Create A Basic Plan
The Importance of Planning
Primacy of Planning
To offset uncertainty & change
Focus on the objective
To help in the coordination
To help in controlling
To increase organisational effectiveness
Before you can even buy Bitcoin, it’s always essential to understand why you’re buying.
Creating a plan is step one and often an overlooked step.
- Do you want to HODL or DCA?
- Just dip your toes in?
Time to make a decision
What does an exit plan look like?
If you have never created an exit plan, some things to consider include the following:
- Your original plan: What was your original goal or plan when you first entered the space or bought those assets?
- Have you made life-changing amounts of money: This is all up to your personal opinion/circumstance. We define this as any amount of money we would lose sleep over not taking off the table and would significantly alter an aspect of our life.
- Tax implications: When is your tax due, what does your jurisdiction say about capital gains tax (CGT), and can you get a discount on CGT for holding? Please see your tax professional!
- Judging your timeframe: Often, an exit plan doesn’t mean exiting 100% of your position—having a stable base is critical for me. It can depend on your timeframe and whether you believe in holding an asset for x years; this can influence how much of a % you exit.
- Specific targets: It might be a specific time you want to sell or a certain price level, such as a plan to sell x% of an asset when it reaches x price. You can also prepare a plan for downward price action and what points you would sell or what you would do if the price reaches certain lows.