Here’s 7 lessons I learned from losing thousands in cryptocurrency in 2018.
0:00 – Why I started investing in Cryptocurrency
1:11 – Lesson #1: Market Cycles
3:01 – Lesson #2: I Am Not A Trader
3:46 – Lesson #3: My Time Is Better Spent Creating Value
4:50 – Lesson #4: Your Risk Profile Has The Ability To Change
6:23 – Lesson #5: Life Gets In The Way of Investing
7:17 – Lesson #6: I Want To Invest In Passive Income Generating Assets
8:43 – Lesson #7: I Believe Cryptocurrency is an Inevitable Technology
9:29 – How I Used This Experience To Generate Passive Income
11:23 – I’m Going To Use This To Make Me Stronger and Wealthier
10 Ways To Make Money From Scratch – https://www.youtube.com/watch?v=FIvRMTXcLbs
I lost thousands of dollars in cryptocurrency this year. Here’s what I got interested in investing in cryptocurrency around December in 2017, as you guys may know. That was basically the peak of the cryptocurrency bubble, the cryptocurrency boom where prices went up to over 25,000 Australian dollars. Now that’s when I started getting interested in it. I didn’t invest in that price. I invested over a period of the next probably six months and put money into the market at different price ranges. Some prices were over that $15,000 mark. Some prices were under the $8,000 mark, so a variation of prices there, but yeah, bitcoin now sits at about four and a half thousand Australian dollars. I actually got out of bitcoin about a month ago and cryptocurrency. I still have a little bit in it. I’ve got a business in it, which I will talk about, but yeah, alice thousands of dollars investing in cryptocurrency and he is seven things I learned along the way.
The first thing I learned about was market cycles and man, did I get a crash course in market cycles? Believe it or not, but I actually haven’t really been through a market downturn in terms of when I’ve been running my business or when I’ve actually had money to invest in. I got married in 2008, which was obviously the year of the recession and we made my watch and have a lot of money around that time or for the next five years really, so we would never in a position to go ahead and invest in the stock market or anything like that. So I hadn’t actually been a part of market cycles. I know being passionate about stock investing, so I’ve never really looked into that and I’m someone who is happy to go countercultural, unhappy to go against the norm. So what happened for me was I found out about bitcoin through obviously the price going up and everyone was talking about it, but then I got really deep into what is this, got passionate about the technology and started investing in it because I can see the inevitability of this technology, but I didn’t understand market cycles and in understand that, oh yeah.
Frequent. Obviously at the peak of a market cycle here, now’s not the time to get in, and so I really got a crash course in market cycles and how they work. Obviously bitcoin’s down over 80 percent now. Um, I would’ve loved to have learned about Bitcoin, cares, my money in cash and then because I still believe in it, maybe invested now or maybe a little bit in the future as things sort of bottom out. So I, I know that I am quite happy to go countercultural to market sentiment when I really believe in something, but I just didn’t understand market cycles at the time and I know that sounds dumb, but that’s something that I learned. I also learned that I’m not a trader looking at charts doing day trading or even a longer term trading. That is not my shtick. That is not something that I’m passionate about.
It’s not something that my brain naturally understand. Some people can really get behind these market trends and look at the different things. And for me that’s just not something that I’m interested in. So I learned that I’m not a trader. I don’t know how to do that. I understand that that’s a skill that you can obviously learn, but yeah, I learned that that’s not for me and so if I’m going to invest again, it’s not going to be trying to trade on a short term basis. My time is actually better spent elsewhere, which is the third thing I learned and that’s about creating value. I feel like my time is better spent elsewhere creating value and whereas cryptocurrency was previously part of my investment strategy, it’s not part of my investment strategy anymore. My investment strategy now is going back to what it was originally, which is built businesses and invest in real estate.
There will still be an aspect of me investing in cryptocurrency in there, but it’ll be a very small portion of my overall portfolio. Be a very small portion of my net worth. It’ll be for fun. It will be because I believe in the technology, but my focus will be on creating value through my businesses, creating excessive value through my businesses. So rather than me achieving financial freedom or may achieving excessive wealth through investing, I really feel like I’m going to achieve that through creating massive value for the world through my businesses and then use the excess money from that to then invest and obviously make more money. The fourth thing that I learned is that your risk profile actually has the ability to change. When I first started investing in cryptocurrency, I invested extra money that I could afford to lose. I was in a group position at the time and I was happy to invest in this asset class that I knew was high risk and I was happy that if I lost that money I would be fine.
But over the course of the year, my risk profile actually changed. So me and my wife ended up splitting up and living separately, which increased our expenses. Business took a little bit of a downturn as well, so it ended up in a position where we weren’t as financially well off and our risk profile changed. I think I should’ve realized this earlier, but this was something that I wasn’t aware of when investing is that your risk profile can change in a and you need to make decisions based on your current risk profile, so that’s something that I had to do. That’s why we eventually ended up getting out of cryptocurrency was that our risk profile change. We needed the money and we needed the money to be more secure in case bitcoin did go down further and so we pulled it out and bitcoin did actually probably half again from when we pulled it out, so our risk profile change, so we had to make different financial investment decisions because originally it was a longterm decision where you didn’t need the money for multiple years, so it was a longterm play that we’re happy to make but a risk profile change and so we had to change with it.
The fifth learning has been really key for me and that’s that life gets in the way of investing. As I mentioned, we had a multi year plan in terms of we didn’t need this money. Now again, that was part of our risk profile. We don’t need this money. Now we have extra money that we can use, so let’s go ahead and give this a try. But life sometimes gets in the way of investing. Things change your. You might lose your job, your business might go down, you might split up like I did. Life changes and things get in the way of your best investment plan. So even though we’re thinking we don’t need this money for years, that’s why we’re happy to take this risk. A life changed and then we needed the money. So I think moving forward I’ll definitely be taking into account the fact that life can change like that super quickly and so I need to take that into account, into my investments moving forward.
The sixth thing I learned is that I want to invest in passive income generating assets. Something that I’ve learned through this whole experience of life change recently is that assets that generate you passive income. When life gets tough, they support you, they’re behind you. They’re like your best friend who’s got your back. They’re providing you with income to get through the hard times and that has been a godsend. The fact that I have online assets, I’ve got websites that generate me passive income, really came through and saved the day for me. Investing in cryptocurrency. Cryptocurrency doesn’t generate any passive income. There are some counties out there that do generate small amounts of passive income, but overall, as a whole, it’s really just a store of value, not an income generating assets and for my life I want more and more of those income generating assets, so moving forward, that’s what I’m going to be focusing on if I invest in stocks are stocks that deliver dividends, deliver passive income.
If I invest in property, I want positive cashflow property and if I do go ahead and invest in cryptocurrency again, I want to find a way to actually make passive income from that as well because as life changes, that passive income can actually really save your life, which I found and also it’s just such a clear path to financial freedom as well. Last thing that I learned is that I really actually believe in cryptocurrency. I feel like this is an inevitability that adoption of this type of currency will grow in the future, and so I got really interested in it at the peak of the market. Okay. The money got me interested in it, but then I got really fascinated by the technology I looked deep into how does this work? What’s the share to 56 algorithm, how does bitcoin work as a whole? And what I’ve learned is that this is an amazing technology that is highly likely, almost guaranteed to revolutionize the world.
So I’m really excited to watch this space moving forward. I’ll still be involved in it. So there’s seven things that I learned. One of the benefits that actually came out of this experience was that I did start a little youtube channel and a little website called cloud money, which you can find at cloud money Dot Co. Now. That website actually makes me passive iNcome in the form of around 20 to $30 per month in passive income in cryptocurrency. NoT in australian dollar is not in us dollars. So I now, despite the fact that I lost money in cryptocurrency, I use my passion, I use what I was learning to go ahead and create another online asset that is now generating me passive income and so cloud money is naturally earning a little bit of cryptocurrency every single month. And so that’s gonna be kind of my cryptocurrency investment moving forward.
That website is doing it anyway and so I’ve actually created a passive income stream in my life. It’ll take years for the money from cloud money to actually make up the losses that I had, but look, that’s fine, but the fact is that I made a little passive income stream and that’s what I should be focusing on rather than just going ahead and putting extra money into cryptocurrency. Probably should have just saved it into cash, put it into the stock market or something like that. And focused on creating extra passive income stream and then using that extra passive income stream to invest. And so moving forward, I’m pretty sure that’s what I’ll be doing is that if I want to invest in something, especially something as high risk as cryptocurrency, I need to create a new asset that then generates me passive income and then the extra passive income I can use that to invest kind of like playing with house money, so a lot safer.
And then that way if my investments do go bad like they have that I still have that passive income generating asset. And so that’s what I learned, you know, it’s been a big year. Investing in cryptocurrency was one of the things that I did this year that I probably shouldn’t have done. We all make our mistakes. I’ve lost some money. It’s not the first time I’ve lost money doing something. I’m going to use this to make me stronger, to come back stronger, to be a better investor next time, to invest smarter, to focus on those income generating assets and overall to make myself and make my family and make my life wealthier. So yeah, I did lose money. Yeah, I learned a lot from it and I’m going to use that to fuel me moving forward to make the best of my life and to achieve financial freedom.
I hope that you enjoyed this episode, that you got some pleasure out of my pain and that maybe you learned a thing or two from this as well. If you liked this video, please check out my video where I talk about 10 ways of making money from scratch. That cryptocurrency website that I started that now makes a little bit of passive income per month. I started that from scratch, so go to [inaudible] dot com.edu forward slash five slash seven slash seven. To watch that episode or click the link to the video. Thanks so much for tuning in. Until next time, stay positive.