How to find funds for crypto investments?
Unorthodox ideas for times when you are short on cash
Due to the very nature of this article, we must put our standard disclaimer before we get started: this is not financial advice. This is just an opinion by some random guy on the internet. Do your own research.
With that disclaimer out of the way, let’s begin.
You are interested in the blockchain technology, of course, you are here for the technology but you are not going to say no to crypto riches. We understand without judgment.
The only problem is that you do not have spare cash lying around, especially when the market is at the best of bear times. This is a problem that most crypto people can definitely relate to.
How then do we take advantage of one of the lower points of the bear market to get in?
Before we talk about some of the options that may help you get cash without busting your bank – make sure your liquidity is not hampered due to taking any of these steps. Crypto space is extremely volatile and there is a possibility that you might lose everything. This space is not for the faint of hearts.
Let’s look at some options you might have and may not have thought about.
Tapping into 401(K)
Tapping into 401(K) is a taboo topic in the financial world.
“You never touch your retirement nest”, they say. Well, then again, there are people who never skydive. Crypto space is like skydiving: a whole lot of money – a whole lot of disclaimers – a whole lot of risk for a 60-second rush. Those who dread the thought of skydiving will consider you a fool if you proclaim you love ‘skydiving’.
I even had a lad in his 20s wanting to skydive but backed out when he learned that he has to sign the waiver of insurances of all kind.
So, yes, skydiving is not for everyone. Crypto speculation is not for everyone. Tapping into 401(K) is not for everyone.
But if you are still interested to look to see if you are eligible to take a loan on your 401(K).
Here is the best part: your 401(K) loan repayments, including interest, are paid to you.
Your plan may be different so talk to your plan manager before you take the plunge.
If you fail, however, to pay back the loan – it will be considered a withdrawal of 401(K) which is subject to 10% penalty in addition to the regular income taxes (probably at your highest marginal rate).
There is another angle to why we talk about tapping into 401(K). During the recession in 2009, 401(k)s where people have put in 20 years of their life savings lost 25%. Some say the losses were even more. When you take into consideration the lost earnings and inflation, it generally takes a long time for people to just go back to their original amount.
That is why – we personally like to gamble with our money ourselves. If we lose – we learn if we gain – we learn too. Again, this is not for everyone (feels like we are on a loop of disclaimer with this topic).
From the most controversial topic to the most vanilla of the ideas. Can you go on without a vacation for a year? Make your own lunch for this same period and not eat out at a restaurant for more than once too? Before you write us off, look below.
You can create your own list using this Spreadsheet
Average American spends about $6000 on liquor alone. Obviously – you are not that Average American – so we have reduced our spending to a median average between low wine drinkers cost of $1500 to Average American liquor cost of $6000, at $3750. Ok, you don’t spend that much – let’s even cut it down by half. Happy now?
Another stimulant that Americans love is coffee. There are two very opposite surveys on millennial spending on coffee.
Thing about surveys is – your results vary based on your sample. If an organization wants you to believe a certain thing – they will get their samples from a certain source. For instance, one news source says Millennials spend more money on their coffee than in investing, while this source debunks that notion. We are going to use the average of these two and take a $2 savings per day on coffee if you cut down from 2 to 1 paid coffees. If you buy your coffee at Starbucks our $2 is a joke but if you get it at McDonald’s – it might be too generous, either way, it anchors as a good average. We also took out weekends because we know you make your own coffee at home and we shaved another 10 days from our math to make it even more conservative.
An Average American (who is this Average American I keep hearing about anyway?) spends about $2500 on entertainment. That’s a whole lot of entertainment, more than average annual income in some nations!
Saving doesn’t make you rich, it can definitely give you a shot at becoming rich in crypto space.
Even if you lose all of your investments that you divested from these savings – it will hurt less since you can always go back to your ‘regular’ splurging spree after your experiment period unless of course you love it and decide to stay the course.
Personal loan, here we go!
How is personal loan unorthodox? It is if you take it from peer-to-peer lending and you are taking it for crypto risking. Two high-risk ideas in one.
There are no certainties in the job market. A personal loan should only be considered if you are absolutely sure that in the event of losing your job or your source of income – you are still going to be able to pay your personal loan dues. If that is you, there are some good peer to peer lending options that might lend you money for as low as a 5% rate of interest (depending on your credit rating).
We personally like SoFi because of their rates, customer care, and ZERO origination fees. You may find some other avenue.
Disclosure: Above SoFi link is a referral link. While we appreciate it if you choose to use it, it is not an endorsement and we have no affiliations with SoFi.
I am not an Average American, not even an American, will these ideas work for me?
Although we have referenced the statistics and facts pertaining to the United States in this article, you can explore these ideas in your own country as well. The savings may not be whopping 12 Grand a year but any percentage that you can divest without taking drastic risks counts.
What other ideas have you used to find funds for your crypto investments? Share with us.
If you are thinking to open KuCoin account, please consider using our referral link.
IMPORTANT DISCLAIMER: Do your own research before investing. Crypto space is very volatile, don’t invest more than what you can afford to lose. Everything in this article is an opinion, not the advice of any kind.