With the dips be dipping, it is a good time to talk about the "don't invest what you can't afford to lose" motto, which is simple, but it is a little more complicated than that perhaps. Sure, it is definitely good to only invest what we are able to lose, but it is also good to recognize that likely or not, it should really be lose completely.
But, it is also good to not that, this is impossible for most people because we are all affected by the sense of loss, it isn't just the money involved. On top of this, we have to think about our position, as it could be, that while we can't afford to lose what we invest, we might also not be able to afford not to invest. This means that regardless of whether we can afford to lose or not, we might have to invest.
Well, no one really "has to do" anything in this world, as there is always some kind of option, but the alternatives might be less attractive than the prospect of losing the investment capital. It could also be that the future cost of not investing is far greater than the cost of investing now, which is kind of where I am at the moment.
What I mean by this is that while I can't afford to really lose anything, not investing now will likely leave me struggling in future years, as I was far less than wise when it came to putting away for my retirement for example. This means that while the capital now could be spent on something needed, that something is is less valuable than a secure future. In order to have a chance to secure that future however, it takes investment.
What this means for me is that not only do I have to invest what I can't really afford to lose (that much of at least), I also have to invest with a long-term position in mind, which means opening myself up to risk of loss and, exposing that capital for a period of time, making the investment riskier.
Time is a massive factor in investing and while people love to make a quick buck, generally the greatest amount of value is generated over time. This can mean that what is invested is essentially "lost" as it is no longer available, no longer liquid. Most compulsory retirement funds work like this where once the money has gone in, it is no longer accessible until a future point in time, which is after retirement or close to.
We saw in Australia that when people were able to access a percentage of their retirement fund, many did and then they spent what they withdrew on consumables, like TVs and Playstations. While some did use it to invest into property or stocks, most didn't buy anything that has the chance to generate income. This is what the average person is like and as averages go - you and I are probably average too.
Startup investors also expose themselves to risks like this, where they put their money into a project understanding that for some period of time, even if the company does well, they will have their capital unavailable to them. It is a risk in the hope for an inflated return if things turn out well. Most venture capitalist investors of this kind aren't putting their lifestyle on the line however, they are putting available resources that if lost, can be written off.
However, an entrepreneur founder could be very different, possibly putting in everything they own on their idea, believing that it is worth the risk. They are of course biased in their chances, as they believe in what they are doing and back themselves. But they often have to invest what they technically can't afford to lose now, because if they don't they will lose the potential to get their business off of the ground completely. This leaves them with three options. Invest and lose. Invest and win. Don't invest and lose. So really - they are left with one choice.
When it comes to crypto, I believe the biggest risk to investment is when people do not well predict the time it takes for return. This means that they can invest into projects that take a long time to see gains (long being relative) like Bitcoin is at the moment or, invest into high risk projects in the hope for very fast gains. This means that they expose themselves to time risk or scam risk - and when they are playing with money they need now or in the near future, both can hurt a lot.
However, throwing a fraction of unneeded value into some high-risk tokens isn't bad, as long as there isn't the requirement for return, where the loss can be written off. Also, putting some into the long-term investments isn't bad, as long as that capital isn't needed for a while. For example, what I have in Bitcoin I don't need anytime soon (I hope), which means that while it might not feel good to watch value decline, these 20% dips and the like have no affect on my daily life, since I am not going to sell it anywhere near this price anyway.
In the past, I used to be more affected by them because I would have the thought that "if only I'd sold, I could have picked up more..." but the fact is, it wasn't high enough for me to sell before the dip, otherwise I would have sold before the dip. If I had just bought before the dip - I don't think I would be willing to take the immediate loss and risk it bouncing and having to get in higher again, taking a double loss on it - so, why get upset? The dip dips, nothing changes for me.
Over the years, I have had to learn to become more bold with my investing, as by my nature (genetic or conditioned) I do not have the risk-taking mindset. This means that I always feel that I can't afford to lose, which meant that I never invested anything. However, what I have found is that I can afford to lose, if I believe that the value of the future is worth more than the cost in the present.
With my beliefs on the future of crypto, currently the value in the future has a massive asymmetrical upside based on the current costs, meaning that the small amount of risk exposure and potential loss, provides the potential of a heavily inflated ROI, but it might not be tomorrow, next month or even next year that the return will be realized. It might be ten years down the track.
If I have to wait ten years to retire on crypto, that will 15 years earlier than I am scheduled to retire without crypto - which is not a bad deal, is it? Especially considering the low buy-in. What this means is that even if I lose everything I have up until today, along that line and as upset as I might be, the access to the potential upside is worth more than the downside of the loss.
But, none of this means that anyone has to mortgage their house, bet the farm or turn tricks down at the docks when navy boats come in, to get funds to invest. People do not have to ape in, it is possible to do a bit at a time and while some big gains will be missed along the way, if the trend continues on the same trajectory, pretty much everyone will be guaranteed gains, in time. And those gains might be significant.
There is a lot of impatience in some people's investment mindsets and as a result, a lot of people end up taking an all or nothing approach. Some get lucky and get everything, some end up getting liquidated to nothing. It is much like the polarized internet - people these days tend to be on and off, with no middle position.
However, because many options are available, we can choose to take a superposition in the markets, which is accomplished through diversification of risk levels and security steps. Rather than put everything in, hold some back - rather than playing all safe, put 5% into risk, rather than too much in risk, most can go in low yield, rather than wanting it all today, spread the expectation of return out across the next decade or two.
Sometimes, rather than looking at whether we can't afford to lose something, we might want to also consider if we can't afford not to win. We can protect ourselves from losing what we have by not venturing it into the game, but in order to get those gains, we are going to have to expose ourselves to the potential to win.
Some things have no room for failure.
Most things give a second chance at least.
Taraz
[ Gen1: Hive ]
Posted Using LeoFinance Beta
It's all a game, too, and most of us are not very good at it. At least not since the start. Some players started at an early age and never stopped improving. Some never retire and by the time they normally would have, they are legends. The world measures the quality of their lives in the capital they own and that includes he jobs and opportunities they created for others.
In terms of happiness, long-term goals probably do bring more satisfaction than consuming here and now. Who am I to judge, though? I can only disagree with those who voice their complains about the outside world being at fault for their lack of success...Well, didn't you choose a path away from that kind of success? If we talk about fair, it's not fair to want all the fun here and now and also have all the things that those who make sacrifices obtain after a while.
I see some of the drama in the fact that we want too much, we want, impossibly, to have both sides of the coin facing us at the same time. It's another matter completely that we're talking about twenty-and-more-sided coins. Let's keep it at two...
You speak of investing as a means to ensure earlier retirement or at least a much better one. Or both. That can be achieved. When we're in a hurry to obtain massive and quick gains, though, it's because we want not retirement funds, we want a substitute for a monthly or weekly wage. We want this to become our job despite the fact that we do not qualify for it yet.
We are The Entitled generation, after all.
It's the Locus of Control thing all over the place, again, and we have a culture of people conditioned to think it's mostly external.
We're in a hurry. We're in a position that requires a hurry. We cling to a straw. We curse the straw when it breaks. It's a losing mindset. We tend to forget Hope is not a strategy.
But Faith in something we must have if we're to wait for the long-term rewards. Disappointment is all around, though. Easy to misplace your faith. The thing is...in order to succeed, you need to be able to fall and then get up on your feet. Again. And again. And again...
Now that I think of it...
Fake it till you make it is not a bad piece of advice but we need to follow all the second part, mostly, not the first one. It's the till you make it part that's hard to stick to.
It's not for everybody, let's be honest. I have faith in statistics. And Normal is normally not at the best end of the curve. The question is do we have what it takes to do exceptionally well.
Ever heard of great artists retiring?
It is an interesting thing - as people make choices young in life that will affect their entire lives - yet do not consider that what they know and believe now, could change significantly not too long down the line.
Yes. We want to avoid the work of having to get there now. If however, we enjoy what we do, we don't mind waiting to get there and having the options a little earlier.
Yep.
I was talking an hour ago with a colleague about having purpose. Most people don't have much or, it is in things that are very transitory, meaning they have to continually search or feel lost. Lack of commitment.
This is the journey, isn't it? Who wants to be their best average?
Lebowski? The Dude Abides.
...
Still, one needs to calculate the cost of living, get it into the equation...while waiting. Those who do well in investment have to be able to afford to lose some. Too much external pressure in a lot of cases, and as you speak, it's about how you handle it.
I'm paying future alternative realities for my past insecurity issues. I'm slowly getting better, though. That constant 1 % improvement that compounds. Mindsets are hard to change overnight, even if you're actively striving for that. Or was it too passively?
We shall see ;)
It's beautiful experience, painful or not. Yeah, we do need to enjoy it and at the very least...we got the tech to access it. It was not always the case, not in this way. And it changed because of some people investing into solving the problem in the first place.
This is what I told a friend who I introduced to cub yesterday and I told him the possibility of a fall and the importance of putting what you can afford to lose.
Somehow, cub started dipping and he started jittering and I was shocked as this was meant to be disposable income.
When I read the intelligent investor, it was reported that investors made more in the long run than traders.
So I feel people should get used to dip.
You shouldn't be shocked. Most people aren't cut out for investing like this, it isn't really natural. It has to be learned by most through experience. Small amounts of loss help prepare for the absorption of large amounts. Most people only think about the upside, before the downside is felt.
A hard to spell word a big word, and one far to many people tend to ignore. I know I did while growing and aging, and I just never had the stamina to learn about such a complicated word. I have been learning a lot more about it with Hive, and Hive-Engine Tokens and even some off chain stuff over at Ionomy. Games are a new "diversification " for me, splinterlands as an income producer, and then it is fun to ape around also. Will either of them make me a millionaire? not likely, that old adage it takes money to make money, and I am just hitting the bottom rung, maybe two rungs up, on the ladder, where my little bit is starting to make more little bits and they are all adding up.
I was rather surprised to come home from our run-around and see that HIVE is back over $0.80. I think that bodes very well for Hive, and with this headline
things over the next few weeks may be a little bit strange. Interesting times, yes I think things will get interesting for a little bit.
And then three or four rungs - and then realizing that the ladder being climbed is not the same ladder than at the start. A new economy is coming.
Me too - it was nice to see it hold up relatively well.
El Salvador is somewhat an unknown quantity today, but I also think that a month or two from now - it will be absorbed into the flow of a rising tide.
The more you get your skin in the game, the bolder you become and the realization comes that waiting is actually beneficial in the grand scheme of things
No one wants to lose their skin, so are a little more careful when running down the hill.
I think if you want to make big you have to take the risk and in crypto you don't know what might happen the next moment but it still best to follow that moto
Taking the risk often means that people will pay more attention and therefore, see more opportunity arise.
Yes that what I'm getting at
Staying in fiat is guaranteeing a slow loss. Even with regular investing your gains are denominated in fiat, which has become less valuable in the time you held.
Find an underappreciated project, with quality people at the helm, push in enough to make a difference if they get traction, then just stop fiddling with it.
"I'm a millionaire"
I'll take a bag of mixed lollies, please.
This is one of the great things in crypto - it is possible to raise funds "easily" for projects. Of course, most projects will inevitably fail. But, what people need to remember is that in order for a project to succeed, it needs to be fed the energy to move.
Well said and explained. It’s easier said to invest what you can afford to lose, but not investing is a greater risk than investing. Because when you don’t invest, you spend the money on something you will likely not be able to account for.
It seems a lot of people would prefer to hold something useless in the hand now, that something valuable later.
Some folks rely on their gut instinct while other may have wisdom to guide them. We do not know the future or its potential and it often is a gamble. Yes there are two sides to the coin. Perhaps there third perspective as the rim of the coin. Perhaps not.
Gut instinct is great, if there is the past experience to inform it. We have no genetic intuition for complex economics - it has to be learned.
Sometimes, it may be difficult to take such decisions, but at the same time, it's necessary. Life is all about taking risk. So we take it and hope for good results.
How open to these kinds of risks do you think you are?
Well, you are in not in loss unless you sell. This is the rule in the stock markets. If you want to invest in long-term, it is better to buy and forget. Supposing that what you invest in has a potential rise in the future, like HIVE.
This assumes that you have enough to buy with. If one doesn't have enough to make a difference, additional things need to be done.
The amount of money that I wouldn't care if I lost.
One thing I believe is that we need to have our exist and entry point as a guide.
Secondly , when you put your coin into work , you will not be bordered much when the coins are dipping
I agree. Having a clearish sense of when to do what, helps regulate the emotional response.
That is very true.
Hopefully you will have luck in infesting.
Luck plays a bigger part than most give it credit.
Yeah, but it also requires big capital if you want to get big.
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STOPCheck out the last post from @hivebuzz:
Very true you and I cannot afford not to not invest as this is an opportunity to get ahead. I do think this will all pan out and this is a massive leap into the unknown as this is not my normal way of doing things. Sometimes you have to go with your gut and not the head.
Posted Using LeoFinance Beta
crypto market lost 3 million approx dollar because many FUD .Coinbase sued by SEC was major cause for market falling but Don't worry,crypto is never dying industry and one day the whole world will accept the need of modern civilisation and the base foundation would be crypto.
For me, no matter how dip it is I will surely invest now because I always have this believe that there will surely be profit for me doing that in the future than now
I feel Investments generally should be based on long term benefits and not just a quick fix. At least, when your mind isn’t too focused on the quick fix, there wouldn’t be so much to worry about.
I've been looking for sources and articles like this.
Now, I have to get back to the drawing board.
Thank you, thank you, thank you!!!
Ahhh crap, I was all packed up and ready for a trip to the docks...
Lmao