Define your exit strategy

One of the major pitfalls new investors fall into, is not knowing what they want. Defining your plan for the future is an important part of being successful. Remember, at some point you will have to spend your crypto. Otherwise, you haven’t really made any money. If you’ve seen the movie The Wolf of Wall Street, then you might remember a scene at the beginning with Matthew Mcconaughey that I think makes a good argument for me.

Hidden in the dialogue about all misc. Wall Street B.S, there lies a very good point. When prices are up, you may feel tempted to keep investing. Until you cash out, you haven’t made a dime. When you buy a coin, you need to ask yourself the fundamental question of “What is my end-game”? If you want to buy a Lamborghini, then you should sell when you’ve hit your goal. If you want to retire early, then figure out how much you need, and cash out when you’ve achieved it.

“But Josh, the price is going to keep going up, if I sell now i’m going to miss out”.

Perhaps. Perhaps not. You need to ignore this voice and make your decision. It doesn’t matter if Ether goes to $1 million each if you aren’t doing anything with it. You are an early adopter right now, and will make more money than most people. Define your exit strategy and stick to it, for your peace of mind.

Every few months, someone reminds me of the story of the guy who paid ~50,000 Bitcoins for a pizza. They agonize over that man’s potential multi-billion dollar fortune when Bitcoin hit $60,000/BTC. It is NOT useful to think like this. Crypto is a currency, it needs to be spent. If you don’t spend it, it’s not worth the computer it sits on. Had this man not spent his bitcoins, we would not have been able to identify that it has value in the real world, exchangeable with the US-Dollar. Nobody could have possibly predicted it would be worth what it is today. If you bought Bitcoin at $.005, the odds are you wouldn’t be holding onto it right now either. You would have sold at $1, or $100, or $1000, just like 99% of people who bought early.

Define your end-game, and stick to it. Live in the present and not agonizing over the past or future.

Some examples of reasonable investment goals:

  1. A certain Percentage Profit (30%, 100%, etc.)

  2. A certain dollar amount ($10k, $50k, etc.)

  3. Buying an arbitrary object (Lambo, starting your own business)

  4. An arbitrary timeframe (Retiring early)