Dive into Ethereum Co-Founder Vitalik Buterin's latest financial wisdom, as he debunks popular myths and offers four fundamental investment strategies focusing on diversification, savings, conservative investments, and risk management for long-term financial stability and growth.
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Vitalik Buterin Emphasizes Diversification and Savings
Realistic Financial Advice from Ethereum's Co-Founder
Vitalik Buterin, co-founder of Ethereum (ETH), posted four critical pieces of advice on X platform on January 7, 2024, as "more realistic financial advice."
This post references another post that claimed, "If Bill Gates hadn't diversified his investments, his fortune would have been $1.33 trillion. Caution is needed with diversified investments and friends who recommend them."
Buterin pointed out that the above advice is very poor and emphasized the following four points as more realistic:
- Diversification is an excellent investment strategy.
- Save enough to cover several years of living expenses, securing financial safety and freedom.
- The majority of your investment portfolio should be conservative.
- Avoid trading with more than double leverage.
【Submitted by Alex】
After Bill Gates became friends with Warren Buffett, he began to diversify his portfolio and sold Microsoft shares. Bill Gates' fortune today is 138 billion dollars, if he hadn't diversified it would be 1.33 trillion dollars. Be careful with diversification and with friends who recommend it.【Submitted by Vitalik Buterin】
This is awful advice. Some actual financial advice:
- Diversification is good.
- Save. Get to the point where you have enough to cover multiple years of expenses. Financial safety is freedom.
- Be boring with most of your portfolio.
- Don't use >2x leverage. Just don't.
Careful Judgment is Key in Investing
While some opinions against Buterin's advice suggest it might be fine for those already wealthy but not applicable to those aspiring to wealth, many support his advice.
The importance of diversified investments is also stressed by government agencies, and investing excessively in high-risk assets is not recommended. Opinions on leveraged trading echo the sentiment, "Avoid using extreme multipliers."
Opinions on investment methods vary, but investing the majority of funds in specific assets or trading with excessive leverage can lead to disruptions in daily life and work due to price drops or preoccupation with price fluctuations, warranting caution.