I used to play a lot of video games and computer games when I was younger. My life revolves around SEGA video games when I was in primary school. When my brother got a desktop computer in secondary school, we went into roleplaying games like Ultima and later on, strategy games like Dune and Command & Conquer.
Warning – this blog post is not going to be of much help to most people and is really something I wrote just for fun.
Then, the internet arrived. The age of dial-up modems *cringe* and soon, I was playing with friends all over the world in text-based multi-user dungeons (MUDs) – the one I played the longest was Dawn of Time – and I KNEW this was the future. The tech just wasn’t ready yet, and this was around 1997 to 2000 when I was in upper secondary and junior college.
Welp. I sound so old.
Yup, MUDs were essentially the predecessor of massively multiplayer online games (MMORPGs) we know today.
My mum always said that gaming was a waste of time, but I was pretty sure that the old-school role-playing games (RPGs) proved to be excellent cognitive training for my young mind.
I could even recall extensive routes that were to be taken in maze-like dungeons in games such as the Phantasy Star series, which was my favourite back then. Funny thing was that the earliest editions were all in Japanese and I couldn’t understand a single thing even though I completed the game.
All in all, I never needed tuition except during Primary 4 when my English grades were precarious. I absolutely HATED it. And so, I started buying The New Paper (haha) in primary 5 and I was soon free from tuition classes – forever.
My mum left me alone to play all the games I want since then.
Guess what? I continued playing games even when I started working. To this day, I still go on adventures in Guild Wars 2 with my wife. We don’t do it that often now, but I have fond memories of us playing throughout the night during launch day and waking up at 3am for a global event. I guess getting her started on MapleStory was an excellent idea huh?
Aww. This was a very old screenshot from Guild Wars 2 that I had shared previously on my blog, and it is the equivalent of almost 30 man-days of gameplay 😉
MMORPGS vs Crypto
These days, seeing so many personal finance (PF) bloggers starting to write about crypto and sharing their on-boarding experience is really heartening. Baby steps.
I believe that we as a community can definitely value-add a lot to folks who are beginning their crypto journey.
I absolutely suck at teaching so this isn’t a suitable post for the newbie crypto adventurer.
Instead, this is just a fun (but intermediate) post to throw out my thoughts. I have mentioned a few times the importance of being relentlessly resourceful. If there is anything that you don’t understand or piqued your interest, simply Google to learn more.
The Holy Trinity
In classic MMORPGs, there are three basic roles i.e. holy trinity to fulfil –
- Tanks – engaging the “enemy boss” and soak up the damage
- Damage Dealers / DPS (Damage-Per-Second) – inflict massive damage
- Healers – keep players alive by healing them
Lose a critical member and the party probably gets wiped during boss fights. Trying to be a jack of all trades (in a classic MMORPG) just means that you suck at everything, and one has to specialize to be deemed useful when looking for groups to adventure with.
Many crypto investors dive in without stopping to think about managing their portfolio. As a person who always lives by some form of defined structure, I have slowly navigated my portfolio in a direction that I’m comfortable with.
My portfolio is currently divided into three sections and I will elaborate on them individually.
1. Tanks
Tanks are basically my pseudo index-investing portfolio. Consisting of primarily Bitcoin (BTC), Ethereum (ETH) and stablecoins, they form the non-negotiable core of my crypto portfolio.
People tend to look at me in disbelief when they see index investing and crypto in the same sentence. But, why not? I felt that the extreme volatility of crypto is great for long-term returns.
Even in the direst situations, BTC and ETH will never fade away due to the role they play and the ecosystem surrounding both of them. They ARE the bulk of the crypto space regardless of which camp you support. Besides BTC and ETH, I have a sizable amount parked in stablecoins earning interest for me.
Constantly rebalanced, they soak up the damage in the worst of bear-market conditions and packs a decent punch in bull-runs. In previous years from 2017 to 2020, I was fairly aggressive and typically have an allocation of at least 40% BTC, 40% ETH and 20% stablecoins. Even when the market is moving sideways, we can easily earn 6-8% by parking these assets in “safer” interest-bearing accounts.
I’m currently (2021) parking a portion of my tanks in options such as BlockFi. BlockFi, in particular, is very handy because I can trade BTC/ETH for stablecoins for easy rebalancing. Also, a significant percentage of my portfolio is sitting in stablecoins now.
Sure, we can either keep them in cold storage or centralized custodian solutions. The choice is yours – yes, I do use cold storage too. And let’s be honest about it. There is simply a higher chance of a user messing up and losing their private key than a custodian solution going bust at this point. Remember folks who forget their password?
For this section, I have planned a small twist by adding DeFi Pulse Index (DPI) for that added kick. Think of it as a cash rider for an insurance policy.
At this point, it is literally impossible for the market to dump (crash) beyond the capital I have invested in crypto. Just like tanks with an enormous amount of hit points (HPs) and massive defense, my pseudo index-investing portfolio will always be the vanguard that rushes head-first into both bull and bear markets.
2. Damage Dealers
We call them damage dealers DPS because they are literally measured in how much damage they can output per second. I use damage dealers for capital growth.
While my tanks are useful and can always be counted on to be the vanguard for my portfolio, these damage dealers i.e altcoins are my moonshot attempts to out-perform the tanks.
They could be smaller cap coins that can be easily manipulated. They could be coins that are hyped and trending. They could be niche coins that attempt to solve particular pain-points. They could be illiquid coins waiting for the Coinbase or Binance listing to give them a boost. They could be hidden gems that you spotted early in the game.
They could be anything – even Duck tokens.
Making a quick multiple X on them is possible. While the tanks are soaking up the damage, DPS will make quick work of the “enemy”.
Like damage dealers, altcoins can inflict serious damage but they can also get crushed to dust in a matter of days if you aren’t paying attention. Just because the project is related to Singapore means zilch – I paid a small tuition fee of a few hundred bucks for this SG-grade shitcoin.
At the end of the day, I have my fair share of damage dealers that have gone to zero, and others that have gone on to do quite well.
To me, crypto is not a battle of “good” vs “evil”. Neither is it a battle of “centralization” vs “decentralization”. It is very simple – of “making money” vs “losing money”. Being idealistic (e.g. something like the GameStop saga + showing the hedge funds the middle finger) does me no good, and I don’t particularly care.
Plus, I’m no longer attached to any of my purchases. Whether or not a project is “good” or “legit” has no correlation to whether it will make me money, because legit coins do get manipulated as well.
3. Healers
Healers are basically for the yield-whore in me. REITs lovers are going to DIG this so, so much.
When getting mauled by the relentless bear, healers keep the party alive with their constant healing i.e. cash-flow, and I can keep investing even under the bear-est conditions. The key was to find options that are less correlated to the general direction of the crypto market.
Regardless of the market (bull vs bear) conditions, these assets would drop dollar bills in my lap, day in day out. Sometimes more, sometimes less. But hey, money pay for bills, right?
Besides, there are literally infinite ways to earn yield in crypto.
Custodian options like interest accounts e.g. Blockfi offer the lowest yield starting around 6%.
Decentralized Finance (DeFi) based options probably starts to ramp up the yield to start around 10-20%.
Then we have Proof-of-Stake coins that typically return single-digit to double-digit returns easily. Sometimes, we even get bonus airdrops too.
For the brave souls who dare venture beyond lending and staking, liquidity farming protocols ramp it up a notch to potentially three or even four-digit returns annualized – but don’t even think of getting started without learning about impermanent loss.
And. Still. There. Are. More. To. Come.
Bonus : In the event of an unexpected price increase i.e. pump, what if you had staked coins that require an unlock period e.g. 21 or 28 days before you can sell them? Use a centralized exchange (like Binance) and put up collateral. Simply borrow the amount of staked coins that you intend to sell, and well – sell them! When the coins you actually own have unlocked, repay the tiny loan interest you have incurred.
Enjoy the loot
Best of all, please don’t forget to indulge in whatever we have managed to make in crypto-land. Spoils of war and our hard-earned loot? I save some of it for rainy days too.
More often than not, I end up using a significant chunk of them to beef up all my facets – defense (tanks), offense (damage dealers) and magic (healers) – that’s exactly how I’m doing it now.
Just like in Guild Wars 2, the traditional holy trinity has been tossed out the window because the combat system demands that each player knows how to take care of themselves – people are just better at some things than others. There is no longer a dedicated archetype and one has to evolve with the times.
Oh and don’t forget to pop by inns and taverns (e.g. Discord, Twitter, Telegram and Reddit etc) because that’s where the juicy grapevine is!
Crypto is (unfortunately) not a game
I repeat. This is not a game. There is no reset button.
It has merely been a few years since crypto started gathering steam, but it feels like it has been a lifetime to me. Attending the Binance conference in 2019 felt like yesterday, and I can vividly remember watching CZ on the stage as he spoke.
Yes, this was a fun post to write but the risk of losing money is very, very real. If you were spooked by the experience of what happened on 22-Feb and 23-Feb, it might be time to re-evaluate whether crypto is really for you. A small reminder that in the last bear cycle, BTC saw an 80% drop ($20k to $4k) and ETH witnessed a gut-wrenching 95% pull-back ($1400 to $90).
Or perhaps, you actually do have iron hands? If you’re itching to get started, go get yourself some free crypto from Coinbase because risk-free!
Back to having fun in crypto-land, I guess! Did I mention that there is really no point to this post? If I had to say something mildly useful, it is this – the MUDs that I played in the 1990s evolved to become the MMORPGs of today. What will the crypto universe of today evolve into when we are in the 2050s?
Catch you in crypto-land or at my Discord channel then. Nah, I don’t intend to post my portfolio or recommend any coins apart from BTC and ETH – it’s not my thing.
** I have not added any money into my crypto portfolio since 24th September 2020
Disclaimer
The information provided on this website is a reflection of my personal experience, and does not constitute investment advice, financial advice, trading advice, or any other sort of advice and you should not treat any of the website’s content as such.
This is a gentle reminder that the trading of crypto (or digital payment tokens) is highly risky and not suitable for the general public. Conduct your own due diligence and consult your financial advisor before making any investment decisions.
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Hello! I’m Kevin, Turtle Investor
At the age of 30, I am the Personal Finance Blogger who laid claim to a negative net worth of minus $25,755 – and decided to turn things around.
- Seven years later in 2019, I hit CPF Full Retirement Sum (FRS) of $176,000 without making a single cent of CPF top-up
- In nine years, I have added more than $1 million to my net worth
- I earned over six-figure in alternative income in 2021 in addition to my full-time job
More tidbits about myself here if you’re curious. My blueprint for financial independence can help give you a head start in your own FIRE – Financial Independence, Retire Early (optional) – journey.
I am married to a lovely wife and that means dual income with no kids. In my free time, I chase miles so that we can fly in business class. My hobby is making pocket change off this blog and sharing everything I know with you!
Hi Kevin,
I think there are some valuable nuggets of info actually!
Like the platforms you use and how you feel for some folks, leaving the tokens in the exchanges might be safer than forgetting a password to their hardware wallets.
And of cos, not to mention that you have not put in extra capital since Sept 2020.
I am the opposite since I only started exploring this space after Sept 2020.
Thank you for your kind words! This post was definitely something I had a lot of fun writing.
The realm of crypto is huge, but I feel that a lot of what I know can potentially do a lot of harm rather than good, and that’s because of human nature.
I am bullish about the long-term prospects but wary of the short-term volatility. I’ll always say this – there are huge rewards to be reaped but tread carefully.
BTW, seems like our coffee session could be back on track – maybe sometime in the Mar/Apr?!
If u r worried of short term volatility then the first objective is to take out your capital when your portfolio or any crypto 2x… and let the remaining run or go to zero. This is what davincij15 calls the “Little old lady” strategy…
Or take out your portfolio capital plus 30% profit, and let 70% run.. something like that is safer.
Hey Rickie!
That’s an excellent and simple strategy for folks who have no idea how to manage their sudden new-found wealth!
Hi Kevin, have been following your blog for some time but didn’t get around to leaving a comment till now. I realised we have more or less the same ‘stats’ if we are to use gaming terminology LOL. 37 married living in HDB (I have no kids though, do you?) I’m a ‘hardcore Boglehead’ who, ‘hypocritical’ if you could say, holds more funds in crypto than the Bogleheads fund itself. This is not by choice but due to the crazy bull run in Crypto lately. I am adopting a ‘Bogleheads-within-Bogleheads’ approach and considered selling down my crypto to pump into equities, but decided not to, as I see vast potential in blockchain. I am currently earning DAI in compound.finance just for experimental purposes, something I regret because I have not even broken even due to crazy gas fees setting it up. Will exit as soon as I can. I enjoyed reading your crypto thoughts and strategies. I always believe buying things is easy. Selling things is hard. The latter is the code to crack!
Hi Tom! Happy to hear from you! Once in a while, I get a message from a nice reader saying he/she is a silent reader of my blog 😉
Wow, really is similar stats and build! HDB + I’ll be 39 this year and no kids (and no plans) either!
I’m always of the view that we should be open-minded to new things. I have my index investing portfolio but that didn’t stop me from learning about crypto. I ended up index investing in the crypto space as per my “tanks” and it exploded in terms of portfolio size – just like how it did for you. (I read your blog heh)
I’ve funneled the returns back into my traditional finance portfolio like AutoWealth and Syfe REIT+ but I’m not cashing out either.
I agree with what you’re doing – “paying” to learn is extremely important in crypto. Getting our hands dirty is a great way to experiment with the crypto offerings – I have made so many transactions I don’t dare to see the amount of gas I’ve paid in ETH haha. Now is simply a bad time with the gas cost 🙁
Stay safe, and keep in touch!
Hi Kevin! Happy to see your reply. Turning 38 here too, and no plans for kids either. Kids is a mutual decision with your spouse and I’m glad my wife has the same philosophy on kids. Recently a friend asked me and my wife to be the godparents of his newborn son and that’s good enough for me. Thanks for reading my humble blog. I just started it recently and don’t have much content, but I plan to use it as a personal space to document my journey. More than the end outcome, I think the journey should be a pleasure in itself. I think DeFi will really explode once the problem of high gas fees is solved. It doesn’t really make sense to pay hundreds of dollars in gas fees and take a year to earn 10% APY. Experimenting is always fun though, so I take gas fees as ‘entertainment costs’ LOL. Always learning new things from finance blogs (I realised there’s a lot in Singapore)! Stay safe and happy!
As a hardcore WoW player back in 2005, I always knew there’s value in gaming! Imagine leading the 40-people raid for 3 hours, making sure everyone is on time and knows their tactic (pre-fight). Then distributing the rewards fairly and behaving. (I wasn’t leading one, but absolute respect to those who held that role).
I don’t know if there are any better transferable skills out there for exceptional leaders in the ‘real’ world!
Great analogy with crypto-investing. Compared to other asset classes though, I’d say BTC is the top DPS out there but every other year he joins completely drunk & wasted 🙂