Where Does One Take Crypto Profits - That is the $100,000 Question
Here's the thing about being in coins that are aggressively appreciating - the point you should sell is a dilemma.
Conversation With A Friend
My best buddy called me up today and we we're talking about Ripple (XRP). He bought about 1,300 Ripple around .70 cents and was wondering what to do at this point.
Just hold it all and wait/hope to see $10 on XRP
Sell it all now and book the 4x profit?
Decisions, Decisions...
There are other options as well, but the first thing to figure out is this:
- Do I need this Money?
- If I do need this money, when do I need it?
In his case; he and his wife I trying to buy a house. He thinks they found something, obviously in this case any extra money helps. However, he still wants exposure to Ripple (or crypto in general).
A Rule That Guarantees You Can't Lose
I always tell people that selling half of an investment once it doubles isn't the worst idea. You get all your money out and are now free rolling. No matter what happens going forward you can not be in the negative on that investment.
Granted, you have less exposure to potential future profits, but you have also just locked in those initial dollars. If you need the money it's not the worst idea to do this.
It's Easier When You Are Up More
In cases where you have seen a 4x return it is even easier to pull the trigger on your initial investment. My friend can now sell just 25% of his position to get his original capital back while still keeping a majority of his XRP in play.
Given his situation that is a no brainer.
Begs the Question Though..
When should we sell? Many of us hold coins that we have seen 5, 10 even 20X returns on yet we continue to hold strong?
What is the end goal? When is it enough? What price does a coin have to reach for us to book profits?
This is the dilemma that many face.
And it's a great dilemma to be in!!!
Learn to Invest Like The Cat
Best Regards,
Disclaimer: All content in this post is my opinion and for educational purposes.
I feel the only bad thing to do with cryptos is to sell them to buy a lambo.
I suggest figuring out what you really want.
If a homestead is the thing for you, start working out how much it will all cost, and work your portfolio to get you the coins you need to trade for it. And the coins you will need to live there.
It isn't so hard with cryptos, as they are all deflating (going up in value while the dollar is inflating away) So, when you put that bitcoin in the "bank" (wallet) it isn't going to go away; dwindling to nothing.
So, you can figure out how much your life costs. And then get your costs down as much as you can (pay off all debt) Then figure out how much crypto will afford that, and work towards it.
Remember, when you actually have cash (coins) in hand, you can work much better bargains. Buying houses where you want, and not where the job is. Buying houses before foreclosure, or at auction.
OMG, yes. Buying a lambo is not the move. When I sell it is because the money is going into fixed assets producing income for me. If the income generated from those assets is enough for a lambo - then I may consider it ;-)
Good call on using cash to buy foreclosed houses at auction. Cash is king in real estate. Its not for the faint of heart or those who aren't self starters. It takes a lot of work but can yield great returns and (relatively) passive income if you rent it out.
I did this with my Steemit earnings because I needed the money due to a family crisis. I have earned back all and in the process found a consistent posting strategy that works for me, it's a small but dedicated group of readers based on the content I write that means a lot to me.
I think the time to sell something, is if you've already profited huge, but you no longer believe in what you bought.
I know you shouldn't trade with emotion, but at some point, if your investment is in something and supporting something that you're only in it for financial gains "only"... I worry about that...
For instance, say Hitler made his own coin, and it went up 10,000% at what point would you say "you know what? Maybe I've profited enough on this, but I really should park my investment where I could make better profit elsewhere, and still support a good technology".
I'm specifically talking about XRP... it could be any investment.
So when you say "what do you say" and if you are looking at profit potential alone... I'd like to add the third element.
Which is, what are you supporting, encouraging, and even "voting for" with your investment.
Collectively if we park our money where it truly belongs, we all win.
I give the same advice. Sell half or a quarter, then use that money to buy into a different cryptocurrency. When that doubles, sell half again - rinse and repeat.
Your money should be making money on your money. :)
Like the saying goes - "Play it till it breaks"
Hodl that XRP!
nicely posted by you i like it
THE REALEST POST I read today... I had a very similar conversation with my friend this morning. Think ahead, know your situation, have a game plan and stick to it. Great post!!!
Yes! Gotta have a gameplan ahead of time.
I've always been one to sell all or nothing of my position, as I don't like to take away from future profit making. When I go out of a position it's usually because of a stop-loss being triggered.
I am currently hoping that SALT takes off (I do not own any.) Then scaredycatguide can park his Ripple at SALT as collateral for the SALT loan on the house. That might prove to be the best move.
I am holding for a longer period. But as soon as i can buy a house. Who knows what i might do. All lot of it has to do with why you invested , and how the market is.
Exactly, everyone's goals and needs are different.