What do Floyd Mayweather, Bill Gates, Kanye West, Serena Williams, Elon Musk and Snoop Dogg have in common (apart from being rich)? They are all big proponents of cryptocurrencies. They all are also great in business. Obviously these people can afford to take the risk of investing in this new asset class, after all they have millions in their bank accounts. But can regular people like you and I, make life changing money in the crypto markets while limiting the risk of losing it all? The short answer is yes and after reading this article you will know exactly how to start!
All times are good times for those who know how to work and have the tools to do so.
Making money with cryptocurrencies can be simple and easy. You just have to know what you’re doing.
The first step is to start treating cryptocurrencies as a tool.
A tool that is supposed to give you real freedom, so you can live anywhere in the world and do anything you want.
Right away we have to be aware of one very important aspect.
The more powerful a tool is, the more damage it can cause if not used properly.
Let’s take a wheelbarrow, you use it to transport material but it is not very powerful. You could still hurt yourself a little if not using it properly.
How about an excavator. You could use it for the same purpose as a wheelbarrow but if you don’t know how to handle it you could seriously hurt or even kill someone with it.
If you had a task of moving a mountain of dirt as big as your nearest Walmart, would you prefer to use a wheelbarrow or to take a couple days to learn how to operate an excavator and use this instead?
Cryptocurrencies are the most powerful tool that the investment world has ever seen but you have to know how to use them properly.
They can give you financial freedom faster than anything else but if not used the right way they will clean your account in a blink of an eye.
After 4 years of investing in cryptocurrencies, and two years of being a full time crypto-investor and educator I came out with a user manual for this incredible tool that will help anyone to start their crypto-investing journey the right way. It took me a lot of expensive lessons to write up this manual. You can avoid all of them by simply reading this article and sticking to the rules.
A short disclaimer before we start:
I am not a financial advisor and this is not personalized financial advice.This is just educational material and an example of what I do in part of my portfolio.
OK, here are my most important lessons:
Like with all investment kinds, especially when it comes to crypto, you have to properly manage risk. Treat investing in cryptocurrencies as a long term investment. This is not a sprint, it’s a marathon. By thinking and acting long term, you are setting yourself up for success, by looking for shortcuts and going with the hype, you are looking for trouble.
You probably heard it many times before but I will repeat it here again: only invest what you can afford to lose. In most cases crypto investment should not be more than 5-10% of your investment portfolio.
Dollar Cost Averaging (DCA) might be the best tool for all the beginner investors out there. If used properly in your long-term investing strategy, it will not only bring great results but also limit the dangerous effects of emotions and volatility (the two most devastating forces when it comes to investing). Let me say it this way: If you started buying Bitcoin 5 years ago and only invested $100 a week, it would now be worth $367,257! 367k from an investment of $26 thousand, not bad, not bad.
Here’s an article I wrote about DCA, check it out.
If you do not know what cryptocurrency to buy, stick to the big guys. You might not make 1000% gains this year but at least you limit your downside risk. Keep away from the shitcoins. Only after you build up your crypto portfolio can you start looking for some more risky and smaller projects (with only a small part of your whole crypto portfolio!).
Build passive crypto income. There are no better tools to build passive income than cryptocurrencies. The possibilities here are endless and some of them also come with little risk. Building passive income by using crypto is like planting a tree that grows money. The sooner you plant the seeds the sooner it will give you the fruits. You can create a passive income stream within just a few steps and enjoy the constant stream of money pouring in right away. Depending on your risk aversion you can easily make anywhere from 10% to well over 100-200% a year! Here are some screenshots of platforms (and their returns) that provide us with passive income opportunities:
Make sure to take profits while the market is climbing up. If your coin went up a lot, sell at least some of it. It is not a real profit if it’s only on paper. You would not believe how many times I’ve heard ‘if I only sold this coin when it was up 100 times, I would be a millionaire now…’ You can use your profits converted to stablecoins to make even more money by using passive income protocols. This way you take money off the table but still make a nice interest on your secured profits.
Remember that first you have to learn how to use a tool to use it properly. This is why education is crucial when it comes to investing in crypto. Access to the right information is the key in this game.
Depending on your approach, investing goals and risk appetite you will have to determine how much time you should spend educating yourself.
Obviously the better education sources you have access to the more money you will make.
Here’s an article I wrote about my favorite free education sources for cryptocurrencies.
You can also visit our blog or if you’re really serious about it, invest into some high quality tools like:
If your budget is tight you should definitely look into some free ways to not only learn but actually earn cryptocurrencies. You can read about it here.
Investing and making money with cryptocurrencies can be easy and simple. It can also be done with just a few minutes a week (if you’re just using the DCA and a couple of passive income tools). If you want to retire within the next 10 years with the help of cryptocurrencies, make sure to follow these rules:
- Start with education
- Minimise the risk and focus on the big players first
- Use DCA
- Take advantage of passive income tools
- Take profits on the way
What will be your next step?
Want to start with some education? Check out our free Telegram group (link under the article) and our blog.
Written by Piotr Borowiec