Here's What Suze Orman Says About Crypto Investing

Crypto may be a risky investment, but not every finance guru is against it.

Suze Orman has made a robust career out of advising folks on how to deal with their personal finances. So it makes sense that many would pay attention to her thoughts on the latest financial movement: cryptocurrency.

It's been in every headline and all over social media for a number of reasons. Cryptocurrency is novel (to the mainstream, at least), it's poorly understood, and it's making people rich.

So what does a well-known finance guru -- one who regularly advocates for having a healthy savings account and avoiding risky spending -- have to say about crypto? Turns out, she's a fan (mostly).

Crypto as a speculative, long-term investment

Basically, Orman's stance on crypto seems to be that it's a worthwhile investment -- so long as you aren't going to miss that money. In other words, you can invest a bit of money into the cryptocurrency of your choice once:

• You've built up your emergency fund
• Your retirement account is in good shape
• Your budget is all set

Orman does recommend sticking to popular currencies, rather than the new coin of the week. She's revealed that she personally invested around $5,000 in Bitcoin.

Another thing she notes is that it's best to consider crypto a long-term investment. Which makes sense, as crypto overall can be extremely volatile, fluctuating wildly in price from day to day. Thinking of it in the long term can help you avoid the feeling that you need to micromanage your investment.

Along that line, she also suggested to her podcast listeners that Bitcoin investments should be made through dollar-cost averaging (purchasing currency on a set schedule, regardless of the fluctuations in price). Dollar-cost averaging prevents you from having to time your purchases to the market, which can take a lot of work.

Orman's eye is on Bitcoin and Ethereum

As far as specific currencies go, Orman has a lot to say in favor of Bitcoin's future potential. In a recent podcast, she even made note of some of the very interesting changes that are currently going on, including the speculation that Amazon may soon accept Bitcoin as a payment method for purchases.

Orman regularly likens trading Bitcoin to trading gold; it can be used to buy things, but is typically not traded that way. However, she also suggests that acceptance by major retailers would propel it into the realm of actual payment structure. This could impact how it's traded and valued overall.

Should crypto become a workaday payment method, Orman notes that Ethereum would be another important currency to consider as part of an overall crypto investment strategy.

Coinbase, PayPal, and more

When it comes to actually investing in crypto, Orman doesn't seem to necessarily recommend one platform over another. For her own purchase, Orman said she used PayPal to buy crypto because of the ease of use.

However, she's also mentioned a number of other potential crypto exchanges. This includes the crypto giant Coinbase. Recently, she also expressed interest in relative newcomer FTX, telling her podcast listeners that it's something they "might want to look into."

Whichever way you decide to buy, one thing most experts agree on is that you should probably avoid using a credit card to buy crypto. Not only will most exchanges charge you extra fees for credit card purchases, but the issuers will typically treat it as a cash advance. That comes with its own fee, as well as higher interest rates. And the interest rates are a big problem if you can't pay off the purchase right away. Plus, some issuers actually ban crypto purchases altogether.

While there are a few rare cases when taking on debt makes sense, investing in crypto certainly isn't one of them. Most credit cards charge at least two-digit APRs, which means you'd need a very high return on your investment to make the debt worthwhile -- something that isn't particularly likely, even with crypto.