Many people keep asking for the best solution for an accumulation plan for Cryptocurrencies and in this moment of huge Bull Run, too many people are risking money on assets that they do not really understand.
I created the 70% rule and that is exactly what I consider one of the most balanced solutions. Balanced in both the horizontal and vertical dimensions.
Horizontal balancing: creating the accumulation plan during time. Diversification in time. Vertical balancing: diversification in the assets.
Step 1: DEFINE YOUR BASKETS
Every month you gain money, from your paycheck, from dividends, capital gain, and other sources of income you may have.
Every month you should define what will be the amount of money you will destine to expenses, bills, and other survival need.
The second basket would be about personal development and financial growth. Learning how to make money and learning how to put to sleep all the voices that we usually have in mind that usually create anxiety and low concentration.
The third basket is for the investment: short, mid, and long term. Cryptocurrencies in my opinion are suitable for all the timespans, depending on the application you will use them for.
Let’s start from the Cryptocurrency Basket. In the following image, it is identified with the “$ Monthly Income” icon.
The “$ Monthly Income” contains all the different activities we are going to create on cryptocurrencies. The Cryptocurrency Basket starts with the first division: 70% directed towards Purchasing cryptocurrencies and 30% directed towards Mining Farm plans.
STEP 2: PURCHASING CRYPTOCURRENCY
In this stage, we are going to purchase cryptocurrencies. That is it. We are in the “Purchase Basket”
70% of purchased cryptocurrencies will be directed to the holding part and in this stage, 70% of the destined amount of Holding Basket will be on Major Cryptocurrencies (Bitcoin and Ethereum), while the remaining 30% will be for Altcoins.
Among the altcoins I am already buying TRX, LINK, ALGO, and BNB Aside from the Holding part, a dynamic part may be creating the possibility of a slightly higher interest than staking, with a lower dedicated budget than the holding Basket. By talking of “dynamic” I am referring to Trading.
I understand that not everybody may be used to trade, or eventually to learn how to trade. There are good solutions for mirror trading (aka copy-trading).
There are different good services and different good traders that make this by everyday job providing interesting results. When looking for them, keep in mind to check their track records and the risk your money is going towards.
For example: is your money staying on your Exchange account, or are you sending money to a third party? Try to avoid this second possibility, because losing money with trading is one side of the same medal, but we surely want to avoid that money may be robbed.
Up to now, we have created two accumulation plans (passive incomes) within the native accumulation plan.
On the top, the remaining thirty percent is destined for mining, and the reason why I still believe in mining is explained in the video here below about Cryptocurrency Accumulation Strategy, and the importance of starting mining when prices are at the lowest (meaning that we may start in the non-profitable side of the business).
In 99% of cases, you will have phases of non-profitability of mining, but starting mining in a non-profitable moment, especially if the market is very at low levels, may the most indicated option.
So, summarizing up:
1) Define the Money to dedicate to cryptocurrencies
2) 70% of it will be for purchasing cryptocurrencies (Purchase Basket) and the remaining 30% will be destined to mining plans (Mining Basket).
3) 70% of the Purchase Basket will go to in the Hold Basket and the remaining 30% will go into Trading Basket
4) 70% of the Hold Basket will go into Major Coins and the remaining 30% will go into Altcoins.
I have not mentioned Network Marketing on cryptocurrencies, because they are not contemplated and they are absolutely not suggested.
I have not mentioned Lending or DeFi because Lending is often carried out on Centralized Platforms and DeFi is in a strong Bubble moment, so I am not recommending to go deeper into it right in this period.
In this period of bull-run, I hope you will take care efficiently of how and when you would choose to buy cryptocurrencies since when I see a lot of people asking me how to buy them, I realize we are entering the FOMO (Fear Of Missing Out) moment.
Michele Zilocchi, chemical engineer by formation, cryptocurrency professional by inspiration. He works in cryptocurrencies full time from 2017, with activities among daily trading, mining farm facilities developer, and blockchain applications studies. Author of one of the most sold books in Italy, he is now entering the international market.