The excitement for bitcoin and other cryptocurrencies is at a fever pitch. Bitcoin, Shiba Inu, Dogecoin, Ethereum, and many others have seen their prices increase dramatically in 2021. As you purchase these cryptos, what is your goal? What will you do if they reach new highs?
For crypto investors, taking profits can be a challenge. If you choose to take profits, where will you put them? There are several options:
- Buy more crypto. This is a popular option among crypto investors. There are many cryptocurrencies available to choose from.
- Hold in cash. Cash can be a risky place to hold your money long term. As inflation continues to rise, dollars tend to lose purchasing power.
- Buy “toys.” Many people have become crypto-millionaires in 2021. To celebrate their successes, many will purchase cars, homes, and other extravagant items.
- Buy other assets. Purchasing assets may be one of the best options for cryptocurrency profits.
While each are all viable options, one of the best options might be to buy assets.
Why Buy Assets?
There are several definitions of the word “asset.” In one definition, an asset is defined as “property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies.”
If bitcoin goes to $100,000 or more, consider doing either of the following (if not both) with some of those proceeds:
- Accumulate items that retain their value. This will be critical as time goes on. On average, people purchase items that lose value, such as cars, clothes, shoes, fancy dinners, vacations, etc. While there’s nothing wrong with these things, only a small portion of your monies should be spent in this manner. The bulk of your money should be invested in items that hold their value. This is done to protect yourself from the effects of inflation.
- Purchase assets that generate revenue. Use the proceeds from bitcoin to buy assets that generate revenue, preferably monthly or even more frequently. These assets should be tangible, or physical assets. This offers the ultimate protection against stock market crashes or big price drops in bitcoin.
With assets, you take advantage of diversification. This will protect you during economic downturns.
Note: Many people believe their house is an asset, but ask yourself the following question: does your home put money in your pocket every month, or take money out of your pocket? For most people, home ownership means paying a mortgage and other assorted bills in order to keep the house.
If a person loses their job, they’d have to figure out how to pay the mortgage or face foreclosure. That house is now a liability. If the house were an actual asset, they could not work and that house would be able to pay for itself.
Under “normal” circumstances, taking profits would simply mean putting the money in cash and waiting on the next investment opportunity to arise. However, this time is different, partly because people are investing in bitcoin to get out of the current monetary system.
Thanks to a weakening dollar and the potential for a new currency on the horizon, staying in cash for long may not be the best option. With that said, here are a few investment worthy assets:
Precious metals. Gold and silver have been used as money for 5000 years and are great hedges against inflation. If the stock market crashes, these two tend to retain their value. Order your gold and silver HERE.
Rental property. Buying rental property with your bitcoin proceeds in a well-placed area is an excellent way to generate a monthly income stream. Rental property is totally separate from bitcoin. Even if the cryptocurrency loses value, you still have your rental property and monthly income stream.
Franchises. A popular franchise can be a great revenue generating asset. Instead of starting from scratch, you will own a business that is already established and has a solid business plan. Top franchises for 2022 include the following:
- Two Men and a Truck
- Checkers and Rally’s
- Tint World
- Fast Signs
- NaturaLawn of America
- Dunkin Donuts
- Sonic Drive-In
- HomeVestors of America
Vending machines. Vending machines can be placed anywhere and can sell practically anything. One vending machine can generate $7k annually. While that may not sound like much, if you own or lease 10 vending machines, that’s $70,000 received annually from selling diet soda, chocolates and microwave popcorn. For more info on vending machines click HERE.
What’s Your Plan?
As the world changes, we must change with it. Covid has been the catalyst for government shutdowns and countless business closings around the world. As we approach an uncertain future, people must have a strategy. Having multiple streams of income may be more important then ever. If you lose your job, you don’t want to rely on a stimulus check or government handout to survive. It’s time to create a strategy. Instead of working for money, learn how to make money work for you.
We are living in unprecedented times. There is a lot of uncertainty what the future holds, but as we move into 2022, the general consensus is cryptocurrencies will play a large role on the world stage. While investing in bitcoin and other cryptocurrencies might be a good idea, having an exit strategy is critical.
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