 Most of us know that cryptocurrency investing can be risky from famous people getting sued for promoting scams to the small scale scammers here on YouTube. And let's not forget about the crypto queen that scams her sim fan base with endless pump and dumps. But those are rookie numbers compared to the other crypto queen that scammed people for billions with a B. I think you get the point. There are a lot of scams in crypto. They scammed you. See, they tricked But while these do seem like pretty obvious scams, there are many mistakes that I see beginners making over and over again. And that is what this video is all about. We're going to be going over what those mistakes are and how you can avoid them. So the first mistake is not investing at all. And it's very important that you start investing while you're still young, even if it's just a little bit. Now with many stock brokerages, they require you to invest quite a bit just to get started investing. And it actually used to be a lot worse 10 years ago, you'd probably need at least $10,000 to get started investing. And because of this, most normal, you know, lower middle class hardworking people wouldn't start investing until they were in their 30s. And because of this, they would literally lose out on millions of dollars in compound interest. And if you don't believe me, go look at a compound interest calculator and start investing, say like $100 a week at the age of 18 versus $100 a week at the age of 35. And you will see that by the end of their life, the difference is going to be in the millions of dollars. But with cryptocurrency, you really don't need much, you can get started with $100 or less. In fact, there are promotional opportunities where you can win up to $10,000 into free crypto and stocks. You've probably heard of these. If you haven't signed up yet, you can find my links down in the description below. But yeah, it is easier than ever to get started investing and you should start even if it's just $5 a month. First of all, you're going to build the habit of investing because investing is a habit. You're also more likely to make a mistake, of course, when you first start. So you want to make those mistakes when you're not investing that much money and not later on when you have much more. Plus, you can only learn so much from watching content. Eventually you actually have to jump in and start investing yourself. Think about it like riding a bicycle. You can watch videos on how to ride a bike. You could read books about it. You could even hire an expert. But eventually you're just going to have to jump on the bicycle and try to ride it. There's really only so much you can learn without actually trying to ride it yourself. And the same thing goes for investing. And just from a human perspective, the fact that you could potentially get incredible returns from something like cryptocurrency at a young age where you don't have that much money makes it pretty enticing. And later on, you might decide to invest your money into a lot less riskier things like stocks or maybe index funds. And that's great. But the fact that you started at a young age is what matters. It's better to dip your toe in now than to wait until you're 35 before you start investing. Number two on the list is going to be not having a goal, a plan and a strategy. Now, there's a lot of different investing strategies out there. Every YouTube channel is going to have their favorite. You know, some people think you should just put all of your money into index funds. I happen to think that's a pretty good strategy. But a lot of other smart people think that you shouldn't just invest in index funds and stocks because of the fact that the government has so much control over those industries. And if the government is extremely irresponsible and they print too much money, for instance, a lot of those industries might suffer. But this is not going to be a video discussing strategies. The important thing is that you do have a strategy yourself. So the best way to do this is to start off with a goal. And you need to kind of evaluate your life situation and things that are specific to you. So for instance, some people are minimalist, they don't really need much to live. And so they would be able to very comfortably retire on less than a million dollars. Others might want to live in really expensive cities, drive really nice cars. And for that, you're going to need several million dollars at least to retire. After you figured out what your goal is, you need to figure out a plan in order to get to that goal. So how much do you need to invest every single year? How long would that take in order to get to your goal? Maybe you want to retire when you're 65 or you want to retire early. Maybe you know where you want to retire. So it would be a good idea to buy a bunch of real estate there because it would be a lot easier to manage. Or maybe you have no idea, you want to travel the world and go to a bunch of different places in order to figure out where you want to live eventually. These are all things you need to keep in mind. Now after you figured out what your plan is, then you want to make a strategy in order to get there. Some people really like real estate, index funds, cryptocurrency, there's a lot of different strategies out there. But the important thing is that you have a strategy that you really believe in because you've researched it and that will bring conviction. And without conviction, you are going to panic sell anytime something goes slightly wrong. And I know a lot of people out there probably think I know this already. I know this is super important, but I have seen experienced investors. In fact, some of my own friends think that they have conviction and then they panic sell at the worst possible time. And me and this friend would laugh at other people who did this and then something happened in the market. He freaked out any panic sold. And of course it wasn't the right call. And if you look at the YouTube landscape and the influencer landscape, we are seeing a lot of people doing this right now where they are panic selling. I sleep really well every night. I pretty much never worry about the markets. And the reason for that is because my investing strategy is long term. Now for conviction, it really does help to have good information guidance and a support group. And that's exactly what you'll be getting with my Patreon. You can find that link down in the description below where you will get access to my buys, my sales and a group of private investors as well as a private discord. Now, when it comes to formulating a goal, plan and strategy, it really helps that you do what's known as your own due diligence. And this is number three on the list is where I see people getting bad information and not doing due diligence. So I don't think there's anything wrong with listening to other people's opinions. And in fact, I actually listen to people who have opposite opinions on things because I basically want to play doubles advocate and see if there's any problem with my personal investing philosophy. So for instance, I listened to really smart people who think hyperinflation is coming and it's going to be a huge deal. It's going to break the economy. And then I also listen to people who think that inflation isn't that big of a deal. Now I am definitely more on the hyperinflation side. I think it's getting really serious and out of control. But if you honestly listen to the opinion of people that think inflation is not that big of a deal, you'll see that it's not as crazy as it might sound. You know, people like Kathy Wood, for instance, are incredibly intelligent and you should listen to what they have to say. So what I personally recommend you do is when you're thinking about investing in something or not investing in something, what you want to do is do your own due diligence first and then listen to what everyone else has to say. This is almost like with multiple choice questions where after you read the prompt, you want to actually try to answer the question yourself before you look at A, B, C and D. And usually the answer that you come up with, if you've studied is going to be the right answer. Whereas if you read the answer choices first, you might psych yourself out and convince yourself that a wrong answer is the right one. But let's say you find someone who is spot on with their assessments, they have access to really good tools, they present really good information, and they're also able to educate and explain things in a way that is really easy to understand. You still need to do your own research, which is number four on the list. A huge mistake I see people make is not doing their own research. Doing your own research is difficult and time consuming, but it's also very important for any investment that you make. And this is why I like long-term investing because I do my research on some type of index fund stock or cryptocurrency. And then I just hold it for the long term. So I don't have to do the research all that often. Whereas if you're trading, you're constantly going in and out of the markets, you're going to be spending basically all day researching if you're making smart trades. And even if you think your source of information is good, always make sure to double check that info. So for instance, the other day I was on Coinbase, I was looking at one of my investments and I noticed that the price was half of what it should have been. And for a split second, I panicked. I thought that something huge, some news came out and my investment flash crashed. But it turns out it was just simply a UI error with Coinbase. They were just simply wrong. Now I could have maybe not had strong conviction or freaked out and panic sold it. Now Coinbase is usually a reliable and trustworthy source. And if someone like them can be wrong about something as simple as the price of an asset, imagine what else they could be wrong about. So this is why you always want to check multiple sources. And if you look at other people's due diligence, always make sure to double check their work as well, even if they've been right and they've been amazing in the past. I really get saying that I like to live by when it comes to investing and kind of just life in general is trust, but verify. Now this video is not about how to do analysis, but the three main types are going to be fundamental analysis, sentiment analysis, and technical analysis. In my opinion, the most important one, especially when it comes to stocks is fundamental analysis. But I'm not one of those people who totally discounts technical or sentiment analysis either. I think they're very important to understand as well. The next one on the list is going to be FUD and FOMO. FUD stands for fear, uncertainty and despair. And FOMO stands for fear of missing out. And these are two very common emotions that you'll see time and time again and investing the result in you doing the exact opposite of what you want to. So in investing, you want to buy low and sell high. FUD and FOMO cause you to buy high and sell low. FOMO in my opinion is the most dangerous one because realistically speaking, you're much more likely to hear about an investment after it's already had most of its gains. So if an investment goes up like three times or five times, something like that, you're probably going to hear about it because news outlets are going to be writing about it. People are going to be talking about it. And that is usually the worst time for you to invest. FUD is also dangerous as well, because you might think that your investment is going to go to zero when in reality it's just a slight correction. And oftentimes if your investment has gone down quite a bit, that might actually be the best time for you to buy. Now one way you can totally avoid having to worry about this that I highly recommend is doing what's known as dollar cost averaging. This means that if you have $10,000 to invest, instead of putting it all in right now, you can put $1,000 per month over a 10 month period. And because of this, it's going to reduce your risk, you're not going to be trying to time the market. And it won't matter all that much, whether the stock goes up or down, as long as you did your research on it, you know that it has solid fundamentals and over the long run, it's likely going to go up. The next mistake that I see all the time is not understanding supply and how it relates to value. So a lot of people remember how Bitcoin used to be one cent and now it's well into the tens of thousands of dollars. And they think, you know what, I missed the boat on Bitcoin, but there's a lot of other cryptocurrencies that are less than one cent and they might do the same exact thing. So I'm going to invest in those. Now this usually isn't the case. And all you really have to do is look at the market cap of the coin and how that relates to the different types of supply. Now there is a max supply, a total supply and a circulating supply. And let's go ahead and look at Bitcoin. So you can see which one is which. So with Bitcoin, when I was writing the script for this video, the circulating supply was 18,922,000. The max supply was 21 million. And the total supply was 18,922,000 as well. The max supply is the maximum amount of coins that will ever exist. So in Bitcoin's case, there will only ever be a maximum of 21 million Bitcoins. The total supply is the amount of coins that have already been created. So in Bitcoin's case, it's 18,922,000. And then the circulating supply is the amount of coins that are circulating on the market. So in Bitcoin's case, the total supply and the circulating supply are the same, 18 million and 922,000. With many coins, those are not going to be the same because the creator of the coin will decide to withhold a certain amount. And then some coins have a total supply that is in the trillions. And that's about 28 million times higher than the supply of Bitcoin. So basically what that means is this coin will never get anywhere near the price of Bitcoin unless its market cap is 28 million times larger than Bitcoin is. And realistically it's much better to just look at the market cap of the coin in order to determine its value. And this brings me to the next mistake. And that is investing in random alt coins to try to get 1000X returns. Now at the time of creating this video, there is over 16,000 different crypto currencies. And for every one crypto that 1000X is, there are hundreds that end up losing money. But it actually gets worse than that because just like most companies in the computer boom or the dotcom bubble went to zero, most cryptocurrencies are also going to go to zero. And that means that investors in those cryptocurrencies will likely lose all their money. So it's incredibly risky to try to pick alt coins that are going to 1000X. At the very least, if you do this, make sure to heavily diversify your portfolio. So it's a much better option to, first of all, make sure to do your research on the cryptocurrency. Make sure you know what problem it solves and understand the fundamental underlying technology that makes this cryptocurrency better than others. You also want to look at the team behind the cryptocurrency as well as the community. And then after you've done that, you want to invest for the long term. And the best way to do it is probably just to dollar cost average in. And then you also want to make sure to diversify your portfolio. Don't just go all in on one of them. Now don't get me wrong. Everyone throws a little bit of money in here and there at random cryptocurrencies. And I've done it as well. I'm guilty. But that was money that I was 100% willing to lose. And I truly did not care about it. I was probably just going to blow it on something that I didn't need anyways. Number eight on the list is going to be buying and selling too much and too often. And this is also known as trading. Now I'm not totally against trading, especially when it comes to cryptocurrency. It's a pretty new market. And I think if you're really good at it, you can be successful. So for instance, Sam Bankman freed worked in Forex when he worked on Wall Street. And then he used his knowledge from trading to figure out how to make a million dollars a day with cryptocurrency. And basically what he did is he noticed there was a discrepancy in the price of cryptocurrency in Japan versus the United States. In Japan, it was going for 11,000 in the US. It was 10,000. And so he would just buy a bunch of cryptocurrency in the US and then sell it in Japan. So if you're incredibly experienced, you know what you're doing. You're like a professional basically sometimes that can work out. And I have seen people be successful with that when it comes to cryptocurrency trading. But with that being said, it's basically a full-time job. If you're trading, this is not investing where you can do it passively. And there are many reasons to invest rather than trade. First of all, when you trade, you're going to be paying short-term capital gains tax versus when you invest over a year, long-term investing, you'll be paying long-term capital gains. So I'll put a chart up on the screen that I found that I liked from last year from Financial Samurai. And you can see that depending on how much you're investing, it's going to be a difference of somewhere between 10 and 17%. And over the long run, those taxes are really going to add up. On top of that, fees for trading are going to be much higher because you're constantly entering and exiting positions. And every time you do that, you're going to be paying fees. Now, if you've ever spent any time around subreddits like Wall Street bets, for instance, you see that people end up losing a lot of money doing this. Many of them get into margin trading or option trading, which can be incredibly risky. And they might end up losing hundreds of thousands of dollars. There are dozens of examples that you can look at. Number nine, and this is something that I have seen even experienced investors do, and that is not protecting your cryptocurrency. Now, first of all, you want to make sure you write down your seed phrases. You also want to make sure you write down your private key. Now you want to have this stored in a very safe place that only you know about. And optimally, you want to store it in several different places. You don't want your house to burn down and you lose your seed phrase and your key, because then you can't get it back. On top of that, you also want to have two factor authentication enabled. If somehow your account gets hacked, if you have two factor authentication enabled, I know it's super annoying, but that is going to save you. And it's definitely worth it for you to always enable that. And then another thing you want to do is always double and triple check your transactions and then send a test transaction first. The reason for this is because if you accidentally send like Ethereum to a Bitcoin wallet, you just lost that Ethereum. So let's say you have several different tabs open and you accidentally click on the wrong tab and it's a Bitcoin wallet instead of an Ethereum wallet. It's really easy to accidentally do that. So how to save yourself from experiencing this, especially if you are transferring a large amount of cryptocurrency is send a super quick little $1 test transaction. And again, these are all mistakes that I have seen experienced investors make, not just newbies. So really, it's totally worth it for you to do this. Always do it, especially if you're transferring a large amount of money. And then the number 10 mistake that I have seen many, many times is no diversification or too much diversification. Now, first of all, I am a huge fan of cryptocurrency, of course, but when it comes to investing, you shouldn't just be putting all of your money into crypto, you should be diversifying outside of cryptocurrency as well. You also should have an emergency fund. This is basically where you can live for three to six months, at least off of money that you have stored somewhere. And you really shouldn't buy more than you can afford to lose as well. So if the economy goes down or crypto is not doing as well as you think it is for a few years, you really should keep a good amount of money stored on you so that you don't have to sell your positions, because that's when the huge losses are taken. If you run out of money in real life and you have to sell your position when it's down 90%, that's like throwing money into a fire. Now, when it comes to too much diversification, I've seen it where people will basically put their money in like hundreds or thousands of different cryptocurrencies to the point where they can't even track all of it. And they also really haven't done any research on those. So I'm not really a big fan of doing that. I think that you should only invest in cryptocurrencies in projects that you really believe in. Now, I have a different philosophy when it comes to stocks, I really like index funds and ETFs that just automatically diversify your money for you. But cryptocurrency is a completely different market from stocks and the same rules do not apply. Now, if you enjoyed my research and my content here, you'll probably also enjoy this video right here. So make sure to go check that out. And if you haven't done already, go ahead gently tap that like button, hit the subscribe button, ring the notification bell, and I will see you next time.