PART 3: The Pitfalls of Modern Investing
Why That 2am Crypto Tip Would Have Made Me a Millionaire (But Didn't)
Disclaimer: This content is for educational purposes only and should not be considered financial advice. I am not a financial adviser. Everyone's financial situation is different, and you should do your own research or consult with a qualified financial adviser before making any investment decisions.
At 40, I did the maths on my 2018 crypto investment. The £1,000 I put into Bitcoin turned into roughly £4,000. A 400% return. On paper, that sounds incredible.
But if I'd put that same £1,000 into a boring global index fund, I'd have made solid returns with none of the stress. And more importantly, it would still be there, growing steadily, rather than cashed out in a panic about whether to hold or sell.
The real kicker? £4,000 wasn't life-changing. It was a nice win on a bet, not a retirement strategy.
But let me tell you about 2013 first.
The 2am conversation I ignored
It's 2am. I'm walking home after another brutal late-night audit shift, questioning every life choice that led me to this career.
A random bloke stops me. Asks what I do. I tell him I'm an accountant.
He lights up.
"Mate, Bitcoin. That's how you get out of all this. That's the future. You need to get in now."
I thought he was unhinged. Nodded politely. Went home to bed.
If I'd put £1,000 into Bitcoin that night, it would have been worth over £1 million by 2021.
I missed it. Completely.
The FOMO catch-up
By 2018, everyone was talking about crypto. Mates were making money or saying they were. I kept seeing headlines about people retiring early from Bitcoin.
So I finally bought in. Not because I understood blockchain or believed in decentralisation. Because I didn't want to miss out twice.
I put in £1,000. Eventually cashed out at around £4,000. A 400% return.
On paper, great. In reality:
- I checked the price constantly (hourly some days)
- The volatility was terrifying (20% swings in a day)
- I had no idea when to sell, so I agonised over every decision
- It felt like a casino, not an investment
- £4,000 wasn't life-changing money
And the honest truth? That same money in a simple index fund, left alone to compound over decades, would likely have served my future better than a quick win I cashed out and spent.
Why I'm telling you this
I'm not saying crypto is evil or that you shouldn't touch it. Some people understand it, research it properly, and treat it as a small speculative part of their portfolio. Fair enough.
But most people, including me in 2018, buy it because of FOMO. And FOMO is a terrible investment strategy.
Here's what I've learned:
The people who got rich from early Bitcoin weren't geniuses. They were lucky. For every person who bought at £100 and held to £60,000, there are thousands who bought at £20,000 and panic-sold at £6,000, or lost everything when an exchange collapsed, or bought a coin that went to zero.
You only hear the success stories. Nobody writes articles about the person who lost their savings on Dogecoin.
The system is designed to make you feel like you're missing out. Social media is full of people posting gains (never losses). Influencers get paid to promote coins. Trading apps are built like games, with confetti and notifications designed to keep you engaged.
According to The Guardian, 73% of Gen Z investors have bought cryptocurrency. That's not because 73% of young people are blockchain experts. It's because the fear of missing out is incredibly powerful.
Crypto has no safety net. Traditional investments have regulatory protection. If your bank or investment platform fails, there's compensation. With crypto? If the exchange collapses or you get hacked, your money is just gone.
What actually works
Boring, consistent investing in diversified funds. I know that's not exciting. I know it doesn't have the "get rich quick" appeal.
But here's the reality: my £4,000 crypto win felt great for a moment, then I spent it. If I'd invested that £1,000 in an index fund and left it untouched for the next 25 years, it would be part of a genuine retirement fund, not a memory of a lucky bet.
Could crypto go up 10x from here? Maybe. Could it go to zero? Also maybe. That's the point. It's speculation, not investing.
If you want to put a small amount into crypto as a bet? Fine. But recognise it's a bet, not your retirement plan. And only use money you're genuinely OK with losing completely.
The real pitfalls:
- Chasing returns after hearing success stories (that's survivorship bias)
- Investing in things you don't understand because everyone else is
- Letting FOMO override common sense
- Thinking "this time it's different" (it never is)
- Trading frequently instead of investing long-term
The FOMO resistance challenge
Next time you see someone posting crypto gains, or talking about their latest investment win, or you feel that pull to jump into whatever everyone else is doing, pause and ask yourself three questions:
- Are they showing me their losses too? (They're not. Nobody posts their failures.)
- Do I actually understand what I'd be buying? (Be brutally honest. Reddit threads don't count as research.)
- Is this money I'm genuinely OK losing completely? (Not "probably fine", actually OK if it goes to zero.)
If you can't answer yes to all three, close the tab. Put that money toward your pension or an index fund instead.
FOMO is designed to bypass your rational brain. These three questions force you to slow down and think before you act.
At 40, here's what I wish I'd done
Ignored that guy in 2013? Maybe. I can't change that.
But I definitely shouldn't have chased crypto in 2018 out of FOMO. I should have stuck to the boring plan: regular contributions to my pension and a low-cost global index fund.
Less exciting. Far more effective.
Where Champion Health can help
Struggling to resist FOMO or wondering if an investment is actually smart or just hype?
Peter Komolafe's How to Make Smarter Money Decisions Masterclass gives you a framework for spotting emotional decisions before they cost you, the exact tool I wish I'd had in 2018.
Getting rich slowly isn't sexy. But it works.
Next up in Part 4: How capital markets actually work, and why you can't beat the market (but you can match it, which is actually pretty good).