Are you cashing out your investments?

By Bala | Bala | 25 Apr 2022


We all know how important investments are but at the same time, it is also important to cash out our profits as well. I have covered profit booking in several articles earlier. This article is also going to be a similar one talking about cashing out your invested value. There are enormous opportunities in the crypto world but at the same time, the market is also unpredictable. If we are not sure about the project in which we are investing, the project returns are also unpredictable. It is always wise to choose the right project to invest in and at the same time cash out the earnings at the right time.

Invest only the money that you are ready to burn

Crypto investments are a type of risky investment. Some people might argue saying that not all investments are risky inside crypto and there are a few stable coin investments and DeFi stuff that are absolutely safe. I wouldn't agree to that. Maybe those investments can be 90 percent safe but there is always a 10% risk factor. If we are totally unlucky the risk will play the game with us.

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I always recommend investing only the money that we are ready to burn. If we are dependent on the money we are investing, things can turn very bad in real life if the money is not returning back intact. Sometimes our luck will turn towards the positive side and sometimes the luck will be a sword pointing toward us. It is always better to keep the investment money aside and stay without any dependency on it. We should be happy thinking that if profit comes, well and good, and if there is no profit at least the principal amount we invested stays. Even otherwise our real life should not be affected because of this investment.

Diversify the earnings

If you are not dependent on the crypto earnings altogether, it is always a good practice to diversify the earnings. Sometimes we would have invested in something that provides us a good income but we should also be planning on when to exit and cash out. There are some types of investments where we can just cash out the profits alone and keep the principle as it is. People might get greedy about it and think that keeping it intact and making it compound would provide a lot more growth in the future. Even though that thought is good, it is always advisable to keep cashing out some part of our investment. In a major case at least the earnings from that and invest on a totally different thing.

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The advantage of diversifying the investment is to make sure that we don't have a single point of failure. We can always get a good profit from different projects instead of relying on just one project alone. Diversifying the earnings can also give us good exposure to different things and it makes it easier to manage our returns. If we have a monetary need in real life, I would say that the priority should be on clearing all the debts and leading a peaceful life.


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Bala
Bala

Developer | Writer | Blogger | Gamer | Blockchain Enthusiast


Bala
Bala

This is my general blog. I share different articles I write every single day.

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