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It pays to take her advice.
Key points
- Bitcoin, like all cryptocurrency, is a fairly speculative investment.
- Financial guru Suze Orman says to only invest if you don’t need the money anytime soon and can afford to lose it.
There was most likely a point in time, and not so long ago, when you never even heard of Bitcoin. But nowadays, it’s all over the news and has gained popularity among investors.
In fact, a lot of people have made a nice amount of money with Bitcoin, and so you may be at a point where you want in on the action. But if you’re going to buy Bitcoin, it’s important to do so under the right conditions. And financial expert Suze Orman has some key advice in that regard.
Be very careful with crypto
Orman says that if you’re going to buy Bitcoin, you should only invest money that:
- You don’t need or expect to need for a long time
- You can afford to lose
The first point is actually applicable to any investment you might make in your brokerage account. You never know when the value of a given investment might plunge, so it’s important to only invest money you don’t anticipate using for many years.
So if, for example, you have $20,000 you’re hoping to put toward a home down payment in the next two to three years, investing it (whether in Bitcoin, stocks, or something else) is generally a poor choice. Rather, that $20,000 should sit in cash in the bank, where you won’t risk losing out on any of that principal.
Orman’s second point, however, speaks more to the risks involved in buying Bitcoin — or any cryptocurrency, really. While there’s no guarantee you won’t lose money with more established investments, like stocks and bonds, digital currencies are notoriously speculative. That means they don’t have a long history behind them and it’s hard to know how much staying power they have.
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