Being broke may have advantages.
My partner lost $800 a few days ago due to a meme coin she purchased. Apparently, she purchased the coin at a market cap of $40 million, and the coin has since grown to $160 million.
That was X4, and at that marketcap she was sitting at 3000$ and over 2200$ in profit. However, she didn't take profit when others were doing so, and just like most meme coin we know, it was rugged and she lost all her money.
I decided to put myself in her situation.
If it had been me, would I have even considered purchasing a meme coin, let alone profiting from it? Definitely not. So, how was she different from me? Is it possible that she was simply greedy or unsure what to do with the profits?
I was not sure what it was, but if I were her, with her financial situation, better economy, and better life than me, I would probably have done the same thing. Would this mean that my state of lack will warrant me to take profit if my money had at least x2'ed? What will prevent me from making the same mistake she did, and then it hit me: eureka!
I recall my first bull run in 2017.
2017
I was in a terrible state of deprivation and lack, and as a result, I was constantly taking profits and converting them to fiat currency. Or, even though I did not have much, I made sure to convert at least 90% of everything I had in crypto to fiat.
I did not do this because I knew how the market worked, or because someone told me otherwise; I did it because I needed all of the money to survive.
The difference is that I didn't have enough knowledge about crypto, but the state of lack which I was was what actually prompted me to take action. I realized my financial situation, and while I could have saved my coins for the 2021 bull run, I didn't, and by December 2017 and January 2018, I had already taken all of my profits.
2021
In 2021, however, things were different. I was not as needy as I was in 2017, which meant that my financial situation had improved and was no longer as bad as it had been in 2017.
Aside from the fact that I had no knowledge of how the market worked, I did not make any profits and made numerous poor financial decisions. Sometimes the majority of the factors that influence our financial decisions are motivated by necessity rather than knowledge.
Too early, until too late
People do not realize they need money until they actually do. When people are not in immediate need, they do not see the need to save money or save for rainy days, and they have not previously experienced a lack.
Most of the time in life, I realize that the difference between winners and losers is determined by who wants something the most.
Sometimes people lose money but do not realize it because they have enough money to cover their basic needs. I believe that when people lose money, whether due to sheer stupidity or greed, they should reconsider their previous actions.
Mental commitment
Make a mental commitment that they will not do such again, and cultivate a disciplinary mindset around this decision.
When people fail to hold themselves accountable for illogical losses, they risk making even worse decisions. Having enough money to get by can cause people to lose their sense of responsibility. When you are not accountable, you are unaware of when you are making mistakes in life.
Before I spent money, I do mental calculations.
For me, losing money only once is enough to make me sit up. This is because I can not stand losing more than once due to the financial consequences. My point is that you need to be in a better financial position to afford many losses in your life.
However, do not be deceived; constant financial losses can cause even the wealthiest of people to go broke. Sometimes it is best not to defend your financial foolishness because doing so will make it easier to repeat it.
This is why I believe people should not spare themselves the judgmentalism that comes with self-blame; when you make a mistake, you must blame yourself to the core because this is the only way to truly make amends.
My partner dislikes doing this, most likely because she believes she is always correct, and I do not blame her. Not needing money and not having access to it will not lead to core financial responsibility and accountability.
Conclusion
At the end of the day, having constant "money needs" is not always a bad thing; it helps you develop the mindset of profit-taking. Everyone needs profit in their life. If you continue to ignore profit, whether out of greed or a lack of accountability, you will face severe financial consequences.
Interested in some more of my posts
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Survival: Choas and Scarcity
Crypto: Gut & meaningful Connections
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What Are Some Things You Should not Do During A Bull Market Year?
"People should not spare themselves the judgementalism that comes with self blame" i agree with you. Agreeing to one's failure is the motivation to being successful. Wisdom navigating through losses and profits is key.
Yeah. I don't think there a reason why I should pat myself at the back, when I obviously messed up. Acknowledging it is really important.
True. It's better than living in denial
I don't even have to wait until I loose money before I sit up. For this Naija wey dey like this, na him person no go shine im eyes. 😂
You're right, but some people wants to lose money countless times before they're wiser
Sorry to hear this about your partner. Memecoins are brutal haha! I don't play around with them!
Agreed with most you said! Nice blog! We should learn from our mistakes and cultivate financial intelligence!
Yes, we must all learn from any money mistake. Personally it's important, people go broke because they tend to repeat their financial mistakes
Oh, taking profit is soo important. I really need to be cool about this about take my profit this year.
After we've been serially dealt with, by the market, profit must be taken. I'll start by September, God willing
I will likely make some choice and analyzing next month already.
Let's see how it turns out. It's looking like eth has started alt season
when you make significant profit, always send 10% back into the bank. or some crypto card to use it for shopping. 10% will not chang your portfolio performance greatly, but it will improve oyur life quality. I still remember how much I enjoyed a pc game that I bought in 2017 with only 3.5 BTC. :)
3.5 BTC? wow that's a lot, but I guess it wasn't so much money in 2017 as BTC was maybe 8k during that time. Do you still have the game?
I haven't made any profits in recent while, I think it's important to take even more than 10%
Yeah take profits depends on one wealth and economics, if one has a wage of 2000 and invests 200, even a 3x won't do big difference so he will wait for like 10x, probably your partner was looking for something like that
Indeed if you don't have financial needs you are less inclined to take profits as you look for a jackpot
Yeah, you're right, someone who is probably rich will never consider taking any profit that's below what they already can have without having to trade or buy crypto. I think it's a disadvantage because profit will always be profit. When you accumulate series of profit, they can even compound into more money.
That's true, but some people seek the immediate rather than the slow growth
Its all boils down to how much of the financial knowledge we have to know exactly what to do per time
Knowledge is it, but life punishes ignorance
Well I won't blame her, some people took profit too early with Dogecoin, and we know what later happened, those who just left it in their wallet, made crazy profit... One thing I have come to realize with crypto is not to be emotionally attached... and we should not let the market control us...
It wasn't even that she lost profit, she was rugged. The people who created the meme coin decided to rug it and send it to zero. So basically any meme coin can go to zero, especially if their creator is greedy.
This is very common in the meme world
If the price dipped lol. It could have been better, they just completely rugged her lol. 😂
I also did the same in the share market 😬😬
I think it's hard to blame someone who doesn't understand the market, but maybe give her the suggestion of a free trade? When a token has gone up high enough, get back your initial investment and let the rest ride. You might lose out on some gains, but you won't lose anything either.
Exactly, you won't lose money when you actually take off your initial capital or investment. For me, that's the golden standards: take your initial capital and let the rest ride..
Hmnnnn... To me I don't think that your partners really needs money, because with your narration, I didn't expect someone using $800 to purchase meme coin and the coin did x4 which made her be in $2200 profits and she sit back watching the coin to rugged pool, or should I say she was greedy thinking making the profits will reach 10k$.I can't imagine what she will be telling herself after the coin rugged. Maybe she will blame herself or blame the market.
And I also believe in this, if you're financially stable, there are some updates you've done when you re not financially stable that gives you money that you won't take serious again because your finance conditions has changed tremendously. That's the situation u're now.
Thanks for sharing anyway, I learnt from your entry.