The theme this week on the One Minute Retirement Tip podcast is Non-Fungible Tokens (or NFTs)...explained. 

Yesterday I talked about where I think NFTs may fit into your life and your investment portfolio. To summarize, you might look at it like a fun hobby, similar to scouring estate sales to find that one-of-a-kind gem. I think that’s the correct way to view NFTs. 

Today, I’m taking it a bit further and discussing whether or not you should actually buy NFTs. 

NFTs may have practical applications, but for as an investment, I think they’re highly speculative and garbage. I wouldn’t give them a second thought as an investment, actually. Will there be people you hear about who strike it rich in NFTs? Yes, and it’s already happened. I read about a woman who paid $1 for a NFT and was offered $50,000 for that NFT the SAME DAY! 

Talk about making a profit! But what you won’t hear about are the millions of NFTs that are sold and never return to their original value. It’s challenging to see the appeal of NFTs as an investment because it’s so speculative, especially when you don’t even get to take possession of the item you bought. 

When I evaluate an investment, whether that’s a piece of art, or a stock, a bond, or real estate, I’m looking at the future growth prospects as well as the income or cash flow it provides. You wouldn’t invest in a stock or a business that is not going to provide any income or cash flow. There’s no fundamental reason for owning the investment like the profitability of the business or the income potential of the property. 

Your only hope in making money in a NFT is to find someone dumber than you who is willing to pay more for the NFT than you did, and sell it to them. So it’s all very speculative and not driven in the slightest by actual fundamentals. 

That’s it for today, Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance