To write or manage investments?

CEX.io

I have learned a lot about the business of managing wealth in the past few months. I’m not drowning in riches by any means but my little crypto hobby suddenly became a viable occupation thanks to the past month’s incredible gains in both Bitcoin and Devcoin. As an example, I recently sold 135,000 DVC at 96 and 97 sat. Then I sent the BTC to my new Camp BX account where I put it up for sale at $695/BTC. This is around $80 higher than the current bid price on the site, so I figure it has a good chance of filling within the next 24 hours. When it does fill, I will then have around $88 sitting in my account. For $2.00 I can have that direct deposited into my bank account, yielding me a total of $86 to pay bills or go on a (small) shopping spree. 135,000 DVC is what I suspect one generation share on the Devtome will be worth within the next couple rounds. The days of two to four hundred thousand DVC shares are likely over for the time being. I am a signup admin for the Devtome and I have been consistently registering one or two new writers a day for the past three weeks. This is only the beginning. One share is what I get for writing between 1,000 and 2,000 words on the Devtome. Right now that share is worth $88. Writing for the Devtome is some seriously good income.

In addition to my Devtome articles, which are for the most part the same as what I write here, I am also getting back into professional freelance writing and I already have one consistent client who pays me in Bitcoin. I hope to land a few more clients in the near future and I’ll be essentially hanging out my shingle as a professional writer. If you need any kind of content creation for your website, newsletter, press release or company brochure, feel free to get in touch with me by leaving me a comment or sending a PM to wiser on the Bitcoin Forum.

Round 30, which will begin paying out in a couple weeks, is going to be a very thin round for me. I only picked up a few shares. Even so, each share is worth more than 135,000 DVC–I think it’s around 200,000 DVC. If the current prices for both DVC and BTC remain as they are today (which is no guarantee), it’s not unreasonable to expect $100 per share. Even a low amount like ten to twelve shares can yield a monthly income of $1200. Back when Bitcoins were only worth $100, I calculated my possible monthly earnings to be between $300 and $600 if I really worked hard and the price of DVC didn’t tank too much. Then when DVC did tank for a long time I didn’t even worry about my earnings in terms of fiat–I just tried to trade a few DVC for BTC and then invest my BTC to make more of them. What wound up happening was that I gave up a lot of DVC at cheap prices I don’t expect to see again anytime soon and then lost my BTC to the CoinLenders debacle and a few other investments that plain didn’t yield what I’d hoped.

With the DVC and BTC prices the way they are, I realized that it would be downright irresponsible to keep playing around with my Devtome earnings as I’d been doing up to this point. It was a true wake up call when I ran the mental calculation of what my funds locked up in CoinLenders were worth and found it to be well over $4000 on paper. I can now officially say that I’ve lost more money in one unfortunate event than my household normally earns in one month. Of course, the price of BTC has dropped considerably since so that value would have only been realized had I actually sold the Bitcoins. But even just on paper, that’s pretty impressive for what I’m used to.

So I’ve had to start treating my little Devtome writing hobby more like I would treat my job because it now could represent a significant portion of my family’s livelihood. And I’ve decided that I need to also line up a few other paying clients.

In the mean time the various investment types of activities I dabbled into have also gotten more lucrative (at least when they turn out well). The main ones I engage in on a regular basis are buying and holding various vehicles–alt coins besides DVC and BTC, stocks (I still hold a position in ASIC MINER), bonds, GHS on CEX.io–, day trading (I’ve tried it on Vircurex and CEX), mining, lending via BTCJam, and although decreasing, hitting up faucets and viewing ads.

Each one of these investment activities takes time to manage, some more than others. Buying and holding is fairly straightforward. I periodically check the price of the shares or coins. Investing in BTCJam loans takes a bit of time. Initially you have to spend some time vetting the various borrowers, but the site makes it as easy as possible by providing a grade and feedback score. Then you have to follow the borrowers you like and log on whenever you want to invest in their new listing. Day trading is by far the most time consuming. I don’t trade with bots at this point, and I don’t yet have the resources to have massive amounts on both sides of the order book. I input buy and sell orders manually based on which way I think the market is likely to go and hope for the best. Then I wait.

I’ve done OK with day trading on Vircurex, well enough to know that I could start off with a fairly small amount of Devcoins, sell them high, then buy them back low, and eventually I’d wind up with a lot more Devcoins. Or I could keep the same amount and siphon off the Bitcoin profits. But I’d have to wait out a lot of situations where the price rapidly took off in one direction or another, leaving the trade I just made stranded. This happened to me right before the price of Devcoin really took off. I’d gotten confident and sold off a few million at 47 sat with the full intention of buying them back around 36, but then the price went up, up, and up, and I ended up just putting the Bitcoins into mining. But thinking about those millions of Devcoins that got sold off way too early and way too cheap gives me a tinge of regret. But that’s the sort of thing that can happen with day trading.

CEX.io is a good place to do day trading as things move very quickly and you’re not likely to have to wait too long for orders reasonably close to market rate to fill. Yesterday and the day before I practiced buying and selling 0.1 GHS simultaneously. I used the mining proceeds to fund the buy orders; I have plenty of GHS I could sell at any time. When both orders filled I’d profit a little on the spread. My goal was to eventually move up to buying and selling 1 GHS, then ten. The bottom line with CEX day trading is that while I really enjoy it, it’s time consuming for such tiny profits. And even with the best placed orders well within market range, they often do get stranded as the market makes a big swing up or down. After two days of off and on day trading on CEX, having accumulated lots of stranded buy and sell orders, and still not being sure if I actually improved my overall position, I decided that with the exception of some very high sell orders and some very low buy orders to be replenished once they fill, I’m really better off just being in it for the mining rewards, cashing out half the Bitcoin rewards and reinvesting the other half. At least I’m better off until mining difficulty noticeably increases.

And then I started thinking about how when I write a press release or promotional article for my client, I get paid for the work at exactly the price we agreed on, and how when I write 1,000 to 2,000 words on the Devtome I earn one generation share for it. I got to thinking about how long it takes me to write my articles, and then compare that to how much time I must spend staring at the computer screen and monitoring the markets in order to get ahead with day trading. Hands down writing wins the day in terms of how much income I can generate in a given amount of time and how low risk that income is. I mean, if I complete the work I get paid. Not to mention I really enjoy writing so much more.

One thing average poor working people do not realize about being rich is the amount of time it takes a rich person to manage his or her wealth, especially the fact that there are way more opportunities out there for generating more wealth than one individual has the time for. For this reason, an average poor working person who comes upon a plethora of opportunities to generate wealth is likely to want to jump on all of them because compared to the grind of an ordinary job, each one of them seems effortless. I’m probably even more extreme about that because I love going after great opportunities and hate turning any down.

But anyway, day trading is a full time occupation for some people just like working at McDonald’s or a construction job is for others. It only looks easy until you actually try it and find out that it’s not. It’s a similar thing with other investments. They all need to be monitored and managed and doing so takes time. In the end, you have to choose which opportunities and investments you will focus on and which ones you will turn down. Everything has its opportunity costs.

For me, I’m going to have to turn down day trading in favor of writing. I’m simply better at writing and can make a whole lot more money. I can still invest, but I find I have to choose investment activities that are much lower maintenance.

One great consolation to this is the existence of BTCJam. The various borrowers who are regularly listing loans–they have great reputations because they are always borrowing money and repaying it–use the loan proceeds to scale up their various investment activities.

One borrower asked for a loan so that he could purchase a bunch of mining rigs at wholesale, then turn around and sell them at retail, all on eBay. I have heard of this kind of investment being very sound and generally low risk. I mean, that’s what anyone who owns any kind of store does–buy at wholesale and sell at retail, profiting on the margin. And I remember thinking at various times in my life how if only I could find my own niche and get into that kind of activity, I’d prosper financially. But that isn’t my cup of tea, and I’ve tried and failed at that sort of thing in the past. When I saw the listing on BTCJam it dawned on me that I can invest in this activity and share in some of the profits by simply contributing to the loan. Granted, I won’t profit as much as I would if I went off and did this deal myself, but I won’t have to deal with the risk and hassle either.

Another borrower uses his loan proceeds mostly for day trading on CEX and he does use bots. He is also an A+ borrower with over fifty positive feedback comments who has paid back every single loan on time or early. So I don’t have time for day trading on CEX. That doesn’t mean I can’t profit from it. All I have to do is invest in these loans and I get some of the upside and none of the downside.

I guess the motto here could be pick the one or two investment activities you enjoy and are good at. For everything else, there’s BTCJam.

Writing is my major investment activity. I may dabble in other things, but I need to make sure such dabbling doesn’t interfere with writing. Writing is also rapidly becoming my job, meaning the way I make a living, which means it is appropriate to cash out most of my earnings regardless of what their future value could be. Just putting this into words makes me feel a lot better about all the future Bitcoins and Devcoins I’m going to be selling so that I can eat and pay bills. I will be holding some of those earnings back for investment purposes whether it means to simply sit on them hoping their value will climb further or put them into my other lower maintenance investment vehicles.

The answer to the question of whether I write or manage investments is both, but with the caveat that I must choose my investments carefully and select for more passive ones so that I can put my active energy into writing.

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