Strategy is vital.
Military planners devise strategies to win battles and wars, gamers use strategy to build strong and sustainable empires and business uses strategies for a combination of the same purposes.
Usually in business circles strategy could be summarised as three Ps, namely People, Process and Product and however sophisticated the model used it relies on these three tenets. Product is of course the thing (tangible item and / or service), Process is about delivery and People concerns both clients and employees.
Over the past few days I have shared a number of different strategies aimed at helping newbies grow their investment portfolios. They are predominantly to do with developing a structured approach, as opposed to keys to reading the market as I am still pretty new myself and learning the ropes. With a background in finance and admin this has enabled me to set up an approach that will leverage to the max, but before doing anything do the best possible research you can. I am briefly going to mention each of the strategies that I have covered thus far before introducing you to what I would like to call my Internal Conversion Engine, which pulls all of these ideas together.
In this post I discussed the possibility of using TEZOs staking as an easy way to earn ‘interest’ on your crypto that far outstrips that offered by banks. It offers easy potential passive income with the only downside being the fluctuation of the market price which makes it potentially unreliable as an investment.
Milking the Cow
It seems like a strange name but its name describes exactly what happens. Currencies are converted between each other to release profits on the spread. The profits are then used to both increase the Working Capital for investment and to skim the cream off the top, by taking some of the profit and moving it directly to the Holding Account.
It’s Not All About the Money
In this post I discussed the concept of leveraging the funds in the Holding Account to increase the QUANTITY of crypto in the account. This is more driven by growing the portfolio than profits. This can even be achieved through the clever investment of Microamounts.
The Magical Money Tree
Money doesn’t grow on trees, but Crypto does! A Crypto portfolio can acquire additional resources for free using three key approaches. Switch to Brave Browser to acquire free BATs, utilise blogging platforms like Publish0x to earn capital or sign up for faucets and view adverts and videos and play games and complete tasks to earn free Crypto.
Each of the methods has its advantages and disadvantages, which are discussed in more detail in the posts themselves.
However, moving on, the major shift comes at the beginning by shifting your Holding Account from your fiat currency to a crypto currency. For me I have chosen TEZOs because of the passive income it generates.
Additionally, and especially if using Coinbase, I strongly suggested the using CONVERSION rather than buying and selling and also introduced the idea of Investment Halving in the instance of making a bad investment decision which results in the market value of your invested Crypto falling.
So how do I pull of this together? I have devised the Internal Conversion Engine, based on the functionality of the Internal Combusion Engine. Don’t worry you don’t need to be a mechanic to understand.
Figure 1. The Internal Conversion Engine
The driving force of the investment is the engine block (1), which runs on a fairly conventional cycle of convert – wait for the price increase and then convert again to another currency (rather than buying and selling). This is a self-sustaining and relatively closed system other than milking the cow (2) when some profit is skimmed off into the Holding Account (3) which acts as a kind of battery that in the case of TEZOs builds a passive income through staking.
Funds held in the Holding Account can also be switched back and forth (4) with the alternator with the aim of increasing the QUANTITY of Crypto in the Holding Account (this is more fully described in It’s not all about money).
At the same time additional funds can be raised through the use of the Magical Money Tree (5) to draw more funds into the Holding Account which can additionally fuel increasing the quantity of Crypto held. This is free Crypto earned though using Brave Browser, blogging and faucets.
Finally income is released by selling from your Holding Account to your fiat currency (6) before sending it to your bank account (7). If using Coinbase, switch to Coinbase Pro to do this.
What I have produced here is a system (or an engine if you like) that is galvanised to maximise profits and wealth generation. However, as always it depends on accurate decision making when choosing the correct Crypto to invest in.
Now I have the system set up this is my greatest challenge. I hadn’t foreseen the sudden surge in Ethereium prices on 23rd July 2020 coming and while considering moving some Crypto there on the back of profiting from the TEZOS surge earlier in the week I failed to do so and missed out.
Whatever the system, it still relies on instincts and reading of the market with as much accuracy as possible.
In my previous posts on Tactics for Newbies I added sections on advantages and disadvantages, but this would be an unnecessary repetition.
The Internal Conversion Engine is not the only way to blend a strategy, and I am sure I will tweak it as time goes on and develop other strategies. As it is geared for growth it consolidates all of the advantages discussed in previous posts with the only possible disadvantage being that the user needs to remain clear headed and analytical at all times because as well as keeping an eye on the market it is necessary to stay focussed on all of the variables in the machine.
For now this concludes my series on Tactics for Newbies. I hope you have enjoyed reading.
Stay safe, stay successful…