Whale Club 2022 THE REAL ESTATE INVESTOR'S 5 Reasons Why Bad Things Happen in Crypto
You Have No Solvable Problem Frequency of Exposure FOMO and Urgency Micro Strategies Directly Opposed to Macro Belief 01 05 02 03 Table of Contents https://www.blockchainwhales.com/ Asymmetric Risk and Reward 06
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is a community of high net worth real estate investors that are leveraging blockchain to grow their real estate business. But what sets us apart? Simply put, we have an unfair advantage - knowledge, an operating system, personal responsibility, and control of our behaviors and emotions. Blockchain presents an incredible opportunity for the real estate investor who takes the time to understand it. Most folks are unable or unwilling to make the commitment to obtain the required knowledge of crypto. We follow a set of rules or “commandments” that guide our decision making, whether in crypto or real estate. Most people that approach investments are essentially gambling. We are deliberately making decisions to reduce risk, reduce effort, and increase our number of options while getting closer to our Solvable Problem™. This is a necessary requirement to be involved in crypto - as we say it’s still the Wild West. One must be dedicated to continuous learning and development, security, and accountability for your own actions. This requires a substantial and intentional commitment of time, energy, and cognitive focus that most are not willing to invest. Behavior matters. Crypto can be an emotional roller coaster. Fear of missing out, staring at charts, HODL, getting rekt’ed, chasing yield, doing your own research, etc… We’ve all heard at least some of these concepts and principles, and most are easy to understand. The difficulty comes in the implementation. Although most can probably learn these behaviors over time, most will not, or will do so only partially, because of lack of time, dedication, or for other reasons. This is how we create an unfair advantage and rig the game in our favor.
LEARN MORE HERE KNOWLEDGE The Whale Club OPERATING SYSTEM PERSONAL RESPONSIBILITY BEHAVIORS & EMOTIONS
Start with the end in mind. What APY do you need to make that goal? How much are you starting with? Are you adding in additional money along the way? What assets, businesses, real estate do you have that are contributing to your solvable problem?
There is no doubt that the upside of Crypto is immense. That doesn’t mean you risk losing everything. Know what you are trying to do. Once you frame your decisions around the blended APR you need to achieve your goal, you can start to make clear decisions on where to put your money.
The answer is, IT DEPENDS. If you don’t know what you’re after, you’ll chase more and ”More” is not a solvable problem.
A solvable problem is about getting a specific amount in a specific amount of time. Getting 10k for a wedding in the next 2 years versus saving $10M for retirement in 10 years has a very different risk profile.
If I want $10M in 10 years and I’m starting with $250K, I now know what APR I need to hit on my investments to get me there. I need a 44.4% net return to get me there. So is throwing everything into a coin that could 100x the right strategy? Probably not.
You Have No Solvable Problem 01 https://www.blockchainwhales.com/
What problem are you trying to solve with Crypto? Without a target, you have no frame around your decisions Crypto moves faster than any other market on earth New coins are being minted by the hour There is massive opportunity and with that there is also massive risk. Is this opportunity or that opportunity right for you?
FOMO and Urgency 02 https://www.blockchainwhales.com/ Do you have that friend that is always jumping on the “next big thing”? He’s telling you about supplements to take, how to win at stocks and now what crypto to buy. He gets you all pumped up about how big the upside is and tells you that if you don’t do it now, you’ll miss out. Yea, we all have friends like that. In Crypto, these hype people are everywhere. Fear Of Missing Out (FOMO) causes urgency, and urgency typically leads to poor decision making. If you know your solvable problem (44% APR in the example above), you don’t need to chase something that is going to “explode” in the next couple of weeks. If you feel FOMO or urgency in Crypto, put your phone down, turn off your computer and walk away. FOMO will get you REKT.
A macro belief is something you believe in for the long term. Maybe it's Bitcoin, maybe it's real estate. Maybe, it's both. Maybe it’s cash (although I’m not sure that’s the best option these days), gold, owning businesses, etc.
Yeah, but what about “so and so” they made millions off trading…Yes, there are traders who do very, very well trading crypto (or other assets).
This is a small minority of traders, which is why a market exists… for those traders to take money away from the MAJORITY of traders (who try and time the market but don’t have the expertise or skill sets).
Micro-Strategies Directly Opposed to Macro Belief 03 https://www.blockchainwhales.com/
For example, if your Solvable Problem is to own $50M in real estate, selling real estate to buy crypto would be a micro strategy that is directly opposed to your macro belief. However, using cash flow from real estate to get more crypto, which you use to buy more real estate would be a micro strategy designed to get you more of your macro belief.
Many traders will get rekt trying to time selling at the top and buying at the bottom, and end up mistiming both. The majority will have been better off dollar cost averaging and just holding.
04 https://www.blockchainwhales.com/ Real Life Example: “I wish I had more time… then I’d spend more of it with my kids.” Then every time you have more time you fill it up with more work… hoping that putting more work into your schedule will open up more time for you to spend with your kids later. Don’t undermine your long term belief with your short term actions.
Constantly looking at data does not get you any closer to your goals. Most of the time it ensures you won’t reach them.
You don’t look at the value of your real estate daily, do you? So why do we do that with crypto? Don’t fall into the trap of constantly checking a chart to see if the price has gone up or down If you are holding for 10 years, what difference does it make if something went up or down 20 cents? You are priming yourself to make rash decisions based on how often you are looking at the data.
Frequency of Exposure 05 https://www.blockchainwhales.com/
Have you ever gone on a diet and you look at the scale every morning and every night?
For most of us, the more we look at that scale, the less we feel like we can achieve our goal What if you wanted to lose 10 pounds in the next 2 months. Does looking at your weight twice a day make any sense? Body weight changes constantly throughout the day, so substantial loss is only going to be seen over a longer span of time.
If my solvable problem is $10M in 10 years, why would I look daily to see what my balance is? Why not look monthly or even quarterly?
Did it make you feel like you were making progress or did it make you feel like you were failing?
Everyone has heard about the guy that took 10 bucks and turned it into a million. He’s all over facebook and youtube. But what about the 100 other folks that threw their money at something only thinking about the “what if it goes to a million dollars” and the next day they are broke?
Asymmetric Risk and Reward 06 https://www.blockchainwhales.com/
Crypto Investing has to have asymmetry to the upside. What does that mean? It means that you are mitigating your risk before you are chasing gains. This strategy is commonly called the Barbell Strategy. Think about a barbell, it has weight on each side and a bar between them that has no weights. You know where to put your hands to pick it up. What happens if you try to put all the weight in the middle of the bar and bench it? Pretty hard, right?
When was the last time you saw someone on Facebook broadcast a massive failure in their life? Pretty rare, right?
07 Contributors A special thanks to the whales responsible for concept and coordination, writing, and designing of this gold nugget of information: Find more here: www.facebook.com/pesparks www.instagram.com/blockchain.whaleclub/ www.blockchainwhales.com/ Paul Sparks Alan Walker Sonia Lipov Steve Trang Nic Peterson Dan Nicholson The Barbell Strategy of investing is the same concept. On one side you have reliable, stable investments where your downside is mitigated. An example of that would be a business you own that averages 100,000 in profit every month. The 100,000 is reliable and continues to come in with (hopefully) very little effort on your part. On the other side of the barbell are your upside plays. These are higher-risk with a higher likely return. Because of that, you put in much less principal because it has an opportunity to massively grow but losing that money will not have a huge impact on your solvable problem. When you can eliminate as much downside as possible then what you are left with is only upside. This is how you create asymmetry to the upside in your investments.