Keep The Weight off
Over the years, I have noticed that many Crypto enthusiasts place too much pressure and expectation on a single idea. This is highly unwise and should be avoided at all costs. Some of the most notable casualties of such an approach were the yield hunters of 2022. These were primarily investors in Celsius and BlockFi. Many of these investors enjoyed a period of earning a full-time passive income. However, it was short-lived.
The wise approach would have been to diversify into yield-bearing opportunities such as DeFi and traditional Proof-of-Stake opportunities. Authentic PoS opportunities are a lot safer than DeFi and third-party investment strategies. DeFi protocols are often hacked. However, staking on-chain to secure a Proof-of-Stake blockchain is more resilient to attack. Diversification should extend beyond this and incorporate a backup DeFi or income-generative fund.
In other words, having the capital to replicate your current income model if you were to lose it altogether. This is something very few people do. However, it is incredibly powerful, even if it is never utilized. Having that type of backup plan will help you sleep at night, especially if you have everything riding on being able to generate this income. Investors often scrape together just enough to extract their desired yield. However, little thought is given to the idea of failure or misfortune.
The Master Plan
Multiple income strategies should serve the Master Plan. In other words, you can have various ideas that serve one another while simultaneously serving a Master Plan. It’s like a kingdom where people and businesses serve one another and yet, ultimately, are in service to the king. Create an ecosystem of ideas. However, don’t lean too heavily on any single idea or venture. The Master Plan is simple. However, the ecosystem or infrastructure that serves it is complex and diversified.
Operating under the structure of such a strategy creates a level of safety. In the event of a death blow, a replacement can be brought in. However, when everything relies upon a single idea or approach, a single event can destroy the entire model. Essentially, strategies need to incorporate an element of foundational strength. The more servants, the stronger the workforce, not to mention increased resilience. For example, a handful of individuals have come to rely on the income of a specific SoFi platform I won’t name.
For a while, their participation was well rewarded. However, several structural and behavioral changes regarding whale accounts have changed the dynamic. Their earnings are now significantly less, and their participation is more a form of slavery. I don’t rely on any single idea. Establish it, maintain it, and move on to the next. Complacency is to be avoided at all costs. If it works well, great; build another. If it diminishes in terms of income generation, do likewise.
In other words, regardless of the outcome, the answer is always to build another. I share specific ideas. However, I don’t go into detail regarding the complexity of my strategies. My Master Plan and “finer” strategies are my pearls. Nobody gets insight into them. On the other hand, I share a lot, including altcoin picks and passive income strategies. Killing multiple birds with a single stone is always the objective.
That being said, I have recently been more attracted by simplicity. The flywheel effect can still be utilized to diversify, mitigate risk, and increase exposure. However, I want to simplify as many of these ideas as possible. Utilizing multiple ideas will always incorporate a level of complexity. The challenge is to reduce it as much as possible.
Find as many avenues as possible and then look at simplifying that “infrastructure” as much as possible. There is wisdom in building with multiple mechanisms, especially when utilizing DeFi. My DeFi approach is concentrated; ideally, I would diversify further. However, at the moment, opportunities are limited. I expect this to change as the particular niche I am exposed to experiences an increase in adoption.
Final Thoughts
Specific ideas may grow regarding their income generation. However, they can fall away just as quickly, making continuation the appropriate mindset to foster and implement. Find as many ways as possible to serve the king. Every investment portfolio or “kingdom” requires a king. Establish a Master Plan and then begin finding creative ways to serve it. All the best! See you in the next one!