The Investment Dilemma: More Than Just Returns
Financial advisor Darcy Ungaro specializes in wealth planning and asset allocation. Through years of helping clients develop investment strategies, he's learned that investing isn't just about returns—it's fundamentally about belief systems. This article examines the deeper philosophies behind two major asset classes: real estate and Bitcoin.
The Shifting Role of Real Estate
When Homes Became Assets
Ungaro reflects nostalgically on a time when homes were primarily sanctuaries rather than investment vehicles. Today, property is the most trusted wealth-building tool for New Zealanders—himself included. Buying a house isn’t just about shelter; it’s a financial strategy.
The Investor’s Social Contract
Property investors, Ungaro argues, provide long-term housing solutions for those who can’t afford to buy. They assume financial risks independently, banking on price appreciation to offset costs.
But reality bites:
- The last four years proved property returns aren’t linear.
- When prices stagnated, investor confidence wavered—akin to a "seven-year itch" in commitments.
Bitcoin: A Challenger Emerges
From Skepticism to Awakening
Ungaro first encountered Bitcoin in 2012 ($1/BTC). His initial dismissal ("scam!" "criminal currency!") couldn’t have been more wrong. By 2024 (>$100k/BTC), he’d realized:
- Most crimes use cash, not Bitcoin.
- Blockchain’s transparency makes illicit transactions less anonymous than cash.
Bitcoin’s Core Innovation
Unlike other cryptocurrencies solving niche problems, Bitcoin was born post-2008 crisis with a mission: "Fix money, fix the world." Its appeal lies in:
- Digital scarcity.
- Decentralization (no banks/governments).
- Potential as a new monetary standard.
Comparing the Two Assets
| Factor | Real Estate | Bitcoin |
|---|---|---|
| Volatility | Low to moderate | Extreme |
| Cash Flow | Rental income | None |
| Liquidity | Slow (months to sell) | Instant |
| Maintenance | High (repairs, tenants) | Zero |
| Driving Force | Credit creation & inflation | Adoption & scarcity |
The Hidden Engine: Monetary Inflation
Ungaro highlights an uncomfortable truth: NZ’s housing boom is fueled by money printing. Banks create new loans "from thin air," increasing money supply without equivalent goods—pushing prices up. Immigration and supply shortages play supporting roles, but credit expansion is the lead actor.
The critical question: What happens when younger generations refuse to inherit overpriced properties?
Practical Guidance: How to Allocate?
Bitcoin Allocation Suggestion
Ungaro offers a non-advice framework:
- Calculate net worth (excluding primary home/debt).
- Allocate 1%–10% to Bitcoin.
Why?
- Cash loses ~50% purchasing power every 25 years.
- Bitcoin could appreciate amid monetary debasement.
Real Estate’s Edge
If you value stability and tangible utility (living in/renting out assets), property still makes sense—despite headaches like:
- Surprise rodent "tenants."
- Rising rates, taxes, and bad tenants.
FAQs
Q: Should I sell my house for Bitcoin?
A: Only if you understand Bitcoin’s volatility and have a 10+ year horizon.
Q: Is Bitcoin legal in NZ?
A: Yes—it’s treated as property for tax purposes.
Q: What’s the biggest risk with Bitcoin?
A: Short-term price drops (50%+ corrections happen).
👉 Learn how to safely buy Bitcoin in NZ
Q: Can real estate and Bitcoin coexist in a portfolio?
A: Absolutely—Ungaro does both.
The Bottom Line
Ungaro’s final advice: Know yourself first.
- Choose stability? Stick with property.
- Embrace volatility? Explore Bitcoin—even a small "what if" position.
The future isn’t certain, but understanding why you invest ensures alignment with your goals.