5 steps to invest stress free in crypto

This letter is for those who want to invest in crypto efficiently and stress-free.

Many crypto investors are mentally exhausted and keep investing even when they have no money to do so (even in a bull run). That’s where the big mistakes happen.

Here is an example of a typical (bad) crypto investor:

Source:
https://twitter.com/coinfessions/status/1853814678549594376

This is a sad story. It’s a story that, hopefully, you don’t fully relate to.
But many people can understand the feeling.

The feeling of being:

• Physically worn out
• Mentally worn out
• Feeling lost

We can all relate to feeling a bit lost in the crypto world. Feeling overwhelmed. Crypto isn’t a straight path and can be very bumpy. And although these feelings are part of being human, they shouldn’t be considered normal.

Consider them a sign instead.

A sign that your path isn’t the right one.
That you need to change direction.
That you need to improve.

Feeling lost or overwhelmed in crypto is a clear sign for you to reduce the stress of investing.

If you want to trade stress-free, avoid this:

1. Investing too much money
2. Investing everything at once
3. Keeping a portfolio with a single altcoin
4. Buying when everything is pumping
5. Buying everything trendy on X or YouTube

Keep on reading for 5 steps to avoid these pitfalls and eliminate stress from investing in crypto.

1. Set a long-term goal

The first step is to set long-term goals. Goals help you move forward so you won’t get distracted by the noise on X and YouTube.

They will help you not to FOMO into a trade – which will hurt your long-term goals – and keep your head straight instead.

Have you ever taken the time to set your long-term goals in trading? If you haven’t. Take a little time now.

Write down:

• Small goal: buy something small and fun. Take a weekend away with your wife/husband/friends, or buy that new video game.

• Big goal: pay off your car. Pay off your house. Go on extended vacations. Invest in your business. etc.

2. How much do I earn and spend

Now we will get very practical. In this part, you need to write down what you earn and spend. Not in crypto, but overall.

This will help reduce overwhelm because you’ll know exactly what you have left to invest.

You can make a precise budget, or you can guess it. I’m more strict and like to make a budget each month.

Take some time (if you haven’t already done so) and write down:

• Spendings: Rent/mortgage, utilities, food, car, loans, etc.

• Earnings: Job, company dividends, etc.

3. How much is left over

This is where the magic happens. We are now going to subtract the spending from the earnings.

Example:

Earn: $2500
Spend: $1750
Leftover: $ 750

This means you have $750 open to spend on things that benefit you.

This amount is carefree because you have already subtracted all your expenses.

Nothing is really needed of that $750.

Overspending

You did the calculation and have nothing left over, or maybe it’s negative.
This means you are overspending, and overspending is a serious problem. You will dig yourself deeper into a hole because you spend more than you earn.

There are two leverages to improve this:

• Spending less.
• Earning more.

These two leverages are great for getting out of debt and having a healthy piece of money left over at the end of the month to safely invest with I would recommend first solving overspending before continuing to invest in crypto.

Solving this issue is the bare minimum if you want to invest stress-free into
crypto.

4. Putting in an emergency fund

Now, we will focus on the emergency fund. We need this to have peace of mind.

“An emergency fund turns a crisis into an inconvenience.”

— Dave Ramsey

Having an emergency fund is a powerful tool. It gives you the control to navigate through the ups and downs of the crypto world without being at the mercy of every big event.

It’s the difference between being in charge of your finances and being brought to your knees by unexpected bills or car repairs.

If you haven’t saved up for 3 to 6 months of living expenses, you need to start saving. After you have managed that you can continue your investing journey.

5. The recurring investment

Now that you know what you can spend stress-free each month, you can look at how you will invest that. The next step is to calculate the amount you can use to invest in crypto.

The amount you want to invest is based on what you have left over at the end of each month.
The percentage is based on your risk tolerance. How much risk are you willing to take?

I would recommend starting small and, after every 6 months, adding a couple of percentages.

Start with 2% and work your way up to 10%.
The more you know about crypto, the more confidently you can invest.

Always start small and build your way up.

Example:

Left over at the end of the month: 750 dollars
Percentage you want to invest:      10 %
My monthly amount to invest:        75 dollars

Write down:

Left over at the end of the month:  …… dollars
Percentage you want to invest:      …… %
My monthly amount to invest:        …… dollars

With this amount you can easily invest monthly.

You can put this amount in Bitcoin but also multiple altcoins. This is all based on your risk tolerance. More altcoins = more risk. You can take a look at how to set up a diversified crypto portfolio for a deeper understanding.

TL;DR

To become a stress-free investor:

• Get your finances straight.
• Know what your earning and spending and what is left over.
• Always have an emergency fund.
• Invest a percentage into crypto each month based on your left-over amount
• Invest that amount based on your crypto investment strategy.

Smart investors don’t push too hard on investments. They maintain a steady pace. If they want to invest more, they spend less and improve their income.

Steady investing will result in long-term success.

Be the hero of your own crypto journey, and stay safe.

Dan John