Turned $5K into $100K in a year. What should I do now?

[onchaintrader]

Hi everyone,

I saved money from wage slaving, and dollar cost averaged into the market in mid-late 2020 with around $5K.

After many successful moves (selling tops and buying bottoms (sold April top, bought July Bottom, sold November top, getting big airdrops etc), it turned a bit more than $100K.

In my opinon, the market doesn't have much energy left. Even if BTC keeps going to $100K, that's just a 2x from here.

I believe it has more chance to turn back to $10K-$20K than going up. So I have everything into stablecoins.

Here are the options that I thought about:

1. Sell 50% into fiat, get hit with taxes (40%) and buy the top of the stock market (S&P 500 ETF) with it, and pray while waiting for a BTC desperation bottom. Use the other 20% stablecoins for yielding interest, and keep 30% as is, in stablecoins.

2. Hold 100% in stablecoins until a BTC bottom, and pray that there's no new regulations that implodes stablecoins. If I don't sell into fiat, I don't get taxed. So I could buy the bottom with 100% of my dry powder.

3. Sell everything into actual fiat, pay heavy taxes, and just wait the btc bottom.At least it would be safe in my bank account and no risk of hack / theft / regulations etc.

I just don't see other options, and I don't know what to do with such a large amount of money (for me).

My goal is to turn $100k into a few million dollars with another crypto cycle (by 2025-2026 something along those lines), invest that money in dividend stocks and quit the rat race forever.

Any advice? What should I do in the mean time with that $100K?

Thank you

 

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[Don Sandro]

Thats not Fastlane Mentality Brother, If I were you id sell a bit of crypto and think about a way generate INCOME. In which sectors do you have experiences?

 

[onchaintrader]

Thats not Fastlane Mentality Brother, If I were you id sell a bit of crypto and think about a way generate INCOME. In which sectors do you have experiences?

Yes, I made sure to post in the investing/crypto section.
As of now, I have a job providing me with income. I tried multiple CENTS fastlane without much success in the past. And when I got into crypto, my net worth exploded. So I think it's better for me to focus on that while living on wage income. With more room to breathe (7 figure net worth), I'll quit my job, and focus on making a fastlane.

But really my question was more focused on what should I do now that I have this 100k.

 

[Rabby]

It's hard to say what to do with it, because any advice could be wrong. But you have a pool of money, and you know at least one way to multiply your savings, given the same market conditions. So that's quite good... it's material you can work with, and something you can use to formulate experiments.

If you want to stay in investments, getting more sophisticated with your financial instruments might be a path that interests you. If you can hedge risk by setting up a position that does very well in the event that your other 100k turns to 10 (using long options or long options-on-futures, let's say, or on a security that tends to perform opposite to the ones you own), then you can nail down one worrisome thing and free yourself to think about more money making trades.

Or if not, of course you can use the money to fund another asset or business that meets your current standards for stability, risk, growth, etc. You might just need to work through some ideas on paper, and figure out what the smallest experiment is that you can run, that tells you whether the idea works as a system for building your assets.

 

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[onchaintrader]

It's hard to say what to do with it, because any advice could be wrong. But you have a pool of money, and you know at least one way to multiply your savings, given the same market conditions. So that's quite good... it's material you can work with, and something you can use to formulate experiments.

If you want to stay in investments, getting more soohisticated with your financial instruments might be a path that interests you. If you can hedgs risk by setting up a position that does very well in the event that your other 100k turns to 10 (using long options or long options-on-futures, let's say, or on a security that tends to perform opposite to the ones you own), the you can nail down one worrisome thing and free yourself to think about more money making trades.

Or if not, of course you can use the money to fund another asset or business that meets your current standards for stability, risk, growth, etc. You might just need to work through some ideas on paper, and figure out what the smallest experiment is that you can run, that tells you whether the idea works as a system for building your assets.

I wouldn't want to play with options / futures given the risks related to my lack of knowledge in those areas. Don't want to lose and go back into < 6 figures atm. I'd rather play defense for a few years until BTC completely bottoms and everyone hates crypto again. Then I'll get back in.

In the mean time, things I could consider would be the stock market. But just simply buy S&P index. Since we're at ATH in the stock market & the FED wants to tapper next year, it seems risky too.
Maybe I should just do nothing and leave my stablecoins alone... but again risking theft/hacks/regulations..
Sell, and get hit with taxes instantly... but it's in the bank..

I don't know guys...

 

[Jobless]

I’d put 80% into btc and eth, the remaining 20% you can be more free with. Cash them out, pay some tax, and go on a vacation. Put them on some high-risk investment or on your own wellbeing.

Don’t trust ”stablecoins.”

 

[Don Sandro]

Hi everyone,

I saved money from wage slaving, and dollar cost averaged into the market in mid-late 2020 with around $5K.

After many successful moves (selling tops and buying bottoms (sold April top, bought July Bottom, sold November top, getting big airdrops etc), it turned a bit more than $100K.

In my opinon, the market doesn't have much energy left. Even if BTC keeps going to $100K, that's just a 2x from here.

I believe it has more chance to turn back to $10K-$20K than going up. So I have everything into stablecoins.

Here are the options that I thought about:

1. Sell 50% into fiat, get hit with taxes (40%) and buy the top of the stock market (S&P 500 ETF) with it, and pray while waiting for a BTC desperation bottom. Use the other 20% stablecoins for yielding interest, and keep 30% as is, in stablecoins.

2. Hold 100% in stablecoins until a BTC bottom, and pray that there's no new regulations that implodes stablecoins. If I don't sell into fiat, I don't get taxed. So I could buy the bottom with 100% of my dry powder.

3. Sell everything into actual fiat, pay heavy taxes, and just wait the btc bottom.At least it would be safe in my bank account and no risk of hack / theft / regulations etc.

I just don't see other options, and I don't know what to do with such a large amount of money (for me).

My goal is to turn $100k into a few million dollars with another crypto cycle (by 2025-2026 something along those lines), invest that money in dividend stocks and quit the rat race forever.

Any advice? What should I do in the mean time with that $100K?

Thank you

Im sorry didn't knew there was such an section. What you could do, I can only tell you as an third party watcher, is that you invest your money in Assets not like Gold or such more like everyday stuff. And You even got 100 k to Fall back on it. Or continue to invest, if you managed to gather that money by short time investing id say you continue trading but with less than 2 Percent of your portfolio so that you don't fall back that quick. Im no financial Advisor and just wanted to give my opinion by reading into your situation. Good Luck

 

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[CareCPA]

Hi everyone,

I saved money from wage slaving, and dollar cost averaged into the market in mid-late 2020 with around $5K.

After many successful moves (selling tops and buying bottoms (sold April top, bought July Bottom, sold November top, getting big airdrops etc), it turned a bit more than $100K.

In my opinon, the market doesn't have much energy left. Even if BTC keeps going to $100K, that's just a 2x from here.

I believe it has more chance to turn back to $10K-$20K than going up. So I have everything into stablecoins.

Here are the options that I thought about:

1. Sell 50% into fiat, get hit with taxes (40%) and buy the top of the stock market (S&P 500 ETF) with it, and pray while waiting for a BTC desperation bottom. Use the other 20% stablecoins for yielding interest, and keep 30% as is, in stablecoins.

2. Hold 100% in stablecoins until a BTC bottom, and pray that there's no new regulations that implodes stablecoins. If I don't sell into fiat, I don't get taxed. So I could buy the bottom with 100% of my dry powder.

3. Sell everything into actual fiat, pay heavy taxes, and just wait the btc bottom.At least it would be safe in my bank account and no risk of hack / theft / regulations etc.

I just don't see other options, and I don't know what to do with such a large amount of money (for me).

My goal is to turn $100k into a few million dollars with another crypto cycle (by 2025-2026 something along those lines), invest that money in dividend stocks and quit the rat race forever.

Any advice? What should I do in the mean time with that $100K?

Thank you

If you're in the US, under current guidance, each time you exchange one coin for another it is considered a "sale," and gain/loss must be calculated on each exchange.
So the tax factor may already be a moot point when making your decision.

 

[mattcordier]

@onchaintrader have you considered using some of the cash to purchase a mining rig?

 

[onchaintrader]

I’d put 80% into btc and eth, the remaining 20% you can be more free with. Cash them out, pay some tax, and go on a vacation. Put them on some high-risk investment or on your own wellbeing.

Don’t trust ”stablecoins.”

I don't trust stablecoins either, USDC froze accounts after the SEC asked them to, USDT is a ticking time bomb.

Another option for stability could be to have a portion of PAXG (gold-backed stablecoins in the UK). Need to research more.

 

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[onchaintrader]

If you're in the US, under current guidance, each time you exchange one coin for another it is considered a "sale," and gain/loss must be calculated on each exchange.
So the tax factor may already be a moot point when making your decision.

Not in the US, lucky on that front

 

[onchaintrader]

@onchaintrader have you considered using some of the cash to purchase a mining rig?

No. How profitable would it be vs buying BTC?

 

[Antifragile]

I have a problem with the OP. You offer nothing. You are new. And you want everyone to jump up and give you advice on how to manage your money?

1. Don’t confuse a bull market for brains.
2. Welcome to the internet. Opinions are like assholes, everyone has one and most are full of shit.
3. You’ve turned $5k to $100k - what the hell doe you need me for? Do THAT again and again.


But most importantly, what can you share with the good people of Fastlane Forum? What value do you bring here? Give. Don’t just ask and take.

 

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[onchaintrader]

I have a problem with the OP. You offer nothing. You are new. And you want everyone to jump up and give you advice on how to manage your money?

1. Don’t confuse a bull market for brains.
2. Welcome to the internet. Opinions are like assholes, everyone has one and most are full of shit.
3. You’ve turned $5k to $100k - what the hell doe you need me for? Do THAT again and again.


But most importantly, what can you share with the good people of Fastlane Forum? What value do you bring here? Give. Don’t just ask and take.

So rude and useless comment. Farming likes by putting down others, good strategy sir, keep going you'll get more virtual status.

 

[ZF Lee]

So rude and useless comment. Farming likes by putting down others, good strategy sir, keep going you'll get more virtual status.

I have to agree with you on this here.

There's always something we can learn around here-- crypto wins or others.

I wouldn't want to play with options / futures given the risks related to my lack of knowledge in those areas. Don't want to lose and go back into < 6 figures atm. I'd rather play defense for a few years until BTC completely bottoms and everyone hates crypto again. Then I'll get back in.

In the mean time, things I could consider would be the stock market. But just simply buy S&P index. Since we're at ATH in the stock market & the FED wants to tapper next year, it seems risky too.
Maybe I should just do nothing and leave my stablecoins alone... but again risking theft/hacks/regulations..
Sell, and get hit with taxes instantly... but it's in the bank..

MJ DeMarco has a thread on the INSIDERS about using options to generate income (not the r/WSB way!)
It feels rather similar to theta gang/wheel strategies though.

You can learn the options by trading on paper first...and then just use a little capital on the major indices (eg SPY) for that to start with.

For buying the indices themselves, I guess you can still buy...but you don't have to go all in. Divide up the allocation for the index into a few tranches to buy in stages down the road...and watch how the Fed does the tapering. If its something like 2017, the Fed will just balance the asset buying and not go ape-shit nuts on rate hikes and all. Dollar cost-averaging is not sexy...but OK if you hate market timing.

I like how you can generate some cashflow with the coins...keep it up.

I'd also keep a cash portion for emergency funds or other business ventures (if you wanna do something non-crypto out of the blue).

MJ's book UNSCRIPTED does have something to say about using the lump sums to build a Paycheck Pot of income...so do check it out. Crypto gains aren't 100% from Fastlane...but well, money is money, and must be taken good care of.

 

[Martzee]

So rude and useless comment. Farming likes by putting down others, good strategy sir, keep going you'll get more virtual status.

I don't think it is rude. It perfectly expresses reality. On top of that, I feel very uneasy giving you any advice when you evidently have no clue what to do and now ask others for their advice with your money. This is a typical newbie post - "I invested into something I had no idea and now I am at a point when I have an even lesser idea what to do, please help."

Investing is not easy and you must enter any investments with a solid plan and strategy and have a plan for all eventualities that may happen. How can anyone give you advice when you yourself do not know what you want? Do you want to preserve the capital or gamble it more? Your 1,2,3 options clearly indicate that you do not know. How can we know?

Nevertheless, I will give you one piece of advice from the trading world: Never compound your investment capital, always invest proceeds in a different asset. Take a portion out (and spend it to reward yourself, a good number is 1%), reinvest another portion into a different uncorrelated asset (and by that, I do not mean a different version of bitcoin or any other crypto but a completely different asset), and trade with your original capital only. So if you started with $5k, and now you have $100k, invest $95k to something else and keep trading your original $5k... If you think it is so easy, there will be nothing stopping you from making another $95k in no time. And if you lose $5k, you only lose your original investment in lieu of everything.

 

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[Sega Saph]

Man you are really lucky! If you didn't read fastlane book yet, just do it! MJ gave us 5 ways where your money can work properly and automaticly!
From those 3 points what you asked us, th 1st one the best one. Imho (=_+)/ Have a good luck! And make updates of this tread! Really curious about final of this story. Peace!

 

[onchaintrader]

I have to agree with you on this here.

There's always something we can learn around here-- crypto wins or others.


MJ DeMarco has a thread on the INSIDERS about using options to generate income (not the r/WSB way!)
It feels rather similar to theta gang/wheel strategies though.

You can learn the options by trading on paper first...and then just use a little capital on the major indices (eg SPY) for that to start with.

For buying the indices themselves, I guess you can still buy...but you don't have to go all in. Divide up the allocation for the index into a few tranches to buy in stages down the road...and watch how the Fed does the tapering. If its something like 2017, the Fed will just balance the asset buying and not go ape-shit nuts on rate hikes and all. Dollar cost-averaging is not sexy...but OK if you hate market timing.

I like how you can generate some cashflow with the coins...keep it up.

I'd also keep a cash portion for emergency funds or other business ventures (if you wanna do something non-crypto out of the blue).

MJ's book UNSCRIPTED does have something to say about using the lump sums to build a Paycheck Pot of income...so do check it out. Crypto gains aren't 100% from Fastlane...but well, money is money, and must be taken good care of.

Ok so that's interesting, since you're the second person mentioning options to me, I will definitely have to look it up and start learning about this stuff.

Yes, I do have both MJ books, have been reading them for many years.

I agree, crypto / stocks is based on hope, which is the opposite of a fastlane (controllable unlimited leverage).
"Money is money" YES. Exactly why I'm looking to treat it with respect and diversify it outside of crypto.

Going to use the crypto cheat code until I can't anymore. Appreciate the feedback

 

[EVMaso]

Congrats OP

Have you considered staking any or all of your amount? You can stake it as stablecoins, turn it into BTC/ETH/whatever and stake that

I wish I could offer more concrete direction with this advice but I am only myself just learning about staking and lending. However if I had a bunch of crypto and I didn't know what to do with it, that's what I'd do so at least it's earning something instead of just sitting there.

 

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[onchaintrader]

I don't think it is rude. It perfectly expresses reality. On top of that, I feel very uneasy giving you any advice when you evidently have no clue what to do and now ask others for their advice with your money. This is a typical newbie post - "I invested into something I had no idea and now I am at a point when I have an even lesser idea what to do, please help."

Investing is not easy and you must enter any investments with a solid plan and strategy and have a plan for all eventualities that may happen. How can anyone give you advice when you yourself do not know what you want? Do you want to preserve the capital or gamble it more? Your 1,2,3 options clearly indicate that you do not know. How can we know?

Nevertheless, I will give you one piece of advice from the trading world: Never compound your investment capital, always invest proceeds in a different asset. Take a portion out (and spend it to reward yourself, a good number is 1%), reinvest another portion into a different uncorrelated asset (and by that, I do not mean a different version of bitcoin or any other crypto but a completely different asset), and trade with your original capital only. So if you started with $5k, and now you have $100k, invest $95k to something else and keep trading your original $5k... If you think it is so easy, there will be nothing stopping you from making another $95k in no time. And if you lose $5k, you only lose your original investment in lieu of everything.

It isn't a newbie post. I said "I got to 100k, I took full advantage of a bullmarket and I know how I got here, and now I am looking to secure the bag outside of crypto (which is outside of my comfort zone), do you guys have any ideas how". I then proceeded to give some diversification ideas that I had, and looking to pick your brain.

Appreciate the advice, YES, I practiced this very often in crypto with alts. Secured the bag, and let the rest ride to the top, and ladder sell. Now this is something I'm going to need to do outside of crypto. As you mention, securing the bag into the "real" fiat world, and let the rest $5k ride. I will think about this, thank you

 

[onchaintrader]

Man you are really lucky! If you didn't read fastlane book yet, just do it! MJ gave us 5 ways where your money can work properly and automaticly!
From those 3 points what you asked us, th 1st one the best one. Imho (=_+)/ Have a good luck! And make updates of this tread! Really curious about final of this story. Peace!

Yes, bought two of his book YEARS ago in multiple format (audio, pdf, paper), revisiting them often.
Ok I appreciate your suggestion, thanks

 

[onchaintrader]

Congrats OP

Have you considered staking any or all of your amount? You can stake it as stablecoins, turn it into BTC/ETH/whatever and stake that

I wish I could offer more concrete direction with this advice but I am only myself just learning about staking and lending. However if I had a bunch of crypto and I didn't know what to do with it, that's what I'd do so at least it's earning something instead of just sitting there.

Definitely, something to remember with staking though is counter party risk : not your keys, not your coins.
The protocol you stake on can get hacked (you lose everything), the founders can become evil (you lose everything), or the yield become ridiculously low during a bear market or they restrict access to your funds...

So I will probably stake only a portion of it.

Here's a sample diversification I am thinking of implementing with my 100% crypto bag:

- crypto 50%

• BTC 20%
• PAXG 20% (gold pegged coin)
• stablecoins 60%
  • -> stored safely not earning yield 75%
  • -> earning yield on stablecoins (ust on anchor, binance staking, usdc on blockfi) 25%

- physical gold 5%
- fiat in the bank 10%
- S&P 500 35% (DCA in)

 

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[ericaung]

Definitely, something to remember with staking though is counter party risk : not your keys, not your coins.
The protocol you stake on can get hacked (you lose everything), the founders can become evil (you lose everything), or the yield become ridiculously low during a bear market or they restrict access to your funds...

So I will probably stake only a portion of it.

Here's a sample diversification I am thinking of implementing with my 100% crypto bag:

- crypto 50%

• BTC 20%
• PAXG 20% (gold pegged coin)
• stablecoins 60%
  • -> stored safely not earning yield 75%
  • -> earning yield on stablecoins (ust on anchor, binance staking, usdc on blockfi) 25%

- physical gold 5%
- fiat in the bank 10%
- S&P 500 35% (DCA in)

not bad allocation. but ur portfolio is very safe.

i recommend to reduce S&P 500 and stablecoins. And, add little more altcoins like DOT, BNB and AVAX

 

[gryfny]

not bad allocation. but ur portfolio is very safe.

i recommend to reduce S&P 500 and stablecoins. And, add little more altcoins like DOT, BNB and AVAX

This post is made last month. So if OP kept his money in stablecoins, he did really really well last month.
My strat has been to buy into public sales and pre sales. You get a big discount, and then flip for profit when the tokens unlock. But the last few months I see less and less opportunities for this. I am also doing the options trading (INSIDERS thread), but I'm kinda getting rekt this last week.

Keep at it OP and follow your instincts, you seem to be doing it right.

 

[Guest-5ty5s4]

Read the Unscripted Money System. I would put a sizable portion of it in MLP dividend stocks, closed end funds, and REITs.

Then again, 100k still isn't enough for a proper "paycheck pot." I'd keep at least half of it in cash for your business venture(s).

 

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[ericaung]

Read the Unscripted Money System. I would put a sizable portion of it in MLP dividend stocks, closed end funds, and REITs.

Then again, 100k still isn't enough for a proper "paycheck pot." I'd keep at least half of it in cash for your business venture(s).

You nailed it. I would do the same.

But it also depends on your country economy too. I am from third world country and I don't dare to put lot of cash into my business ventures too.

 

[ericaung]

This post is made last month. So if OP kept his money in stablecoins, he did really really well last month.
My strat has been to buy into public sales and pre sales. You get a big discount, and then flip for profit when the tokens unlock. But the last few months I see less and less opportunities for this. I am also doing the options trading (INSIDERS thread), but I'm kinda getting rekt this last week.

Keep at it OP and follow your instincts, you seem to be doing it right.

You talking about initial public offering coins. Yes I agree with that, its good way to make decent profits in crypto.

But definitely it carry high risk. Holding stable coins also cannot turn 100K to 1 million. Also not good to HODL bitcoin and ETH either. They are too safe. Definitely should consider to diversify into multiple coins and big projects like web3.

 

[Guest-5ty5s4]

You nailed it. I would do the same.

But it also depends on your country economy too. I am from third world country and I don't dare to put lot of cash into my business ventures too.

Thanks! Yeah - I don't mean go spend $50,000 on inventory for a new business. I mean, start a business, maybe spend $100, and have $49,900 in the bank so that if you're stuck in the desert of desertion, you aren't dead.

Or if suddenly you need to buy new equipment for $1,000, you have it. Or you lose your first shipment in the Pacific. You get the idea. Having cash is important for business. Doesn't mean you should spend it!

 

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[gryfny]

You talking about initial public offering coins. Yes I agree with that, its good way to make decent profits in crypto.

But definitely it carry high risk. Holding stable coins also cannot turn 100K to 1 million. Also not good to HODL bitcoin and ETH either. They are too safe. Definitely should consider to diversify into multiple coins and big projects like web3.

Yes but the risk-reward ratio is still amazing. Almost all go up after release, because I got in with a discount. And some go up A LOT. If half of them would go to 0, it would still be profitable since the others hit x2, x5, x10 or more.

It's basically gambling, but with these kind of outcomes it's hard to lose.

 

[nothingness]

Off the top of my head, check with a CPA if you can do this

Form an LLC
Transfer out your crypto as an asset to the LLC in the form of a director loan
Cash into fiat. It's an LLC so you should just have to pay 20% CGT instead of 40% income tax. Depending where you live you might not even have to pay this now.
Whilst this is going on start reading these forums and the threads by @IceCreamKid to figure out what you can sell (product or service) that fixes peoples problems in a large market with high demand.
That 80k gives you an awful advantage in ad spend vs relying on SEO to do so, in the form of PPC. @Andy Black has some good resources for PPC.

You won the crypto lottery in a bull market with a black swan event with literal kids making 6 figures from their pocket money, don't go thinking you can easily do this over and over especially if we enter into a bear market.