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The original was posted on /r/cryptocurrency by /u/raresanevoice on 2024-01-24 07:49:16+00:00.
What Does 'Have a Plan' look like?
We hear it often enough in the sub. "Have a plan" or "DCA" or even "DYOR" but what does that look like. For me, this is what, 'have a plan' looks like. Feel free to add any extra wisdom or lessons learned as well.
1- First step was the DYOR phase or determine what project to invest in. For fairly safe and sure price growth, Eth and BTC are two good bets. They're essentially the 'blue chips' of the crypto space and if you get confused or overwhelmed by all of the projects and the terminology, they're a good starting point. White papers are a great read though they can be technically daunting. Development plans or cycles help as well, like the bitcoin halving cycle / calendar or Eth development plan.
2- Second step is determine how much you can afford to invest that wouldn't break you if you lost it. This is the 'don't invest more than you can afford to lose' phase. Be honest and serious about your budget. For me, it's 250$ every two weeks out of each paycheck, with an additional bump whenever I get unexpected stuff, like a tax return or a small bonus this year, making sure not to stretch out or expand debt to be able to invest.
3- Third step is determine your exit price. This will be the price at which you start to DCA out or phase out your profits. By DCA out, you ensure you're not just taking whatever the price is at the time of exit but averaging it near your exit price. For example, for me, I have a few Eth that will be DCA out ~10k. I'll take my profit on them in that range.
Having that price target in mind really helps with FOMO because knowing that i'm not selling til 10k means that right now, in the crab bear market, the day to day actions of the price chart, don't mean much because I'm DCAing in until I hit that exit price.
4- Fourth step is expand that plan. By that I mean, like above, I've got a few ETH set aside to be sold at 10k. The rest will keep staking for longer term with an exit price of ~25k. That might be 2030 or 2035, but knowing that exit point again helps me ignore the daily charts.
5- Step 5 is plan where those profits are gonna go. I know I'll set ~1/3 to taxes (overplanning in case), a good chunk to pay off debt, and we're planning a small add-on to the house that those profits will take care of. Having that plan made out helps you hold firm until that exit price as well. If I know I need to be around 10k to sell, it reinforces that I don't care if the price point is 1650 or 1666, because I'm not selling anytime soon.
6- Step 6 is plan for a small powder bag. One way I do this is keeping some USDC on one of the CEXs, nominally staked or yielding and earning a bit. Usually at a higher rate than a savings account. This is the gambling bag or moonshot bag or secondary portfolio, however you want to call it. This is the money you set aside for when things catch your interest. Whether it's legitimate like Moons or a pump and dump like Pepe that you want to throw some money in on a gamble. Plan for where those $$ come from and limit yourself to what you set aside for it and know your exit price as well.
7 - Step 7 is determine if there's anything you can do to grow passively. I mentioned that I have some Eth and I have it staked or earning passively to grow my bags. There are options to grow your bags that don't take $$ but might take some time. If there's a hobby you enjoy that might earn some crypto or something passive like using BAT browser or something along those lines that help you get a fix during a prolonged and incredibly BORING crab-bear market.
That's what I got so far. What would you add? What have you learned in this market cycle or in this prolonged bear?
