Yesterday I saw this video of @taskmaster4450 who started his talk from this article: the super-wealthy of the world are going to roughly double their net worth (as a whole) until 2030, according to the major accounting firm Deloitte, to almost 10 trillion dollars (9.5).
What we can remark is that the economies of the world haven't been doing very well these past few years and yet the growth of the net-worth of the mega-wealthy families of the world was "meteoric" and will continue to be so, to use the word of the accounting firm.
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If we think in crypto terms, 2x may not seem impressive, but for most other investments of the world, it is, especially when we talk about big bucks, and not their pocket money.
Taskmaster made a good overview of the situation, where most people think in terms of income instead of net worth, and an applied discussion to what we have in crypto. It would be a good video to watch because sometimes we forget why we do what we do, we get trapped on the hamster wheel and think we progress and we don't.
I am however going to focus on one aspect alone in this post, since I've talked about some of the others with other occasions, and I don't feel it makes sense for me to rehash the same information anyway.
Many in crypto are hodlers. Meaning they hold on to tokens or assets at least on the medium term, but their end goal is to have more of them. I am a hodler too.
The question is: is there a difference between a hodler and a net worth builder?
And I think there is. The decisions of net worth builders are much more strategic and in many cases involve long-term vision and are driven by business reasons in many cases. In enough situations, net worth grows as a result of growing businesses, and not as a result of them getting more share of the same business, especially after it takes off.
Holders do have a long term approach, they are not easily scared by various issues that come in the life of a project, they are security mindful in the crypto-sphere, especially if their assets start to have some value, and they may be mindful about how they use their stakes, the bigger they get. They usually want a higher stake, unless they have a threshold after which they stop growing the numbers for a certain type of asset, token or on a certain project or platform.
Sometimes... hodlers get in love with their holdings and ride them down to their death. They may become blind to obvious warning signs that something is going wrong. This can lead to some of their assets becoming worthless (it happened to me with a few tokens on Hive-Engine - in one case, I even knew it was going to crash and still didn't sell it; in other cases, I got out before the inevitable), but it can also become something extremely profitable down the line, with the right asset and some luck (surviving Mt. Gox collapse as a bitcoin hodler, for example).
Both high net-worth individuals and high-stake hodlers are influential. Often, a high-stake hodler is not also high-net worth individual, depending on the projects he has invested in.
A high net-worth individual is often a hodler too (although that's not a rule), but the reverse only becomes true if the assets held grow in value significantly for a high-stake holder. Lessons of paying 10000 BTC for two pizzas back in the day...
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You can be a hodler for life and never get rich, if you invested wrong.
Indeed!
That’s true.
I think the assets are better. While you can get rich by trading and selling a lot, that requires some luck and knowledge. There is always going to be some risk and if you are trading. I think the rich are at a point where they prefer to put in less effort so I think that naturally leads towards hodling.
I agree. While someone can make lots of money by trading, it is an active and stressful activity. From my observations many start out as traders maybe even because they have too much energy when they are young and think they can outperform the markets in the short term, but eventually they migrate toward a more passive role, mainly as an investor. Either that or they grow their own businesses, where they might be as active and stressed as while trading or maybe more, but it's their business they work on.
Being a hodler definitely have it's pros but sometimes, we tend to overlook it's cons too, especially in crypto with narratives/trends constantly evolving. For me, being a net worth builder seems more practical, especially when you're in the season of creating wealth. Is kind of like deciding how to create more value in tokens rather than just accumulating more tokens. Perhaps, shifting more into quality than quantity?
That's a good idea, that often makes me re-evaluate things. At least add some threshold to how much of a token you enjoy having you want to accumulate, without considering its intrinsic value or risks associated with having more of them. I often have a threshold, if I find myself unwilling to sell some tokens I got attached to. But sometimes you just need to rip the band aid, and I'm not very good at that.
Yes, having a threshold can get help separate between the two and not get overly carried away with getting too attached to a certain token. Sometimes, I try to rationalize my way into selling tokens with little to no intrinsic value but this seldom does the trick.
What can I say? I think when it comes to the hive-engine assets, some of us owned a lot of them that amounted to nothing. It was out of loyalty that we probably didn't sell them and I think that might be the case..
There's really no gain in holding if you wouldn't take profit.
Hard to be loyal to HE tokens, when with some exceptions, they follow the same pattern which leads nowhere. That doesn't mean I don't hold some stashes of HE tokens that were once shiny and now are dead. We sometimes can't bring ourselves to sell...
It's why I think Leo has been through the ringer, and it's still presenting and packing a lot of value. Khal has done a tremendous job really
LEO is surprising. It may be one of the few tokens on Hive that are fundamentally undervalued still. But the future will show us if that's true.
Well, I think in terms of the Principal portfolio and the monthly income that this will bring. 2 metrics, but the rule is, do what you want with the income, do not touch the principal, and only increase it when possible.
That's ok in a non-inflationary situation. But let's say we talk about fiat and we use the monthly revenue generated by that principal as income. In time, the principal erodes through increasing prices (what we popularly call inflation). That's true in crypto or other non-fiat investments too. The principal at least needs to keep up with the growth in prices, but that only allows us to stagnate, not grow. To grow, we need to grow the principal over the rate of inflation consistently over time.
Yes, I usually take the profits one month and reinvest the other one.
Hodling Bitcoin or stocks of quality blue chip company like Microsoft, Berkshire or Apple will help also HENRYs grow their wealth too, not only HNW individuals.
HENRY = High Earnings, Not Rich Yet
I agree. High earnings mean they don't need to tap into their investments or their returns for living expenses. They can also set aside some portion of the earnings for additional investments, to grow their portfolio, which if it is growth-oriented, maybe even risk on (as for many Bitcoin or the tech stocks are), then that will likely increase their net worth.
Hmm
Being a holder may be good but what’s the best?
Investing in proper investment
That's true... The problem many define proper investments differently, and they should, depending on the risk adversity of the person doing the investments.
Good investment could be the key
They always are.
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