“Practice what you preach” was the Golden Rule in my parent’s house. These days, this adage seems less a rule and more a relic of the past.
Clearly few of our national leaders follow this rule. The same could be said of our most highly valued business leaders as well.
Whatever happened to the law that a celebrity couldn’t endorse a product unless that celebrity really used that product? Clearly that’s gone the way of Don Draper’s career and Orson Welles’s need not to drink a wine “before its time.”
As those who read my articles may or may not be aware, I’ve written about bitcoins both in articles on MarketWatch and as a co-author on one of the first books to examine the topic, “What’s the Deal with Bitcoins?”
In line with my work regarding retirement, I’ve discussed the potential for bitcoins as a potential “alternative investment” for retirement portfolios. Most asset allocation models advise that a properly allocated retirement portfolio should have a small (read this again — small) part of that portfolio in a class of investments called alternative investments. These “recommended” numbers can range from 5% to 20% of the portfolio (please remember that any portfolio allocation should be a personalized decision based upon your own needs and level of risk — don’t rely on recommended numbers).
However, it isn’t even clear if you could actually classify bitcoins as an alternative investment. Most current alternative investments focus on currencies, hedge funds, private equity, commodities or real estate. Many people familiar with bitcoins will state that it falls into the currency or commodity category. However the U.S. government recently decided that bitcoins aren’t currencies (those phony Ben Franklins from recent bank ads were noted to have breathed a sigh of relief from this decision) but are property and they can be taxed similar to transactions related to other properties such as real estate and well, uh, stocks and bonds.
It seems that if the Fed plans on profiting from bitcoins, why can’t an American citizen do the same? Just as the government shares in our profits from real estate, stocks and bonds, you begin to think that bitcoins may not be so “alternative” after all.
So if I’m looking to live up to what I’m preaching (or at least writing) about bitcoins, maybe I need to “practice” it as well.
It was after watching a documentary about one of my heroes of “real” journalism, George Plimpton, that I came to a conclusion. For those who don’t remember, George Plimpton was a writer who would tackle a subject by “living” it. When he wanted to write about being a professional baseball pitcher, he actually became one. He took this same approach to writing about being a professional football player, boxed Sugar Ray Robinson and played hockey with the Boston Bruins. He even tried to create the world’s biggest firework — all so that he could write about his experiences. To him, it wasn’t only the best way to get the story, but it was the most honest way to relate to his readers.
Now, let’s be clear, I’m no George Plimpton, nor will I ever play him on TV. But, I think we need a good old dose of his attitude mixed with some old time advertising ethics in today’s financial journalism.
So, I decided that I will find a way to invest my own actual funds in bitcoins as part of my retirement portfolio. I’ve owned and used bitcoins as currency in the past, but have not used them as an investment in my retirement account. Should be easy, right?
It was probably easier for George Plimpton to play tennis against Pancho Gonzales, but in my next article I’ll discuss the realities of trying to find a suitable way to invest bitcoins for my own retirement account — while trying to convince my wife, my financial adviser and even myself that it makes sense.
Plimpton, by the way, was demolished in that match.