How much to invest in crypto currencies?
- We know that we should be diversified.
- We know that we should not risk more than we can lose.
- We know investments are not guaranteed.
- If you lost all this money - would it change your life or just make you uncomfortable until you earned the money back from your regular job?
How much can you lose?
- If you were going gambling - what is the maximum amount you would take with you?
- If you could scrape together extra cash - how much would that be?
Danger, Danger, Danger
- Do not use money that is required for monthly expenses
- Do not use credit cards - that you cannot pay off before interest is charged
- Do not borrow money. Instead of borrowing money - earn it OR ask people if they'll just give you some cash so you both can learn (see gifts below).
- Do not use margin
Think Long Term and Realistically
We want you to only risk money - that you have no intention of needing for 10 years. Do not expect that investing in crypto currencies are going to change your life in the next 10 years. In more advanced lessons we will discuss money management, other investments and more advanced investing topics.
Let's just say - one million dollars is not enough to live on. If you think it is - you must live very frugally (cheap) or you have not thought things through. Don't worry - in later lessons we will discuss all of these. We have plenty of time :-).
Many people have heard about Bitcoin and crypto currencies and are curious. But they either don't know how to start or are scared to start. If you tell people you know how to get started, but just don't have the money - we think many curious people would give you $25, $50, $100 to get started - just so they can see how and what you do and learn from you.
Tell them - if you lose it - they lose it also. But if you make it big - you'll not only give them their money back - you'll tell them how to do it.
Here are more great ideas:
- Cut back on meals and entertainment: going out to eat, expensive coffee stores, movies, etc.
- Cut back on vices: smoking, drinking, drugs, etc.
- Cut back on items you typically splurge on
- Get a second (or third) job to earn some extra cash
- Buy used / second hand clothes, cars, and other items - instead of buying new items
- Can you postpone purchasing items you really don't need right now?
- If you typically get presents or cash for birthday, holidays, graduation, or other events - ask for crypto currency or cash to buy crypto currency.
- Do you have some asset - an extra car, motorcycle, ATV, boat, camper, that you can sell and raise cash?
- You do not have to put all the money in at one time. You can buy $50 one week or month and $50 the next week or month. $50 per week is $2,600 over a year. $50 per month is $600 over a year - both are great initial investments.
When should you stop investing more?
We get it. Whatever sacrifices you are making to invest in crypto currencies are painful. Delayed gratification is a good thing. When should you stop?
When you are making as much or more as you would invest.
For example, let's say you are only able to scrape together $50 per month to invest in crypto currencies. Once you are consistently averaging gains from crypto currencies of $50 per month - that would be the point that we suggest you can stop or reduce the investing.
Note - this does not mean you are rich. It does not mean you can start spending wildly. It does not mean you quit your job.
It means maybe that $50 per month is better spent somewhere else - perhaps more education about crypto currencies and / or investments? Perhaps a fire and water proof safe to store your documents? Perhaps a hardware wallet? Perhaps investing in other investments?