Cashing in your crypto assets
This week, DUFFMONEY will be looking at cashing in your crypto assets.
Recently, I have managed to cash out about £10k. That is my initial investment plus about £2k profit. I cashed some out in January and some in April.
Plus, I still have about 10 alt coins. These alt coins are spread between different exchanges and my trezor wallet (secure hard wallet).
I missed the boat with BTC (Bitcoin) but I’m hoping to do ok with my Alt coins (Alternative to BTC).
IF you get a bit of luck
If you manage to get a bit of luck, try and take at least some out.
We have all heard the stories. People who cashed out too early. People who don’t cash out and end up with zero.
Just invest with money you are willing to lose. And try and take some money out if your little investment does well.
In 2018, I had an alt coin that went from $2k to $20k and back down to $200. I was willing to lose the $2k but I didn’t take any money out. Try and avoid this situation.
In 2021, an alt coin has gone from $2k to $14k. I’ve had a bit of luck. I was willing to lose the $2k and I did take some money out. I cashed 50% out and took out $7k which is roughly £5k. This (from experience) is what I would recommend.
DISCLAIMER TIME: I am 100% not a financial advisor and am 100% NOT in a position to advise you on anything crypto related.
DUFFMONEY is about raising financial awareness and helping you learn from my experience.
How I cashed out
Before cashing out, I called my accountant for some tax advice. To see what to do with my profit from crypto assets.
I explained that the money will be used to help build my property business (DUFF PROPERTIES). This is the advice I received:
- Transfer the money to your personal account
- You can then transfer the money from your personal to your Limited company (if this applies to you)
- You are allowed to make £12.5k profit tax free (capital gains tax free allowance)
- This means my £5k from above is tax free
- If I was to make £25k profit take half out one tax year and the other half out the next tax year (being tax efficient)
- If I make £25k and take it out in one tax year – 1st £12.5k tax free, 2nd £12.5k taxed at 18%
This might sound like a very cautious approach, but it suits my long-term strategy. I am all about long-term buy and hold. That £5k will go towards my next BTL property.
What to do
Decide what suits you. Do your research and due diligence.
If you invest in crypto make sure you know the basics. How to buy, hold and transfer crypto assets.
If you fancy an alt coin, look into it. Go on the chat sites online and see what people are saying (Reddit).
Invest with money you are willing to lose.
Try and pull some money out e.g. your initial investment.
And good luck. Hopefully you will end up with a big cash out that will help you towards FI (Financial Independence).
Book of the week: Cryptoassets, by Chris Burniske and Jack Truner. Cryptoassets offer a massive investment opportunity for novice investors. But you need to do your research. This book will help you to familiarise yourself with the market and what it means to invest in Crypto.
For a hard copy visit the excellent Imagined Things Bookshop: https://imaginedthings.co.uk/