Learning the friendly way

Welcome to the world of APY (Annual Percentage Yield). If you're looking to delve into the fundamentals of investing and understand how returns are calculated, you've come to the right place. In this article, we'll explore the concept of APY, digging into its significance, calculation methods, and how it factors in the power of compounding interest. 

What is APY?

In conventional finance, a savings bank account frequently offers both a low-interest rate and an annual percentage yield (APY). Let's explore these definitions below:

• The simple interest rate is the amount earned on the original deposit. 
• The Annual Percentage Yield (APY) is the annual return from the original deposit plus accumulated interest on investments or savings, expressed as a percentage.

By definition, the annual percentage yield (APY) is a key metric that reflects the true rates of return on an investment, taking into account the impact of compounding interest. Unlike simple interest, which remains constant over time, compounding interest is calculated and added to the principal at regular intervals (more on this below).

This results in a growing account balance, leading to larger interest payments as time goes on. By harnessing the power of compounding, investors have the potential to see their investments grow at an accelerated pace, enabling them to potentially earn higher returns compared to simple interest calculations.

APY captures this compounding effect and provides a more accurate measure of investment performance. For example, a certificate of deposit (CD) provides a secure investment option with a fixed term and a guaranteed APY, allowing investors to earn a predictable return on their savings over a specific period.

Compound interest and APY

Compound interest is a powerful concept in finance that enables investments to grow exponentially over time. Unlike simple interest, which is calculated only on the initial principal, compound interest takes into account the accumulated interest. This means that with each compounding period, the interest is added to the principal, leading to a larger base for calculating subsequent interest.

Annual Percentage Yield (APY) goes a step further by quantifying the impact of compounding. APY reflects the true rate of return on an investment product, factoring in the compounding effect. It provides a more accurate measure of growth potential and allows for effective comparisons between different investment options in the global market.

To calculate the effective annual rate of return with APY, consider the compounding frequency. Using the APY, you can determine the annual rate that, when compounded at the given frequency, yields the same overall return. This calculation enables investors to assess investment opportunities with all the information, based on their true growth potential, accounting for the compounds factor.

A practical example of APY

Suppose you have $10,000 that you deposit into a savings account with an APY of 5% and the interest is compounded annually. After one year, the 5% APY means that your investment will have grown by 5% of the initial amount, which is $10,000 * 5% = $500. Therefore, at the end of the year, your account balance will be $10,000 + $500 = $10,500.

Now, let's see how compounding interest affects your returns over time. Assuming you keep the money in the account for another year, the 5% APY will be applied to the new balance of $10,500. This results in an additional $525 ($10,500 * 5%) of interest earned, bringing the balance to $11,025.

As time goes on, the compounding effect becomes more pronounced. After five years, your initial $10,000 investment will have grown to approximately $12,762, thanks to the compounding interest.

This example demonstrates how APY takes into account the compounding of interest and enables your savings to grow more significantly over time compared to simple interest calculations.                       

A comparison of the terms: interest rate, APY and APR

The APY takes into account the impact of compounding, whereas the interest rate does not. The APY is the projected rate of return earned annually on a deposit after taking compound interest into account.

Compounding interest is the interest that a person accrues from their initial deposit, as well as the interest they earn from their original investment (or in other words, the initial deposit amount plus the interest generated).

The terms APY and APR are frequently used interchangeably, although they represent two different things. These words are sometimes confused due to their close resemblance. However, APY and APR aren't the same things.

The APR (annual percentage rate) is a formula that determines how much interest you'll pay when borrowing money and is the rate of return earned if your funds are invested in an interest-bearing account. 

When a consumer takes out a loan, their lender sets an APR that varies based on the loan. APRs are either fixed or variable depending on the type of loan the user requires. However, the APR is a rather basic interest rate and does not take compounding into account, unlike APY. 

Investors are typically on the lookout for opportunities that offer high-yield, such as investments with a competitive APY, as they aim to maximize their returns and grow their wealth.

How Is APY Calculated?

APY represents your rate of return, also known as the amount of earnings or profit you can make. Of course, your ultimate earnings will vary depending on how long you keep your assets invested while the holding period will influence how much you will earn. 

APY measures the rate of the annual return earned on any amount of money or investment after taking into account compounding interest.

The following is the formula for calculating APY:

APY = (1 + p/n)ⁿ − 1

Where:

p = periodic rate of return (or annual APR)

n = number of compounding periods each year

Bear in mind that an APY can be calculated in a variety of ways depending on the provider.

Conclusion

APY is a crucial measure reflecting the true rate of return, accounting for compounding interest. By harnessing the power of compounding, investors can potentially earn higher returns. Understanding APY empowers informed investment decisions, leading to wealth accumulation and maximizing growth potential.

Technical analysis is a method of evaluating the strength and weakness of an asset by collecting historical price data to identify trends. It involves using tools like charts, graphs, indicators or signals in order to compare them from past data in order to make predictions about what's going to happen next with the market for a specific financial instrument such as equities, commodities etc.

Technical analysis is a method of evaluating stocks, crypto or commodities using past market data. The goal here is to determine the future price movements. In contrast fundamental analysis which involves analyzing financial statements in order to assess what fair value would be for that company.

Technical Analysis can be applied to any security with historical trading data, such as forex (foreign exchange), commodities and stocks.

Let’s now dive into the subject and learn more about the different tools and techniques that you can use for cryptocurrency technical analysis.

The Market trend‍

‍‍The most important step in learning how to spot a trend is to figure out what one is. For any beginner in technical analysis, knowing how to identify the trend should be the first order of business. Let’s watch this Chart below:

We can here observe the three different trends:

The Uptrend: In an uptrend, the asset is going up and making higher highs with each wave. Each high is also greater than the last one, resulting in a series of higher lows as well that push prices even further upward.

The Downtrend: A downtrend is a pattern of decreasing price that continues until it breaks. It’s called "downtrend" because the asset keeps going down, making lower highs and lows each time they form.

The sideways trend: The asset trades between a dynamic range of prices in an horizontal channel.

You may as well encounter different terms such as “Bearish” and "Bullish" to refer to a trend. The term, Bullish comes from the bull who strikes upwards with its horns thus pushing prices higher; in contrast, Bearish comes from bear who drives down markets by striking downwards with their paws.

Resistance & Support

Understanding the support and resistance levels of a cryptocurrency can help you time your buying or selling to maximize profit.A technical trader identifies these points on their chart so they know where it's best to enter, when there is a probable upcoming breakout, as well as understanding where not to be hasty with new financial commitments because prices are more prone than ever before to reverse quickly at this price point. When the resistance level is broken, it usually becomes a support level and vice versa.

Support: Support is a level where buyers tend to concentrate, and this will help the downtrend that has been occurring stop or rebound.

Resistance: A level where an uptrend can be expected to pause or rebound. This is a concentration of sellers and indicates that the market may have reached its peak for now.

Candlestick

Candlestick charting is a popular way to track the market trend.  Candlestick chart, is also known as a Japanese candlestick chart (Developed in Japan in the 1700s, historical records indicate that this tool was first used to track rice prices). This type of financial chart is used to track stock prices or other asset prices. The candlestick's shape can vary depending on the high, low, opening and closing prices of a given day.

A candlestick shows both bullish and bearish price movement over its duration, and gives more detailed information than the simple bar charts. A candlestick looks at the prices during a specific time interval, such as a day. The main feature which distinguishes this from other charts is the ability to plot each day's open, high, low and close values on a single chart.

This method of charting involves plotting price data over time on an open, high low and close basis with wicks projecting out from each end of the body for daily bars or just one day in higher timeframe charts.

Bullish candle: The close is above the opening‍‍ (green)

‍Bearish candle: The close is below the opening (red)

Moving average and (MACD)

The moving average is a technical trading indicator that calculates the constantly changing stock price over time. It smoothes out this data by creating an average of different subsets to help investors make decisions on what direction prices are heading and how long they will continue to change in such directions.  A moving average is a customizable indicator meaning that an investor can freely choose whatever time frame they want when calculating an average.

The Moving average convergence divergence (MACD) is a trend-following momentum indicator that looks at the relationship between two moving averages of an asset's price and gives traders an indication to changes in momentum, strength, directionality and duration of a trend for a given asset.

It combine these 2 moving average: 

-A short-term moving average

-A long-term moving average

‍

Chart interpretation:

The lines on the chart below can be interpreted as follows:

-If the green line (MACD) is above or crosses over the orange line (signal), it means that momentum for a certain market is bullish. 

-On conversely, if the green line is below the orange one, then this shows bearishness in terms of momentum 

-When the lines diverge, it denotes a strengthening of the current trend. However, when they converge, this shows that there is likely to be an upcoming reversal in trends.

-When they cross, this signals confirmation that we have evidence for a change in momentum.
‍

Bollinger bands

Bollinger bands attempt to measure market volatility by creating a band around a moving average. This strategy was created by John Bollinger in the 1980s. They serve as a relative indicator of whether prices are high or low on a moving average.

Bollinger bands are typically used by traders who like to use a long-term approach. This technique can be applied to any major currency pair, as well as commodities and stocks. As opposed to short term strategies that try and capture very small price movements, this strategy works best when combined with a directional view where the trader believes that the market will either go up or down in the long run.

The main disadvantage to this technical analysis is that it is not as effective when markets are flat or choppy (trading range). This strategy can also be difficult to use for novice traders who do not have a good understanding of market conditions, and an entry/exit approach.

‍

News are a big influencer of crypto prices

Cryptocurrencies are heavily influenced by speculation, and even a small piece of news can trigger multiple price reactions by investors. 

For example, when Bitcoin Cash was launched on August 1st 2017, it resulted in a sharp decline in the price of Bitcoin as well as other cryptocurrencies as investors feared that a new competitor could undermine the value of existing cryptocurrencies.

The use of advance statistical techniques helps you to take into consideration past data to generate price forecasts. The best way to do this would be to look at historical prices and volumes for cryptos, and compare them to current data. This allows analysts and traders to gain some degree of insight on how the market price will react to future events.

Our aims is to help you grow your knowledge about trading and cryptocurrencies. That's why we're here to help you better understand Cryptocurrencies and trading technics. We want everyone who uses Tap not only to feel informed about market trends but also be inspired by crypto culture, which drives people like you and me into a passionate future for this technology.

If you wish to learn more find more resources in our dedicated education centre available here.

When it comes to navigating the cryptocurrency markets, staying informed and staying away from FUD can oftentimes be more complicated than one might imagine. In this article, we're going to guide you through how to recognize FUD in the blockchain space and how to avoid it. 

Since Bitcoin entered the scene in 2009, the crypto markets have seen their fair share of ups and downs. Although it's true that each market downturn has been followed by a recovery and considerable development, experienced and novice traders alike may find that times of decline are difficult to navigate. Particularly with the rise in FUD.

Before we cover the tools of the trade to recognize and avoid FUD, let's first cover what FUD is exactly.

What is FUD?

FUD in the cryptocurrency realm stands for Fear, Uncertainty and Doubt. This term is used to refer to inaccurate information released by people who wish to manipulate the markets. Releasing FUD content is intended to influence a trader to make decisions that might affect the cryptocurrency's price or their holdings in some way (usually encouraging them to sell).

While commonly used against Bitcoin, Ethereum and other cryptocurrencies are also targeted. FUD typically leads to investors selling off their coins, leading to a panic sell which snowballs and results in a significant loss in value for the coin. 

Often mentioned alongside FUD is the term FOMO, Fear Of Missing Out. FOMO is centered around the fear of people missing out on profits, leading them to make quick decisions that aren't necessarily the best ones. While FUD tends to instigate selling an asset, FOMO tends to drive traders to buy an asset. Essentially, these two terms are designed to tap into human emotions that lead to quick decisions. 

FUD is typically released through a rumor published on a well-respected website, a negative news item, or a well-known figure expressing concerns about a certain asset (commonly done over Twitter ). Content surrounding FUD and FOMO tend to be from organizations or individuals that have something to gain from the intended action. The content is designed to strongly influence the reader. 

FUD and FOMO aren't strictly related to the crypto market, such tactics have also been witnessed in the stock market and other commodity trading spaces. The jargon has become synonymous with trading. 

How to recognise FUD

The crypto community might seem tight-knit but there are often ill-actors that gain access to the trusted space and infiltrate it with bad news. This is often seen when people use a commonly discussed topic, such as regulation, to build a narrative that isn't necessarily true to influence traders. 
‍

Here are several tips to ensure that you don’t fall victim to FUD:

Establish a trading goal 

Before you enter the crypto market ensure that you have definitive goals, with accompanying timelines. When faced with FUD or FOMO information, consider if the resulting actions of this news will move you closer to your goal or further away. If you stay focused on your goal you are less likely to be swayed by market sentiment. 

Build a trading strategy before entering a trade

A trading strategy generally involves determining a stop loss, entry point, target sell point, and amount of capital. By establishing this before entering the trade, you will have clear objectives to follow and be less likely to fall victim to FUD-centered misinformation. 

Stay informed, but verify sources

Keeping an eye on the crypto markets and staying informed is imperative for any trader, especially day traders. Ensure that the places that you acquire your information from are reputable and legitimate, and if something sounds suspicious, verify it through a number of other sources. 

Be patient and consistent

Engaging in crypto trading involves making well-informed decisions based on market trends and supporting technology. Rather than seeking rapid financial gains, it's important to maintain patience and consistency in working toward your goals, while staying focused on your intended path.

Navigating FUD

Despite this sounding difficult, FUD is easily avoidable if you stick to these tips above and only seek information from reliable news sources. While Twitter may have quick tips, it's also hard to determine what the author's intentions are.

Consider whether something sounds accurate or not, and always conduct your own research when considering involvement in a new project. From a financial standpoint, participating in digital currency can be a profitable endeavor, so be sure to act responsibly and observe market trends with a critical perspective.

Much like traditional stock portfolios, crypto portfolios can too be balanced to ensure a spread of returns and risks over the asset class. Building a diversified cryptocurrency portfolio can be done in many ways, however, in this article, we will be exploring a general approach that market participants can use to build their own. 

From thoughtful diversification to asset allocation to buying your cryptocurrencies, the road to building a balanced crypto portfolio is not a complicated one. It will require some upkeep though, so be sure to factor in that you will need to balance your portfolio regularly. 

Starting with the basics, a cryptocurrency portfolio is a collection of varied cryptocurrencies held by an individual (these portfolios hold one asset class, while others can hold multiple asset classes and would require further asset allocation).

Some users also choose to use a third-party tracker which calculates the portfolio’s holdings and profits. A balanced portfolio will have a collection of coins, products, and tokens, each with its own risks and rewards.

It should have a mixture of high and low-market-cap coins and might look something like this: 35% Bitcoin, 10% Ethereum, 25% stablecoins, 15% NFTs, and 15% altcoins (this is an example based on the current climate of the cryptocurrency market and not financial advice).

The 5 main types of cryptocurrencies

Before we start building our portfolios, let’s begin with understanding the 5 main categories that can be found in the cryptocurrency market today.

Most of the cryptocurrencies on the market at the moment will fall into these options.

Payment focused

Consider these the original first-generation cryptocurrencies, starting of course with Bitcoin. Many earlier projects were designed as systems of transferring value, take for example Ripple (XRP), Litecoin (LTC), and Bitcoin Cash (BCH). 

These types of coins typically have a high market cap.

Stablecoins

This category refers to all coins that are pegged to a fiat currency and commodity. These coins naturally bypass any volatility, ensuring a stable anchor in your portfolio and a safe haven for when the markets experience a dip.

While they might seem to represent more traditional assets, stablecoins provide a valuable contribution to the crypto ecosystem.

Examples include PAX Gold (PAXG) which is pegged to the price of gold, while options like Tether (USDT) and USD Coin (USDC) are pegged to the US dollar. 

Utility tokens

Utility tokens are unique to their ecosystems and generally offer a product or service. This could come in the form of a coin used to pay transaction fees on a network, or a coin created to launch a crowdfunding initiative.

Examples include coins found on dapp and smart contract development platforms, Ethereum (ETH), and Binance Coin (BNB). 

Security tokens 

Much like traditional securities in the stock market, security tokens can take on many forms.

These digital forms of traditional securities have been integrated with blockchain technology and span across three categories: equities, debt, and a hybrid of debt and equity. This can range from representing a bond issued by a project, equity in a company, or even voting rights. 

Governance tokens

Governance tokens offer holders voting powers and a share of the project’s revenue. Similar to utility tokens, the value of a governance token directly relates to the success of the underlying project. Examples include Uniswap (UNI) and PancakeSwap (CAKE).

How to build a balanced crypto portfolio 

When it comes to building a well-balanced crypto portfolio there are plenty of different schools of thought. We encourage you to do your own research and ultimately go with what feels right, however, here are several common themes to pick from.

• Diversify risk

Ensure your crypto portfolio has an adequate amount of risk tolerance by incorporating high, medium, and low-risk coin options, portioned appropriately.

It’s important to first establish what level of risk you are willing to take, and plan your portfolio accordingly. 

• Include stablecoins

While these aren’t associated with wild gains, stablecoins help to provide your portfolio with liquidity and are key to many DeFi dapps.

They also allow traders to quickly and easily exit a position or lock in gains whether in a bear market or a bull market.

• Monitor the market

Ensure that you are checking in to see what is happening in the market regularly and adjusting your crypto portfolio to best manage this.

Crypto markets can still be very volatile, so ensure that your trading decisions reflect what is happening. 

• Monitor your emotions

This might be one of the biggest overseen aspects of trading but ensure that you have a grip on your emotions as they can play an integral part in your decision-making.

Fear and greed are strong contenders when it comes to making logical trading decisions, make sure that these are not influencing any of your trades.

Don't let greed interfere, changing potential big gains to huge losses. Things can go terribly wrong when emotions are behind the wheel of trading decisions.

• DYOR

We cannot stress it enough - always do your own research when exploring the cryptocurrency market. Never engage in a project that you cannot fully explain to another trader. Buying cryptocurrencies requires a substantial amount of due diligence.

While there is value in taking advice from a strong trader, ensure that you do your own vetting of the project before blindly trusting a stranger, this is your own money after all. 

• Only spend what you’re willing to lose

As a golden rule of thumb when it comes to navigating any market, only ever spend what you’re willing to lose.

If you’ve made trading decisions that are causing you sleepless nights, consider a different approach, and ensure that should something go wrong that you have the financial means to stay standing. Your overall portfolio should be correctly balanced in order to ensure you can have rest-filled nights.

How to use a portfolio tracker

While typically used for short-term and day traders, trackers can also provide value to long-term market participants. Trackers provide a reliable way of monitoring the performance of your low, medium, and high-risk endeavors.

Crypto trackers also allow users to measure their results across several blockchains and wallets in real-time, allowing one to directly measure the success or losses of their crypto financial products.

Portfolios typically involve holding multiple coins across various blockchains, so finding a compatible and suitable portfolio tracker makes sense.

First, you’ll need to select a good portfolio tracker that best suits your needs. Below we’ve outlined the top crypto portfolio trackers, although it's best to get a feel for the platform before diving in.

For instance, Pionex is better suited to high-volume users while Delta is better suited to beginners. See our selection below of top options on the market at the moment.

• CoinMarketCap
• One of the most used sources of information in the crypto space, CoinMarketCap also provides tracking functionality. Users can enter their coins, what price they were bought at, and monitor their progress.
• Pionex
• Favored to high-volume users, Pionex provides a more advanced option when it comes to tracking your crypto portfolio.
• CoinGecko
• Most commonly known as a data aggregator, CoinGecko also allows users to track over 1,000 coins across its mobile and desktop crypto trackers.
• Delta
• Delta not only provides a very user-friendly crypto tracker, it also allows users to track a wide range of assets including fiat currencies, stocks, bonds, futures, and ETFs.

Aside from the look and feel, other factors to look out for are safety and security and whether it supports the wallet and coins that you’ve purchased. 

Building your crypto portfolio manually

When you’re ready to start building your well-balanced crypto portfolio, you will need to find a reliable platform and wallet on which to do so. Ensure you stick to a regulated exchange and that the security behind the wallet you choose is of high standards. The Tap mobile app offers a secure and convenient platform through which users can buy, sell, trade, and store a wide range of cryptocurrencies. Next, you will need to decide on which coins you'd like to purchase, ensuring that you allocate your capital strategically with appropriate weightings.

While conducting your own research is crucial, it's also wise to consider consulting with a licensed financial advisor before proceeding with building your portfolio. A professional advisor can offer valuable insights and guidance tailored to your financial situation and investment goals, helping you navigate the complexities of the cryptocurrency market and make informed decisions.

Remember, understanding what crypto is and conducting thorough research on individual coins are essential steps before investing any money. By combining your own research with expert advice, you can build a crypto portfolio that aligns with your objectives and risk tolerance."

‍

Generational wealth is not just about building a large stash of money, it's also about how you pass it on. Once you've paid off your debts and established various forms of income, the next step is to start to build generational wealth that can surpass your lifetime.

In this article, we explore what generational wealth is and how to start building it. As with any investment account, the earlier you start the better the end result. While building generational wealth is a great place to be, we encourage you to get your current financial situation in order and build your financial education before you start exploring this concept.

What is generational wealth?

Generational wealth, also called family wealth, is the transfer of assets from one generation to the next within a family. This may include multiple streams of income from financial investments like stocks and bonds, as well as valuable assets, real estate, and family businesses. These assets continue to generate financial value as opposed to just being a lump sum of cash.

It's important to note that when an individual is born into wealth, that wealth was created by a generation before them, whether that be decades or centuries before. This financial success can help eliminate financial struggles for generations to come, or if not handled correctly, could be eradicated by just one generation.

The main factor for passing on generational wealth

Creating wealth is not the hardest part, the hardest part is educating the next generations on how to manage this wealth. According to the Williams Group wealth consultancy, 70% of wealthy families lose their wealth by the second generation while a whopping 90% lose it by the third. 

Generational wealth is not about creating enough money to allow your children’s children to sit around all day, it’s about passing wealth down for generations to come to make the world a better place and empower the family tree. Generational wealth is not about materialism or consumerism, it should be about financial education and philanthropy. Consider how important generational wealth is to you before embarking on building wealth for future generations.

The key steps to building generational wealth

There are two key components that need to come together in order to build generational wealth: firstly, building this wealth, and secondly, passing on this wealth. In this first section, we will cover the former. 

Creating generational wealth isn't going to happen overnight. It's a journey that necessitates time, purposeful planning, and commitment. There are no shortcuts when it comes to creating generational wealth, it's a marathon, not a sprint no matter which financial assets or stock market you might choose to invest in.

It involves not only taking care of your personal finances through proper planning but also educating the next generation about financial literacy and personal finance. This legacy wealth could go on to fund a child's education or college education, or be used to build an impressive real estate portfolio or invest in family businesses.

It's not about inheriting a trust fund at a young age so that one can simply enjoy life, it's about learning how to be financially fit, understanding how to create wealth, and hopefully building a secure financial future for the next generation.

1. Build a solid financial foundation

First and foremost, you will need to build a solid financial foundation before you start to build generational wealth which means you need to get out of debt and establish an emergency fund (three to six months' worth of expenses).

Do not progress to step two until this step has been completed. In order to build wealth one needs a firm foundation, so set yourself up to weather any storms that might come your way before you embark on the journey to create generational wealth.

2. Start allocating 15% of your income to a retirement fund

Now that you are out of debt and have established an emergency fund, allocate at least 15% to your retirement fund. In this step, consistency is key. Determine what kind of investment account (whether using new-age financial assets or the stock market) you wish to use, consult a financial advisor if necessary, and start allocating 15% of your gross income to this tax-advantaged retirement account.

If you consistently do this for two to three decades you will have built enough wealth to live comfortably after retirement and pass some on. 

3. Build slowly and consistently

As we mentioned earlier, building generational wealth is a marathon, not a sprint. This is a long-term commitment that requires no rush and no pressure. Commit to consistently building your wealth for the rest of your life. 

4. Communicate with your family and educate them about money

Discuss your financial goals with your children and use the opportunity to share your knowledge about wealth. If your wealth creation involves investing in real estate, building a family business, or any avenue that requires active participation, ensure that you keep your descendants in the loop and provide them with the wisdom, knowledge, and skills to maintain and ideally continue to build generational wealth. 

By discussing money frequently, being open about mistakes you have made with finances, and demonstrating smart financial decisions in your own life, you can teach your children about the importance of managing their money wisely.

5. Officiate things by making them legal

When it comes to building generational wealth, a financial advisor is optional but including a lawyer is essential. This step ensures that the generational wealth you spent your lifetime building is distributed accordingly.

Ensure that you go through the necessary legal proceedings to make sure you're not only on the right side of the law but also that the generational wealth is passed on as per your intentions. 

How to pass on generational wealth

Now that you've put the processes in place to start to build generational wealth, the next step is to put in place the necessary steps to ensure a smooth handoff. Here are three key steps to ensure that your generational wealth remains a blessing and not a chaotic curse for those left behind. 

1. Create a will

No matter what earthly possessions or family wealth one has, a will is essential for everyone 18 years and older. This legal document outlines how your assets are distributed after you die. While consulting legal counsel is advised, there are plenty of templates and methods online for writing and establishing your will. Regardless of whether you create generational wealth or not, this step is important.

2. Establish an estate plan

Estate planning entails organizing your possessions and determining how they should be handled after you have departed. A will is a very important component, but if your net worth exceeds $1 million, consulting a professional could be wise to guarantee that all the details of your estate plan are in order. 

Expert estate planners can help with more complex situations, like a family business or intricate family wealth, as well as demonstrate tactics for diminishing federal taxes so you don't pay any more than necessary.

3. Put together a legacy drawer outlining your family wealth

Crafting your legacy drawer should be on everyone's to-do list, it is a place where you store important documentation and items that will become invaluable for your family (and family wealth) should anything happen. While there are many documents to consider keeping in this secure location, here are a few must-haves:

• Your will and estate plan
• Financial account information
• A copy of your monthly budget
• Life insurance policy
• Tax returns
• Account passwords
• Personal letters to loved ones
• Funeral instructions

Create lasting generational wealth

Once you've made the decision to strategically allocate resources for your financial future and build generational wealth, there's no turning back. If you aim to create enduring generational wealth and blessings for future generations, it's time to focus and begin. Consider this a long-term journey that, with the right financial commitments and education, will empower generations to come.

‍

Before you invest in any crypto projects or assets, the golden rule is to always do your own research (DYOR). Hearing about a new coin from your neighbor or cousin's friend on Facebook is great, but it still requires a sizable chunk of your own research. Before you part ways with your money in the crypto space ensure that you've weighed up both the risks and the potential, the responsibility lies with you.

Crypto investing has a track record of being volatile, so the more clued up you are on the crypto assets you invest in, the better. While market data and fundamental analysis are important, be sure to understand the basics of a project and the project's potential.

What is DYOR (do your own research) in the crypto space?

The holy grail of investing in crypto projects, DYOR has become a common abbreviation for do your own research. The phrase is used to remind crypto investors that they should conduct their own research on a crypto project thoroughly before investing any money in it.

Whether you're looking to buy crypto assets, tokens, NFTs, or in any way get involved with a crypto project, be sure to thoroughly investigate the following factors mentioned below when doing your own research. Don't be lured in by a project's fundamental analysis, ensure that you understand everything there is to know about the project. Crypto investing can have devastating consequences for uninformed investors.

The 4 dimensions of how to DYOR on a crypto project

Below we will outline the four main dimensions of conducting your own research on a new cryptocurrency. These four pillars will give crypto traders a solid understanding of what the project represents, how it's been received, and what might happen in the future. Be sure to do this before looking at any technical analysis.

Remember, doing your own research requires reading multiple sources and verifying that the information is correct. When conducting your own research you mind find some disputing information, continue looking until you have the accurate answer.

Team

First and foremost, who is the team running this project? This information is typically presented on the platform's website or in its whitepaper (it's imperative that a project has both of these).

Take a look at the size of the project team, a small team might fall apart if one of the three members leaves while an excessively large team might be a red flag if it is still in its early days.

Check the experience of the leaders on the team. Ideally, you want leaders and executives to have experience in blockchain, Web3, finance, business, computer science, or any other related fields. Also, consider whether their current titles match their experience.

Are the team entirely anonymous? This is considered a red flag as the potential for them to execute an exit run is high. Consider the leaders of the project carefully and decide whether they have the means to steer this ship in the right direction.

Tokenomics

Tokenomics refers to the factors related to the supply and demand of a coin or token. The term merges "token" and "economics" and provides a key area of study for potential investors when establishing a coin's long-term viability. Below are the main aspects of tokenomics:

• Token supply: what is the maximum supply of coins or tokens?
• Token utility: what is the purpose of the coin (does it have governance rights, does it serve a specific function)?
• Market cap: How does the coin's market cap compare to that of its competitors?
• Issuance tactics: does the project intend on conducting token burns or any related activities?
• Minting, allocation, and distribution: how are the coins minted (all at once, gradually), when launched how are the tokens distributed, do a small number of members hold a large amount, are any coins locked up that will be released to the market on a specific date?
• Trading volumes and liquidity: what kind of volumes does this coin trade and how much liquidity does it have?

Innovation

For this pillar of the project, you want to look at what problem this project is solving, and what edge it has over its competitors. It's also worth taking a look at the project's road map and whether it is delivering on its self-set milestones. No roadmap is a red flag, well-managed projects are transparent and eager to release their milestone accomplishments.

Ideally, you want to establish what solution this project is bringing to the greater industry and what competitive advantage this project holds over similar projects. Consider its weaknesses.

If you want to take things one step further, consider what the team might not be telling you, and what elements could work against the growth and success of the project.

Social

This might not seem essential, but social media platforms can offer significant insights into the project's community, achievements, and current state within the crypto space.

When conducting your crypto research check whether the project has active official social media channels, and how often these are updated.

Secondly, how big is their community both in terms of followers and engagement? Are people engaging with the platform or talking about it on their own channels? Community members can shed a big light on how the project has been received.

Lastly, what kind of discussions are being had within the community of these groups? Are people friendly and inviting, or are they blindly promoting the project and pushing "lambo" sentiments? Ideally, you want to have a space where open and honest discussions can be had and constructive criticism accepted.

Toxic communities along with shillers and abandoned channels are all red flags.

The bottom line for DYOR and crypto projects

Establishing these four dimensions of a project is important prior to commiting any money. Not only does it give you the opportunity to learn about a new project, but also to become better acquainted with what is happening in the crypto space.

Through the process of conducting your own research, you might discover a viable gem or even gain access to exclusive airdrops as an early supporter. Bear markets are a great time for diving into DYOR explorations.