My financial independence journey has taken anything but a straight path. Some endeavours have worked out and some have failed miserably. Some situations I’ve had some control over and with others I’ve been powerless. Every financial loss has been painful but everytime I’ve come away with more experience and I’ve altered my approach to avoid making the same mistake again. Here’s a rough timeline of my most pertinent losses and what I learned.
The house I was selling is finally gone and whilst it’s nice to have some cash the topic of inflation is getting a lot of attention in the current media cycle so it could be argued that I’ve actually lost an asset whilst gaining a liability. Wealth preservation There are no guarantees when it comes to investing and speculating but it is a certainty that cash sitting in a bank will steadily lose it’s purchasing power over time.
During the summer I built a web application to visualise the Bitcoin futures curve which proved very useful in informing my trading decisions. As useful as it was however, each time I viewed it I had to wait for the application to first boot on Heroku and then to perform a sequence of API calls to Deribit before the chart could finally be rendered in the browser. Impatience as the mother of invention I’d no other major projects that needed attention so building a more responsive native application seemed like a reasonable task to take on.
For the last couple of years my cryptocurrency trading has focused on doing a carry trade between the Bitcoin spot and derivatives markets. This has involved buying spot Bitcoin and selling short a corresponding quantity of perpetual swap contracts and/or futures contracts. The mathematics of this trade are described in this in-depth article . To trade futures I’ve been using Deribit as they now offer contracts that settle up to a year in the future which I’ve found useful for longer term planning, especially when I’m borrowing against my spot holdings to increase the size of my position.