175. Why You Need This Mindset When Investing In Crypto

There's crazy studies done where over a 10 year period, once or twice a year, those two days are responsible for 50% of the gains.

Mindset psychology is super important if you want to make it through crypto. A lot of people think it's just super easy. You go and you buy and you're going to make money, right? It's never as easy.

You don't have to optimize every single dollar.

If you don't have cash on the sidelines, it creates a very stressful environment because you can't even take advantage of the opportunities when they're down.

Mate, it's horrendous. It is one of the Hardest things.

Welcome back to another episode of the Ben and Bergs Podcast. I'm Ben, your favorite high school dropout and founder of Collective sh alongside me as Bergs, your favorite MBA and CEO of Collective Shift. Join us as we bring you world class crypto research and strategies to help you dominate this crypto bull market as well as behind the scenes view of us scanning a fully remote subscription research business here in Australia. If you like the podcast, we'd love for you to leave a follow if you're on a podcasting app or leave us a subscribe if you're on YouTube. We'd love to bring you these episodes each and every week completely free, with no advertising, no affiliates, so you can grow your crypto portfolio. Now today.

You got through the intro.

Without stuttering, so Bergs is just taking the mickey out of me for stuffing the intro every time, but we absolutely nailed that, mate. Dial it in.

You caught it, mate. 175th episode or whatever.

You're gonna get it two or two and a half years over there. Today we're talking about the investor mindset because we've gone through some pretty heavy volatility over the last few weeks in the market and mindset psychology is super important if you want to make it through crypto. Like a lot of people think burgers is just super easy. You go and you buy and you're going to make money, right? It's never as easy, mate.

It's horrendous. It is one of the hardest things and we're in that interesting period where we've had the bitcoin halving and the fireworks haven't started. So people getting bored, they're looking day to day. What do I do? There's a lot of FOMO going around and this is just a reminder of this episode of how difficult it is to invest in the prices you have to pay and how long it takes to become a seasoned investor. Even people that, you know, sell their companies have a lot of money. It takes at least five years for them to become a competent investor. Both of us, this will be our third cycle, seven plus years in crypto each. And through the recent volatility, in the last two weeks, we haven't even felt it water off a duck's back because we've been through it so much, been through the hard times. We've made a lot of money, lost a lot of money, and now we understand the game. And I want to start off with the conversation we had at dinner last night over some beautiful Japanese food mate. And you've got a little bit of money coming your way from the business and you're asking, what do I do with it? And you're like, do I invest it here? Do I put it in here? Do I put it over there? And my response was just put it in your bank. It doesn't matter. Put it in your bank, figure it out later, do it in 6 months, 12 months, who cares? Because I know what you've got in your portfolio, how you allocated, and you don't have to optimize. This is the first lesson. You don't have to optimize. Every single dollar, not every dollar you have has to be invested in something. You don't always have to maximize that return. It becomes about having some capital at risk, but also having money so you can sleep well at night and a safety net as well. And you were kind of caught up in that mindset where you're like, where do I put it? I want to put in here, but then I'll get this. But then I have to do that. And it was just, it's like, can you explain that State?

I'm very opportunistic, right? I'm like, you know, I want to invest every dollar to get the maximum return. But then I'm, you know, looking at portfolio allocation and percentages and you know, I am fully allocated right now, right? Like, well, I'm not fully allocated. Like, I've got cash, but, you know, every, every dollar I sort of have, I want to pump back in the market. And your point of view is like, well, just hold. How about you just hold on your horses a little bit, maybe stick a little bit of cash in the bank, have that sort of buffer and that you can do other, other things with. Because for me, I'm 99 allocated to crypto. Like, I don't have any assets elsewhere at all in crypto. And at the Moment. I'm not looking to diversify. You know, I just want to buy more crypto. But like, that's, that's the, that's the downside because you know, for you that you're sitting on a bit more cash. Like it's, it's. You're probably just a little bit less.

Less, I guess correlated to the market in that sense. Like it doesn't really matter.

I'm less affected.

Yeah.

I can weather more storms. Yeah. And I see where you are at your age. You're 25 now.

Yeah.

And your position. And it's. I've been in that position as well. It was much later in life for me, but I felt exactly the same way. Where I have to maximize everything, I have to put it in now to get that return or I'll miss my opportunity. But if you map out your goals and the things that you want to achieve with the amount you have already, you're going to achieve that relatively quickly.

It's, it's already like, you know, could probably achieve, you know, a couple of my goals pretty quickly. And you sort of do the math on like where things are going to be in the back end of this bull market. You're like, well, you know, it's kind of like.

Exactly right. And we have these kind of like fomo. We don't want to miss out. Have I done enough? Have I not done enough? Is, is my allocation. Okay. And really the thing you need to do here is just think long term. So if you take a 5 to 10 year look outlook, what do you want to achieve and what are your specific goals? And then work backwards from there. Great. I want to buy a house. I want to buy this one. But let's say it all adds up to a million dollars. Right. In 10 years I want to have a million dollars. If that's my base case today, how much do I have now? What percentage do I need to compound year on year and which asset class will do that for me? That's it. And just live there and then start executing every day or every week or every month against that goal. That's the secret here. It's compounding in time.

But you pay the price because there will be down days, there'll be updates, there'll be euphoria, there'll be depression. But you need to weather that and know that over time you'll be okay. The classic example is superannuation. Having that people don't even look at it. They don't know how they're allocated. They don't know how much money they have, but when they get to their 50s and 60s, they look at it and they go, oh, there's a lot of money here. And that's because they've not touched it for 40 plus years and it's just been compounding. And then they can, you know, retire and achieve their goals. So, first of all is think long term. But in the short term, what I find, and this is with people that have limited funds or people that have a lot of funds, is comparison. Comparison is a thief of joy, Ben. It's one of our favorite sayings at Collective Shift. And you look on Twitter, some guy's making more money than you. Some guy turned $10,000 into a million dollars. Some trader got on this awesome coin, someone's bought this meme coin that you didn't buy. And there is so much FOMO out there. Or you're heavy in bitcoin and bitcoin's gone from 70,000 to 50,000. You're like, holy shit. And you feel that FOMO and you're emotional. And what should you do when you're emotional?

Ben, step away from the screen. Don't make a decision.

Exactly right. Step away. Don't make a decision. You've got your strategy. You're going to execute against it. And this is what we said to our platinum group recently. So if bitcoin's gone from 70,000 to 50,000, let's say it's 50% of your portfolio. Fundamentally, in bitcoin, has anything changed in the last two or three weeks?

Fundamentally, nothing's changed.

Nothing has changed. Nothing's changed within the crypto ecosystem. Nothing's changed within bitcoin, only the price has gone down due to world advances and crazy Japan, carry trade and numerous other things that we don't even know or care about. Bitcoin is still the same. So you should be executing against your strategy. And you should be buying more bitcoin because it's on sale and. And it's 20 to 30% cheaper than it was two or three weeks ago. Yeah, that is the hardest thing to do because you'll feel sick doing it. The number's going down, yet you have to buy. And when you are. When you are investing, you shouldn't be. Look, honestly, it's boring and it's hard. If you're feeling those two things, you're doing the right thing. If you're feeling excited about your investments, you're buying the wrong thing. Ben felt excited about an investment recently.

I'm still excited about this. I'm so excited about it.

We'll track it over time and then I'll sled you on the podcast.

Give me, give me some time before we make a call that. Yeah.

And honestly have your strategy and execute against it. And in terms of goal setting, your goals don't have to be big, but they do have to be yours. I don't have super massive goals. Like my goals to completely fulfill will be $700,000. Like that is what I would need to get to, to achieve those goals. And I don't want like a boat or like a $5 million house or whatever it may be. I'm just not that guy. Like looking after that stuff stresses me out. But I do want certain things. And for you out there, it might be, yeah, I do want the multimillion dollar house. I want to retire some members in my family or I just want to buy a bike or a new car. As long as those goals are your own. When you hit those goals, make sure you convert your investments to cash. Go and achieve your goals, buy those things and live your life. Because that's what it's about. Money's just a tool. And we're using this so we can improve our lives. That's why you invest. You don't have it, so you got a bigger war chest. Like, what are you going to do with that?

Yeah. Yeah. And I think the short term piece that you were talking about, that's for, for, for so many people in crypto, you get so caught up in the short term. Like people looking at the prices refreshing every three hours. What the, what's the price doing? Like your reality is no one, no one knows why the price moves up and down in that period of time. It doesn't, it doesn't matter.

Yeah.

You know, you really got to zoom out and think, where, where are we going to be this time next year? Where are we going to be this time in five years? Like, do you really think that you know where we're going to be in five years, time is going to be less than where we are now? Like my opinion? Absolutely not. Like, I think we're going to continue to drive up the price. And if you're that long term time horizon, like it really shouldn't matter. The intraday, you just got to stress yourself out, get emotional, get angry, you know, get, get worried. And ultimately you're going to create some poor decisions because you're so fixated on why the price is down 4% today.

Yeah. And if you're feeling those things and you're not sleeping well. Ask yourself why are you in the wrong investments? Do you have to monitor, monitor them too much? Are you over allocated?

Yeah, I think a little bit over allocated. And that's one thing I've seen as well. Like if you don't have cash on the sidelines, it creates a very stressful environment because you can't even take advantage of the opportunities when they're down. Like we, we bought the dip last week pretty heavy because we're getting assets on discounted price. But you know, without the cash on the sidelines it can be hard because your hands are tied.

That's exactly right. You want optionality in investing. You don't want to be all in on something.

Yeah.

Unless you've got very high conviction and you're willing to risk it all.

Yeah.

But in investing, never carry the risk of ruin, but the risk is too high. Don't invest in that thing. And I think you and I both believe that bitcoin is going to eat the market cap of gold. So we'll need to at least 10x from here. 10x in price, around 700k.

Yeah.

The majority of people I know agree with that and they think it's even going to go further and start taking dollars away from property and everything else.

Yeah.

If we just look at that within the next. I think you'll do it within the next five years personally. 10 max. That's a 10x that in 10 years. Usually you double your market, your money in the market in 10 years. That's a huge achievement. So just step back and look at that. You don't need to go crazy into mean coins and alts and all this sort of nonsense. And you need to be able to weather the storm in investing. It's not timing the market is time in the market. There was these crazy studies done where over a 10 year period, I think once or twice a year, those two days are responsible for 50% of the gains. Are you going to pick those days? No. Well, that couple of days each year responsible for the majority of losses.

Yeah.

But if you're averaging in over time, you're getting the top, you're getting the bottom, you're getting the average. You'll be able to take advantage of those days. So spending longer in the market don't have to get rich quick, get rich slowly, sleep well at night. That is absolutely the key. And the final thing is selling into strength is what a lot of investors call it. Where when retail comes on board, when things are pumping, when everyone's talking about it, everything's going up 5, 10% a day. That's when you start thinking, okay, I've gone through this bull market, this, this bear market, these really bad depression. I've had to buy heaps of assets, they keep going down. And you do that because you know the good times are going to come. And when the good times are there, for you to actually succeed, you need to take profits and you need to sell. This is something that you help a lot of our members with and it's their number one problem.

Yeah. So many people come to us, go and go, I missed the last cycle. I can't fuck this cycle up again. I need your help. And that's really where the self strategy is so important. Being able to take chips off the table as we go up. And you know, really the, the retail investors, they're not here right now. When they do arrive, they're going to be the last liquidity into the market. You want to be well and truly scaling out by the time they arrive, otherwise you're going to miss the top again. Because once the retail come, there's no one after the retail. Yeah. And selling into that, like you said, selling the strength is, is super important. And also having a sales strategy and a portfolio construction that's not so chaotic that you can't even figure out where your assets are and what you're doing. Because the more complex it is, the harder it is to sell.

I got caught out. I needed to sell one of my tokens. The exchange. I had it on. Didn't have it listed anymore.

Yeah.

And I couldn't do it on a dex because the liquidity was very poor. And I had to sign up for another exchange. Move it over there. By the time I did that, it had gone back down. Yeah, I missed it. And it was all too hard.

It was even one of our platinum clients recently signed up, went into his office, sat down in the boardroom and it was just stuff everywhere. We got the collector shift dashboard up, we figured out where all his assets was, we plugged it in and now we can actually see what's going on and you can actually start to create a plan from that. But before that, if you're trying to do all that in the middle of a bull market, like you're going to miss out.

And I've actually just thought of two more things. A lot of people I talk to, I've noticed this trend just in life over the last five years. Everyone speaks in all or nothing terms. Everyone's so extreme where it's just like, oh, You're a Trump supporter, therefore you're crazy. And you, I don't know, do all this weird stuff. Like there's this weird association where if you like one thing or do one thing, you're immediately everything else. Or when it comes to investing, people are all or nothing.

Yeah.

They have to get out all of their money. When bitcoin hits $100,000, I'm selling all of it. You probably don't want to do that because it'll probably go higher than that and you want to sell portions of it. You, you don't want to be all or nothing.

Yeah.

It's a very crazy mindset. It's very risky as well.

It's very crypto to be all or nothing.

And I always tell this story about a while ago, a guy that we met at a meetup where he wanted to get $2 million for a house. He put in about 10 or 15k, got up to 1.8 million from 10 or 15k, and then all the way back down to about 50k. He didn't sell any of it because he didn't hit 2 million. Imagine if he's just scaled out a million of that, how good that would have been and he's halfway to his house and his mortgage would be a lot smaller than it would have been previously.

The thing I work with our platinum clients on is having. Having three different goals. I like to set up a bearish goal, a base goal, and a bullish goal. And the bearish goal is more like not like worst case scenario, but it's like, what is the minimum that I want to achieve in this cycle? So that for this guy might have been 500k base goal, a million bullish, 1.8 or 2 million. And, and that way you can sort of achieve these goals as you, as you go up, you think about like a leveling up in a game. Like the checkpoints.

Yeah.

And if the game fails or you lose, you go back to that checkpoint. Yeah. But if you're not creating checkpoints along the way, ultimately, if you fail and miss the top, you're going right back to the start again.

Exactly right. That's it. You need these little signposts to tell you what to do in different scenarios, because you don't know how the markets are going to play out, but you need to know what action you're going to take when that does happen. Yeah. And I've talked a lot about mindset now, but I haven't really gotten into the how. Like, how do you become a good investor so I'll talk about my journey. I started investing in shares when I was 20, 21.

They put like 5 or 10,000 into different shares. One of the ones I bought was JB hi Fi. Because my mates would go there. I used to love reading like Money magazine. They have all like little tips. And I was working on it. Help desk. I was very bored. So I just. Just invest all day. And this was. God, probably 2005, something like that.

So. And the guys on the help desk were all investors as well. You couldn't do any wrong back then. You buy anything, it would just go up. Right. It was all crazy. And the GFC happened. But Mason. I would go to JB hi Fi and we couldn't. Every Saturday and then we get on the beers. We just couldn't help but buy DVDs and everything there it was just pumping. The business model was great. Put my money into that. That money went up quite a bit. Invested in other shares as well. Took some of that money out. Ended up buying a primary place of residence, using that as a deposit. So bought some land, then built a house. All the while investing in stocks and junior miners and everything. Going on forums, making money, losing heaps of money. Learning all the stupid lessons about tax capital gains, when to get out. Bullshitters. On the Internet. You learn a lot of this just by doing. And losing a lot of money.

Yeah.

From there in or early 2017, probably late 2016. Discovered crypto. Only started buying it early 2017 and then getting caught up in all the scams. ICOs, losing money. It was just crazy times back then. And learning about markets, thinking I was a trader, losing money, trading like you make. You can make money quickly, but you lose a lot of money. And quickly discovered. I'm not a trader. Yeah, yeah. The. The amount of effort you have to put in to become a trader. And look at those screens, turn your emotions off. Understand markets and psychology and everything else. It is just ridiculous.

Yeah.

Like unless you want that to be a profession, do not do it.

Yeah.

And then yeah. Started investing quite heavily in crypto, more than I had anywhere else. And then bought stupid amount of like, you know, stupid investments, NFTs, meme coins, those kind of things and all. Meanwhile my BTC and E stack are going down. All this, you know, could have been in Ethan should just sell the eth. I'd be retired and now building that stack up. Buying a lot of dollar cost averaging through the. The bear market. And really the way I got there was similar story to you. Like reading Rich Dad Poor dad, that was like the entry. Another book was, I think it's called Money by Paul Clithero, an Australian investor. Brilliant book to start out with and doing simple things, taking 10% of your pay, investing it and the rest, you know, you use for your living expenses. Constantly investing and upping your game. So listening to investors from eo, listening to people that have done it before you, people that own companies and a lot of just reading books to get different perspectives on market psychology.

Yeah, yeah. And I think all of that company with time in the market in crypto gives you that, that investor mindset for crypto because I think there's having the investor mindset macro or just outside of crypto and then there's like the crypto mindset which is like a, it's a whole new level of like patience and not being so emotionally driven. And I think that's where, you know, and we see it on chain, the short term holders that come in and buy and sell within three months, you know, and the amount of money these people lose because they don't know what they're doing, they're not patient. The market goes down 20%, they panic and they sell. So many people could go and do that. It's super important to align yourself with education and you know, listen to, you know, something like Collective Shift or ask because it can kind of help give you a little bit of calm amongst the storm.

I sometimes think like, what if I was starting out again, how would I invest these days? And I come back to again, not, not financial advice at all, but come back to a very simple thing of I would buy, I would probably allocate 20 to an ETF, another 50% to Bitcoin. The rest may be to Ethereum. Very simply and every payday put a percentage of my pay into that.

Yeah, yeah.

Like that is as simple as I would keep it. I will not go any further. I would live my life and practice my craft.

Yeah, keep it simple, man.

Yeah, but you only understand that after you've been in the market for a.

While, you've lost money.

Yeah, yeah, that's it. And it feels like you're not earning it if it's that simple. Like you have to put the effort in, you have to do the analysis, you have to. Yeah, that's just not true.

Yeah, yeah, I agree. And having, and having that sort of accountability and someone near you or with you can talk to this about because I think that's the other thing that crypto is a super lonely, no one understands it. Everyone thinks you're weird.

Like, even my mates still. Well, they always thought I was weird. But even with crypto, I can't have crypto conversations with them. They still think it's a scam. Only one guy has actually invested and done quite well. Yeah, yeah, it's. It's a lonely road, investing. And even just normal investing, a lot of people just don't do it. I know a lot of my MBA mates that earn a lot of money that don't invest. Yeah, they've got their house and they renovate it. That's it. Yeah, but they don't even invest in shares, which is just crazy to me.

Well, there you have it, folks. That's the investor mindset. And we're going to be going a little bit deeper on this actually, live on our first Benneberg's live podcast at the Australian Crypto Convention in Sydney in November. So we have a bit of a discount for our listeners. So if you, if you are coming or planning on coming, you can use the discount code collective shift or one word and get a 10 discount. I think the tickets are like $80, I think. And yeah, we will be there. I'll be doing a presentation myself personally and then we'll be doing a separate live Benedberg. So there's been a bit of hype on Twitter already, Bergs. There's a few, few Bennett Boogs listeners getting around it.

I've heard you've organized a very expensive present as a giveaway.

Mate. Hold up a minute.

I remember a few thousand dollars worth of accountability that you haven't paid back to the Bennabes list.

Here we go. I just, I just paid it back in value, mate, through the.

Where is it?

Can't see it, mate. You paid it back in distress to me, mate.

But yeah, we'll be there live and we'd love to see all of you, all of you there. So, yeah, grab a ticket. We'd love to see you there. I'm not sure the time that we'll be on, but we'll make it clear once the, the schedule's out. But yeah, it's gonna be fun. I don't know what we're gonna talk about yet, but that's gonna be awesome.

Just rock up, have a good time.

Yeah, it'll be good.

Just roast Ben. Bring your best heckles.

Well, guys, thanks so much for listening. If you like this episode, we'd love for you to share it around. Share it with a friend or family or someone that has, you know, maybe some crypto and, you know, need some, some. Some assistance on the investor mindset. Stuff we'd love for you to share with them. It's how we grow the podcast. And we'll see you on the next episode.

Thanks, champions.