I know you got one. A funny money account.
It’s cool. I got one too.
What we don’t all have is a plan to fit it into the bigger picture.
Here’s the rules I use to make my funny money account turbo charge my serious money.
Rule #1: Assume you will lose it all. Make sure you’re okay with that. It’s called “funny money” for a reason. Assume it’s a game stacked against you, so make sure you won’t lose a wink of sleep if you lose it all.
Rule #2: Use no more than 10% of your total investment portfolio. You CANNOT lose more than 10% of your total portfolio and be okay. So just in case you need an upper limit, there you go.
Rule #3 Take gains at specified levels Determine what rate of return you’d be happy with and sell the gains on autopilot at that level. That way only your principal is ever at risk. Personally, 10% is my level, but you do you.
Rule #4 If you double your money, you MUST take gains. Playing with the house’s money is just plain smart when your speculating.
Rule #5 Put the gains into your serious money bucket. Whether that’s with Financial Zen, your “guy” or Wealthfront, turn the gambling gains into reliable, predictable long-term returns.
There ya go! Hope that helps frame where that Coinbase account fits in!
