Investing in Crypto The Warren Buffett Way: The Intelligent Crypto Investor
It is no secret that the legendary Investor thinks that the cryptocurrency market is a tulip mania like bubble, however that does not mean we can't use his proven investing strategies in the crypto space. In this post I will breakdown 10 of Buffetts best money tips and how we can apply his value investing strategies to the crypto markets.
Buffett Rule 1.) Never lose money
In a space with so much volatility it is often difficult to keep your emotions in check, when your investment is dropping I urge you to keep a strong hand and never sell in a lose.
Buffett Rule 2.) Get high value at a low price
"Price is what you pay; value is what you get" is a famous quote from Buffetts 2008 annual shareholders letter. How do we apply this to crypto? Do your own research find projects that you believe in that aren't getting as much hype as whatever flavor of the day coin is jumping 200%. Even when buying the big coins use the age old adage "Buy the dip"
Buffett Rule 3.) Form healthy money habits
Saving money is a habit, paying yourself first is most important. Set money aside every paycheck to save and invest in the coins you hold, this allows you to BUY and HOLD more frequently not just buy once and hold. Remember compound interests is the name of the game.
Buffett Rule 4.) Avoid debt
Please don't buy crypto with your credit card, and please don't take another mortgage out on your home to buy crypto either.
Buffett Rule 5.) Keep cash on hand
Keeping fiat on hand can help you in a multiple of ways, one is being able to take advantage of downturns and always having buying power without having to sell your crypto assets, another is if your personal financial situation gets rocky you'll have cash available to help ease the financial stress.
Buffett Rule 6.) Invest in yourself
This goes beyond crypto investments. Anything you can do to improve your own talents is well worth the the investment. In terms of crypto, learn all you can, read whitepapers, be active in communities, and attend conferences if possible.
Buffett Rule 7.) Learn about money
"Risk comes from not knowing what you're doing" Learn personal finance, it is imperative in order to appropriately be a crypto Investor. Just like you can compound your money, you can compound your knowledge by reading and learning everyday.
Buffett Rule 8.) Trust a low cost index fund for your portfolio (I'll put my own spin on this one)
I do not personally recommend buying a crypto index fund (at least not at the moment) however I think a great strategy would be every year buy the top 3 coins by market cap and keeping those held in your portfolio, creating in a way crypto bluechip holdings in your portfolio. At the time of this post this would mean buying Bitcoin, Ripple, and Ether.
Buffett Rule 9.) Give Back
Making massive returns in crypto? Awesome! but don't forget to give back to society, find something thats important to you and give back making the world a better place for all of us.
And finally Buffett Rule 10.) View money as a long-term game (HODL!)
The original HODLer himself has been preaching the term in his own words his entire career "our favorite holding period is forever" buy and hold your favorite projects for long periods of time and take advantage of the most powerful force in the universe...compound interest.
Remain an Investor
-Buhl
Enjoy the vote and reward!