Investing on a Budget - $100-$1000 The TRUTH HURTS!

BITFINEX:BTCUSD   Bitcoin / Dolar
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I am ever so grateful that many of the responses and messages I get are from Investors from 18-30. As my grandmother used to say "tickles me pink" to see you saving for your future. At least that's what you should be doing. I understand from experience that when you are just starting out you do not have a lot to invest, but you want to. This is a good thing; However, you must understand you are not in a position to trade. Yes the TRUTH HURTS and sometimes we all need a little truth in our life to get us on the path to success. I know it really is a downer your not running with the big dogs though you feel you should or could, but 99.9% of you will fail as you do not have the means to replace a significant loss. I'm not saying it can't be done, as someone will inevitably point to someone who did, I'm just saying the odds are against you, I can point to hundreds that lost.

If you are 25 years old then you have a good 30-40 years of investing ahead of you. Ohhh I know, you want to throw $300 on a hot tip, double your money and take a trip to paris this weekend. This type of mentality will work sometimes, but not as often as you think. The result will be working well into the years you thought you were going to be fishing, and golfing every day. Every $100 you blow now is potentially $15,000+ of your retirement or more! THAT'S REALITY and THE TRUTH WILL REALLY HURT if your not prepared!

So how do you with minimal means turn 100's into 100's of thousands. It's simple. Invest for the long term! believe me $10-$25 a week grows into 100's then 10,000's then 100,000's.

Don't believe me? Well start with $100, and 10% return every 3 months on one coin (which is more than possible) after 12 years that $100 is now $9700. if you take $1000 and do the same it's $97,000. do the math yourself! Look at a coin like OMG, way more than 10% return. BTC LTC all of them are doing better than 10% per month. Now if your investing $50 a month, imagine what you will have in 12 years?

So what do you do. Look to invest into 5-6 coins at most over the long haul. I know some already have 30 with $500 account, but let's get that narrowed down to under 10 for now, and ones in various markets. Look for coins that are BEST IN BREED, and already have market penetration with a working system. Example BTC is sorta the gold of Cryptos, you should own some, ETH is the basis for contract alt-coins (or many of them) You should own some. DASH has market penetration as a payment coin, Maybe you like CVC because of the equifax scandal. and then XRP for financial transactions. Now the last three are examples and you should do your own research. But why only 5-6 coins. First diversification is often miss interpreted. It means various markets, not a bunch of coins. Second you can be an expert on 5-6 coins and can follow updates, how the company is doing, Most importantly in a new technology IS THEIR COMPETITION DOING BETTER (maybe you need to switch) etc. Third and last share accumulation. Nothing like seeing your horse win, and realizing you only had a 10 cent ticket, because you picked to many horses. So pick 5-6 coins you want to be in for the long haul.

Now similar to the graph I have above you slap your coins up there percentage wise. If your investing monthly you want to invest in the one that is under performing as you will get your best bang for your buck. Of course if one continues to under perform well then maybe you make a change. Your goal is share accumulation over a long haul. Keeping your coins around 20% each, definitely no more than 25%. Get's to that you shave a little off and spread it out among the others. This will also increase returns as normally over achievers become under achievers and vice versa. I know how boring, crytpo master just gave a buy on BLAH coin. NO be consistent, invest timely and wisely.

In the short term THE TRUTH HURTS, in the long term you'll be happy you listened!

Komen: I cannot emphasize enough your investing into companies that have market penetration and a WORKING system. You pick what you think is best in breed but the other two qualifications are not negotiable. Everything else is speculative. In the dot com and computer run. Companies with initial market penetration and first to market became winners. MSFT CSCO AMZN INTC. Yes there are the exception like apple, but again the exception not he rule. And apple became best in breed, with market penetration, hence you could have replaced blackberry with them back in the day. Why you don't get to many.
Komen: Some of you CANNOT HANDLE THE TRUTH. If your young and have limited means you should NOT be trading. Especially if you have a young family. You need to sit down and write up a list of PRIORITIES and LONG TERM GOALS. I cannot emphasize this enough. I can guarantee that in the top 10 you will NOT have, work hard to throw all my money in trading cryptos with less than 2 years trading experience. I guarantee that will not be on your list. I invested for 20 years before I started trading, and many friends of mind that were trading when I was investing have no retirement account. They are still trading like they were going to play poker tonight. You have an opportunity to get in early on a technology that will revolutionize trade, barter, and financial systems in the future. Your gambling that away!!!

If you went to the poker room last night with your paycheck and lost most of your money, you do NOT go back there today with the rest and try to make it back. You quit playing poker until you can afford it. Same with trading.
Komen: Great comment I would like to address, and this is not to call someone out it's not. But it's how unfortunately those that should be teaching you are misdirecting you for their own gain.

you only live one time - and you should take some chances.

I couldn't agree more. However, does this mean with no sailing experience you go out and buy a 30 foot sailboat, take one class on sailing, because you think you want to be a sailor, and then head for cape horn to "live life". NO This is not taking a chance this is stupidity under the guise of taking a chance.

Taking a chance is opening up a coffee shop because you have a PASSION for coffee. You worked for years at a coffee shop learning the trade, saving your blood sweat and tears, and then after you have done all that, you take your life's savings and open your own coffee shop. This is taking a chance and living your dream.

Know the difference!!
Hey golbug, first: I really love your TA and learned a lot from it. Made me more calm and instead of fomoing all over the place, I reduced my buys to one or two picks at recent lows (it's for long term, but why should I buy at the freshest of fresh highs, right?). But I have one question about diversification. You said pick "best in breed". But how can I know? Isn't it more clever to maybe instead of trying to pick "best in breed", concentrate on one or two breeds and pick like 2 potentially candidates, so you have a larger chance of picking the actually winner?
Many thanks again and would love to hear your thoughts on that.
+1 Balas
goldbug1 wellenreiter
@wellenreiter, I'm still researching myself. ;)
+1 Balas
Hi goldbug, I already have my 6 coins (BTC, ETH, Litecoin, Monero and Factom). However, I'm still in cash, except in Factom, I think it's better if I wait to buy on the dips. It may take weeks or even months, but maybe it's worth the wait?
+1 Balas
goldbug1 marvirafae
@marvirafae, I have a bunch of cash on the sidelines waiting as well. I wanted to initially get in to have positions and add as at appropriate times.
+1 Balas
marvirafae goldbug1
@goldbug1, I bought Tenx and Neo at all time highs. not doing that again lol.
I also want to say to some of the first time, or new to investing, people here. Look at silver also. IMO one of the best investments of our time besides crypto. Why so, why such a rare opportunity as an asset class? Because, it's the only asset I know of that has so little downside/risk while having huge potential to upside. The only reason I can really see silver bullion losing significant value would be fiat going deflationary long term, which I'm not sure has ever happened before in the history of printed money. IE: the world somehow magically fixing all the problems inherant in the relationship between GOVs and Money. Even if this did happen and your silver was -xx% less in value, the money you would get for it would be +xx% higher in buying power so it would pretty much even out. There is however, a very good chance for it to rise much in value in the coming years.

consider this statistic from 2012:

6.6 billion people on earth. If you would divide all the known previously mined GOLD amongst us, we would each have 1/3 of an ounce.

If we would do the same with SILVER then each of us would have 1/14th of an ounce.

Also consider that while gold is mostly hoarded, A good deal of silver is actually consumed by industries in ways that it will not be recovered.

Gold currently = $1297
Silver currently = $17

This bears consideration. IMO, Let silver be thy rock, and crypto be thine wings!

A good person to search via youtube on this topic is Mike Maloney for those wanting to learn more.

Happy investing all!
A favorite quote of mine that I always remind myself..

"The Truth is a bitter pill, but it is the only true medicine." -unknown

Another one from a great man that touches upon what you are discussing here..

"The roots of education are bitter, but the fruit is sweet." - Aristotle

I must attest that patience is a very big thing to have to come to grips with, and gain control over when entering this highly volatile and fast paced crypto sector but it will absolutely out perform other tactics. It is very easy to become accustomed to the astonishingly fast pacing here vs other markets.

Some of my best successes here have arisen from exercising patience and and my larger disappointments from not. The race is not for the swift, but whom can endure it.
@goldbug1 Thank you for the insight of saving/investing/portfolio mgmt once again! ur articles are awesome especially the way u start each one of them and are 'if compiled all together' nothing less than the list of essays of warren buffet ;)!!

Your much needed advice on the diversification of portfolio : We sometimes notice some of the altcoins like OMG, neo and many more, they behave differently in relation to ETH & BTC. Sometimes they act in tandem to the core coins and otherwise they act inversely to their behaviour! How do u trade / invest or rather how can one shuffle the portfolio especially during times when the core coin is tanking down and so is the altcoin coz when the inverse is in play ur core coin remains at the same value giving u a better hedge!! Your guidance in this matter wud be really appreciated Sir!! ;)
@goldbug1 , thank you for another fantastic post.
You mention 20-25% a fair spread between the coins
I have read a lot of literature about portfolio weights; either doing a standard even amongst all, or some other weight which is usually based on performance, but that is usually trading strategies and NOT individual Coins/ETFs/etc.
I wondered if you had considered a % for a BTC allocation to be a portion of the sqrt of the market caps of the coins invested:


Including the following coins would suggest a % allocation to BTC of 36%; if you wanted to SQRT it twice, which normalises it further, you get: 22% to BTC,

CapRatio SQRT Double SQRT
BTC 60.2% 36.7% 22.9%
ETH 25.8% 24.0% 18.5%
RIPPLE 6.9% 12.4% 13.3%
LITE 2.6% 7.6% 10.5%
DASH 2.5% 7.4% 10.3%
MaidSafe 0.2% 2.3% 5.8%
OMG 0.9% 4.4% 8.0%
KORE 0.0% 0.4% 2.5%
NEO 1.0% 4.7% 8.2%

Thanks @goldbug1, just found your posts today and they're super insightful. I'm a millennial who started messing around with long term stock holds like APPL a few years ago.

I've been on the edge with crypto since I started, just wasn't sure if it would endure. I think I'm ready to dive into crypto with some long term holds.

Just wanted to say thanks + will be watching for future posts!
+1 Balas
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