Investing in cryptocurrency also comes with some costs and expenses which determines how much profit you can make on your trades.
In this post, I will be sharing with you the different strategies to cut costs/expenses and save more money.
Because as the saying goes...
“It's not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” ~Robert Kiyosaki.
How to save more money in crypto
Avoid high fees
Trade less and only on high margins
Avoid online beggars
Have a budget
Avoid fads and herds mentality
1. Avoid high fees
Your crypto investing activities is a (serious) business. And like every business there are running and fixed costs to take care of.
One of these running costs is the transaction and trading fees. Some tokens even have taxes in addition to the blockchain transaction fees.
All these fees and charges add up to reduce your profits and if you're not careful will eat into your capital as well.
If a particular blockchain is too expensive for your financial status move on to another.
For example, I have stopped using Ethereum since late December 2020.
Since then I haven't made any transaction on the Ethereum blockchain except a few that are absolutely necessary (usually transferring money from one wallet to another).
All my farming and trading is now on BSC just so I can avoid paying the high fees on Ethereum.
The same goes for Bitcoin. I can't even remember when I transacted with Bitcoin last. It's been months, if not a year already since I used Bitcoin last.
Similarly, cryptocurrency exchanges, yield optimisers all have different fee structures.
If a coin or token you wish to invest in is on multiple platforms, choose the one with the highest return and the lowest fees.
For example, I was staking CAKE on Beefy and then discovered that the return on Autofarm Network is higher and the fee is also lower there. I moved my CAKE there for farming.
If the returns where the same and the fees are lower on the other, I will migrate to the platform with the lowest fees. And if you plan to maximise your profit, you can do the same.
The same is true for centralized exchanges or any platform that you use for that matter. If you can get what you want on another platform with lower fees, consider using that instead.
But be careful that that other "cheap" platform is "safe. We are not sacrificing security to save a few dollars.
2. Trade less and only on high margins
I have never been a fan of trading generally as it's a well-known fact that more than 90% of traders lose money. It's a zero-sum game. For you to make a profit, someone has to lose.
And if you're not knowledgeable and experienced enough in charting and picking good signals you will be the one making the others richer.
Aside from the fact that you're more likely to lose money in trading than you make, there're fees involved.
So the less you trade the less money you're likely to lose, and the fewer fees you're likely to be paying.
But does that mean you shouldn't trade? Not at all?
If you must trade then be prepared to do these 2 things:
Buy and be willing to HODL for as long as it takes to reach your profit target
Sell with a high-profit margin to comfortably offset the fee you paid, the risk you took, and the effort you put in calling the trade.
Some people "trade" and come out with a $1 profit and they're happy. That's a massive joke. You're just catching fun, not trading.
Make only profitable trades and make sure you make enough profit on it to justify the risk taken and time spent.
3. Avoid online beggars
Begging is a type of scam and it is very effective.
Most of us have kind hearts and can't pass by someone who seems to be in need.
But the problem is that by my estimate over 95% of all only begging and requests for money (not Kickstarter donations) are scam.
Someone's grandma just died and they need money for burial. Like seriously?
Someone's child is sick and in the hospital and there's a need for money to pay the hospital bills. Some might be true and some are fabricated, but how can you tell?
And there are better channels to follow if the case is genuine rather than some random internet guy in the same Telegram group or social media platform as you asking for this.
If you really want to help people in need, go to your local orphanage or hospital and you will find genuine people who you have no doubt need your money like air.
You will be doing more good to the world that way than sending coins to some random internet beggar.
4. Have a budget
A budget will define your spending boundary. Predetermining what you spend on, and how much you spend will help you know where your money is going.
This usually requires that you have a crypto investing plan and strategy in place. So that all that's required then is allocating your money to the various segments of your portfolio.
For example, my crypto activities involve some trading, farming, lending, HODLing, etc. And my income is allocated to each of these categories.
This helps you save money by:
Not investing based on impulse. You tend to think before shifting money from what it's been allocated to into something new and shiny.
And that small window of "thinking" and deciding what you have to do might be all you need to not make a stupid decision that could cost you money.
5. Avoid fads and herds mentality.
Do you really need to buy all those NFTs, or you're allowing the fad to ride you?
You're still trading on Uniswap because some clowns and maximalists made you believe that all other chains with low fees are centralized and unsecure.
Or you're switching exchanges, farms, buying some trending token because everyone seems to be doing the same and it feels good.
These random, thoughtless acts will cause you to lose money by buying into scams, hypes, pump and dump schemes, or using an inefficient strategy to execute your investment.
Very sensible recommendations for those who want to take care of their valuable cryptos that they have earned by investing their precious time. People tend to underestimate the time they spend on their blog or reading to others. Consider equating any coin in terms of vital energy. It would get another perspective on life and how you use it.