A common mistake made by investors is thinking that investing is about making money. It’s not, it’s about protecting your capital. There’s a BIG difference.
There are three considerations I ask anyone before they start to invest in anything:
What is your goal?
Are you trying to turn $1 into $1m? This is going to be really difficult. You basically need to find the next project that is going to solve a serious world problem, buy it at $0.000001 and sell at $1. Probably not gonna happen.
Trying to slowly build wealth for your retirement (whatever your age)? Look at dollar cost averaging (setting a weekly or monthly recurring investment into a proven, secure coin (BTC/ETH)). It may not make you a millionaire (unless you’re investing tens of thousands every year), but it will give you a better return on investment (ROI) than your savings account.
Are you bored and looking for a new hobby? If so, divide your kitty into 50 and invest in whatever the hell you feel like.
What’s your risk profile?
Are you happy to stake half your net worth on a project or are you more conservative (1-10%)? The first isn’t advised. At all.
If you like a bit of adrenaline, learn how to leverage trade – the potential to make a fortune is HUGE – check out Bitcoinsensus or Carl (The Moon) Renefelt.
HOWEVER, the potential for the upside is only outweighed by the potential to lose ALL your money. Faster than in a casino. SERIOUSLY. DON’T every trade with leverage without knowing what you’re doing. You have been warned.
Figuring out your risk profile is really important before putting money into anything because no matter how safe something seems, things can go wrong FAST (Terra/Luna).
How long are you in this for?
Do you want to make money fast, or are you playing the long game? As with the “what is your goal?” question, if you’re gonna be refreshing your balance every 5 minutes hoping your $50 or $1,000 has magically turned into $10,000, and you’re gonna shit yourself when you see it drop 10% every day for a month and 90% overall before rebounding, you’re gonna stress yourself into an early grave. If you’re happy to make an investment, sit on it for 5 years and watch that balance grow, you’ll sleep better and lose less money (depending on your investment).
My advice?
Set a SMART goal: To turn $10,000 worth of investments into $50,000 over 5-10 years, for example. How? Dollar cost averaging into Bitcoin and Ethereum on a weekly basis for the next 5-10 years. Do not touch this investment. Spend 5-10% of your net investment each week, month, year into speculative investments. Learn how to leverage trade but DON’T DO IT. Practice on free sites until you understand all the necessary tools to trade. Get a teacher. NEVER invest more than 5% per year on leverage trading and never trade above 10x leverage.
Best of luck…
-Jamie