Meet Andrew, a crypto investor who knows a little research goes a long way
If Andrew has learned anything about crypto, it’s that you don’t need to be an expert to make a great investment — you just need to know the basics.
Like most people in their late twenties, Andrew, a media professional, is thinking carefully about how he invests his money and knows the importance of creating a diverse portfolio. As a crypto newbie, Andrew says he didn’t feel confident at first, but he found a steady hand in doing his own research and starting off small. Now he has plans to invest regularly and is committed to holding onto his crypto investment for the long haul.
Greatness from small beginnings
To make his first successful investment, Andrew took a considered approach to cryptocurrency; he first needed to understand it.
“I guess it’s just nice knowing the details,” says Andrew. “In the beginning, I was the farthest thing from being a crypto pro. I wasn’t a hater, I just didn’t get it.”
“But then I found a really good article relating Bitcoin to gold, and it showed the similarities as well as the differences. I learned that Bitcoin is finite, meaning: there’s only going to be a certain amount in existence and is guaranteed to be deflationary. It also touched on some of the differences to gold, and why there’s such good upside with Bitcoin.”
With added confidence, Andrew made one of his earliest investments with a $50 Luno voucher he’d received, and watched its value appreciate from there. Instead of trading the proceeds or splurging on things he doesn’t need, Andrew’s mind is set on keeping his crypto for the future.
“For the moment, it’s more of a longer-term investment for me.”
Preparing for an uncertain future
Before pursuing a career in media, Andrew was a student of business and economics and held a particular interest in the larger worldview of macroeconomics. As a result, he’s aware of how fragile economies can be and why it’s important to secure your finances by creating a diverse portfolio.
“I pretty much do the basics. I have a 401k, an Acorns account, and I do small trades with an investment firm. But I’m also paying more attention to crypto now, just because of the record inflation that’s happening in the United States,” shares Andrew. “It’s definitely something I really haven’t noticed in my adult life. I’m 28 years old and I haven’t seen anything like this before.”
Andrew is self-admittedly a risk-averse investor and is always looking for safe ways to invest money. By shifting the way he thinks about crypto and considering how he can mesh it into his financial life, he’s started to realise “the old ways” might not necessarily suit him best.
“I would say what’s more risk-averse than putting money in the stock market or keeping it in your bank account? For me, I’ve had a savings account for so long but it’s just sitting there making no money. So, if you’re super risk-averse to do that, but at least have it in some kind of blue chip stock.”
“But even then, it’s the opportunity cost of are you going to get the same kind of growth year over year? If you put your money in Bitcoin a few years ago, you’re making a lot more than you did if you put it in Apple or something like that.”
Taming risk with the right investment strategy
Starting something new can feel exciting, but also like a step into the unknown. For Andrew, it’s all about generating savings sustainably and without breaking a sweat. Enter: Dollar-cost averaging, the idea of making timed, periodical investments regardless of market conditions.
“I’m going that route because it’s just something you don’t have to think about; it’s super easy, especially because it’s a super simple investment. I think that’s definitely the way I’m going to go for the long term.”
As simple as this strategy may sound, Andrew still had to put in his own research to feel confident enough about making monthly investments. His advice to others is to start with an amount small enough that it won’t affect your monthly expenses.
Although cautious, Andrew is excited to see what the future holds for crypto as he continues his pragmatic approach to investing: consistently brushing up on crypto knowledge, understanding how much of his savings he can turn into investments, and personalising an investment strategy to suit his preferences.