Ethereum founder offers important financial advice

Vitalik Buterin, founder of Ethereum (ETH), offered financial advice to his five million followers on social media platform

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Ethereum founder advises

Buterin responds to an X message from Alex Voigt, a German engineer with 114,000 followers of

Voigt writes that after Bill Gates became friends with Warren Buffett, he began diversifying his investment portfolio and selling Microsoft shares. It is noteworthy that Gates' wealth could have reached $1.33 trillion had he not taken this step, instead of the current $138 billion. “Be careful about diversification and with friends who recommend it,” he concludes.

Buterin says this is “terrible advice,” and shares four key lessons with his followers.

This is terrible advice. Some current financial tips:

*Diversification is good.
*Memorizes. Get to the point where you have enough to cover several years' expenses. Financial safety is freedom.
* Be boring with most of your portfolio.
*Do not use leverage greater than 2x. Just don't do it. https://t.co/CIvDJcD3UG

— Vitalik.eth (@VitalikButerin) January 7, 2024

First, he wrote that diversification is actually a good thing. Diversification refers to the principle of distributing investments across different assets or asset classes.

Secondly, it encourages people to save. Specifically, he recommends getting to the point where you have enough to “cover several years of expenses.” “Financial security is freedom,” he continues.

Third, he recommends being boring in most of your portfolio. This likely refers to the strategy of choosing stable, less volatile investments for the majority of your investments. In the world of cryptocurrencies, you will soon end up with Bitcoin (BTC) and Ethereum (ETH).

Finally, it is highly recommended not to use leverage greater than 2x. Leverage means using borrowed money to take a larger position than you can buy with your own capital.