Cryptocurrency: The surmountable Hill of Investment
The recent ATHs achieved by Bitcoin, Ethereum & other Alt Coins in the Cryptocurrency space has left many jumping on the investment bandwagon due to a case of FOMO (fear of missing out). Read on to find out how to get started on investing
Many of us are wishing that we bought in on the unstoppable train that is of Bitcoin when it was first released in 2011 at 1 BTC = USD$0.30.
I wished that I had spent $100 placing a bet on Bitcoin as well instead of those fancy running shoes that saw me complete my 1st full-marathon — but I am letting bygones be bygones.
But this article isn’t about ‘I should have done this’ or ‘what could have been’ — it’s about how you can start your very first investment that can potentially see you beating rising inflation rates & cost of living.
Below is a quick summary prepared by myself on how you can start investing based on the method I learnt & referenced from the The Woke Salary Man (thank you for changing my thoughts on money!) instead of placing heavy speculation and wishing that you boarded the ‘get-rich-train’ in the past. Hopefully, this would help you in finding out what will be the next Bitcoin!
- LEVEL 1 — Make sure you have at least 6 months of emergency funds to tide you through hard times, or to be crude
Determine what makes up your emergency funds. Is it going to be 6 months of your spending? (e.g groceries, transport, entertainment) or is it going to be 6 months allowance/salary worth? If you do not have this, please focus on building this up first.
- LEVEL 2 — Start small and easy. Passive investing to build that sweet passive income.
Funds like the STI-ETF has always been a great start. I first started out in STI-ETF in my college days at $100/month. It uses DCA and ARR is about 4–5%, not too shabby. Pays dividends too. You can consider other safe options like FDs, but take note the IR is pretty poor right now. You can continue to allocate more once you have a higher earning power. I usually allocate 10–20% of what I earn to ETFs. Can be more, it is subjective to one’s life at the moment (I have renovation payments coming up).
- LEVEL 3 — Once you have built up your passive investment portfolio, you can look at active investing.
It is crucial to have the first 2 points mentioned above so that you do not crash and burn. Again, start small, allocate maximum 10% of what you are willing to risk into active investing.
You can look into REITs, stocks and even options trading. These are all middle to high-risk options and you must be willing to lose them in case shit hits the fan. My strategy is to save up for 6 months, and take for e.g, 5k worth to invest in let’s say, Tesla, which I’ve been following for the past 6 months.
- FINAL LEVEL — This is the peak of investment, and might take you years to come to.
You can then start looking into high risk investments like Cryptocurrency. (Yay, can finally start on Bitcoin!)
But wait! DYOR is EXTREMELY CRUCIAL here! Don’t buy into any Crypto projects and expecting it to moon in the next 3–5 years and earning you an early retirement. Cryptocurrency is very volatile & high risk!
I’ve seen the currency rise 400% and wished I got in while it was low, but this is all part of investing. No time for emotions!
All in all, these are just very basic principles of investing that I use to build my knowledge bank.
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**Disclaimer: What I am providing is not financial advice. The thoughts expressed here are meant for your own research purposes. Always, ALWAYS conduct your own research into the variety of options out there before you come to a final decision