Yesterday morning, I met a friend I had not seen for over a year. After pleasantries and reminiscing, the next thing we talked about was the cryptocurrency markets. He said he got a trade signal which he was willing to put most of his savings on and advised I did same. Well, I was so surprised why he would want to take such a questionable financial decision.
I thanked him for his advice, and then asked him if he was told Tesla would become so big some years ago whether he would put all his savings into the stock. He said no that the risk is much. Lol, then I laughed a bit. So, I helped him to see how it was similar to what he was suggesting.
It’s basic financial education not to risk all one’s savings in a single investment. Even if your savings is a small figure, even lesser than $500, you have to consider the risks. For example, I use my savings to settle my basic needs and my immediate financial burdens. So there’s not so much left for high risk investments.
For those with larger savings, it’s best to divide the investable sum into different categories; high risk and low risk. The low risk investment can bring about 2 to 7% interest, while the high risk can be used to purchase different stocks and cryptocurrencies.
Even the less risky investments or trades are not always guaranteed. So why risk it all. It’s like keeping your savings in a bag and walking around with it.
With those points I was able to help my friend see reasons why he should not put all his savings into an unregulated crypto trading company, as he called it.
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Shout out to all the members of Hive, Project Hope and my good friend 