On the importance of having a crystal clear, written-down goal when investing in crypto: Financial Literacy matters a lot!
TL;DR: Setting up clear goals helps you with avoiding high expectations from your crypto investments. Educate yourself in terms of finances from reliable sources and have a clear, written-down investment plan.
So you want to get rich with crypto? Here's some food for thought.
If your goal is simply "getting rich", you should really stop and think what that means to you, because maybe you have to lower a bit your expectations. And by thinking about what getting rich means I do not mean like "buying a lambo" or "getting a nice house" or "traveling every year". These are extremely vague and opaque objectives. You should not be afraid of numbers. Therefore, put all of your objectives on a paper/spread sheet/whatever. Let's say you want all of those things I've mentioned. Have you calculated their costs?
Lambo: around 210k USD
House: around 269k USD (average price)
Comfortable trip: ~20k USD
That's around 500k USD for the items only. There's insurance for the lambo (not very cheap), for the house and for the trip. The items come with a maintenance cost. For the house, this comes at around 16k USD a year.
But you've invested 2000 USD plus 50 USD every month because that's all you have. No shame. You can only invest what you have and kudos to you for trying to get some financial freedom. You've taken the first step, which is deciding to invest. Now you have to see what you can get with the amount you invested. Could you get from ~ 2000 USD to ~500k USD in a short period of time? Yes, of course, this is crypto we're talking about. But how long would it take? When do you want the house?
These might seem trivial questions, but from some of the comments I read here it is not. It is unlikely we will see those 1000x gains we had in the last decade. I might be deeply wrong, but you have to expect a reasonable outcome from your investments and set your brain in a mindset of realistic expectations.
By having realistic expectations from your investments (time- and amount-wise), frustration hits you lesser than it could have.
- Write down what and when you want to buy/achieve in a clear manner, just as in the example I gave you (price of the house, lambo and trips). Sum everything as I did before (~500k USD was what I found);
- Separate those things in short (e.g. max. 2-3 years) and long term (e.g. 3+ years);
- Now take into account how much you can invest during these times and see what of the things you've written on steps 1) and 2) are realistic. Rinse and repeat until you have found yourself with some realistic and achievable goals. You can of course have a set of "what if" tables/notes, but attain your attention to the real possibilities. Example of realistic goal: "When my original investment hits xx% of profit, I'll be able to afford my new dental care and will therefore cash out part of it".
- Have an emergency reserve, if you can. Bills are paid in USD/EUR/fiat, not in BTC/ETH/ADA/crypto, and unforeseen things DO happen;
- Only invest money that you can afford to lose. If all you have is 2000 USD (as someone who DM'ed me), you should not invest everything at all;
- Education and financial literacy are more important than returns. It's better to have an aware and decision-based investment rather than going all in on this or that shitcoin just because someone did a "TA" with triangles and shit in a graph and got you hooked;
- Most "influencers" in crypto shill coins that they ALREADY HAVE. They want you to buy them so that their bags go up, so take their advice with some kilograms of salt;
- Only hold coins that you'll feel comfortable in holding in a bear market. I myself know that BTC and ETH will be around for a long time, but have no clue about stuff like NANO or whatever (just used it as an example, NANO holders just chill);
- Be patient. It takes a while between pumps and bumps for your portfolio to be in profit with a solid position, i.e. not going down anymore;
- Do not get that much into the hype, i.e. do not invest money you don't have/can't lose. It's better to have a small investment that will not harm you if you lose it all than having all bets on the table and sleeping bad every night, because tomorrow the market can go down 80% and you might need the money;
- Get yourself educated from reliable sources (NOT influencers, NOT random comments on this sub), e.g. take an online Coursera-based University of XXXX course on personal finances;
- When taking profits, remember to take care of yourself, like doing some therapy, going to the gym or that new dental treatment. Being genuinely in good health and happy with your own self beats money and lambos anytime;
- Finally, be easy on yourself. "If I had invested in 2010, I'd be rich now" is something you should never have in mind. Hindsight is 10/10 and is not good for your mental health.
This post is about financial literacy/personal education. I'm not telling you what you should invest in or where to put your money on. Therefore, not classified as financial advice.
Godspeed to you all!