2020 has been a wild, crazy, and difficult year for many people for a variety of reasons. People have been furloughed, laid off, had their business shut down, found themselves sick, and isolated from their friends and family, while 350,000 others have lost their lives. The coronavirus pandemic has effected nearly everyone in the United States in some way. With that said, now isn't the time to beat yourself up about something this is completely out of your control. Financially, I was fortunate enough to get through 2020 while meeting my financial goals, but I sacrificed in other areas. Regarding my health and fitness, for example, my 2021 goals are exactly the same as they were in 2020. Setbacks are ok, and expected in life. What's important is that you identify the obstacles and find solutions to overcome them. Now that we're on the same page, I'll explain a little about my best financial decision of 2020.
In October, my 2006 Ford Mustang was involved in a hit-and-run while parked on the street (again). I hadn't really driven it since early March, because I work from home, and primarily use my car to get to the gym and back, and occasionally to drive back to visit my family in Wisconsin or work on my rental properties. With the pandemic in 2020, the gyms were all closed, and family visits were nearly non-existent. I had just finished building a gym in my office, and decided that the hassle of owning my car wasn't worth the value I was getting in return. I did a little research to see what the car was worth, and listed it on Craigslist for more than I thought it was worth. I fully expected very little interest, and was hoping to sell it sometime over the winter or early spring after haggling with a few buyers.
I was surprised to hear from a buyer with cash on Nov 10th, who was willing to pay the full asking price of $4,400 that day. We met at my bank in my neighborhood, completed the paperwork and the car was sold. But that's only the first half of the transaction. I was happy to sell my car, since cars are a depreciating asset, and I wasn't even using it enough to justify the cost. What I did with the $4,400 was nearly as important.
In November I was looking to incorporate more diversity in my investments. The market had completely recovered from March crash, and I didn't (and still don't) feel good about the many of the prices of stocks in the market. Even with a COVID-19 vaccine being currently administered, I think we're due for another market correction. That, along with Preston Pysh's (The Investor's Podcast) conviction in Bitcoin, led me to research it a little further. After reading books like Inventing Bitcoin, and The Bitcoin Standard, I decided that I wanted at least a little exposure to bitcoin, just in case it does perform well. So after selling my care on November 10th, I bought $4,000 worth of bitcoin through Coinbase that day at a purchase price of about $15,500. Since then, the price per bitcoin has more than doubled and is around $32,800. That's a return of more than 111% in just a few months and makes the $4,000 I invested from my car now worth $8,444. I don't know what that car is worth today, but I know it's not worth $8k.
This is just one example of the power of investing capital in appreciating assets. I wouldn't suggest anyone go out and sell their house, or stocks to buy bitcoin, but if you have capital that's just sitting around losing value and providing you with very little benefit, it's not a bad idea to transfer it over to appreciating assets. Accumulating appreciating assets and building your own net worth is the key to personal financial freedom. Good luck in 2021, and always be on the lookout for new and diverse opportunities.