All Your Eggs in Three Baskets
You have all heard the saying "Don't put all your eggs in one basket..."
the rest of that saying requires thought and the ability to foresee what the problem would be in doing that. For those that may not possess that faculty, I will explain it. It is presumed that if you drop the one basket, then all the eggs will be broken and rendered useless.
Still some people are sold on some coin that is "heading toward the moon..." as they say, and they start stacking all their eggs in that one basket just the same.
We will talk about the many baskets later. For now I will tell you what I had planned as my wealth grew. I wanted to "have money" and I got that - see my first post on Wealth Tips. For those of you who are comfortable with money just sitting there not being spent, it is time to make sure it is not all in one place, the proverbial "onebasket".
My plan was to have roughly thirty percent in gold and precious metals, thirty percent in cryptocurrencies and thirty percent in S&H Green Stamps. Then I would make adjustments to whichever of those three piles was lower than the rest.
After that, I started cutting up the money within each basket into other baskets, none of which could be dropped and ruined individually or collectively.
After further thought, I sold my dollars (aka S&H Green Stamps) because they have an expiration date, plus the value is constantly falling. I can buy them as I need them, if I ever need them, which is less and less these days. I am thoroughly amazed at the quantity of earth dweller who will give you really great products, including my motorcycles, just so they can have those green stamps.
Baskets within Baskets
Lets start with the metals. There are investment bulk silver and collectable silver coins. Gold comes in ingots, coins, and a thick gold foil that is quite divisible until you cannot weight it anymore.
Crypto coins are divided into the large trusted coins like bitcoin, litecoin, and their various forks. Much of the crypto wealth is invested in the most time tested protocols. I do cold storage and keep the keys behind layers of security and in many locations.
Staking coins get another sizable percentage of my investment capital, Hive comes to mind along with Leo and ProofOfBrain tokens that seem to be doing well. I have a cap for this type, but I would not be against doubling my stake in the near future. I like that I hold the keys and it seems secure as long as I am careful.
Then we have privacy coins. I like these because I am finding it harder and harder to spend bitcoin and traceable tokens these days with all the algorithms that try to identify who is who. I have put some bitcoin into Wasabi wallet and it makes them private, but some will call you a thief just for mixing your coins.
Enter Monero! Due to its unbreakable (up until now) ring signature technology I am starting to stack these and grab more when the price is down like now. I would group Particl into this group as well since its wallet uses both bitcoin and Monero code and swaps between the two of them.
Finally, there are the new project coins. I only put one 1/100 of my wealth in these but I love them because the majority of my wealth in crypto has come from tiny investments that can end up in the tens of thousands or even into the six figure range. This group of coins occupies the smallest percentage of money earmarked for crypto. I like to invest between $100 and up to $1,000 in each depending on the age and activity of each.
Why the Break down?
As I may or may not have said last post. I looped a lot of my USDT back into my base cryptos when bitcoin fell below $27,000 because you have to buy low at some point. Since then we are having a dry period where all coins just kind of linger in the depressing price ranges.
Two are up: Doge and Particl
I am not willing to spend my Doge until it goes above forty cents and Particl is a hope coin for me. I want that market place to take off as people, myself included, run from ebay, paypal, and banks. I will hold on to Particl and only give it up when I have to.
Doge, Particl, or Hive which are all way above what I paid for mine. Hive is still at three times what I paid for it, but it is hard to sell Hive since it pays me to hold in through voting and because I have seen it much higher over the last couple years. To me Hive is not a sell option while in the mid thirty cent range.
A Person Has to Live Though
My USDT has been paying all my expanses for the last year. I have about six months more that I could live normally only on this one asset. Still, when gold is fluctuating and hits two thousand, I use it to get those green stamps (dollars). For now, dollars work extend until the slump is over.
The gold I have was collected over the last fifteen years and it is as good as a house in beating inflation. Each coin I have is worth three times what I paid in nominal dollars.
My USDT was purchases using seventy-thousand-plus bitcoin and other assets that fluctuate with bitcoin. I do not want to spend this USDT all at one time. Every USDT I spend is like having super-dollars that can buy things everywhere with sixty five percent off! If I did not have these few assets that are holding past values, every LTC or XMR I spend would be buying only fifty percent of the merchandise that it would have two years ago.
And that is the point of this post.
Every month worth of bills can be played like the market and leveraged in the same way. Having my money in many baskets protects it and limits my losses if one coin should crash and burn. But the point of having divisions and subdivisions, each with their limits, allows for sensible spending when everything seemingly is down.
I could spend Hive to live right now and I would be "up" as they say. But why would I choose low Hive to sell when there is another asset that is doing better than other cyrptos. Sell that one.
If this goes on for ten years, I would be out of metals and cheap USDT by then, and I would spend Hive that is only slightly in the green. But really, I am attempting (successfully) to avoid all losses by having options.
The point is to control spending so that one has money, which gives you those options. Then manage the baskets, as illustrated here, so that you can spend the asset that is not having a bad week when you have to buy things.
Thanks for reading. Comment. And have a good weekend.
Links to my Wealth Tips series
1 How to Have Money
2 Debt and Percentages
3 Waste not, Want Not
4 A Practical Example
5 Cost Averaging for Investing
6 Overnight Successes