About 40 percent of those between 24 and 35 have at least $1,000 in their savings account. That may not sound like that much, but 19-year-old bitcoin millionaire Erik Finman says that’s enough to invest in cryptocurrency.
The teenager has had some luck with the cryptocurrency growing up: At age 12, Finman used a $1,000 gift from his grandmother to buy his first bitcoin and by 18, he became a millionaire. He currently owns 401 bitcoins, which equals $3.4 million at a rate of $8,512 a coin.
In an interview with CNBC Make It, he offers this advice to other young people looking to join the crypto-craze: Invest 10 percent of your income into the top cryptocurrencies, especially bitcoin.
“I’d just put it into bitcoin,” he says. “I think bitcoin is the safest cryptocurrency right now.”
However, experts are generally more wary about investing in bitcoin, given its volatility: Although it reached $16,000 just weeks ago, a single coin currently goes for nearly half as much.
JPMorgan Chase CEO Jamie Dimon famously dismissed the cryptocurrency as “a fraud.” At the Delivering Alpha conference presented by CNBC and Institutional Investor, he added, “It’s just not a real thing, eventually it will be closed.”
CNBC’s Jim Cramer agrees. On “Squawk Box,” he likened the cryptocurrency to “monopoly money,” adding, “It’s just pure gambling at this point. I mean, if you want to gamble, go to Vegas. Vegas is fabulous.”
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Additionally, it’s important to note that most personal finance experts suggest you live by the 50-30-20 rule, by which “50 percent of your income goes towards necessities, 30 percent towards discretionary spending and 20 percent towards saving.”
In that case, you’d consider investing some percentage of that 20 percent you’re saving, as opposed to the full 10 percent of your income that Finman recommends — and in a diverse portfolio, not just in high-risk investments like cryptocurrency.
“NEVER BEFORE HAVE YOUNG PEOPLE BEEN ABLE TO CHANGE ECONOMIC CLASSES SO QUICKLY.”
Finman is particularly bullish on bitcoin: He says it’s currently your best bet, though he notes that another coin could eventually take the top spot. However, he predicts that won’t happen for a while.
“Putting money into bitcoin right now is good,” he says. “That may change because there may be a better solution. But I think that better solution will be very obvious and will be a long time coming so you can make that switch.”
Finman has previously stated that investing in cryptocurrency is one of the fastest ways for young people to attain wealth. “Cryptocurrency represents the largest transfer of wealth our generation has ever seen,” he wrote on Twitter. “Never before have young people been able to change economic classes so quickly.”
Still, he adds the same disclaimer as Mark Cuban: Only invest what you’re willing to lose.
Once you’ve determined the amount of money you’re putting into bitcoin, says Finman, keep it there, while still closely watching the market in case an obvious better currency comes along.