Cryptocurrency is an exciting thing, and it’s encouraging some people who have never explored the world of investing to get into finance. It’s an interesting statistic that thirty percent of millennials would rather invest in cryptocurrency than traditional stocks. Attracting new investors is a good thing, but you shouldn’t rush in without learning a few things first. Here’s what you need to know about investing and cryptocurrency.
Finance and investing: the basics
Far too many Americans are ignorant of the basics of investing. Many of us have very minimal investments, and a startling number of us aren’t investing at all.
Having no investments is a problem because of inflation. Slowly but surely, inflation reduces the value of cash currency. Years ago, your great-grandparents bought candies for a few cents; today, you’ll have to drop a buck or two to grab a Hershey’s bar. That’s inflation, and if you stick your cash in a box under your bed, inflation will rob you.
Investments grow, and — ideally — help you outpace inflation. You stop inflation from robbing you and, if you play cards right, actually build wealth.
Getting started investing
Getting started in investments is as simple as finding a form of investing that appeals to you. Follow a few basic safe investing rules, of course, but use your passion to get yourself started in the right direction. The exciting world of cryptocurrency is a perfect example of a way in which many new investors have gotten started.
You can take things as far as your passion takes you. Some new investors eventually become day-traders, quitting their jobs to trade stocks, bonds, cryptocurrencies, and more full-time. You may choose to invest in securities training and get certified as a professional in the finance space. This could be the beginning of a new career. No matter how deeply you choose to get into investing, you should make sure that you’re at least growing your wealth in some way.
Cryptocurrency investing for beginners
Is cryptocurrency the investment opportunity that drives you to wade into the world of finance? If so, great — learning how to invest will give you a lot of valuable tools for securing a brighter financial future.
To invest in cryptocurrency, you’ll need a cryptocurrency wallet. This is the way in which you’ll store the cryptocurrencies you buy. Next, you’ll need a reliable source of information for cryptocurrency prices and news. There are a few reputable sites that offer you information such as the latest Litecoin price and — just as importantly — the latest news and analysis of Litecoin (or, of course, any other major cryptocurrency). Keep tabs on this information, especially if your strategy involves a lot of buying and selling of cryptocurrencies.
Cryptocurrency investments have an enormous amount of potential, but they also come with plenty of risks. You may want to diversify by investing in multiple cryptocurrencies: Bitcoin, Litecoin, XRP, and others are strong choices. And, of course, you should also invest in things outside of the cryptocurrency space, so as to hedge your bets across multiple investment spaces.
Smart and safe investing for beginners
Diversity is the key to investing safely, especially when you’re new to investing and aren’t necessarily ready to make bolder bets. But the type of diversity in your investments is just as important as the amount of different commodities, stocks, and bonds that you own. Having a bunch of different stocks, for instance, isn’t as diverse as it looks if all of those stocks are high-risk stocks in the same industry.
Keep an emergency fund in cash and put a chunk of your nest egg in low-risk spots that offer at least some interest, including savings accounts, “safe” large-cap stocks, and stable short-term bonds. Then take the money you’re willing and able to risk and push it into the more exciting opportunities, like cryptocurrency. You may also find that you’ll want to diversify a bit within your growth (higher-risk) investments.
If you’re not sure of yourself, don’t be afraid to get help. Reach out to a financial advisor to learn more. And do your own research, too, by visiting great financial sites for news about cryptocurrency and investing, in general.