You think long-term when you desire to build generational wealth. Well, everyone want so much money, but when it comes to “doing the work,” many shy away. That’s the mentality that make one become target of peddlers of fraudulent acquisition of wealth.
The Challenge
The honest truth: it is not so easy to build a generational wealth simply from selling crypto every time there is a slight increase in price. If you happen to be rich already, then that is a different case. Then, your $100,000 could easily turn into a million dollars. Irrespective of where you are in the world, a million dollars is a lot of money.
When it comes to crypto and other digital assets, there is a possibility of investors creating a form of generational wealth. For example, early bitcoin adopters, that bought the token when it was still less than a dollar, would definitely agree with that. However, the possibility is currently slimmer for smaller investments.
Nevertheless, if you are interested in getting good returns on your tokens, then you should consider the factors influencing the markets, and you need to be patient with your investment. There is always a need here and there - for money to be spent. But, you have to HODL tokens that you believe in. That’s the catch.
Just like marshmallows, quite a number of persons can’t stand, but to eat it early. Well, if you are thinking generational wealth, then you definitely should not eat your investment. As an finance enthusiast myself, I know how tempting it could get. And, normally I wouldn’t even let my marshmallows spend hours. But, I’m learning to be patient with investments.
Bad as it gets, I’d sell only when a need arise. When I have free funds, then I get some more. It’s beautiful to watch investments grow. Well, if you are not patient, then it’d die off. Then, you’d have nothing to watch. Not good, yeah I know. There are quite a number of projects utilising disruptive technology, you should monitor them closely. That’s one way to grow wealth. Gradually and effective.
Expectations
You shouldn’t get your expectations so high, because you can’t be so involved when high blood pressure develops. As often advised, limit your expectations because life is full of disappointments.
Although it is recommended to HODL tokens that seem rewarding, you could do arbitrage. Sentiments do not need to be involved. Well, I think everyone that has been in crypto for the last 5-10 years will agree with me. I have some regrets myself. And yet, that doesn’t hold me back.
Retracement
You can sell tokens when there is a massive boom. And then, plan to buy back when the prices are low. Yes, and again avoid sentiments. There is usually a retracement of prices after a boom, so you can profit from such short trades. A retracement of up to 90% could affect your investments so badly. Oh, you don’t want that.
Diversification
Diversification helps to reduce the risks. But that is when it is done right. You shouldn’t diversify simply to have different tokens in your portfolio. Rather the diversification should be because those are the numerous projects that you belief in. I’m a little diversified when it comes to my crypto holdings, but I’m also interested in stocks and forex trades.
The Plan
You should have a long-term plan. I met Michael last week, and he intends to use his crypto holdings to buy a house within the next 5 years. The plan he had was to sell every token he owns, as that could be enough to pay off his house. Then, if any amount remain, he can just hold till next boom. That sounded like a good plan till I heard a mutual (Solomon) made a different suggestion.
The initial plan involved selling during booms and buying during dips, and then keep difference kept. He said that should be enough to complement his income. He already has close to $100k in his holdings, so it is quite realistic.
Solomon advised that he shouldn’t sell, but keep the difference he made from the boom, and invest it. Then try to generate interest on his holdings. There are different ways to do that, even some exchanges do so. Actually, a good interest on 100k for some years would get him a house.
Conclusion
In the end, patience is the most important quality in order to achieve this. The longevity make it appear tiring, but in this case the end justifies the means. Well, you can also keep some tokens for your children. There used to be some on the blockchain that bought steem and powered up in accounts they created for their children. That is a good plan btw. Token inheritance doesn’t sound bad.
Storing crypto could also be a way to prepare for retirement. Irrespective of your pension funds, you can still be earning from your crypto assets. Worse case scenario, the pension fund is depleted. And, money wouldn’t be a problem.
Thanks for reading, I’d love to hear your thoughts!