A few days ago, a friend shared a case with me, saying that someone made $5 million with $10. As shown in the figure below.

I have heard many similar stories. I can only say that such things may happen, but they will not happen to most people. If someone can use leverage and contracts to leverage a small amount of principal to gain a large return, I personally will not envy such a result, nor will I deliberately imitate it, because I know that I will definitely not be able to do it. I can't do leverage contracts anyway.

For me, investing is a long-term practice.

For most ordinary people, 10 million should be a good financial goal, but it is obviously impossible for ordinary people to achieve this goal by working. Even if someone can earn a million yuan a year by working, it is still very difficult to increase his personal net worth to more than 10 million, because he needs to consider various issues such as working age and daily expenses.

At this point, some people may leave a message and continue to nitpick. Maybe someone will say that any family in Beijing, Shanghai, and Guangzhou has 10 million, such as those who have been relocated or have several houses. From this perspective, it seems to be true, but what I mentioned above is a net asset of 10 million. In fact, the liquidity of houses is very poor. It seems that many people in places like Beijing and Shanghai have assets of tens of millions, but how many people can directly take out 10 million in cash (including U)?

In simple terms, there are several main ways to make money:

- Use your body (physical strength, mental strength, time) as capital to make money

- Use your assets (money) as capital to make money

- Use your connections (background) as capital to make money (this seems to be more sensitive, so I won’t discuss it in detail)

Regardless of whether you make money with your body or with your assets, it is actually cyclical. For example, in the past two years, many people have said that the overall environment is not good enough, there are many unemployed people, and many shopping malls and stores have closed down, so it is difficult for unemployed people to find good jobs, and those who have jobs are becoming more and more involuted.

Similarly, even if you want to use money to make money, you still need to consider the cycle. In other words, any financial market is cyclical, whether it is stocks, gold, or virtual currency.

But it is obvious that the people who can really make a lot of money, such as 10 million, are definitely those who use assets (money) as capital to make money. The strategy to make 10 million seems to be relatively simple. I summarize it in one sentence: increase the value of assets by grasping the laws of cycles.

In simple terms, as long as we can buy certain assets during the period of market undervaluation and then sell the corresponding assets during the market bubble, then,

- For investors with a capital of one million, it may take 1-2 cycles to achieve the goal of 10 million;

- For investors with a capital of 100,000, it may take 2-3 cycles to achieve the goal;

- The investment capital is relatively small, but if you can master some effective investment methodologies and choose a market with a higher risk-to-risk ratio (such as the crypto market), then you may be able to achieve your goals by persisting for several large cycles.

But it is easier said than done! So, in this issue of Huali Huawai, I will combine the encryption field and my own personal experience to try to sort out some of the key points in the process of achieving goals, hoping to bring you some new thinking points.

The following 8 items are all sorted out based on ideas and methodology, and do not provide specific so-called wealth codes (that is, no projects or tokens will be recommended).

1. Risk management is crucial

When investing in the crypto space, the most important thing is to put risk management first. No matter how experienced you are in traditional finance, or how smart or lucky you think you are, if you ignore risk management, you will most likely face failure.

The most effective methods of risk management can be simply summarized into two points: reasonable allocation of positions and investment portfolio structure.

(1) Reasonable allocation of positions

Regarding the issue of position management, Huali Huawai has already discussed it in detail several times in his e-book "Advanced Blockchain Thinking" last year. Interested friends can look back at the historical articles. As shown in the figure below.

(2) Investment portfolio structure

...This article is to be continued. We will continue to supplement and update the remaining content through Huali Huawai.

Disclaimer: The above content is only a personal point of view and analysis, and is only used for learning records and communication purposes, and does not constitute any investment advice. The encryption field is an extremely high-risk market, and many projects have the risk of returning to zero at any time. Please treat it rationally and be responsible for yourself.