Crypto lessons from 30 year old me to 25 years old me
As a millennial who has recently crossed my third living decade, one popular topic that comes up among peers is investing. This is a strange phase of life where the realities of adulting hits hard — starting a family, building a career, mental health and wellness, loans, money etc. Some (myself included) are even sandwiched between providing for our parents while planning ahead for our own lives. A little extra help wherever possible would be great. So I started looking into investing – both stocks and crypto, but here we talk about the latter – and thought this might be the financial boost I needed.
Tldr; failed miserably, decided to try again and am finding (some) success today
Now that Crypto has been making mainstream waves once again, I thought it might be a good chance to do some introspection to help navigate the Crypto market moving forward.
How it started
A friend introduced Crypto back in 2017 but my journey could be visualized into four red boxes – to describe my performance would be utter trash. Not to mention the emotional toll it took on me.
Back then, fresh out of college and at my first job, I managed to squirrel up five thousand dollars and decided to go heavy into Crypto. During that time, I had chased pumps, trade signals, price targets, exclusive gossips etc, and it seemed like the numbers only went up … until it didn’t, and I ended up realizing losses below my original capital.
(Looking back, it was simply a bull market so anyone would’ve been a genius)
Then, life got busy – my parents got sick and I was settling into a new job – so investing took a back seat for a bit. The pain of having to restart was brutal.
Fast forward to 2021, joke’s on me because here’s the same chart but extended to current day. The biggest realization was how much behavioral psychology led to poor decisions and negative financial outcomes – literally self-sabotage. I would have still made out well if I had just held it through; none of it matters though because hindsight is always 20/20.
Lesson #1 - Less overthinking, more action
“If only I had bought it at $[insert price here]”
“ It’s too high now, waiting for the dip”
“It dropped so much, it might go lower”
Still struggle with this, but to a lesser extent now. Understandably, Crypto’s unpredictability can be nerve wrecking, and it is human nature to prefer certainty. To win at this, we need to overcome our own psychology.
When just getting started, be actionable; first open a Crypto exchange account. Connect your bank. Deposit and fund the Crypto account. Buy your first $10. Not sure if Bitcoin or Ethereum? Get both! Be comfortable with it, then increase it to $100, then to $1000, then to a recurring buy schedule to develop habit. Purchase a hardware wallet. Try out Defi and staking.
These may seem trivial, but the inertia for each is MASSIVE. So, if you have already done these, pat yourself on the back — you are now ahead of the curve because you have taken action.
Remember, all the thinking (and potential gains) are for naught if there’s inaction.
Lesson #2 - Build a strong conviction
Working hard is important, and more so working smart. As we exchange our time for money, remember also that money makes more money.
In early 2020, I threw a bunch of scripts and APIs together and made my own investment tracker (liked tinkering with code), and collected some data.
The rule was: No emotional selling
To do that, concentrate into the highest conviction stocks/ crypto because when the market bleeds, you will feel better owning assets you actually care about. And when the market goes up, you feel validated that the general crowd finally “caught on”.
Make time your friend so that the power of compounding can do its thing.
Lesson #3 - Holding Power
The reason why most people don’t end up rich is because they cannot hold — or in Crypto speak, HODL. This is actually much more difficult than it sounds.
Crypto is a brand new animal. Stocks are mainly valued on business fundamentals like cashflow, but Crypto is more on community driven adoption (for now). As such, it’s understandable there’s a healthy dose of skepticism; reflected in price volatility.
The trick to taming this beast is having holding power. Markets move up and down as they please, and being able to ride it through on your terms, is an incredibly powerful and liberating feeling.
As mentioned, I am a sandwiched millennial and had to be intentional with money. Budgeting became very relevant because spending the extra $100 on a skateboard meant a lost opportunity to grow it into more (I did still buy that skateboard).
Over time, buckets were created for every spending category and this provided mental awareness on how much I could actually spend despite the overall bank balance — property purchase, future holidays, family building, parent allowance, rainy day savings, insurance, entertainment have all been accounted for. This meant that my investment bucket is decoupled, and I wouldn’t be forced to liquidate my assets prematurely.
Oversimplified example, a $20,000 bank balance:
$10,000 reserved for a home down payment
$7,000 reserved for emergencies
$2,500 reserved for monthly expenses/ bills
Actual amount available to invest without life going to 💩: $500
Lesson #4 – Filter what you see online
Social feeds and forums are filled with stories about overnight crypto millionaires — good for them (no sarcasm), but ignore. These are called echo chambers, and over time can really warp expectations. Sure, a $1,000 investment that did 1000x could really make you rich, but it’s a trap that subtly feeds into greed.
In my observation, said people tend to be:
- Extremely lucky
- Already had a large pool of money to begin with
- Irresponsibly YOLO
- Pushing some hidden agenda where you are the one contributing to their success
It’s not good for mental health to keep comparing. Remember, you are on our own personal journey, with a unique set of constraints. What matters is you are closer to your financial goals today than yesteryear.
Curate the lessons they bring, then tune out the noise.
Wrapping up…
Am bullish and vested.
The “currency” in Cryptocurrency is misleading because it’s not a total replacement of the monetary system we are familiar with today. More so, it’s about how the underlying distributed ledger technology would create new network effects, and that’s where the value is at.
As a very rough analogy, think Apple. Consumers don’t care about how iOS actually works, but that code infrastructure gave birth to the entire community of MacBook/ iPhone/ Airpods users
Crypto is all still very hard to wrap our heads around and since there has been no precedence, it’s fair to say the experiment is still ongoing (similar to how the world experimented with remote working due to the Covid-19 global pandemic)
Personal opinion is that Crypto is an upcoming asset class with demand still growing exponentially. We are not early into the space, but are not late yet either.
