I’ve reached that stage in life where financial planning is one of those things I’m thinking about all the time. Someone very close to me just lost her dad. At least two of my friends have parents fighting cancer. A few of my friends (and we’re relatively young) have survived their own bouts with cancer. And my dad is struggling with Parkinson’s.
All of this happening almost at once is a stark reminder of just how fragile life is – and how quickly it can be taken away.
Financial planning for crypto investors is particularly tricky. And crypto’s volatility is the least of our worries. The bigger problem is making sure our loved ones can actually access our investments after we’re gone. I know about this from personal experience.
I don’t tell this story often. But I’m telling it today because I want you to understand just how important it is that your crypto investments don’t go to the grave with you.
A good friend of mine passed away a couple of years ago. In fact, the second anniversary of his death is coming up in May.
I had known this friend for only a few years. But during that time, he showed me more kindness and generosity than almost anyone I’ve ever met.
He and I lived in different cities, so we mostly communicated via email and phone. But that didn’t matter. When we saw each other in person, he made it feel like we were best friends who had dinner together every night and lived next door to each other. It was one of his many gifts.
This friend was also an early investor in crypto. He saw the investment potential and jumped in relatively early. He couldn’t afford to invest a lot. But he invested what he could and watched his portfolio grow.
One day, he joked that he should tell his wife how to access his bitcoin and other crypto investments because if he didn’t, it would go to his grave with him.
Two weeks later, he passed away… without telling anyone how to access his crypto.
I don’t know how much money his portfolio was worth. I do know his wife could have used the money.
Tragically, this story is not uncommon among crypto investors. According to digital forensic firm Chainalysis, between 2.8 million and 3.8 million bitcoins have been lost for good. Some were lost because computers were thrown away or keys were lost. Others are gone because the information needed to retrieve them died with their owner.
It doesn’t have to be that way. When you’re done reading this newsletter, grab a trusted loved one and show them how to access your crypto. Even if they don’t remember the process, seeing you do it once will help them in the future. Then write down exactly how to retrieve your crypto and make it part of your will.
Don’t make the same mistake my dear friend made… and that many other crypto investors have made. Start planning for your future right now. I know that’s what I’m going to do when I get home.
Senior Managing Editor, First Stage Investor