What do investing and gambling have in common?
Money? Life saving? Fun? Thrill?
Where do you draw the line? At "make or break" situation, "over-extended", "all in", or somewhere earlier?
Can you still afford a ramen?
We probably all have a friend, or two, or three, who boasted how much money they made on Tesla, Bitcoin, Dogecoin, Luna, Solana, or some other shitcoin, you name it. What they are not telling you is how much they have lost, when their bets did not pay off, when they almost lost everything.
Without knowing the full reality and often only getting the biased success story, it may be very tempting to try to one up their success - by taking excessive risks and uncontrolled gambling to get rich (go broke) quickly. Emotion is powerful and detrimental to financial success, FOMO is most dangerous when your mind tries to trick you into chasing that "potential profit" you "could have gotten".
Could have, would have, should have, hindsight is 20/20.
How many people have the ability (without insider trading) to consistently buy at the bottom and sell at the top? If you have the perfect crystal ball, you wouldn't be here, you wouldn't be reading this, you would own the entire world already.
Imagine you just pulled off a 100x... what's next?
When you are young, you have the time to start over and recover from lessons and experience, you probably don't have a lot of assets to lose (unless you are born with a silver spoon), you may have already made your 100x that amount to... not much, because you could only put in $100.
Now with $10,000 banked, you want to continue to grow the wealth and attempt to pull off another 100x, you aim high and you believe you will be a millionaire next bull market, and billionaire will be within reach after two more cycle. After all, you only have to do 100x 2 more times followed by only a 10x to be a billionaire, but if you do 100x the third time... you can by 1/4 of Twitter, maybe Elon will let you buy 1/5 of Twitter for a cool $10 billion. But will you? Do you have the crystal ball (or luck) to consistently do back to back 100x?
Here is the reality as we go through life
Risk is a necessity, how you manage risk is both an art and science.
If you take no market risk, inflation will eat away the purchasing power and in no time you will feel very broke.
If you continue to HODL a single asset like when you did in the teens or early 20s, one Kodak moment you will be starting over from zero. Kodak was cool, Xerox was cool, Blockbuster was cool, AOL was cool, Myspace was cool, Blackberry was cool, Palm was cool, until they are not. Even Facebook is for "old" people now.
Is BTC going to be cool for the next 100 years, or for the rest of your life? Maybe, maybe not. Do you want to gamble or hedge your risk? It all depends on individual circumstances, you decide for yourself.
It is important to keep the money after you have made the money
While bear market is the best time to pick up additional assets that are on sale, now is also the best time to be real about your priorities, without FOMO hysteria that clouds your better judgement.
You really don't want to be "forced" to HODL for yet another cycle just to "make back your potential profit” again - especially if this is the money you are counting on for goals that are important to you.
Posted Using LeoFinance Beta
