Earn More #104
Market Meditations | February 23, 2021
? How to Build Long Term Wealth
What a day it has been. An important day to remember the following: real wealth is built through holding appreciating assets over a LONG period of time ✅ Let’s explore that further today.
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Blood on the streets today.
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As an investor, when the market is red it’s important to zoom out and look at the big picture. Stay calm and stick to the plan.
We believe in bitcoin, DeFi and the NFT space. We know the value proposition and the size of the market they can capture ?
That, is the source of our conviction.
As a trader, it’s important to be prepared for these drops during a parabolic move. Those in our premium community were ready and expecting. Here’s a snippet from our premium analysis on Friday.
We actually brought Trader SZ on to our podcast ? to discuss protecting ourselves from these red days. He’s a veteran trader who truly understands how violently parabolic markets can turn. More on this later, first, let’s explore further how to build wealth ?
Rich Dad, Poor Dad
In Rich Dad, Poor Dad, Robert Kioysaki takes us on a journey through lessons from his two dads: his real father (poor dad) and the father of his best friend (rich dad). Both men shaped his thoughts on money and investing, which we can all learn a great deal from ?
Make Sure Your Money Works As Hard As You
Robert’s real dad (poor dad) spent his life working for a company and therefore creating someone else’s wealth. If you want to create real wealth, acquire your own assets that generate your own income. All assets should increase your cash flows (and allow you to buy more assets). This creates compounding income ✅
2️⃣Good and Bad Debt
According to Robert, there is both good and bad debt ? The difference is to do with what your debt is used for. Bad debt is used for expensive purchases and generates weaker cash flows. Good debt is used to purchase assets and generate more cash flow.
Minimise Income and Maximise Expense
Robert’s poor dad was of the opinion that to maximise wealth: we need to maximise income (through hourly wage) and minimise expenses. ? Rich dad thought the opposite: you shouldn’t try to maximise your income through an hourly wage but rather, you should aim to invest your capital. What’s more, it is a good idea to increase the right type of expenses (going to a seminar, learning a new skill, buying a new book or checking out our Introduction to Technical Analysis Course ? ).
The Three E’s
Rich dad believed that to become a successful investor you need: Education -> you need a sound understanding of the markets, otherwise, everything you are doing will be pure speculation. Experience -> it is important to get started with your investing journey (begin, try, fail and try again). Excess cash -> maintain strong cash flows and utilise any excess to invest in assets.
Stop Delaying Your Journey
Keep your day job if you need some stable income but put all extra time into your business / investing journey. Stop waiting. After many failures, it becomes more likely that your next attempt will be successful ? However, make sure you only risk enough capital to be able to fight another day. Don’t let the failures wipe you out!
Now over to the hottest crypto and DeFi news and analysis ?
? If you like Rich Dad’s lessons, consider joining our community and gaining access to the full range of insights and analysis ?
CRYPTO NEWS & ANALYSIS
Tether Settles for $18.5 Million
A legal battle beginning back in mid-2019 finally came to an end this morning when the New York Attorney General’s office settled with exchange Bitfinex and Tether for $18.5 million ?
In April 2019, the NYAG’s office accused Bitfinex of using Tether’s funds to secretly cover $850 million worth of lost payments. This caused a major issue when Bitfinex customers tried withdrawing their funds in late 2018 and were unable to do so. As part of today’s settlement, however, Bitfinex and Tether admit to no wrongdoing.
Many people have questioned whether Tether, supposed to be backed 1:1 by the U.S. Dollar, has enough in its reserves ? Tether has volunteered, as part of the settlement agreement, to publish publicly available quarterly updates on its reserves to assuage such concerns.
Why is this relevant for traders and investors?
Many have speculated that this Tether FUD (fear, uncertainty, doubt) has been used as a negative catalyst to suppress price. Even if that’s not the case, we know uncertain markets are often harder to trade due to their increased volatility and chop. This clears up the legal battle once and for all, which should give the market clearer direction ✅
Regardless, this legal battle has revealed that markets are susceptible to unexpected and unpredictable events. That’s why as traders, we need to make sure we know how to manage risk. Check out my free ? Risk Management course on YouTube ? to learn more!
DEFI NEWS & ANALYSIS
Solana DEX Raydium May Integrate SushiSwap
SushiSwap is considering an integration with Raydium, one of the newest decentralized exchanges on the Solana blockchain, in order to reduce Ethereum’s soaring gas fees ✅ For those who don’t know, Solana is a high-performance blockchain that helps developers create scalable crypto apps ?
Why is this relevant for traders and investors?
If you’re trading the suite of DeFi products, it’s likely that Ethereum gas fees have cut into your profits and you’ve been frustrated by the slow nature of transactions. This integration can allow you to swap tokens and manage yield farms faster and cheaper, which means more profit in your pocket.
If you’re a trader looking to take advantage of the hottest altcoins, Solana’s native tokens SOL and SRM are both up around 27% and Raydium’s native token “RAY” has also surged since the weekend. This bullish news could be the perfect narrative to catalyse another price surge.
And that’s enough reading for now, sit back, relax, make some popcorn and tune into our podcast episode ?
How to Protect Your Profits with Trader SZ
Saeed Zaman is a well-known trader and mentor. He holds a degree in mathematics and has been a full-time trader for 8 years, covering a range of markets with a focus on FX.
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Disclaimer: The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision.