Rich vs Poor: Taking Profits in Crypto

Many of us recognize that being rich makes it easier to make money from investments. An underrated aspect about being rich is that it makes it easier to take profits from investments as well and especially in a casino like the crypto market. Here is an example.

Rich has 5 million dollars net worth, and invests 1% of his net worth into crypto during the bear market. That is 50,000 dollars. In the bull market, Rich sees 10x growth in his portfolio and it balloons up to 500,000 dollars. For Rich, 500,000 dollars is still a large money and Rich takes profit on 80-90% of it.

Poor has 10,000 dollars net worth, and invests 1% of his net worth into crypto during the bear market. That is 100 dollars. In the bull market, poor sees 10x growth in his portfolio and it balloons up to 1000 dollars. For Poor, 1000 dollars just isn't satisfying as Poor wants to stop being poor so Poor doesn't take any profit.

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Bear market hits and crypto dumps down the drain. Rich took 400,000 dollars in profit and is happy about his situation while Poor is even or down again.

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Basically, the problem for poor is that the initial investment is so small that it is impossibly difficult to take profits because while the percentage gained is large, the amount gained is unsatisfying and doesn't get himself out of the poor status. For rich, both the percentage gained and the amount gained is large. Even for millionaires, half a million dollars is deemed a huge amount of money that you want to preserve. So you take the profit. The rich becomes richer and the poor stays poor.

Moral of the story. Increase your amount in your portfolio and taking profits will be easier. (this means less gambling and more on doing whatever it takes to increase your seed by taking on multiple jobs, working overtime, etc. )