Issue #18 - Bitcoin Haters are Right

May 27, 2024

Read time: 3 minutes

Hey friends! Back to you with the 18th issue of the journal. Hope you are enjoying it as much as I am. 


1. Personal Finance

Credit scores....

So, picture this: You pay off your big fat 6.5% variable rate mortgage.

You're feeling on top of the world. No longer a slave to your debt.

But just hang on a second...  your credit score decides to take a nosedive faster than you can say "what the &$%^?" 

Yeah, that's what happened to me.

My credit score, once a dazzling 875 (out of 900), dropped 28 points after I paid off the mortgage.

It got me thinking: Why are we penalized for actually being responsible with our money?

Shouldn't paying off debt be a reason to celebrate? Nope. Instead it's: "you don't owe any money? you're a loser!"

It's like we're living in some twisted financial twilight zone. 

Among other things, like being influenced to spend spend spend and keep up with Tommy Two Time, we're told that to have an A+ credit score, we need to owe lots of money, as long as you pay on time.  

Who's really benefiting from this shell game?

Not us. It's financial institutions laughing all the way to the bank.

Visa and Mastercard are both incredible businesses, their Returns on Equity are 50% and 100% respectively.

Good thing is, if you've been following along the Journal, you own these companies in your ETF portfolio already - so pat yourself on the back.

Anyway, debt is like that devil on the wrong side of your shoulder saying "buy that piece of garbage and just pay on time and you get an A+". 

Before you know it, you're drowning in interest payments and you feel like shit. 

So, what's the solution? Simple: better financial education. At home, in schools and in the entire community for that matter.   

Now, don't get me wrong; credit can be a useful tool when used wisely.

But let's not fall into the trap of believing that a high credit score is the key to success. 

Far from it. System needs a reset. 


2. Stock Markets

Love or hate Bitcoin, this video below is both hilarious and informative.

I will never recommend that someone buys BTC, but I think after 16 years of existence, a $1 Trillion market cap, it's worth paying some attention. 

If you want to learn more, start with this book: The Bitcoin Standard by Saifedean Ammous.

Read that first, then let's talk.


3. Real Estate

Stubborn inflation in the US has kept interest rates elevated and pushed out anticipated rate cuts everyone has been hoping for. 

As a result, the S&P United States REIT Index is down 5% YTD and is down 25% from the peak in December 2021.

And yet private valuations have barely budged. Something has to change. 

It's not a matter of if, but when.


1 Quote

“The more that you read, the more things you will know. The more that you learn, the more places you’ll go.”

― Dr. Seuss


A Question

Did you watch the bitcoin video? 

What are your thoughts on Bitcoin?

A) don't care, never will, it's a pyramid scheme.

B) interesting, but too complicated, so I largely ignore it.

C) own some, learning as I go.

D) own alot, it's the future. 



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Thank you

Eddie Gudewill, CFA


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