Forbes had a fun writeup titled "How Much Of Your Portfolio Should Be In Crypto." As you can imagine, there were "experts" with very conservative suggestions as others with very aggressive suggestions. I am plenty skeptical of the crypto space but have detailed the two fliers I've taken with Bitcoin (been sitting on a small position of GBTC since December). I can buy into the idea that transactions will become safer and more efficient but that is not where we are now, today's news of a $41 million hack as evidence of that.

Bumps (or worse) along the way are an unfortunate byproduct of being involved with a potentially disruptive technology but the flood of charlatanism accompanying the crypto space only serves to increase my skepticism. Today I saw a Tweet that drew a parallel to the bitcoin theft to bank robberies which is either stupid or intellectually dishonest as bank deposits are insured.

One of the sources quoted in Forbes thought that "20% is very reasonable" but only into Bitcoin in his opinion. A recurring theme on this blog over the last 14 years has been that 20% into anything other than equities or fixed income is a huge bet and I'd put Bitcoin at the top of that list. Over the years we've looked at other people's suggestions of 20% into REITs, MLPs, gold, commodities more broadly, alternative assets, maybe a couple I am forgetting and now Bitcoin. Eventually, these suggestions become very bad ideas, ruinous ideas.

A different source for the article takes an approach that is in line with what I have written about. If Bitcoin rockets into the stratosphere as so many of its proponents (or maybe they turn out to be charlatans) believe then a small investment (speculation is a better word) could grow into a life-changing piece of money. This is known as asymmetric risk. For most people, putting 20% of their portfolio into Bitcoin would have serious consequences if it ends up going to zero as opposed to starting out with a 1 or 2% allocation. As was mentioned in the article, "if you can't laugh wryly and move on if it goes to $0, you should never have gotten in." That doesn't happen at 20%.

Pivoting to ex-pat living we have Retired Expats in Ecuador: What Life’s Really Like for Them. A couple of things stood out in the article. One is the tendency, observed by the journalist being interviewed, is for Americans who've moved to Ecuador to lose weight. The article attributes this to being "more physically active, walking to places and eating healthier food." In the US we consume a lot of processed food which has contributed to the rise in obesity rates. Many countries have less processed food, if Ecuador is one of those countries then these folks could be onto a longer healthspan and lifespan.

Ecuador may not be a cheap as some believe as some expats found "it wasn’t possible to live on $700 a month." I seem to recall from reading about Ecuador it being about $2000/mo so not sure where the $700 comes from (this link says $1600-$2400). For people with no real savings but who've worked their whole lives, that range fits well within the average Social Security income a couple might get (in a recent post I looked at $1400 as the average benefit now, plus another $700 for a spousal benefit or another $1400 for another full benefit).

The proceeds from selling an average priced house might yield $250,000 plus a savings balance more akin to an emergency fund than a retirement fund, maybe $50,000-$150,000 combined with a financially scaled down lifestyle in Ecuador or somewhere like it becomes financially tenable.

There was also a mention in the article of Edd and Cynthia Staton who moved to Cuenca, Ecuador ten years ago out of financial necessity and created a consulting business to help other wouldbe expats move to Ecuador or somewhere else. I don't know whether they know what they're doing but they have put a lot of effort into their website and have created a program that costs $497. In the realm of living on $2000-$3000/mo, selling their program to just two people per month becomes a meaningful contributor to household finances. I've talked about this before but if you're interested in some version of an expat retirement, finding a side-gig to bring in a little money could be a huge difference maker. Giving the Statons the benefit of the doubt of having a good product, it is a great business model. They presumably put in a lot of time putting it together and while they probably need to update it occasionally and they offer some level of ongoing help to customers, they may have done most of the work already and might be able to ride it for many years.

If I were in the situation above of living in Ecuador, I would try to have Social Security match expenses, hopefully have a side gig for fun money and try to leave my nest egg alone for emergencies like in this instance, the cost of getting back to the US for medical treatment.