Investment; The Basics.


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Jun 2, 2018
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So, outside of being an individual with an opinion – what qualifies me to talk about investing YOUR hard earned money?

Well, I am a qualified accountant in the UK – I run our family owned accountancy firm with my mum. It’s been in business for over 35 years and has just over 1000 clients.

This gives me a unique insight into both established and growing businesses, as well as exposure to how people in different wealth brackets deal with their investments.

This post is NOT for people who understand Crypto’s or have had experience with investments. You may find it interesting, but are far more likely to get a bit pissed off with my droning on.


Right… I say nutshell but there are a few things that need to be covered.

Thing #1; The Blockchain.

Put simply, Blockchain is the new technology that Bitcoin & other coins are run on. Regardless of anyone’s thoughts on Cryptocurrency, Blockchain is sexy af.

At it’s essence it is a new way of managing trust between parties. It came about in 1991, when Stuart Haber & W. Scott Stornetta came up with the idea of timestamping digital documents in a secure way. I think the easiest way to explain it and Cryptocurrencies would be just to create one. So here goes:

- You, I and a handful of other BHW members decide to create a Sovereign State. Let’s say there is 10 of us total.

- For a while, it all works out comfortably. In the beginning we simply barter between each other for the things that we want, but don’t have. I give @Apricot tea leaves for her Apricots, you get the idea.

- Soon we realise this is an incredibly inefficient process, so we have a town meeting where we decide that it would be best to use something that we believe has a constant value (We are ignoring other currencies & Inflation for the sake of ease). We choose gold, and we value it by weight. At this point, you could consider our little world to be decentralised and unregulated (as there is no governing body deciding when to distribute more gold and as any of us could go out and dig for gold – however, it’s not yet resembling a blockchain. Before we can achieve that, our State first must go tits up.

- I DECLARE MYSELF RULER! I hire some goons to go around to everybody’s homes – confiscate their gold and replace them with pieces of paper. I assemble a town meeting and explain that from now on, I hold the gold in a vault and these pieces of paper are “I owe you’s” that are legal tender. This is the system we have. This is a central, regulated system. This is the system that the blockchain could disrupt.

- You and the other 8 members of our community are pretty unhappy with the situation. I’ve become a corrupt leader but you can’t exactly revolt because I now have an army. However, you have collectively come up with a way to take back control of how you pay for things. You guys come up with the idea of X-Coin (XCN), a coin that you agree between yourselves will pay for everything and it only exists in your heads. So, at this point you have the basis of a decentralised currency – the problem is, it’s not at all secure and would be easy for anybody to manipulate. For example, if @Sherb wanted a house but could not afford one. What’s stopping him from declaring he has XCN 300,000? Absolutely nothing, he would have just created 300,000 X-Coin and your system would fall apart.

So, you need some way of ensuring the system is not manipulated, and you need a way of ensuring people are telling the truth.

- Enter “The Ledger” – “The Ledger” is simply a book that somebody holds and records all transactions of X-Coin. However, there is another problem. Let’s say you decide that @MisterF should hold on to the book. What’s to stop Sherb & MisterF from colluding together to create 300,000 XCN and taking @abhi007’s house? Again, nothing.

So, how do we deal with it? Simply give more people the books and ask them to keep all of the books synchronised. Therefore, if two (or more) people were attempting to collude – someone else would just stand up and say “Hey, that’s not true”. So, the blockchain is the ledger and you can track it back to the very first XCN (Genesis Coin) and the trust comes from the crowd.

That is a VERY rudimentary introduction to the blockchain. I haven’t gone into “Mining”, which is just the job of validating transactions – I haven’t talked about the type of encryption coins use. I also haven’t explained how the individual books stay synchronised. There is much more to learn, but I’m not trying to write a book here. Also, I apologise if I tagged you and you did not want to be.

Anyone want to start a Sovereign BHW state?

So, are we all on the same page with the Blockchain and it’s usage with regards to Cyrpto?

We understand they are not the same thing? Not hearing any complaints, good. Let’s move on.

Further Reading/Watching:

Thing#2; The early investors.

Now that you understand the principles of the blockchain, you can understand the mentality of the early investors of Bitcoin. They were individuals who believed in the idea of a decentralised currency, nobody would have assumed BTC would ever reach $14,000 and that’s okay.

Maybe someday something you’re passionate about will explode in a very public way and you’ll make a lot of money. It’s important that you don’t feel as though you were left behind on Bitcoin, if you were not around at the genesis, it wasn’t something you were interested in. It’s also important to acknowledge that the only reason you care about Crypto now, is because of the huge gains you assume your going to make. Be honest with yourself in business, otherwise it’ll come back and stab you in the dickhole later.

Further Reading:

Thing#3; The intention of Cryptocurrency.

The intention of Cryptocurrency was simple, an online – decentralised currency that worked quickly.

In the ideal world it would work as our example above “a coin that you agree between yourselves will pay for everything”. The only difference being that it would exist on the internet (In synchronised Ledgers) rather than in everybody’s heads and in paper books.

Thing#4; The reality of Cryptocurrency.

The reality of Cryptocurrency is fascinating to me. Essentially it is now an asset class, which is bought readily with fiat money – I imagine this being the furthest thing from what its creators would’ve hoped.

The reason is because unlike our situation above, everybody has not agreed to use Bitcoin as a currency and that’s what it needs to stop being some weird class of intangible asset.


Investing is buying an asset with the intention of selling it at a (much) later date for a higher price than you bought it. When investing in something, you are essentially hoping that your ROI will beat the rate of inflation.

With that in mind, understand that nothing else matters. You are not aiming for 400% gains you're happy with 10%. It’s still a gamble, but it’s a long term gamble and it SHOULD BE an educated gamble.

Trading or Day Trading is the practice of betting on which way a given market will go. The difference is that trading is done on the short term. Not a soul can tell you what’s going to happen short term, no one.

One of the key differences between the two, at least here in the UK, is that one is considered gambling. That would be trading, and one is not considered to be gambling. That would be investing. You would pay tax on any gains you made through investment, via Capital Gains Tax and you don’t pay any tax via gambling.

Here is a wonderful rule of thumb. If the government think you can make money off of it, they'll tax you. So, here in the UK I could sell my car, which is an asset, without paying capital gains tax (Capital gains tax is tax that you incur when selling assets). That's because the government understand that most people make a loss when selling their car and if they taxed you on gains, they would also have to accept relief on losses as well as accepting expense claims. Which basically means, they would loss money.

Unless you are an experienced gambler, portfolio manager or successful business owner – you will not have the stomach for trading. You will buy at the top, based off of some shit advice and sell at the bottom. Every time. You will lose money faster than you can understand. Seriously, invest in a hooker before you trade, you’ll get a better ROI and last longer too. Don’t be an idiot, DO NOT TRADE.


Rule 1: Have a plan.

Know when you’re going in, know how and when you’re getting out.

You wouldn’t approach a new business without a plan, why approach investment any differently? If you are investing correctly – you are not going to get rich quickly.

Now, I cannot tell you what kind of plan you need to have. It’s depends entirely on how you operate and how you view the world. I will talk about risk management a little later and I hope that you pick up some pointers, but I’ll never be able to change how you fundamentally think about risk. How you feel about risk will ultimately decide how you plan things.

Rule 2: Understand what you are buying.

Do you buy a dildo without knowing where to stick it? I fucking hope not.

In the same way, don’t invest in ANYTHING without understanding the asset. By that, I mean the individual asset and the wider asset class. For example, if you’re planning on buying a house you’ll know if you’re paying above the odds by assessing the housing market in that area. While, you’ll know if the house is a piece of shit, by assessing the house.

Understanding what you are investing in is the most important rule I can think of.
“But, TheAlmighty” I hear you call.
“Why is it rule number two then?”. Piss off.

The rule of thumb I use is, if I don’t know something like I know the smell of my own shit – I stay away.

Rule 3: Don’t panic.

This is super easy to type, watch – D.o.n.’.t. .p.a.n.i.c. See, fucking easy.
It’s a little harder in practice.
Let’s say you have 10K on some asset, and the floor falls out. Your 10K suddenly is worth 8K. On top of that, you’ve got a tip that another type of asset is growing at 30% a second. Every fibre of your body is telling you to take the loss and reinvest in this new asset, because fuck it – you’ll get the loss back and more.

Most people listen to there fibers. Most people lose money.

Don’t Panic. We’ll cover this in more detail when we get to risk management.

Rule 4: Don’t bet your fucking shirt.

This should be obvious, no? You can’t lose it if it’s not on the table. Don’t invest what you can’t afford to lose. People must’ve heard those sayings but I’m constantly seeing all over the place “I’ve invested my life savings in X-Coin, it’s going to mooooon.”

If that’s you, what the fuck are you doing?! If you are invested in Crypto you are invested in the most speculative market we have ever seen, put simply, you’re gambling. Would you put your whole life savings on the flip of a coin?

The money I have invested in Crypto, I don’t need for anything. I don’t need it for food, to keep my wife happy or for my kids inheritance.

Rule 5: More risk more reward, yes, but MORE FUCKING RISK.

People seem to be oblivious to this age old rule, they just see “…More Reward”.

I am aware that my investments in Crypto may make me a millionaire – I am also acutely aware that the whole thing may go bust tomorrow and if it did and I lost everything, I wouldn’t lose a wink of sleep (See previous rule).

I understand that a 5% ROI in Bonds & Guilts is boring but it’s more stable than the 15,000% increases we are seeing on Cryptos.


We see a huge amount of Newbies come to this forum super excited about the prospect of making money online. They comment on a bunch of journeys, vow to learn and complete the associated method and then two days later they have given up and are on to something new. This kind of attitude will fuck you when it comes to investing. And not the good kind of fuck, where you’re just left wishing it had lasted more than 3.5 seconds.

FOMO & the reality of lost opportunity.

This little acronym (Fear of Missing Out) has made me fuck up so many things in my life, it’s unreal. I’m not talking about asset acquisition per se, but if we are being honest, them as well.

It’s easy to think that you will not succumb to it and you might even want to skip past this part of the post. I urge that you do not; it’s so easy to get caught up in. Take, for example, a certain forum member – he started a Journey discussion in 2015 and if you read it all the way through, the FOMO gets real fucking real when he starts posting photos of his supercar.

Firstly, there’s this idea of social proof – “If everybody else is doing it, why am I not?!”
Think about it, if all your friends start talking about a particular idea – and you literally don’t have the foggiest; do you not go and immediately google it?

It stems from the sudden virality of things nowadays – So, that googling of whatever subject your friends are talking about is the definition of The Fear of Missing Out. Now, granted – there are no real repercussions for pulling out your phone and googling something whereas there are real repercussions if you buy into something just because “it’s mooning”.

You will succumb to this little four letter fuck, here is how I recover:

Step One.

I admit that it’s already too late. I promise, if you are not a part of the development team of something and you’re hearing breaking news from a third party; it’s far too late. And any gains you make will be pure luck. That’s not to say you can never get the inside scoop on something, you can, it’s just that you have to figure it out.

Step Two.

I read/watch/listen to whatever it was that made me FOMO in the first place with the understanding it’s already too late and with a sceptical head.

That’s what I did with the above Journey – and I immediately stopped with the FOMO shit and I got back to work because I want a fucking supercar.

Further reading:

  • This dissertation on the subject; I have not had time to read the whole thing but what I did read was interesting.

  • The book “Contagious; Why things Catch on.” (I don’t know if I’m allowed to link to Amazon, but it’s on there. I’ve got the audio book which was pretty good.)

End Game.

Always know your end game, which means know when you’re getting out.
If you planned on getting out at 10% up, you planned that for a reason. You shouldn’t care that it’s now at 15% up. Doesn’t matter.

There is advice that’s thrown around which tells you to let the winners ride. It’s badly suited advice for such a fast moving market. The advice works for risky, well developed markets – for example, the housing market (UK).

If I invested $2,000,000 into the housing market and expected a 30% return over 10 years (Yes, I’m afraid that is what real life returns look like) but 10 years in I was 35% up – I could analyse why, it might be because for a handful of years there was a booming GDP or more people had more kids. Whatever the reason – I could work it out and then think “well, yea – that’s changed the market outlook for the foreseeable future”. So I could then let the winners ride.

In the Cyrpto market, though, people seem to want to get out at, let’s say 15%. But then they see it get to 20%, 30%, 60% even thinking it’s going to continue up. Without realising there in the middle of a pump and when they want to sell, they won’t be able to.

You should also always have a worst case scenario in mind. And I don’t just mean “well, the market could collapse” – I mean, actually plan the demise. Here is mine:

The UK, US and the German governments get together. They decide that Cryptocurrencies are fantastic, but not in their current form. So they decide to create three: UKX, USX and EUX, everything else is the same – it’s decentralised in that the governments don’t decide when new coins are made – they use the same mining techniques that are used currently (Anyone can mine).

There is one other important difference. The governments state that the coins value will always remain fixed to the US Dollar, Great British Pound and Euro respectively. What would happen?

Well, because of the stable environment that has been created, immediately Amazon, Google, Paypal and Co would accept these coins as forms of payment. Which would leave, your coin, my coin – any other type of coin fucked.

Make a worst case scenario and keep it at the back of your mind always.


This is a good way to get an understanding of how risk taking or risk-averse you may be.

Think about all the money you have in the bank and all of the assets you have. Got it, good – now liquidate all the assets – so you just have a pile of cash that is the sum of your life’s savings. Got a figure?

How much of that would you put on a coin flip?

Personally, it wouldn’t be more than 5 or 6%. Any more than 8 or 9 and I’m worried for you. This figure is really important because you have just defined your budget for high risk investments. This means that when you get a pay check through and you have peeled away your savings. You don’t put the whole lot onto anything. You take whatever percentage you came up with and that’s all you risk.


Right, so this next bit is going to be analogy laden. It’s because I really like my shitty analogies and I kept forgetting to put them in. Sit tight, we’re nearly finished.

I despise horse racing, but this analogy works. Let’s pretend horse racing was a brand new phenomenon – nobody had ever seen it before and there is a group of us at the first ever horse race. There are 12 horses stood in front of us and we decide to wager on which horse will win. You say that horse #3 will win because he has the longest legs. I say that horse #4 will win because he is the most muscular, your mate says that horse #6 will win because he has just taken a massive shit and is therefore the lightest and it goes on. You can see the problem here, we’re not experts – we don’t know shit. It’s just as likely when the gates open the horses do fuck all because nobody had thought of the Jockey yet.

In the same way, there are no experts in crypto. The market is too young and these Guru’s know fuck all. They may well argue with me and say “look at my stack of cash and stack of supercars” – to them I directed them to the section on FOMO.

Even in very established markets, there is uncertainty – a farmer for example, cannot tell me at the beginning of the year what kind of yield he can expect at the end.

Don’t listen to these fucking idiots, please.

That about sums it up

Take Care,

Thank you for taking the time to write this. I think this will benefit me a lot.


Nov 15, 2018
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Nice thread. Blockchain technology and crypto currencies are having huge ability to change the landscape of contemporary business operations and emerge new means of payment on a wider scale. The implication of this technology is yet to be seen in the future


Apr 13, 2016
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In what way do you regard cryptocurrency as an investment? It's speculation for half of people and a medium for value transfer for the other half.

You invest in a in a company because it has assets and you believe it will create value (as measured by revenue/cashflow) in the future. By treating it as an investment and expecting appreciation of it as an assets runs counter to it's principle as a "currency" or a medium for value exchange. A deflationary currency like BTC will never be a true currency. A commodity at best. Currency must have inflation to encourage spending and circulation. If I know my BTC will always appreciate, I won't spend it. If I know my BTC will be worth less tomorrow, I would be much more likely to spend it.

You can buy crypto because you support the tenets of decentralization, blockchain, public ledger etc. etc. but it is definitely not an investment in that any reasonable person should expect returns because it's a value generating asset. Where is the value creation aspect of cryptocurrency?


Feb 26, 2019
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I don't invest when Bitcoin was 1000 dollars after that up to 19K. Now it costs 4K. Should i invest now?


Power Member
Dec 27, 2018
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I don't invest when Bitcoin was 1000 dollars after that up to 19K. Now it costs 4K. Should i invest now?

As it's been said before many times to others. Nobody here can answer a question like this.

It depends on a bunch of factors for yourself which we are not privy to. For example, what is your risk tolerance? Do you have a lot of money in the bank, a little, or living paycheck to paycheck? What's your investment experience? Do you plan to day trade, swing trade, or invest and forget about it? How much do you have to invest? Are you comfortable with losing it all?

Anyone that answers your question without knowing all these factors, is a shill. And we might be shills anyway even if you answer these questions for us, because well, none of use are financial advisers ... probably.


Jul 19, 2018
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For a second I though you were gonna sell a ebook.
Quiet nice piece of basics about investment, wise words that are easy to read and understand but sometimes we forget to put in practice.


Banned - Multiple Rules Violations
Jan 15, 2017
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"horse #6 will win because he has just taken a massive shit and is therefore the lightest"


Mar 24, 2019
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BTC-e/Wex fucked off and stole all my ethereum. I'm a very sad puppy :(
Nov 1, 2019
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You can get many strategies online for earning money but cryptocurrency is the easiest way to do it.
As I have been trading bitcoins for the past two years, I would suggest that one should invest in cryptocurrency but be alert of the frauds, just be aware before investing your money anywhere.


Jan 7, 2020
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Very well explained, which tells me this isn't your first rodeo. I personally have not messed with any cryptos' at all, but have taken a dive into the rabbit hole to figure out what all the fuss is about. Funny story my younger brother had bought some coins when they were a few bucks, and when the hype of 2016/2017 rolled out he was trying to figure out how much and where he had them. Luck wasn't on his side, couldn't find them.

From my point of view crypto is behaving exactly like a stock, because of its volatility(100% moves) with all the swing highs and lows. Unlike its competing counterpart currencies such as the EUR/USD as an example. Their relative volatility doesn't hold a candle to cryptos', with a 30% move from the highs @ $1.60 in 2008 to the lows of today @ $1.10 in 2020. But whats your point you may be thinking? Well first question is , why would you in-trust your net worth in a pendulum asset? I wouldn't, but I would speculate the shit out of it (short term trading). Second question I have is regulation. Who's regulating this "new currency"? Currencies have lasted because they don't swing that fast and violent, and yes there has been currencies that have gone bankrupt. But on the average its much safer. If you guys have a real interest in currencies, check out Martin Armstrong. Guy is a super nerd when it comes to currencies.

A good example that exemplifies the risk to your net worth holding crypto would be real estate. Let's say you have 10 BITCOINS that are a total of 100k, and you're shopping around for a house. Well you're almost ready to pull the trigger, when you discover BITCOIN nose dived 30%, which can easily happen.
WHAT NOW? Well you're short 30% of the payment. Better luck next time Jack, or dig a little deeper into the pocket. Now some may not see it this way and that's your rite, but think about being in that position. Some people don't even realize the real drivers in cryto prices, such as dark pools of fiat money, people fleeing communism with the mindset something is better than nothing, and those are some to name a few.

To be fully transparent, I don't know everything about everything, but experience tells me Fiat is the lesser of the two evils compared to crypto.

Now what's better than these you may ask? Nothing better than God's money, Gold and Silver. Those bad boys have been around forever and will stay here for years to come. Their purpose is solely to hold net worth, and not to speculate or live day to day transactions. Silver has been way undervalued and i've been buying since it was at $15, with expected high of $50 or maybe even more. I prefer buying bricks versus coins, because you have to pay extra for the coin itself additional to the weight in silver. Coins are mainly for doomsday transactions and are more granular , but for ease of storage/travel bricks are the way to go.

This world we live in is full of smokey mirrors with so many options to chose from. I have personally wrestled with the knowledge barrier to understand the game being played. Educate before parking your eggs in the wrong nest, and I promise you I would not leave it in cryptos.

There are a lot of opportunities in the stock market, if you know how to pluck them, which is not rocket science once you know what you're looking for. They consider an investor after the 6month horizon, but I tend to disagree and still consider myself a trader. From the onset of a trade I plan on holding it for one year, but if it rips then it just means i made it faster. But its never my intention, and that's where traders get hurt. Setting time expectations is the biggest demise to a trading plan.

If you can remember one thing from this long ass tangent i wrote, is price does not give a fuck about time, they're not friends. There I put it in bold so you could not miss it.

Have you guys heard of the 90/90/90 rule, 90% of traders lose 90% of their equity in 90 days, and i think this applies to all disciplines worth pursuing in life.

Trading is a zero sum game where some have to lose for the to other win, their cant be 2 1st place winners.
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May 6, 2020
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I really loved the examples, blockchain thing always was a bit coonfusing for me, I kinda have the idea but the example clarify a lot. Thanks!!


Jan 10, 2020
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It all starts with Rule No 4 - Don't bet your shirt!!! If you can to that, then all the other ones go smoothly as there is no pressure and you can adjust yourself to the market's trend.
Well structured info, thanks for sharing!