Questions to put to yourself first
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 5 min
In short
There are questions to answer for yourself before deciding. Could you lose all of it without it affecting your life? Could you hold through two years at half the price? Did this idea start with someone else's recommendation? Any question you cannot answer is a reason not to start now.
Key points
- Check that losing the whole amount would not affect how you live
- Decide in advance what you would do if the price stayed down for a long time
- If someone else prompted this, work out what they gain
- While questions remain unanswered, not starting is a sound choice
Definition
A set of questions for checking your own finances, loss tolerance and motivation before deciding whether to deal in crypto at all.
The first question is about money. If the entire amount you are considering were lost, would rent, living costs, school fees or medical bills be affected? If so, that is not money to use here. Crypto can fall and stay down, and you would be forced to sell into the loss at the moment you needed the funds. Borrowed money, and money already earmarked for repayment, are not contemplated anywhere in these pages.
The second is about time. Suppose the price sat at half your purchase level for two years. What would you do — sell and take the loss, or hold? Decide now, because if you leave it, you will be deciding while watching the price, which is the worst possible condition for a decision.
The third is about motive. Why are you looking into this now? If someone suggested it, establish what they gain — a referral fee, or a position that benefits if the price rises. If the reason is that people around you are doing it, that is not decision material; it is anxiety.
The fourth checks your foundations. Could you explain to someone else that crypto has no principal guarantee, sits outside deposit insurance, and may not come back if an exchange fails? If you could not, you do not yet have what you need to decide. Not starting remains available at every point.
Watch out for
- · Borrowed money and living expenses are not contemplated here
- · 'Everyone is doing it' is not decision material
- · Opening an account before you can answer these makes you easier to push around
Frequently asked questions
What amount would be acceptable to start with?
This site does not name a figure. The test is whether losing all of it would leave your life and your plans unaffected. If the amount that passes that test is zero, the conclusion is not to start.