The most painless way to learn is from other people’s mistakes. This is my preferred method but far to often I have to learn from my own. The following are some of the mistakes I’ve made investing in crypto. My hope is that you will learn from my mistakes and not get REKT in the markets.
Mistake #1) Borrowing to Invest
Taking out a loan to invest is never a good idea.
I justified it by using my crypto assets as collateral for my loans, and then I bought more crypto with the loan. Initially this move worked out okay but once the market took a fast and deep dip, the value of my collateral dropped and caused my loan to get liquidated. So I didn’t go into “debt” but I did lose a valuable asset because of my greed for more.
I feel sorry for those who go into real debt over investing.
This brings me to my next point.
Mistake #2) Being Greedy
That’s right, I’m not a perfect saint… yet. When you first get into crypto, you see gold everywhere. You hear the stories of how one guy turned $500 into $5Million and you’re hooked. Yet, looking for the quickest way to turn a little money into big money is the best way to lose it all.
Did you know, the number one way to make money online is by selling people, “how to make money online,” products.
Of course, many get into crypto for the massive gains but we still have to be patient and not get carried away by emotions.
Being greedy for me looked like borrowing money to invest, over leveraging while trading and buying in when things are going up because of a fear of missing out(FOMO).
Greed sneaks in quietly and often we are unaware, so having a simple long term plan will save you the emotional roller coaster of the markets. Of course this method is not as popular but it’s extremely effective. Anyone who’s been in the market for 4+ years, has made significant returns on their investment. Stay tuned for a long term strategy post.
Whoever works his land will have plenty of bread,
but he who follows worthless pursuits will have plenty of poverty.
A faithful man will abound with blessings,
but whoever hastens to be rich will not go unpunished.
Mistake #3) Not taking profits
This goes right along with greed.
The reason I did not take profits is because I believed the hopium that the markets would keep going up and up. Greed took over and I stayed in the market. I saw many indications that the markets were going to correct, I even predicted a two day double bottom, yet even I didn’t believe.
Take profits along the way and have a solid long term strategy.
Luckily I am smart enough not to sell at the bottom out of fear. The institutions that dump on the market would love nothing more than for the little guys to sell their shares to them before they pump the market back up. Don’t sell bottoms ever.
If you can learn to invest what you can, be patient and take profits along the way, you’ll be a very successful crypto asset investor.
More to come!
Never Lose Hope