It is very easy to be an emotional investor. Trust me this is not good for your mental health. It will lead to anxiety and stress.
Disclaimer – I am not a mental health professional. And I am not giving out any advice. This blog is for information only from my experience.
As I have mentioned previously, single shares are not for me. This led me to index investing – index funds.
My strategy with investing is long-term buy and hold. This is very apparent if you read the DUFFMONEY blog or listen to the DUFFMONEY podcast – DUFFMONEY podcast.
But I do believe in investing in crypto assets. Or at least getting familiar with crypto assets. Things are moving fast and it is my belief that it is important to learn about digital assets.
This comes with a little warning. It is easy to get excited with your crypto assets. If you get to a point where you are checking your crypto every 5 minutes, it’s time to change. Have a little word with yourself and try and ignore the noise.
Aligning crypto with my long-term investment goals
Just to be transparent, I’ve been getting too excited and too emotional over my crypto assets recently. But eventually, I learn my lessons and have managed to cash out on the gains of one of my crypto tokens – Crypto cash out.
What I did with the £5k from my cash out, is to put it into DUFF PROPERTIES. This aligns with my long-term goal of building a successful property business.
The perfect scenario for me is to take 50% out of a particular token and then forget about it. Then I’m not checking on it every 5 mins and getting stressed out. I can ignore the noise. Ignore what’s going on in the crypto world.
The majority of profits made will go towards DUFF PROPERTIES. Crypto wise, my long-term goal is to buy and hold Ethereum (ETH).
What this means is that crypto has slightly altered my long-term investment goals. They were long-term buy and hold with property and index investing. Now, they are long-term buy and hold with property, index investing and ETH.
Depending on who you talk to in the Crypto world, ETH has the potential to overtake Bitcoin (BTC) as a store of value – Goldman Sachs on ETH.
DUFFMONEY’s understanding of ETH
Blockchain is a secure and shared database that stores transactions. The data is stored in sections known as blocks and these blocks create a chain of data.
Blockchains are a thousand times faster than transactions made on stock markets. Like GOOGLE, the ETH blockchain technology is about big data. The more storage and processing on offer, the better. And blockchain has laid the foundation for a completely new way of protecting individual data and conducting online business.
Unlike BTC, ETH is not just about digital currency. ETH offers more applications and this could be a reason why some are suggesting it might overtake BTC.
For example, ETH can be used to create a binding contract between 2 or more parties. It can also be used to transfer digital goods like music or video.
In the past, I have been guilty of investing without doing the necessary research. This isn’t the case with ETH and I believe it is a good long-term investment.
A way of understanding crypto assets is to read the white paper:
In general, there are three types of applications on top of Ethereum. The first category is financial applications, providing users with more powerful ways of managing and entering into contracts using their money. This includes sub-currencies, financial derivatives, hedging contracts, savings wallets, wills, and ultimately even some classes of full-scale employment contracts. The second category is semi-financial applications, where money is involved but there is also a heavy non-monetary side to what is being done; a perfect example is self-enforcing bounties for solutions to computational problems. Finally, there are applications such as online voting and decentralized governance that are not financial at all.
The above is taken from the Ethereum website within the white paper. Being aware of the applications helps you to understand the crypto asset in question.
See below for additional applications:
- Savings wallets
- Crop insurance
- Decentralised data feed
- Smart multisignature escrow
- Cloud computing
- Peer-to-peer gambling
- Prediction markets
What to do
From my experience, getting some much-needed financial literacy can benefit you and your investments. It will help you to make educated investment decisions and decide on your long-term strategy. We all want to make quick money, but normally this doesn’t happen.
Don’t just steam in and expect to be a crypto millionaire and get stressed out when it doesn’t happen. Stick to the plan (Stick to your own game) and ignore the noise. It helps you to avoid stress. The stress that comes when you check on your investments every 5 minutes.
Personally, I do want to become financially independent. But I don’t want to be stressed out in the process. And from my experience, the way to do this is to get a financial plan in-place. With some discipline, it’s then time to take a long-term view of your investments.
Book of the week: Ethereum, by Henning Diedrich. You will learn all about blockchains, digital currencies and smart contracts. Focusing on Ethereum, this book explains how blockchains might just revolutionise society and commerce.
For a hard copy visit the excellent Imagined Things Bookshop: https://imaginedthings.co.uk/