Should I Invest in Bitcoin?

Nate Williams General Leave a Comment

If you’ve ever seriously considered buying Bitcoin, please read this article. The principles I’ll discuss below also apply to gold, other forms of currency substitutes and any other speculative (non-productive) investments (e.g. precious metals, stamps, baseball cards, etc.).

Around the time Bitcoin reached its then price peak of $19,650.01 on December 17, 2017, we received as a firm a record number of calls from clients who wanted to jump on the bandwagon. For reasons I’ll discuss below, we recommended to not buy Bitcoin. The Bitcoin party quickly died as the Cryptocurrency fell into an almost 3-year slumber (in comparison) with prices dipping almost to $3,000 at some points. Our clients dodged a bullet and we got to look smart, for a season. Now that Bitcoin is back, and with more fanfare than ever (peaking today at a staggering $58,194.50), the number and frequency of client inquiries are heating up again.

For this reason, I’ll offer this as my official opinion statement as to why I will not personally invest in Bitcoin, and why I don’t recommend it to you either.

Unfortunately for you and me, however, I still don’t have a crystal ball. I have tried to identify and base my reasoning on timeless principles that, if followed, will benefit us in the long run. That is the secret in life: find and live by true principles; the timeless, immutable laws that govern the universe—including economics. The hard part is that these universal laws don’t sell headlines, and they don’t often sell the products marketers want us to buy. Like Bitcoin.


Investment vs. Speculation

For starters, we need to define the terms investment from speculation. An investment, as we define it, is ownership of a venture with some productive capabilities or other intrinsic value because of a benefit the asset provides. A business, with people working in it, is productive. A home does not produce, but it has the intrinsic value of providing shelter, a place where someone can live.

Therefore, with an “investment,” you can expect a return on your investment from the productive power (e.g., Apple will produce and sell the next iPhone); or you can expect it to hold its intrinsic value.

A speculation, on the other hand, is when you buy something with no intrinsic value, nor productive capabilities, with the hope to sell it in the future at a higher price.

Take a bar of gold, for example. If I buy one today, put it on my shelf and wait 20 years, I’ll have the same bar of gold plus a pile of dust. In order to sell it for a profit, I’ll have to find someone who values the shiny, dust-collecting paperweight more than I do.

Investments (e.g., stocks, bonds, farmland, real estate, dental practices) will produce for you. Speculative purchases (e.g., gold, silver, baseball cards, and Bitcoin), will not produce or do anything. If you buy them, you better cross your fingers that you catch the market wind going in the right direction.

On principle, we never have, nor will we, recommend you put your future livelihood in the hands of speculative “assets.” If you want to buy speculative assets (like Bitcoin or gold), my recommendation is to take the money you have budgeted for Vegas, forego the trip, and use that money to buy Bitcoin.


Speculative assets can actually go to zero.

I am asked all the time, “what if my stock portfolio goes to zero?” Remember what your stock portfolio is – your share of ownership of the best-run companies on the planet. If you’re unsure of this, take the afternoon, drive to Costco and just observe. Even though your ownership may be small, you own a share of that business—the building, the inventory, the supply chain, the reputation, etc. Then ask yourself, “what if Costco goes to zero?” It is possible, but how likely is that really?

Bitcoin, on the other hand, as well as other speculative assets, can actually go to zero. If Bitcoin becomes out of favor for whatever reason, it’s value could literally go to zero in that instant (OK, it might take a day or two).


Bitcoin is an incredible technological idea…but a technology nonetheless.

I think the idea of Bitcoin is brilliant and I tip my hat to Satoshi Nakamoto, who or whatever that is, for its creation and implementation. But at its base, it is a technology, and an infant tech at that. As such, although it’s gaining notable traction, a new technology could emerge over night that could instantly replace it as the newer, better version.

Take MySpace, for example. When MySpace came out it was an absolute marvel and people flocked to it by the millions. Once the idea was born, however, others stole the concept and quickly made a better platform. MySpace is now irrelevant.

So if you’re thinking of buying Bitcoin, are you sure that you shouldn’t buy Ether instead? Or how about Litecoin, or Bitcoin Cash?


Doesn’t cash have similar qualities to Bitcoin? And if so, doesn’t that disprove these arguments?

Great question. Yes, as a currency, cash has many of the same qualities as Bitcoin.

Cash is a currency with no intrinsic value. Each bill has the words “In God We Trust,” printed on them. Now I do believe in God, so I appreciate that reference. But when it comes to cash, we simply “trust” that the vender will accept it as payment for the goods or services I want to buy. Cash only has value because you and the vender think it does.

Cash is also quickly becoming a digital currency. One client of ours, who has accumulated over $100,000 in actual bills, recently tried to pay for his home remodel with cash; most of the contractors, however, would not accept the paper bills.

Cash is also completely unproductive, like Bitcoin and other speculative assets.

And to one-up you on this point, with each stroke of the presidential pen, cash is quickly losing its value (meaning the US government can’t stop printing it by the trillions, which is devaluing it by the day).

For these reasons we have never, as a firm, recommended that our clients hold cash as an investment. On the contrary, our position on cash has always been consistent and to the contrary: don’t hold any cash (but rather invest it or pay off debt), unless you need it for working capital, an emergency fund, or you’re going to buy something in the near future (or have some other expense, like taxes).

It is possible that Bitcoin will replace cash as the currency of choice (although I doubt the US governments and Central Banks will allow that to happen without a war); however, at the time of this writing cash is still the dominant currency in the US.


But if you were going to buy Bitcoin, is now the time to do it?

Let me offer one final reason as to why I am not buying Bitcoin; but even if I were, why I would not start now. On April 9, 2020, Bitcoin’s value closed at $6,871.91; today, its value is $58,194.50; this equates to a 746.8% increase in the last 365 days. Again, I’m no Dr. Emmett Brown so I can’t say for certain as to Bitcoin’s future, but I can’t remember a time when buying anything was a good idea after a 746.8% price increase. Can you?


If I am still going to Invest in Cryptocurrency, is Bitcoin the right one to buy?

I have no idea. And as you can tell, I’m not planning to buy crypto or any other currencies (unless I travel abroad ?). But if you were a crypto investor, Bitcoin was definitely the wrong one to buy! You should have invested in Ether (ETH), which posted a staggering 1,210.97% return in the past year!



Although I think Bitcoin is a brilliant concept, and one that I like (a currency where politicians can’t trash its value in order to buy votes), it has a long way to go to become mainstream, and it will face steep opposition along the way. And because it is a currency—a commodity used to facilitate trade—I would only ever treat it as such, and not an investment.



In case you’re wondering, there are many smart, rich people who disagree with me. How many of these will profit from you jumping on the bandwagon with them? All, perhaps?

In my observation, most people are following trends, not principles.

Nate WilliamsShould I Invest in Bitcoin?

PPP 2.0 – What to Know and Do Now

Nate Williams General Leave a Comment


On December 27, 2020, President Trump signed the “Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (aka “EAA”). Among many other things, the EAA created the “Second Draw PPP Loans Program,” (what we’re calling PPP 2.0) which gives you the chance to basically get the same PPP loan again.

Since then, the Treasury Department has released additional guidance providing clarification of this loan program, which I cover below. Many of the details and terms of the loan mirror the first round of PPP loans, hence the term PPP 2.0.


Who is Eligible?

PPP 2.0 is eligible for businesses, sole proprietors, and independent contractors who:Read More

Nate WilliamsPPP 2.0 – What to Know and Do Now

Cash Balance Plans 101

Nate Williams Investments, Taxes Leave a Comment

Specific financial recommendations are like dental procedures – they are made when the circumstances make the recommendation appropriate. For the doctors with the right circumstances, we have been recommending Cash Balance plans for years to accelerate toward retirement and drastically cut taxes. The purpose of this post is to give an overview on what Cash Balance plans are and how they work.Read More

Nate WilliamsCash Balance Plans 101

Value Investing: What Does this Mean and How does it Impact You? (Part 2 – Webinar!)

Spencer Kenley General Leave a Comment

In our previous blog post, we discussed what value investing is and why we have positioned our PFG Portfolios to take advantage of the value premium. For this week’s post, we hosted a webinar to discuss recent trends in the market (including the recent value premium) and what that means for our portfolios. In case you missed it, check out the recording here! PFG Investments Webinar (11/20/20).

Spencer KenleyValue Investing: What Does this Mean and How does it Impact You? (Part 2 – Webinar!)

Value Investing: What Does this Mean and How does it Impact You? (Part 1)

Spencer Kenley General, Investments Leave a Comment

In the world of investments, one way to classify stocks is to differentiate between what are known as “growth” and “value” stocks.  The difference is this: growth stocks are relatively more expensive than value stocks; in other words, a growth stock means that an investor must spend more upfront to own the same amount of company assets.Read More

Spencer KenleyValue Investing: What Does this Mean and How does it Impact You? (Part 1)

The Role of International Investments in Your Portfolio

Spencer Kenley Investments Leave a Comment

In recent years, the US stock market has significantly outperformed international markets; this performance is exaggerated by the fact that we live in America, so all the financial news is about the performance of the US Market—the Dow and the S&P. As of September 30, 2020, the S&P 500 had outperformed the global market1 over the preceding 5 years by 7.92% per year. This disparity has left many investors to re-evaluate the benefits of holding international investments in their portfolio. While international performance in recent years has lagged behind the US, it’s important to remember that recent performance is not an reliable predictor of future results.

Read More

Spencer KenleyThe Role of International Investments in Your Portfolio

Has the Market Lost Touch with Reality?

Spencer Kenley Investments Leave a Comment

2020 has been a hard year for investors. News about the economy has been bleak, with headlines telling the story of high unemployment, falling GDP, and the onset of the first recession since the 2008 financial crisis. The stock market tumble earlier this year was swift and painful for many investors, but the recovery has been equally fast and surprising—by mid-August, the S&P 500 index had fully recovered and was once again reaching record highs. The same can be said of global stock markets. In the face of such troubling news, many people are left wondering, has the stock market lost touch with reality?Read More

Spencer KenleyHas the Market Lost Touch with Reality?

Elections and the Market

Spencer Kenley Investments Leave a Comment

In the face of the coming presidential election, many investors wonder how the outcome of the race for the White House will impact market returns. While it is easy to get caught up in the excitement and noise of the moment, history shows that the winner of a presidential election is not a reliable predictor of what will happen in the stock market. Election campaigns and biased news media will argue that “this time is different;” however, we believe that the sun will keep coming up and the economy will drive forward regardless of who is president.

Read More

Spencer KenleyElections and the Market

Paycheck Protection Program Flexibility Act

Nate Williams COVID-19 Updates Leave a Comment

On June 5, 2020, President Trump signed into law the Paycheck Protection Program Flexibility Act of 2020. This new law significantly changes the rules of PPP forgiveness, allowing most borrowers to receive maximum forgiveness. As has been the norm, we expect more guidance and changes to come. We will continue to stay on top of any changes and keep you updated. In the meantime, here is a summary of the new bill and how it applies to dental/medical practice owners.

Read More

Nate WilliamsPaycheck Protection Program Flexibility Act

PPP Update – House Passes New Bill

Nate Williams COVID-19 Updates, General Leave a Comment

On Thursday, May 28, the House of Representatives passed a new bill (417-1 in favor), which will drastically alter the rules and timeline surrounding PPP Loan Forgiveness. While the legislation has not been signed into law yet, we anticipate that a version of it will soon. There may still be changes to the new law before it passes through Senate, but as it stands now, here are some of the major changes:Read More

Nate WilliamsPPP Update – House Passes New Bill