HODL Isn’t the Only Way. My Personal Rules for Altcoin Investments
It’s not hard to hear about the latest crypto success story who threw their $50 monthly latte allowance into a penny fund and came out with millions. If you’re saving for your own future, and especially if you’re frustrated with the early slog of just earning pennies extra at a time, this can seem really tempting. But, as with all speculative assets, there are big winners and big losers, and you need to prepare to be either if you’re going to try something this risky.
For me, the power of hope is worth the chance to lose (a little). However, I have set up my own set of rules on how to invest so that it’s not pulling from my main investment plan or risking my main assets. I see this as the same as gambling (and have used a version of the same rules the 3 or 4 times I have been in a casino). Don’t risk what you’re not prepared to lose completely.
Here is a look at the rules I use to keep my finances (and sanity) secure when I dabble in high-risk investments:
1. This is Entertainment- So Fund It That Way
Like gambling, this is entertainment. It fills a need for fun/excitement/risk-taking. When I pay to watch a thriller, I don’t expect my money back in the end. The same is true for this unless I’m really, really lucky. Because of this, I set limits on money in and take it out of my entertainment budget, not my savings budget.
2. Invest Small
This should not be your main way to save. Personally, I like the rush of seeing if I will wake up with a huge bonus on any of my little altcoin funds, but I find that I get that rush by just investing $5 on a fund rather than a huge sum. So that’s my limit- I choose one fund for $5 once a week out of my entertainment fund. And then I walk away.
Your investment here shouldn’t cut into anything that you need or derail your main investment/debt reduction plan. It’s fun. It’s risky. You are likely to lose. Smart planning will help you lose just a little.
3. Take Emotion Out of It
In order to prevent a loss of sanity, I have a few basic rules when it comes to avoiding emotion. First, my balance is based on my money in, not the increased asset value. That way, if it roller coasters…
