It's June 2023...
Johnny walks into a bar, sits in the corner, orders a beer. His beer arrives and then he starts drinking and crying uncontrollably. You see, Johnny invested his life savings, $100,000, in crypto 18 months ago, and has seen his investment drop in value to $10,000. He's really upset as it took him five years to save that money, before he was convinced by his mate (a crypto 'expert') to invest in shiba inu, ripple and bitcoin, because this was the best way to make money and get rich fast. Turns out those investments sucked.
All of a sudden, to his surprise, Johnny hears someone else from across the bar crying a lot louder than him. He wipes his tears, gets up and walks over to the guy wailing uncontrollably. He asks him what's happened that's so bad for him to be crying that much. The bloke looks up and sobbing and sniffling, he says: About 18 months ago, I was told by my mate, a mortgage broker, that it was a good time to buy property. He said property always goes up, and it's the best way to make money and get rich fast. So I put all my life savings, $100,000, down as a deposit on a $1m house. I borrowed $950,000 including the stamp duty. Then interest rates started going up, and this year I lost my job. And then a couple of months ago, the bank forced me to sell the house, and it only sold for $900,000. I've lost everything and I still owe the bank money. I don't even have enough money to buy a beer.
Johnny smiles and says, don't worry mate, let me buy you a beer.
Moral of the story: Borrowing a shitload to buy a big ticket item like real estate, at the peak of the market when interest rates are almost zero, is extremely risky. Riskier than punting on crypto.
Remember this story.
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