I just want to turn it over to him to share who he is and what he does, so that we can dive into the whole crypto talk.

00:43 Matthew

Hi, happy to be on. My name is Matthew. I'm Katherine's younger  brother. Like she said, I graduated from University of Saskatchewan 2010 with a management degree and worked in the accounting field for 10 years before kind of branching off onto my own and finding my way to blockchain which everyone seems to be gravitating towards. So I've been working in the blockchain space for about a year and a half. Now, I'm currently enrolled in MIT going through their blockchain program for executives.

01:22 Kathryn

So cool, so cool. And yeah, you had mentioned that people are gravitating towards the blockchain. So I want to talk a little bit about that. First, I want to start by distinguishing between blockchain and crypto because I know I used to call it Bitcoin and you corrected me it's not bitcoin is Bitcoins, one coin,

01:41 Matthew

for sure. And I mean, I still use Bitcoin as like an overall descriptor because it is the easiest thing to kind of gravitate to and everyone knows what it is. Yeah, um, Blockchain is the underlying technology, which all crypto coins and tokens are traded on. So block, yet blockchain is the foundation of the market.

02:04 Kathryn

Okay. And when people say that blockchain is web 3.0, what does that mean?

02:11 Matthew

Well, yeah, it is. It's the infrastructure of a new internet, a decentralized internet. So the internet that we know today is basically owned by Amazon, Facebook, Google, the big incumbents. And what a decentralized blockchain internet is is supposed to do is give kind of the power back to the users. So instead of all information being on one central database, that database is just spread out, distributed or decentralized.

02:46 Kathryn

Gotcha, gotcha. And so crypto is the money piece of it. Like blockchain isn't just all money. Like you said, there's the decentralized web 3.0. But crypto is what the investments and then money piece of it is correct.

03:03 Matthew

So yeah, the crypto coins and tokens represent value. They can but yeah, so they represent any type of value. And it's easy to think money. Money is the easiest descriptor. Yeah, they also represent data pieces. They can be non fungible tokens and fts. So they can represent real world assets, like houses or deeds or all sorts of anything really.

03:28 Kathryn

Ah, okay. So why should people now because I do also know that whenever we bring anything new into the market, there's skepticism around whatever it is right? There was skepticism around the internet, back when the internet started to come out. So why should one people trust crypto? And why should they invest in it or even look to invest in it at this point?

03:56 Matthew

Well, it's still in its infancy. So it's a good time to still get in. We're still early to the party. I think there's 200 million worldwide users. And in 1998, there was 200 million worldwide users of the internet. And we kind of know where that went, there's over a billion users of the internet now. And crypto will probably be there in five years from now. So we're still early and the investment opportunities are still are still good.

04:29 Kathryn

Yeah. So is there a benefit to adopting early or like sitting back and kind of waiting?

04:36 Matthew

I mean, the opportunity cost of waiting is you don't make money in the midterm. But I mean, you can wait but there's more good. Yeah. I like so we could probably stop the recording. Yeah. I was just gonna clap at that mic, so he knows Oh, Is that what it is? Yeah. Yeah. So what's the question there? Yeah. What's the benefit of waiting? Or why would you wait?

05:09 Kathryn

Yeah, like if people are skeptical now, with crypto and everything like why would they? Should they wait? Or should they get in?

05:21 Matthew

Like it was sit on the sidelines, I'm obviously it's risk. There's risk involved. So you don't want to like, take out a second mortgage on your house and put it all into the market? Yeah, you know, that wouldn't be smart. But to slowly start to build positions and good projects would be a good idea.

05:40 Kathryn

Yeah. So where should people start? If they're, like, completely fresh with this, they have no idea what they're doing? Like, what are some? Like? What would you recommend to somebody just dipping their toe into this?

05:52 Matthew

Yeah, the easiest thing to do would be to find an exchange that you trust. So something like get crypto.com It's got a big name Coinbase, big name, sign up with them, and make your first purchase. So transfer, you know, $100 from your bank account to this exchange, and buy your first $100 of Bitcoin? Yeah, or Aetherium.

06:16 Kathryn

Yeah. So how do you know what coins to invest in? Like, because they are ranked? So how do we know which ones to or are good ones to go into? Like, where would you even find that info?

06:28 Matthew

Yeah, so I use coin Gecko, coin market cap. COMM also is another search engine. Yeah, they're ranked by market cap. So everything is ranked by market cap and market cap just means the value that the market has given a certain coin. Obviously, the higher the value, the less risky that asset becomes on the charts.

06:55 Kathryn

Okay, so Bitcoin sitting at the top?

06:58 Matthew

Yes, bitcoins almost got them, or has reached a market cap of 1.5 trillion. It's currently down sitting at about $800 million in,

07:09 Kathryn

Okay. And how much do those fluctuate? Like, could something in 200? Ranking, all of a sudden spike up to like, 10?

07:20 Matthew

Yeah, so I mean, the lower the market cap, the actual, the easier it is for it to grow, less money needs to come in to make it move to make Bitcoin, say double its market cap. Another trillion dollars has to come into the market, which takes time.

07:39

Yeah, okay. Okay. And so have somebody say, put $100 down and say they made some money or whatever on it? Like, how can I know the understanding? Is they Okay, they've got these coins, and they've got this money or value sitting there? Can you go and buy something at the grocery store?

07:58 Matthew

In some places? You definitely can. And I think we'll see more adoption. Yeah, Bitcoin in general, has kind of moved into a store of value. So I would like to use it as a medium of exchange. It's technology is slow, and it won't become a medium of exchange. Right? There's other currencies that are much quicker.

08:23 Kathryn

Okay. So, but you when you do make money, like any investment, you could take it out.

08:30 Matthew

Yeah, there's, I mean, there's always times to take profits, especially in crypto because of the volatility. Yeah, there's definitely times where you want to take profit. I set my portfolio up into three sections. A long term hold section, which I don't care about daily price action, I just want to acquire Bitcoin. Aetherium polka dot Cardano. Yeah, in the long term. So I won't really take profit on those. Yeah. My midterm section, I'll take profit in the short term and my short term section, I'm always taking profit.

09:07 Kathryn

Okay. So why do you do that? Like, I know that, for instance, if you invest in like an RSP, the idea is like that, you know, let it sit there, let it grow for retirement. Why are you setting up your profits? Like you've got the long term and then you've got short term?

09:25 Matthew

I'm just trying to build capital with in the mid short term, so I'm not they're not necessarily long term investments, they're more I want to grow my capital so I can buy more Bitcoin.

09:37 Kathryn

Okay. Okay. So you're reinvesting it basically? Always Yeah. Okay. Okay. So, you talk about how volatile it is. There's lots of drops and spikes. Why are both of those points really good?

09:57 Matthew

Well, the top of The market is good. So you can take profit, like you should never be buying at the top of a market, right? Retail FOMO kicks in, and the herd kind of rushes in and drives the price up, you should be selling to those people. And most people are the herd when they first get into the markets, because they start hearing about it on the news, they start hearing about it from their friends, and they're like, oh, maybe I should get in. But in reality, that price has already gone through the roof. Right? People like me are selling to the herd.

10:37 Kathryn

Yeah, so people buying at the top. And so I know people again, freak out, like anytime you're watching your investments, I try not to watch investments.

10:46 Matthew

Yeah, it's tough. Yeah.

10:48 Kathryn

So when it drops when it drops, right, like, dropping also is a benefit because that's when most people buy, that's a good buy.

10:57 Matthew

That's one smart money buys for sure. Okay, but it's like I it's, it's the inverse of how, you know, the herd things. So it's like, when people are panic selling, when we go into a bear market, or an extended bear market, you should be looking for opportunities, you should be really getting down to the fundamentals of a coin. So the vision the team, its partners, its tokenomics and finding good projects that are cheap. Yeah, because the market always swings. So if you can get in on those prices and hold be able to hold for a couple of years, maybe the chance of profit is much, much higher.

11:38 Kathryn

Okay. So for the the newbie user, or like the non-investment human that doesn't know investment terms, what is a bear market?

11:49 Matthew

A bear market is just it resembles like a recession. Okay, if so, if you know what a recession is, yes, when coins are underperforming, or stocks are underperforming, the economy's not performing as well. So Bitcoin right now Aetherium, the whole market is about 40%. Under its all time highs, which would be considered a bear market.

12:14 Kathryn

Okay. Okay. Okay. And so what would you say are some of the mistakes then that people are currently making when they're getting into this game? 

12:26 Matthew

Yeah, Imean, we touched on it, people buying too much at the top, you know, like FOMO in into coins. And not really just not having a strategy as well. So not understanding what you're investing in, you should always at least have some understanding of what's going on. You should never invest more than you're willing to lose. Because you can, it can go to zero. Yeah, we'd be in a lot more trouble than just your investments going to zero if they go there, like the world would be on fire. But yeah, it is. It is a possibility. Yeah. Um, yeah. overleveraged not managing not managing your risk. So again, just putting too much money in.

13:14 Kathryn

Yeah. Do you see the excitement around it? Like, whenever there's something new, like almost like trend hopping, right. So it's like, you're excited. And it's like, oh, man, like, I could make a million dollars. Like, I'm gonna just go all in on this.

13:30 Matthew

Uh, yeah. And again, I've been there. Yeah. But, and so that, that is FOMO. That's retail FOMO. Again, if you're hearing about it from a friend of a friend of a friend, the, like, don't buy it. Don't buy it that time, research it, it's likely not what the people are telling you.

13:54 Kathryn

Right? And so I guess, you know, on the contrary to that, like, how do people what's the flip side then? Like, how do people avoid some of the mistakes? What are some tips you can offer people to avoid the FOMO to invoice avoid trying to make a million dollars overnight? I mean, it would be a dream, right? If we could, if we could do that.

14:19 Matthew

I mean, there's no such thing as fast money except it's like blood a lottery. So this isn't a casino as much as people think that it is or gambling to avoid it. Always just try to play devil's advocate when you're making investments or try to come at it from the other side be like if, or Yeah, okay, maybe stop it again. Hold on. So let's the question and the question is how do I avoid mistakes?

14:56 Kathryn

Yeah, so if people were you know, How do they avoid the mistakes? Right? Because if they're excited to get into this, and they want to do this, and they might have that FOMO or they're seeking that million dollar overnight payment, like, how do they avoid it?

15:13 Matthew

Um, too well, you should always have a plan. So any should always start slow. Yes. Go to an exchange, start slow start dollar cost averaging. And so you're every week by the same amount. At the same time, no matter the price, you're not you're not searching, you're not writing, you have to build positions in certain coins, build positions and capital. If you want to make a million dollars, he definitely can. But it's gonna take years years of investing practice and knowledge.

15:48 Kathryn

Yeah. So would it be beneficial to hire somebody to manage your money for you? And are there people out there that are doing that now?

15:58 Matthew

Because I'm sure there are people out there that are supposedly managing your money, but in the blockchain crypto space, never send money to someone in Yeah, in hopes of them going to make you a million dollars because it's likely a scam. First of all, there's lots of scams in the industry. And it's just not realistic. Yeah.

16:21 Kathryn

Okay. Yeah, I just I, you know, again, when I think most of the people that are listening, and the listeners are going to be our new basically, they're there, they're not going to know anything about, you know, where do they even start? And, and I have seen lots of people out there, you know, reaching out to people I like, I mean, this is probably about a year ago, but getting, you know, people coming into the DMS being like, hey, you know, crypto is awesome, like, come with me, and I'll show you how to invest in crypto and all that sort of stuff. And so just try to avoid some of the Yeah, pitfalls that might come with, again, a new industry, that sort of thing? For sure.

16:59 Matthew

Yeah. It's there's definitely full of scams, it's part of it, I guess. But anyone that's like reaching out to you and asking you to send them Bitcoin or send them money, and they'll come back to you next week with you know, 10,000 or $20,000 is trying to scam you. Okay.

17:20 Kathryn

And I think that's some of the skepticism around it. One. I think anytime that like I said, there's something new, there's that skepticism around, what is this? I don't know what it is, but also trying to make sense of it. Because we're so used to like, paper money, right? We've got bills, or a debit or a visa. And so it's like, trying to make sense of like, what is the what is crypto? And how does it even work? For sure. Um, so what would you say then, to somebody again, like what, you know, they're again, they're just starting out, you know, like, the first thing to do, what if they don't have time to do the research?

18:03 Matthew

Join my group.

18:05 Kathryn

Yeah, awesome.

18:09 Matthew

So I'm token finance, I have an Instagram page @tokenfinance. By the time this comes out, my website will be up and running www.token.finance.ca. And I have a group on Facebook, and we're playing around with the idea of moving it to telegram or discord. But for now, it's in Facebook. So it's a free group. I give all sorts of information in there on opportunities project reviews. Yeah, everything trade opportunities, my opinion on where the markets going up, down, left, right. Awesome. So that's one one way to go. And then there's lots of other good groups out there. There's lots of other good places to research coin Gecko coin market cap, go to the coins websites, and read their white papers look at their visions look at their teams look at their partners and make educated decisions.

19:08 Kathryn

Yeah, and if you're uncertain or unsure, right, like obviously maybe it's you're not investing or you're not you're not putting a ton of money into one coin or whatever, right it's just it's getting getting the knowledge getting the information before you decide to Yeah, remortgage your house.

19:27 Matthew

Good. Yeah. Get your feet wet, sign up for an exchange get used to send in your money from from your bank account to an exchange, making a purchase, and then maybe sending that Bitcoin to a wallet. So

19:41 Kathryn

yeah, is there ways of testing it without real money?

19:45 Matthew

Um, there's two trade you can trade on paper. But to like, send your money from your bank account to an exchange? Yeah, you're gonna just have to trust it.

19:58 Kathryn

Okay. I just mean like, yeah, just as to start to try and test it first or just to kind of get your feet wet before Yeah, put some money down. But again, like you said, don't invest more than you're willing to lose, obviously. And if you're just getting your feet wet, you know start Yeah, obviously with what you can have. Yeah,

20:18 Matthew

like so for my, like, every Tuesday, I buy really small amounts of the same five projects, no matter their price, I plan on holding them and I buy $10 of each. So I buy $10 of Bitcoin $10 of dot $10 of Aetherium you don't have to. It doesn't have to be, you know, 1000s of dollars a week. Yeah, yeah.

20:39 Kathryn

Okay. That's, that's good to know. Cuz I think that yeah, it's that again, conception do I need to, you know, put down 20,000 or 100,000, to teach and to get into this game, and you can definitely do small, small trades. Are there any other tips you would have for somebody getting into this?

21:06 Matthew

I don't know. I mean, yeah. Again, it's just, it's just start small and research your projects? Under? And yeah, that's it.

21:24 Kathryn

Yeah. So yeah. So just just be knowledgeable about it. I did have one other question, I think, too, was the whole idea of the long term strategy. Like you're the goal is something that you promote is like, this is like to build long term wealth and investment within your life. Right. It's not like, you know, the overnight money success sort of thing.

21:45 Matthew

Yeah. And it's not the day traders on Instagram that are laying by the pool and trading and making so much money, and it only takes two hours a day. Any investment that you make in life should always have a long term vision. And this is, this is no different from any other investment. So yeah, be willing to hold hold for 10 years, 15 years, 20 years, and it will, it will pay you greatly.

22:17 Kathryn

So this is something obviously for somebody to diversify the investments that they maybe already have. For sure.

22:26 Matthew

Okay. Yeah. So I think, you know, like, lots of financial advisors out there. I'm not a financial advisor. Yeah. This isn't financial advice. Yeah. Well, financial advisors say, you know, five to 10% of net worth can be in cryptocurrencies, it is a risky asset. So, yeah, keep it all keep it in those lines, and you'll be saved for sure.

22:52 Kathryn

Awesome. Awesome. Well, it's been Yeah, it's such a pleasure to sort of dive in. I know, again, lots of our listeners will be excited to kind of learn about this, because it is something that seems to be gaining popularity, and you're starting to see some of the big name celebrities out there talking about the blockchain and crypto and all of that. So, again, such a pleasure to have you on and I know lots of people are likely going to still have questions. So I know you mentioned that you are the owner of Token Financing that they can find you on Facebook and Instagram @tokenfinance, and we will link that stuff up in the show notes. 

Now on Episode #36 – I feel like we’re covering a lot of really hot topics when it comes to business. And next week’s episode is no exception. I have Emily Perron on to talk about how to hire high-quality team members. And if you don’t know by now, building a team to support your vision is vital for your success, so be sure to tune into that episode.

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