Big Barry Bitcoin on Nostr: I was talking to a friend about this recently. The "don't invest more than you can ...
I was talking to a friend about this recently.
The "don't invest more than you can afford to lose" catchphrase is a catch-all statement that basically just means:
Look I know this thing has monetary value and seeing things with monetary value go up and down can motivate you illogically.
So don't invest more than you can afford to lose before:
- You need to evaluate your own reactions and feelings as the value changes over time. Condition yourself to realise the short and long term consequences of your actions without gambling all of your money first.
- You need to evaluate the barriers in your way. How easy is it to deposit funds and how easy is it to get then back out. How long does it take and are there ways to get it out faster. What other risks are there?
- Identify your misunderstandings by practicing. Don't realise that you didn't know what "liquidate" meant after putting all of your life savings into a long trade.
The same applies to Bitcoin. Figure out what you don't know and learn about it. Gain confidence and conviction. Until you are confident that you have that, and you have spent some time practicing that, don't invest more than you are willing to lose into a technology that is new and unfamiliar to you.
TLDR; it is solid advice, but not permanent advice. It's more like "don't invest... until...".
The "don't invest more than you can afford to lose" catchphrase is a catch-all statement that basically just means:
Look I know this thing has monetary value and seeing things with monetary value go up and down can motivate you illogically.
So don't invest more than you can afford to lose before:
- You need to evaluate your own reactions and feelings as the value changes over time. Condition yourself to realise the short and long term consequences of your actions without gambling all of your money first.
- You need to evaluate the barriers in your way. How easy is it to deposit funds and how easy is it to get then back out. How long does it take and are there ways to get it out faster. What other risks are there?
- Identify your misunderstandings by practicing. Don't realise that you didn't know what "liquidate" meant after putting all of your life savings into a long trade.
The same applies to Bitcoin. Figure out what you don't know and learn about it. Gain confidence and conviction. Until you are confident that you have that, and you have spent some time practicing that, don't invest more than you are willing to lose into a technology that is new and unfamiliar to you.
TLDR; it is solid advice, but not permanent advice. It's more like "don't invest... until...".