[0:00] if you're brand new to investing and [0:01] looking at crypto because that's what [0:02] everyone's talking about right now and [0:03] trading I just want to go back to basics [0:05] and give you the absolute fundamental [0:07] very simple things that you can do to [0:09] just completely change your life over [0:10] time Bitcoin and crypto have the growth [0:13] and all you need to do is just [0:15] understand that be consistent and it [0:17] will change your life and I'll show you [0:19] how to actually figure out what are the [0:21] compounded returns how to think about [0:24] that within your own uh strategy and [0:26] what you can invest right so let's look [0:28] at how this actually works so again I'll [0:30] leave links to all of this down below as [0:31] well these charts and everything uh and [0:33] more information so you can see that [0:36] this is the Bitcoin chart and this is [0:37] what everyone looks at all the time and [0:38] they get obsessed with daily price [0:40] movements and everything like that this [0:42] is not how investors trade or think [0:43] about things the one thing that uh [0:47] newcomers never uh grasp initially is [0:51] investing takes time right everything [0:53] takes time there is no amount of money [0:55] that you can make in one trade with one [0:57] purchase and one sale that will eclipse [1:00] what you can make over time right you [1:02] have to be consistent it's not about [1:04] buying once it's about buying multiple [1:06] times and so you have to identify assets [1:09] that have longevity and growth in them [1:11] over longer periods of time because [1:13] there's nothing you can do this week [1:15] There's no trade that you can make that [1:16] can Eclipse someone else who's been [1:18] investing consistently for 15 20 years [1:21] they just have a much bigger portfolio [1:22] small percentage movements for them in [1:24] nominal dollar amounts or fat currency [1:26] amounts can be massive right and you [1:28] just cannot Eclipse that with one trade [1:30] no matter how good you are and how how [1:31] good the trade was so what investors use [1:35] is something called kagr or ARR annual [1:38] rate of return or compound annual growth [1:39] rate it's pretty much the same thing you [1:41] take a period in time right usually four [1:43] years 6 years 8 years something like [1:45] that this is a fouryear Kar for Bitcoin [1:47] and ethereum so what we're saying is [1:49] what's the growth rate that I can expect [1:52] so over the last four years you can see [1:53] that Bitcoin and ether have annualized [1:55] at around 40 to 50% and people get [1:58] absolutely caught up with a day-to-day [1:59] Trading price and the movements and [2:01] everything it's just so irrelevant it's [2:03] completely irrelevant the what is the [2:04] 4-year kagar 50% a year so 50% a year is [2:08] the compound annual growth rate of your [2:10] investment if you just buy buy buy once [2:12] a week something like that and so this [2:14] is the uh table of investment returns [2:16] this is a fiveyear kagar this is from [2:18] Fidelity and you can see that over the [2:20] last decade uh Bitcoin has been at the [2:22] top 9 out of 10 years and this thing is [2:24] massively volatile right it's gone up [2:26] it's gone down every sideways everything [2:28] else but the comp pound annual growth [2:30] rate so you invest $100 a week $200 a [2:32] week $50 a week whatever it is again and [2:35] again and again you're the best [2:36] performing Trader in the whole market [2:38] and all you've done is just put some of [2:40] your wages to buying it every week [2:42] that's it it's as simple as that so the [2:44] real thing investing is identifying [2:47] assets that have uh decent growth rates [2:49] not just that longevity right all coins [2:53] that go up really high 100000% up in a [2:55] bull market and then crash back down [2:57] that's not investing okay Trading that's [3:00] different but investing is identifying [3:02] assets that have that sweet spot of [3:04] growth and Longevity so Bitcoin has it [3:06] you can see ethereum has had it as well [3:08] definitely a very good performer so it's [3:09] not about the daily traded price it's [3:11] about the compound annual growth rate [3:13] and longevity of the asset it's the [3:14] number one thing in investing finding [3:15] that sweet spot and right now I think [3:18] Bitcoin and EA but I'm not trying to [3:19] convince you about these assets [3:21] particularly I just want to give you the [3:22] tools to do it yourself compound annual [3:24] growth rate I'll leave these links below [3:26] as well so you can go and look at this [3:27] and try and compare it around different [3:29] assets [3:30] um so that you know exactly you know [3:31] where your sweet spot is now I want to [3:33] quickly touch on bitcoin versus altcoins [3:35] because a lot of people say you know [3:36] what should my portfolio look like [3:37] should I buy some Bitcoin should I buy [3:39] some altcoins you know what should I do [3:41] you know a lot of people have you know a [3:42] kind of anchor asset that thing in the [3:44] middle that's the biggest thing and then [3:45] they have you know some kind of [3:46] satellite assets around it where you [3:48] know they like the project or something [3:50] else and they put smaller amounts in um [3:52] I just want to you know show you the [3:54] performance of Bitcoin versus altcoins [3:56] because it kind of doesn't matter right [3:58] it's an arbitrary difference here right [4:00] there's a thing and it has a growth [4:03] profile a volatility profile right and [4:06] then a longevity profile it's those [4:07] three things you need to focus on so [4:09] over the last year Bitcoin and Orange [4:12] versus total 3 which is the entire [4:15] cryptocurrency market cap except for [4:16] Bitcoin uh and ethereum so this purple [4:19] line pink line has basically every [4:21] single coin except for Bitcoin eth and [4:23] stable coins um and the value of that [4:26] has not outperformed Bitcoin over the [4:28] last year right and so you have to look [4:30] at Bitcoin the longevity of Bitcoin over [4:32] time the complexity of buying every [4:35] single coin in crypto versus just buying [4:38] one coin right it hasn't outperformed so [4:41] what you can see here is you know [4:42] essentially it doesn't matter what [4:44] you're invested in it just matters the [4:45] performance and the volatility so [4:46] bitcoin's outperformed then we take this [4:48] from the lows of the previous bare [4:50] market right the very lowest price that [4:52] Bitcoin got to and Bitcoin has massively [4:54] outperform the rest of the market right [4:56] so looking at this it's not about [4:57] Bitcoin or being a Bitcoin Maxi or [4:59] anything else it's just simple logic and [5:01] simple uh facts Bitcoin is outperformed [5:05] it's a simple investment it's easier to [5:07] make than indexing the whole entire [5:08] Market you can't even do that it's [5:10] outperformed by a huge amount therefore [5:12] that is the stronger asset and you [5:13] should probably invest in it this is [5:15] since the high of the last bull market [5:18] right where Bitcoin got up to 69,000 [5:20] altcoins were going crazy since then uh [5:23] Bitcoin has massively outperformed in [5:25] fact the entire altcoin Market is [5:26] actually down right so if you bought all [5:28] the altcoins You' actually lost money [5:30] versus Bitcoin uh which has gained uh a [5:33] lot of momentum this is even further [5:36] back pretty much at the lows of the of [5:38] two cycles ago uh the altcoin market has [5:42] outperformed Bitcoin by 30% right so [5:45] what you would have to have done is [5:47] invested in every single coin in crypto [5:49] to outperform bitcoin by 30% uh which [5:52] again is an amazing performance [5:53] considering that the amount of coins has [5:56] increased significantly right you're [5:58] you're you're looking at one coin in [6:00] Bitcoin versus every single other coin [6:02] and hundreds of coins thousands of coins [6:04] that didn't even exist back here so [6:06] they've just been adding adding adding [6:08] new coins all the time versus BTC the [6:10] other thing to be aware of also when [6:12] looking at valuations is market cap [6:15] versus [6:16] price the price of a token right this is [6:20] not the total value of that of that [6:21] thing right the price of the token has [6:24] to be multiplied by the amount of tokens [6:26] in circulation and that gives you the [6:28] market cap which is the total value of [6:31] circulating coins and what happens in [6:34] cryptand is that there's inflation in [6:36] these assets right so they start off [6:38] let's say they have a billion coins or [6:40] 10 billion coins whatever it is they'll [6:42] have 10% of them circulating initially [6:44] right so if you've got a million coins [6:46] you have 100,000 of them circulating [6:48] initially over time that 100,000 coins [6:51] gross so every year there might be 5% [6:54] 10% 15% inflation which means that [6:56] 100,000 coins grows in size so have more [7:00] and more coins coming into the market [7:01] over time now as people buy the coins [7:05] right what they're doing is basically [7:06] putting money into the market and buying [7:09] new coin issuance and that can grow the [7:12] market cap but the price may not grow [7:15] and if the market cap grows it doesn't [7:17] matter for you because you have a coin [7:19] at a price so what I mean by this is we [7:22] look at salana I'm just picking this one [7:23] hour I could be anyone but it's a good [7:25] example here we'll go over to Max here [7:27] this is the price of salana you can see [7:29] that had this huge price up movement [7:31] here to a basically an all-time high we [7:33] come down and we move up now we are [7:35] let's say near an all-time high right [7:38] now actually we're just underneath it so [7:40] from a price [7:41] perspective uh the price of salana is [7:44] not above its previous all-time high but [7:48] salana has had a massive amount of token [7:50] inflation during this time which means [7:52] people are buying the token but there [7:54] are loads more tokens coming onto the [7:56] market to dilute the value of those uh [7:58] the tokens existing so you look at [8:00] market cap which is the true valuation [8:03] and this is at an insane all-time high [8:06] right so this shows us that has there [8:08] has been a massive amount of token [8:09] inflation into the market and people are [8:11] buying new coins and putting money into [8:13] the market right but the price is [8:16] getting crushed uh versus um you know if [8:20] there weren't isn't isn't any inflation [8:22] so when you look back here what we can [8:24] say is well how much of this [8:25] outperformance over two cycles is token [8:29] inflation and new tokens that didn't [8:32] exist before and with all of that it's [8:34] only outperformed by 32% so again what I [8:37] would suggest is just looking at the [8:39] data and and logically from from a [8:41] logical perspective you know Bitcoin [8:42] seems very very strong right and so if [8:44] you're looking at crypto and you're [8:46] looking at these assets then you just [8:48] have to look at these strong assets that [8:49] seem to outperform I'm not trying to [8:51] convince you to invest in Bitcoin or [8:53] anything else I just want to get you [8:54] thinking as to what the real valuation [8:57] of something is the real value over the [9:00] long term longevity and price and [9:02] volatility that is going to influence [9:05] what you actually invest in over the [9:06] long term when investing you really want [9:08] to be looking at asset classes and not [9:10] just individual assets especially if [9:11] you're a beginner looking at individual [9:13] assets is going to make take you down a [9:14] rabbit hole and it's just going to take [9:16] you away from the very Basics which is [9:18] there are a handful of asset classes [9:21] they have uh return profiles and that's [9:23] pretty much it so down here at the [9:26] bottom these are all the kind of top [9:27] asset classes that anyone would have a [9:28] choice from down here at the bottom you [9:30] have bonds okay these are really dismal [9:32] right if you want to invest in us [9:33] treasuries or you know whatever very [9:35] very dismal returns right 2% 3% [9:38] Commodities have actually lost value I [9:40] mean obviously because they're [9:41] Commodities right the actual word [9:43] commodity means something that's [9:44] basically worthless and no one wants so [9:46] why would it go up in value so there we [9:47] go right these are dismal As you move up [9:49] you get a little bit more exotic you [9:50] have real estate investment trusts here [9:52] basically broad real estate exposure [9:54] going up at around 7% uh you have high [9:56] yield bonds convertible bonds these are [9:59] kind of more exotic Securities trying to [10:01] get a little bit more return um you know [10:03] 5 to 8% as we move up we have the S&P [10:06] 500 which is really the Benchmark [10:08] worldwide for investing right which is [10:10] 500 best companies in the States you can [10:12] see that's annualizing around 133% a [10:14] year if you look at the NASDAQ which is [10:16] you know just as popular you've only got [10:18] 100 uh companies here focused in [10:21] technology they're 18% annualized and [10:23] then you get get up to bitcoin 150% [10:25] annualized right and so you know if you [10:28] put alt coins in this list it's going to [10:29] be around 100 150% as well right so [10:32] they've done very well but with a lot [10:33] more risk and volatility some coins do [10:35] really well some coins don't which means [10:37] if you're investing in all coins you [10:39] probably have to diversify and get a [10:40] basket of 10 15 20 of them or you know [10:43] something like that which becomes [10:44] complex and so maybe just Bitcoin is the [10:46] answer but again it's not about the [10:48] asset it's just about asset classes what [10:49] growth they have and how you want to [10:51] gain exposure right so they they have [10:53] different risk profiles as well right [10:54] Bitcoin is really really volatile [10:56] compared to these and so it's volatile [10:58] and that means well it's growing with [11:00] volatility so you face big draw downs [11:04] and big ball markets as well but [11:06] annualized you're actually making more [11:08] right if you don't want that volatility [11:09] then you have to go down to something [11:10] that's less volatile so you're looking [11:12] at NASDAQ or S&P you're you're going to [11:14] make less returns there because they're [11:16] less volatile they're more mature right [11:18] and so yes Bitcoin is more volatile but [11:20] it's also gaining more over time so it [11:23] matters about the asset class exposure [11:25] just think how much do you want in each [11:26] of those buckets right how much risk you [11:28] want to take you know are you a young [11:30] person well if you're young then you can [11:31] stomach volatility right because you can [11:33] work and you can make it back and [11:35] everything so you don't care if you have [11:37] to invest for 4 8 12 15 years if you're [11:39] 70 years old maybe Bitcoin isn't for you [11:42] so with investing it's not about trying [11:44] to make money and trying to make returns [11:45] it's just these are the asset classes [11:47] there's volatility there you can choose [11:49] which one is right for you at the time [11:51] that you're investing are you young you [11:52] middle-aged old that's going to affect [11:54] what you invest in but I just want to [11:56] get this over it's not about individual [11:57] coins or anything like that just gain [11:58] exposure to assets that have growth and [12:00] volatility profiles that are appropriate [12:01] for you investors have many different [12:03] types of calculations that they can use [12:04] to work out what an investment will be [12:06] worth in the future and again all we [12:08] have to do is take the compound annual [12:10] growth rate of the asset right we can [12:12] plug this into many different types of [12:14] calculations I used to do this manually [12:16] but you can go to you know AI you can go [12:18] to chat gbt Gro or whatever you can put [12:20] this in here um the downside here is [12:23] that I often see them making slight [12:24] mistakes actually so um I don't know if [12:26] this is exactly correct but it's just [12:28] illustr [12:30] what you can do is you go to Gro or [12:31] whatever and you say you know I want to [12:34] invest x amount per week and I'm [12:37] investing in an asset that has this [12:38] growth profile so you can you can tell [12:40] grock you know Bitcoin has a kagr of 25% [12:44] now currently it's 40 to 40 to 50% but [12:46] let's just knock it down and say the [12:48] kagar is 25% a year so if I invest $100 [12:51] per week the kagar is 25% a year and I [12:54] do that for 12 years what's the outcome [12:56] right so $100 a week so the total [12:58] investment here would be over 12 years I [13:00] think this is I asked it yeah 25% kagar [13:03] $100 a week for 12 years what's the [13:05] return on invested [13:07] Capital return on investing Capital [13:09] annual rate of return compound annual [13:11] growth rate right you can use these so [13:12] the return on investing capital is [13:14] essentially we invested 62,400 and after [13:18] 12 years the total investment is worth [13:20] uh total portfolio size is 206,000 920 [13:24] so it's [13:25] $144,000 uh return if we assume this [13:28] compound annual growth three over time [13:30] right so you can work this out that's [13:31] that's just makes things well easy and I [13:33] understand there is no way that as a [13:36] Trader if you've got a couple of grand [13:37] to put in and you want to trade you want [13:39] to make some money there's just no way [13:40] you're can outperform that right you may [13:42] make some good trades and some bad [13:43] trades but you literally don't have to [13:45] do anything it's literally 10 seconds a [13:47] week to make a $100 trade on coinbase or [13:50] binance whatever and that's it right so [13:53] that is basically 12 years that's your [13:55] retirement finished so in 12 years time [13:57] your retirement I'm not saying you can [13:58] retire but I'm saying that retirement [14:00] bag finished because in 12 years time [14:02] that's still going to be annualizing at [14:04] 25 20 18 177% whatever retirement bag [14:08] done your entire life changes now you [14:10] have strength you have time you can quit [14:13] your job and go and get the job you [14:14] actually like on less money because your [14:16] retirement's done you don't care you can [14:17] pay the bills now it's irrelevant you [14:19] can quit your job to start your own [14:20] business because you have time you have [14:22] strength that's investing so there is [14:24] nothing you can do there's not one [14:26] single trade you can make if you have [14:27] $26,000 has a portfolio in BTC and it [14:31] goes up 20% in a year that's a $40,000 [14:34] income in your Investment Portfolio [14:36] there is no trade you can make over a [14:37] short period of time that can Eclipse [14:39] that right so is about time and [14:41] investing in assets to have that growth [14:43] over time is massive outperformance [14:45] right so it really is important to get [14:47] longevity in your assets to understand [14:50] what's going to keep having growth over [14:51] time and investing in that because this [14:53] is this is important 12 years can change [14:56] your entire life now I want to touch on [14:58] Market timing and dollar cost averaging [14:59] so for most people we work and we ear a [15:02] wage and therefore we ear a wage once a [15:04] month or once a week whatever we have [15:06] hopefully some cash left over that we [15:07] can invest that's dollar cost averaging [15:10] right because you just buy consistently [15:11] over time and you grow your portfolio [15:13] it's not that dollar cost averaging is a [15:15] better strategy it's just the one that [15:16] most of us are forced into because we [15:18] don't earn our entire life's wages at [15:20] once when we're 20 years old right so we [15:22] dollar across average and we grow our [15:23] portfolio and you want to grow it as [15:25] large as possible Right think about the [15:27] assets that you can invest in for 25 [15:29] years cuz you can invest in them over [15:31] and over and over and over and your [15:32] portfolio grows and grows and by the [15:33] time you're old you don't need massive [15:35] returns because you've got a big savings [15:36] amount right in any case dollar cost [15:38] averaging is what most of us are going [15:40] to do because we don't have any other [15:41] choice we earn our wages every week or [15:43] every month dollar cost averaging right [15:45] you can see it's not the best strategy [15:47] right the best strategy is to buy the [15:49] thing at the lowest price that goes up [15:51] the most but as in you know as investors [15:54] really you just need to be consistent [15:56] with savings right now you can invest in [15:59] early opportunities or anything like [16:01] that but the reality is early [16:02] opportunities 99% fail anyway right you [16:05] may have one that makes up everything [16:07] else but we're not VC funds right we're [16:09] not Venture capitalists we don't have [16:11] the capital to go ahead and do that so [16:13] we need to actually just play the the [16:14] the game right which is playing the odds [16:15] playing the percentages in any case [16:17] dollar cost averaging okay it's there or [16:19] thereabouts perfect timing is where you [16:21] time the market absolutely perfectly on [16:23] this and that and the other but it [16:24] doesn't actually outperform that much so [16:26] don't bother right play the percentages [16:28] and you're going to make make mistakes [16:29] if you try and do this as well bad [16:31] timing so if you try and time the market [16:32] and you don't figure it out you're going [16:33] to underperform dollar cost averaging [16:35] anyway so dollar cost averaging is away [16:37] what is dollar cost averaging it's [16:39] essentially when you just buy each and [16:41] every week or each and every month and [16:42] you just put the money in over time and [16:45] it's going to grow your portfolio the [16:46] main thing right is to grow the biggest [16:48] portfolio you can so that when [16:50] percentage growth happens you have that [16:52] percentage growth on the most amount of [16:54] dollars and so that means you have to [16:55] choose assets that going to be around a [16:56] long time the other thing that no one [16:58] ever talks about with investing or [16:59] trading or any crypto videos is tax and [17:02] the way that you use assets to benefit [17:04] yourself right investing and and is not [17:07] about making money it's about growing [17:10] your asset base so that you have [17:11] strength and options in the future so if [17:15] you sell crypto in most countries in the [17:17] world this is this is a taxable gain [17:19] right because they're assets and so when [17:21] you make a profit on an asset you have [17:23] to pay capital gains tax on it tax is [17:26] charged on the capital gain meaning [17:28] let's say you trade a billion dollars of [17:30] something so you buy a billion dollars [17:32] and you sell a billion dollars but you [17:33] make a $1,000 profit well you're only [17:35] charged on that ,000 profit so you're [17:37] charged on the capital gain but around [17:40] the world I mean the UK you can see it's [17:41] 24% here in the US apparently it's not [17:43] to 20% maybe different I'm not sure how [17:45] it works in the US in the Euro Zone [17:48] 18% so you're getting you know a 20% [17:52] worst trade immediately on the profit [17:53] that you make now that may be fine right [17:56] you may have made lots of of gains so [17:58] you know who cares you want you want to [17:59] buy a house you want to do this pay off [18:00] some debt I get that but all in all you [18:02] know taxable gains aren't great and the [18:05] longer that you hold something the more [18:07] that it compounds the more gains that [18:08] you'll have and then you start to have [18:10] to think do you want to do you want to [18:11] pay that now what do wealthy people do [18:13] wealthy people essentially have as much [18:15] assets as possible they don't sell their [18:17] assets if they can what they do is they [18:19] borrow against them so maybe you want to [18:21] borrow against the asset because you've [18:23] got a big portfolio and you want to buy [18:25] a car well you don't sell the portfolio [18:27] to buy the car right you take take a [18:29] loan to buy the car and your income pays [18:31] it off over time right because as long [18:33] as the Blended interest on the car [18:35] payment right let's say you get a 12% [18:37] car loan but Bitcoin is going up at 40% [18:39] a year as long as you can pay as long as [18:41] you have an income to pay then it's [18:43] actually going to be way better for you [18:44] to take the loan and pay off the loan [18:46] and wait for the Bitcoin to outperform [18:48] it right so you can do that for Nasdaq [18:50] or anything else if your Blended [18:51] interest rate is lower than the uh kagar [18:56] the annualized rate of return of the [18:57] asset then you can take that over time [19:00] and wait and literally the growth of the [19:02] asset will outperform the debt and the [19:04] depreciation of the car you can do all [19:06] these calculations so these are the [19:08] things that you can think about when you [19:10] have an an asset base and it is these [19:13] are the big decisions in your life right [19:15] again there's nothing you can do to [19:16] trade and make money that is going to [19:18] outperform so you know taking debt to [19:20] buy a car paying that off over 12 years [19:23] right and letting the Bitcoin outperform [19:25] right now you're basically leveraging up [19:27] your income stream right now I'm not [19:28] saying leverage it up I'm not saying [19:30] take leverage to buy BTC but these are [19:32] the things that you can think about uh [19:34] that make a big difference to your [19:35] overall portfolio and that's what [19:37] wealthy people do I'm not saying do it [19:38] I'm not saying take leverage you can [19:40] work that out for yourself if you don't [19:41] want to take leverage then just sell the [19:43] assets take the hit on the capital games [19:45] and and buy the asset but you can do the [19:46] calculations doing the right thing and [19:49] making the right decisions over time can [19:50] make a really big impact over the long [19:52] term you look at Warren Buffett like a [19:54] crazy stat that the vast majority of his [19:56] wealth was made you know in the last 10 [19:58] 15 years of his life because he just [20:00] compounded and you get larger and larger [20:02] and larger and the nominal dollar amount [20:03] on that is huge right so that's what [20:05] rich people do they do not sell their [20:07] assets they do not pay tax if they can [20:08] help it they borrow against it or they [20:10] have an income stream that they pay and [20:12] if you can work do work to pay uh income [20:15] streams off into debt and let the assets [20:18] actually outperform because they can [20:19] demonetize the debt that you have if you [20:21] need some more specific and Technical [20:22] guides on how to actually go ahead and [20:24] trade cryptocurrency like how to buy how [20:26] to sell how to read charts how to [20:29] analyze kagr and other types of metrics [20:31] I've got a bunch of videos I'll leave [20:33] them all down in the description below [20:34] where you can get much more specific and [20:36] Technical I'll leave some deposit and [20:37] trading bonus links to the exchanges I [20:39] use as well to buy crypto down in the [20:41] description I'm James is mg cheers for [20:43] watching and I'll see you in the next [20:44] one