Recently, I've been thinking about how young people in the crypto world, like little shrimp 🍤, have become quite wealthy but are reluctant to buy property. It's actually quite rational; in fact, it's not just properties in Tokyo University that are pretty terrible assets worldwide.

The biggest allure of real estate is that when you don't have much money, you can leverage yourself in ways that are mismatched to your own abilities and gamble on one-sided bets, a.k.a. fraudulently obtaining loans. After all, no financial institution will lend you 10 million at a 3% interest rate to buy crypto, and to legally obtain 10 million in loans, you need to show a monthly income of 100,000. I dare say that 60% and above are compliant false documents.

But the quality of the assets themselves is actually quite poor; those who have played with NFTs understand that it’s next level—the liquidity, control, transaction costs, and maintenance costs are all quite bad. The benefit is that the win rate on the right side isn’t low, because it’s hard to start, much like getting a train locomotive moving; once it starts, it’s tough to stop it immediately, and I won’t buy unless it rises by the first 10%.

As the asset scale increases, the quality of real estate assets will be worse because maintaining the leverage ratio is too difficult when buying luxury homes. Getting a loan of 50 million for a penthouse is quite challenging.

Another idea is to become a landlord and use rental income to cover the mortgage. If you go to high rent-to-sale ratio areas, like the Midwest of the U.S., and do the BRRR method, one, maintenance costs are ridiculously high; do things that match your worth instead of spending every day painting walls and renovating. Two, although renting can cover the mortgage, the population growth isn’t very good, and the appreciation is quite limited. Even if we in the crypto world do some arbitrage, we can easily outperform those landlords who are struggling with painting walls and laying floors.

The only possible use is to solidify some assets to prevent falling back into poverty. Little shrimp can also allocate some stocks for the same effect, but I don’t quite understand the leverage on stocks.