What Makes An Investment Great?
In most cases, a bad investment is fairly obvious at first glance. However, some individuals still manage to get ruined by bad investment decisions, largely due to ignorance. A good return on your invested capital is only one aspect or criteria that defines a great investment. This is often the only criteria that is considered by certain investors. This group of investor often ignores a number of other very important aspects that are essential in making an investment a success. How you approach an investment, is absolutely imperative to whether you will succeed or fail.
Simply taking part in a Formula 1 race does not necessarily guarantee you the trophy. It all comes down to how you drive, which is a combination of skill and actual execution. In the investment world, it comes down to knowledge, combined with excellent execution.
The Most Important Rule
I view allocation as the most important rule of investing or trading. Wise and prudent allocation can and will make all the difference, especially when things don’t go your way. Investment is not a case of all or nothing but rather a means to secure gains. Throwing your entire capital at any particular investment is in essence a gamble. If all goes well, you walk away a winner! In the event that things don’t quite go your way, you stand the chance of significant ruin! This is particularly true in the Crypto world.
When Things Don’t Go Your Way
Whether you want to admit it or not, there will be times when circumstances seem heavily apposed to your investment decisions. What do you do in times like this? If you followed the golden rule, then you can simply add to your investment and subsequently pull down your entry level average. Alternatively, you could also wait for a trend reversal confirmation. Once confirmed, you could increase your holdings.
In the case that the project has suffered a fatal blow, your loss is not devastating, as it was only a portion of your capital at risk. If you chose not to follow this rule and allocated all of your investment capital, you would be, what we call toast!
Utilizing Passive Income To Remove Risk
This has got to be one of the best ways to grow your investment portfolio. In the case where an investment opportunity may appear relatively sound, there can also sometimes be other risks involved. BetFury was one such case for me. Being a gaming and gambling platform, there are a few important aspects to consider. Regulatory issues often arise, specific to certain locations and laws. Transaction volume can also drop due to a multitude of reasons.
After recouping a small investment in BetFury, I decided to slowly increase this avenue by utilizing passive income that I generate utilizing other strategies. In this way, I am not really risking anything, as this is capital being generated automatically without any work. The following fundamental aspects are what encouraged this move.
Guaranteed Token Appreciation
Before we look at this, it is important to understand how this investment works. The BFG token, which can be purchased via Biswap or Hotbit is required in order to stake. The staking of this token earns dividends in BTC, ETH, BNB, TRX and USDT on a daily basis. Dividends are credited to your account every 24 hours.
Playing games and gambling subsequently earns users BFG. This is known as mining BFG tokens, as tokens are actually mined relative to the wager amount. The mining difficulty adjusts over time and so one needs to wager more BTC in order to mine BFG. What this does is basically ensure that the price of BFG increases over time. Now that the BFG token can be bought on exchanges, the purchase price and mining price need to remain somewhat tethered. Considering that the mining price increases by default, it makes sense that the purchase price will have to follow, in order for this model to remain relevant.
Earning Dividends In Assets That Increase In Value
This strategy works extremely well when dividends are held and hodled over time. Initially, all dividend payouts were made in BTC only. The addition of other coins has only taken place fairly recently. I was receiving BTC dividends when the price of BTC was only a few thousand dollars, so you can imagine how those earnings have grown over time. This is another reason why this particular opportunity works so well when you incorporate sound investment principles into the mix!
The Yield Is Even Better Than CAKE!
Many within the Crypto space will be familiar with PancakeSwap, a DEX powered by the CAKE token. CAKE is the native token of PancakeSwap and can be staked in order to earn a monthly yield of approximately 6% on various platforms including PancakeSwap. This figure fluctuates slightly and will be higher if earnings are compounded within the staking protocol over time.
Depending at what price you are able to secure your BFG tokens, you can generally earn anywhere between 7% and 10% per month on your initial investment. With daily dividend payments and immediate withdrawals at any time, it is an attractive opportunity.
Taking Advantage Of Dips
In the event that the BFG price dumps significantly, it becomes the perfect entry point for someone looking to earn ongoing passive income. Buying the dip, essentially means increasing your dividend yield, provided the price returns to previous levels. If the price remains trapped, then the expected 7% to 10% is still available.
Dividends For Risk Allocation
When investing in smaller cap projects that are still undiscovered, I prefer to take capital from passive income sources. I do this so as to eradicate risk. Passive income is constantly created and does not require my time or effort in order to generate it. This approach does not put my lifestyle or budget at risk.
This is a prime example of how I evaluate an opportunity and apply sound investment principles in order to offset risk.
This is not investment advice but simply my personal approaches and strategies to generating Crypto wealth.