When I started researching how cryptocurrencies work, I realized that it was quite a long and different world for each coin. Learning how everything worked would take me time, and I wanted to start investing at that precise moment.
For that reason, I started with the most basic lesson: how can I lose money there.
You don’t lose money in the cryptocurrency market if you don’t sell your coins, buy in a suspicious place, or violate any security laws. You do not lose money in the stock market if you invest in solid companies and do not sell your stocks.
It sounds too easy to be true, right? Some of you will tell me that currencies or stocks are too volatile, and they can drop until the point you could have less than the 50% of your investment.
But as long as you have your coins or stocks in your account, the prices may change over time, but you will always have the same amount invested.
You can have 5 shares of Netflix that you bought at $400. If the share goes down to $5 or up to $1000, you will have the same 5 shares of Netflix.
And something that reading about the history of all investments over time has taught me is that eventually, the market always goes up.
The image above shows the S&P 500’s performance of the 500 biggest companies in the U.S. over the last 90 years. As you can see, even there are dips, the overall trend is that the market always goes up.
And the same happens with cryptocurrencies:
If you saw in 2018, buying a bitcoin at $ 19,000 would have been crazy. Currently, I would have liked to have made that decision even if it was at the highest price 3 years ago.
“The only way to devalue your money is by leaving it in a bank account. “
So you don’t have to know 100% how a stock or coin works to make money with it, as long as you know how you can lose money on that investment and create a good strategy to invest in without having to worry.
“If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.”
One of the things that cost me more money was the daily trading and trying to get out of investment fast to take the profit.
It happened to me with the stock market when I decided to do daily trading from 9 am to 12 pm only with technical analysis and with cryptocurrency with Doge and Shiba when the hype was almost over.
And now I know I lost because you need specific skills, knowledge, and timing to make money in this way. If you will make it a daily strategy to make money fast, the only thing you will get is to lose everything.
You don’t need to get out of investment fast, so don’t do it.
There is not a formula to get rich quickly. Taking advantage of opportunities and doing it without the proper analysis is just gambling.
If you are consistent, you will stay in the game. But if you start making random decisions to get money quickly or based on speculations, then there is a big probability of fail.
“It’s virtually impossible for average investors to predict whether the market will go up or down in the short term.”
No matter what “coach” and “experts” say on the internet, no one ever knows when any stock or fund will hit be in the bottom or when it will rise. So if the only information we have for sure it’s that at one point it will raise again, the best thing we can do is take it to the long term.
My recommendations if you are going to start doing it is:
- Look for the shares and coins that have a good promise or a solid idea. If you are going to buy ghost companies or meme coins, make sure they are from reliable pages that you can maintain for a while and that it is money that you are not going to use at the moment.
- Use applications that allow you to hold without commissions and that the movements are cheap or free. The software I used to do daily stock trading had very high commissions if he didn’t sell before 5:00 pm, so I always had to make quick moves even if I was losing.
- Find a way to make more money with the stocks and currencies that you currently have if you are going to hold them for a while, so you can generate more money while you wait for your price.
In stock, I buy shares that pay dividends, so they pay me just for having them. In cryptocurrencies, I buy coins that can generate me an annual interest like certificates of deposit.
I think one of the most overrated advice is “don’t put all your eggs in one basket.”
For me, the more investments I have the more I will have to learn and watch to the point where I don’t even know where and why I started investing in something.
Concentrating your investments decreases your overall risk because where you tend to be in trouble is if you have to watch 35 or 40 shares and coins.
If you start paying attention to one single investment, it has all your attention. You will learn how it works when it goes down, when it will rise, and when to invest.
“Put all your eggs in one basket and watch the basket carefully” — Mark Twain
The way I applied this advice was to read and research a specific company or currency and then start investing in it a small amount of my money monthly to the point where it leaves me a good amount of profit.
This has helped me understand how the investments I am making work and have the certainty that something is going to generate the desire profits.
The problem with buying when the market is “low” is that you never know when you are in the deep. So if it keeps going down you will be disappointed or angry that you didn’t wait any longer.
But investing is not about getting the best entry and exit; it is about being consistent enough so that no matter when you exit, you are winning.
So something that helped me a lot to earn money is to set a schedule for my investments. Every month on the same day I buy stocks and currencies no matter what price they are at.
This application helped me understand how much I could earn with a coin if I decided to buy a specific amount every month for a year:
According to the image above, if I had decided to buy $100 ADA every month without considering the price, now I would have $6662, 455.2% of my investment.
I am no longer stressed by the current price or having to wait for the “perfect moment” that will probably never come, and I’m sure it will pay off eventually.
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