I thought I made stupid mistakes, but then I read a bunch of threads on the internet, and it blew my mind.
It was about how some people have put their life savings in crypto and lost it all.
And it's not even the worst case. The worst cases are when people take loans and invest in a shiny crypto project.
They lose vast amounts of money and still have to repay their loans.
I made a lot of gains when I started in crypto. Later, I lost a significant amount of money.
But I have learned from my mistakes. I don't invest in shiny projects that give massive returns.
So, I still believe that crypto is a beautiful opportunity.
However, the story would have been entirely different for me. If I had entered during the bull market's peak, and rode down till the bear market's peak, I would have lost most of my money.
Then, I would have believed, like most outsiders, that crypto is shady and scammy.
Our emotions are important, but we make dumb mistakes following them. When we act on emotions, we don't think about outcomes. We have a bias and find reasons to make it valid.
If you are an average human being, you will weigh the value of one choice against the other in the short term. Like taking a loan at a 10%-15% interest rate and then putting it all in a crypto project that gives 50% to 200% yearly returns, it seems like an intelligent choice at the time.
You find reasons to confirm your bias that even if the coin's value drops a little, you will be profitable after a year or two.
You fail to consider that the coin's value can drop 90%, to almost zero. The massive returns are not sustainable in the long term.
But who's thinking for the long term? Most of us make decisions for the short term only.
What's more dangerous is when you make a stupid decision and get lucky. Now, you will try to repeat the process, causing you to make even worse decisions in the future.
You think you are clever when you get a lucky 50% gain. That's someone's one month salary you made in a day.
So, you repeat the process by buying with your instincts and lose it all. That's crypto life.
Your one success gives you the conviction to take substantial risks until the market humbles you down.
When you hold a position in stocks/crypto for years, and your position is in a considerable loss, it's hard to let it go. You will eventually become a bagholder.
You don't want to get out of a massive loss and save a small amount of money because it's difficult to accept that you were wrong all that time.
Letting the position go with a slight loss is reasonable. But we make decisions based on emotions, not logic.
I have always acted on my emotions and lost. I have given up hope on dozens of coins because their value dropped to zero. Rarely have I decided to salvage what's left and invest it in a better project.
If I had acted on rationality, I would be more profitable.
Unless you become honest with yourself, it's hard to improve.
If you give up on bad investments without losing all your money, you can invest the remaining amount on good projects.
If you do this, you will win eventually.
Something is always better than zero. Even 10% of your initial investment left, though painful, is better than nothing left.
It is like planting a fruit tree vs growing vegetables.
You plant vegetables, and then you pluck them when they grow. You have to repeat the process. Sometimes the crops fail because of various factors.
So, you will lose your time and investment. You can see immediate returns when you plant crops, so you are addicted to growing crops.
On the other hand, when you plant a tree and water it for years, it gives you shadow and fruits for decades. You don't expect anything in return for a long time. You are patient. And that's how investments should be!
Similarly, when you invest, you should prefer something that will give you better returns in the long run than some shiny short term rewards.
When you invest in crypto, defi's and nfts, they may or may not be beneficial in the short term. But if the project is worth it, it will be worthwhile in the long term.
There are fewer efforts and more rewards when you plant a tree. But most of us prefer the immediate rewards and go for crops.
The world is full of options and opportunities.
Every new opportunity excites you. But is every new opportunity worth pursuing?
Richard Branson said that business opportunities are like buses; there's always another one coming.
But if you keep riding new buses, will you ever reach somewhere?
Lots of opportunities confuse you. Writing helps you clear your mind.
One of the best ways to make better decisions is to write your emotions.
Writing is a simple yet effective way to think clearly.
It slows you down so that you can think rationally.
You can articulate your ideas and read later about your logic.
When you read what you have written, you will understand what you were thinking.
If you have written vague ideas, you were not thinking clearly. So, it would help if you don't act on your emotions because you don't understand your logic yet.
If you don't act, you can organize your thoughts, add more ideas, and connect them for a better solution.
In short, you can map out a clear plan.
Writing is relaxing for your mind because the more you write, the more you understand your ideas and logic. The more you can improve.
It might give you a new perspective or improve your old mindset.
Writing Helps You Connect With Like-Minded People.
Hive is a great opportunity to write and let your emotions out. There is an additional incentive of earning some money.
Then, there are communities like Leo-finance where you can find like-minded people about crypto and stocks to connect with.
When you share your thoughts/perspectives about something with others, you can take feedback about your thoughts.
You can understand if your logics and thought process is right or if you have to change something.
If you think about it, it's a great system to improve yourself. Drop the bad ideas; pick up the good ones. Then make the good ideas great.
I have been an introvert all my life, but writing and connecting with people by commenting on their posts have worked for me here.
So, I will continue the process!
Read my last posts here:
Another Day Has Passed!
Train Your Feel Good Chemicals🤤
