Asset Trip with Guy Gotslak: Using Crypto IRAs to Compound Big Wins

Just to clarify, the platform helps people invest in crypto through a self-directed IRA, right? Are there other options as well?

The self-directed IRA is an option and also cash.

What do you see as the main benefits and drawbacks of using a self-directed IRA to invest in an alternative asset like crypto?

One of the main benefits is that you get to really take control of your retirement and make the decision on what you think is a good investment and not a good investment. It's not a science like with stocks, you know, so there's a lot of understanding the fundamentals of crypto and learning about the technology underneath it, and all of that. So for those that wanna take more control of their retirement and be a little more involved in deciding what to invest in, I think that's the main benefit of the self-directed IRA.

I'll add to that by saying that with a self-directed IRA, when you think your specific asset is at a high, you can sell it, and then you have the tax benefits on that gain. And then you can buy in again when it's low. So you have a lot more freedom there instead of just watching someone else manage your fund.

At this point, do you see crypto as an asset that just about any investor can benefit from adding to their portfolio? Or is it still more for a particular type of investor?

I think you do have to have a certain appetite for risk. I think anyone can benefit from it depending on your risk, that's how big you should make your crypto pile, right? You can start small [with] whatever you can afford to lose, and the gains kind of make up for the fact that you invested a small amount. When I started, my first investment was 5X I made off of it. So even if it's a small amount, it's probably better than the bigger amount that I put in real estate. So anyone can benefit from it, but you definitely have to understand it's volatile. There's a big risk, but also a big reward.

I'm curious about how you got involved in crypto and what drew you to crypto as an asset in the first place.

So I'm a tech guy. My background is in helping companies implement disruptive technologies. So I've always been at the forefront of technology with data analytics, machine learning, and then cloud computing. And the next thing was crypto. I was investigating blockchain and its applications, and at the same time I was living in New York and my friends were very much into investing in stocks and also a lot of different alternative assets. They were always talking about crypto and how much they've gained from it.

So they were pounding on me about that from one direction, and from the other direction, I was studying the technology and I saw the promise of it. So I decided to invest in it, to take a chance. And then once I saw the gains, I was hooked. Even though my risk appetite has always been on the lower side, at least compared to my friends, I decided to take a risk because the amount that I gained was just too exciting for me to not take the risk.

Then after that, after I made that 5X, I realized, wow, I have to pay a lot of taxes. Then I found out that you can invest in crypto using an IRA. Imagine if you aren't taxed on that 5X, right? And you can actually reinvest that and take advantage of compound growth. The only regret I have is not starting my retirement earlier, because I had an old 401k that I rolled into My Digital Money actually. And I doubled it within four months, whereas previously it doubled over 15 years. I only wish I started earlier, and that's another reason why we started My Digital Money too, to make people aware of the potential and retirement earlier on. Because I wasn't really thinking about it when I was younger.

I'm curious about what your investing goals and strategy are and how you allocate your assets accordingly.

My investing goal is more long-term, I would say. I'm looking to build long-term wealth, not looking at making a short-term salary and just living off of that. So I'm not a day trader. And even swing trading I don't do as much. I look at crypto as a long-term asset.

So I usually research the technology behind each coin because each coin is not just a currency. It actually has utility, it actually has a function, a technology behind it. And so I look at what problem it's solving, just like any company would be solving a problem, and is there a market for that problem? I look at the potential of the technology itself, and I research the founders to see if they have a track record, and then I base my decision on that. And I believe that if it does have solid technology and solid fundamentals, then you know long term it's gonna grow, even though it's gonna be very volatile on the way up. So I just hold.

But I do have a pile that I do more swing trading with. But even then, I wait a while—not five years, but I might wait a year for it to double. And I have a goal for myself. My goal is, oh, I wanna make a hundred percent on this asset. On our platform we can set trigger orders. So I can say, you know, when Ethereum doubles, I wanna automatically sell it while I'm sleeping. Because maybe there's a spike while I'm sleeping. It just sells for me. That's usually good enough for me, then I wait until the price drops down again, and then I buy it.

Are there any other alternative assets besides crypto that you invest in, or that you're curious about investing in?

If you wanna consider real estate as an alternative asset, that's where I started actually. That one was good just because I had a low-risk appetite. As I started making a bigger and bigger salary and I had some extra money, because my mom is big in real estate, I felt comfortable getting into that. I learned from her pretty quickly that you have good credit, you take a loan, you have an income, and then at some point when the value goes up, you can refinance. You can roll that additional money into another investment and you can continue to roll that in to new investments. So that's how I started.

In terms of what I'm interested in investing in, NFTs definitely is something that I'm looking to get into pretty shortly. I bought a couple, but I'm looking to buy real estate in different metaverses. I've seen my friends do well there.

Do you happen to remember how old you were when you first started investing and what your very first investment was?

I was probably around 31 or 32, and it was real estate.

What's been your biggest investing win and your biggest investing loss?

I'd say my biggest win is probably that one I mentioned where I bought Ethereum at around $700. Mainly it's because I believe in the technology. It's a smart contract platform that allows you essentially to build decentralized applications. It's the next evolution of the internet, you know, the buzzword Web 3.0. I kind of saw it as part of the future. So I decided to invest at $700, and it went up about 5 times. And I decided to sell it, even if it continues to go up, I'm happy with 5X, and I can at least re-buy later. So I think that was one of the best investments.

One of the worst ones was probably when I bought into the hype and bought Bitcoin close to its all-time high. You know, a lot of times you buy into the hype. People will say, oh yeah, it's gonna go to $100k by the end of the year. But of course, that's always risky because you can't really apply what you know from stocks or from other assets to a new asset like [crypto]. And there was a stock-to-flow model that was applied, and it held for Bitcoin for quite a while. So because of the stock-to-flow model, a lot of people thought that it would go up to $100K by the end of last year, or even early this year. But it didn't actually hold.

That's one thing you gotta watch out for, when you look at signals that you look at in the equities market. You've gotta understand that it's not really proven with this newer asset. So, you know, take it with a grain of salt. But yeah, I bought into the hype. People always invest on the way up, they make that mistake. Cuz that's when people are talking about it, like, "wow, I made all these gains." Okay. I wanna get in too. But really you should invest when no one's talking about it, when it at its low, right? So I made that mistake. And I bought two Bitcoins and I ended up losing on those. Not the end of the world. But I was willing to lose that amount, so I allowed myself to do it.

That's what I tell our clients not to do. Don't buy into the hype. It's really hard to time the market. I like just investing when you think it's at a low and keeping it for a long time.

Take your own Asset Trip

If you're interested in investing like Guy, you can check out these platforms:

• Gemini: Gemini is a simple, elegant, and secure platform to build your crypto portfolio, whether you’re an experienced trader or just getting started.
• Coinrule: Coinrule empowers traders to compete with professional algorithmic traders and hedge funds. No coding required.