Lee’s Journey Into Investing Part 1

I have always been a cautious individual when it comes to managing my finances. I have always lived within my means, saving wherever possible and avoiding any unnecessary risks or gambles with my money. However, the interest rates on savings accounts since the financial crash in 2008 have been very underwhelming and I never even considered the concept of putting my ‘money to work’, as it just never really occurred to me.

The idea of investing was always on my radar but I felt I never had the time or knowledge to delve into it further believing it was out of reach for me and just the playing of people that were rich. I paid it no real attention. That was until the crypto craze swept through the public’s consciousness and I heard rumblings of making money in multiple % terms. Suddenly, everyone down the pub was talking about investing in crypto instead of betting on sports. And I do mean everyone, not TV pundits or Bloomberg TV or the FT, it was Jim, the builder and Tony the landscaper.

Lured by the promise of easy money I jumped into the ‘assessment’ phase where I researched the sector. I immediately hit one of the (many) troubles with crypto in that it is often marketed as a way to make instant gains and become a millionaire overnight or at least double your money in a very short period of time. As someone who is naturally sceptical and likes to wear his ‘sensible hat’ most of the time, I at least did a fair share of research and realised that the markets can be extremely volatile and that the price of every alt coin and crypto project is intimately tied to the often wild fluctuations of Bitcoin. Promising decoupling for contagion doesn’t mean it actually exists. Crypto wasn’t meant to be like this. 

I realised that crypto *might deliver on its promises, but it is often just down to luck and having the right alt coin project when it’s pumped, whilst not getting greedy and exiting before it’s dumped.

I was looking for an educational source to guide me through the maze of social media noise, conflicting opinions and misinformation in Crypto. That’s when a good friend introduced me to someone who had not just a crypto wallet but also an ISA and diversified with ‘traditional’ investing – stocks and shares. I had many conversations and he showed me that education about the framework of shares and stocks can make you a better overall investor, and just luck on its own shouldn’t apply to traditional investing.

He had tried, and to some degree of success, applied this knowledge to crypto which resulted in a portfolio that was more robust and diverse. Comparing this to mine where I had lots of risky eggs in one crypto basket, I could see how he used his knowledge to mitigate his risk and improve gains.

As I continued to research Crypto, determined that if others made it big I could too, it became obvious that I was taking large risks with my money and I was getting burnt. I feel in hindsight traditional investing could have been the better option for me, but I was dazzled by the onslaught of bright lights and promises of the cryptocurrency scene.

I have always been interested in making money online, but I never considered letting my existing money WORK for me. A concept whereby instead of languishing in a current account with next to nothing coming back in interest, I can use my money to make more money, providing a continuous growth opportunity whereby it’ll, hopefully, build over time.

Crypto is still exciting and there are still genuine money-making opportunities if you’re lucky or in-the-know but I started to question why crypto was so appealing to me in the first place with the above concerns vs the obvious risks.

I wanted to ‘hold on for dear life’ to something promising me the world but I was yet again paralysed with an abundance of choice and things were quickly becoming very overwhelming. I had no real direction. It was hard to invest in any alt coin project and feel totally safe as I was always reading about some rug pull or a crypto project crashing to zero in the news.

In reality the biggest risk was following the advice of big name Youtube crypto influencers where they often promised the earth and the moon along with it. Investing in crypto alt coins with promises of 100x gains isn’t sensible investing. I was learning some valuable lessons.

The crypto markets taught me my first real lesson in the middle of 2021 when the bull run was in full swing and confidence in crypto (including my own) was at an all time high.

It was an exciting time and I delved into the world of automatic investment trading bots and for a while, it worked well. To me it was the ultimate panacea, an automated money making machine. The bots made me hundreds of pounds of profit in a short period of time. However, when the markets crashed, my bots’ trading parameters fell out of range and everything stopped working. My money was in limbo and the majority of my crypto portfolio consisted of potentially shady alt coins. Just like that, my portfolio was 85% down. Fuck. Didn’t expect that…

Instead of panicking and selling, I waited and adopted a strategy to regain some of my losses. I swapped parts of my portfolio for bigger crypto alt coin projects and eventually sold them all out for Bitcoin and transferred my crypto out of Binance into a cold wallet.

In 2023, my crypto portfolio is still worth just a third of what it was worth in 2021. Despondent, I had another conversation about ‘traditional’ investing as I was wondering how the 85% shock would be felt in their world. There was no 85% shock, on the FTSE… Traditional investing was finally on my radar.

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