So why I did not invest in crypto and tesla, I’m going to answer it in this first line. Simply because it does not suit my investment strategy and plans, I have nothing against it, just it does not align with my risk tolerance (I’m more of a conservative), age (I’m 30), and my financial independence plan (retire in my 40’s on solid assets).
However, I’m open to putting up to 10% of my money in crypto and these promising investments in the very near future (I already did), and to be honest with you I feel like I missed a lot, by not getting involved, but it’s never too late to do anything. if you want to look at my portfolio click here
Beside that, I have some advises for you to minimize the risk and avoid getting burned
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Go for it only if
If you are into these type of investments, do it as long as you check these points
- You can emotionally and economically accept and handle the downside ( seeing your investment goes -90% for example), are you gonna be okay with that? can you hold long term and not panic sell?
- You should not allocate all your wealth in it, max 25% and 75% should be in real estate and long term solid stocks
- Diversify across these different risky investments to minimize the risk
- You have time to recover from any loss if it happens (idealistically you are in your 20’s)
One month ago I read that Tesla is going to be part of the S&P 500, and historically speaking any stock if added to the S&P 500 it rises significantly in price, so I took a small amount of cash and I put it there, just for curiosity, and tataaa, I made 50% in one month which is insane for me and for my boring 7% annual returns.
I understand that most of you guys like taking risks and go for big gains, I understand the adrenaline rush you feel when you do this, just do it smartly and allocate what you can lose.
Ideally, the best situation where you can invest freely and go for risking stuff is when you are financially free if you have enough cash-flow generated from your assets that covers your expenses, even if you lose it all with these risking investments you will never go back to zero, you got your back covered.
The bottom line
- Invest smartly and have some fundamentals reasons why to buy
- Allocate what you can lose (max 25%)
- Have other stable investments (real estate and long term stocks)
- Your goal should be always financial independence