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Investments are a great tool to advance your financial stability. In times of uncertainty when your only source of income comes to a dead-end, any investment you’ve previously made will definitely help to navigate the rough waters. And what’s wrong with having more than one stream of stable income? If anything, it would only enhance your living conditions and upgrade your lifestyle.
If you are a salaried employee who entirely depends on your one source of income, you need to read this to learn more about the best investments for employees.
Having a fixed monthly salary certainly sounds more stable than a new startup or business, which may or may not reap benefits. But, what if you lose your job due to unforeseeable circumstances? Or what if you had to quit your job for one or the other reason and now you have no income coming in? If you had depended solely on your monthly salary, with significantly fewer savings, the chances are that any progress you’ve made on financial stability could come crashing down.
So then, why take the risk and put yourself in trouble? Why not take a small portion of your savings and put them in smaller investments that will ultimately only benefit you in the long run?
Which is the best investment option?
From deposits and mutual funds to provident funds and pensions, the traditional methods of investments are many. However, as the world is becoming increasingly digital and moving to digital modes of payment systems, the best investment option you could make as a salaried employee is to invest in cryptocurrency.
You surely would’ve heard of cryptocurrency, but if you ignored it, thinking it’s too complex a technology for you to learn about, then it’s not. In fact, cryptocurrency is increasingly becoming the best investment option of several investors and ordinary people alike as an asset class. Not only is cryptocurrency one of the best investments for salaried employees in the modern world, but it also has several other benefits that we will discuss below.
Introduction to cryptocurrency
Cryptocurrency, based on blockchain technology, works as an independent decentralized digital currency that does not require the authority of financial intermediaries like banks. It is one of the best investment options for employees who are looking to diversify their portfolios and improve their incomes. Anyone can buy or sell cryptocurrency on reliable crypto exchange platforms. With no mediator between the buyer and seller and comparatively lower transaction costs, you can use cryptocurrency in any form you like. And your transactions will remain largely anonymous.
How to invest in cryptocurrency?
Start small
Considering that you are a beginner at cryptocurrency investments, it is best to start small. Invest a small portion of your portfolio first, and as you learn the tricks of the trade and understand market conditions better, you can start investing more. An ideal amount to be allocated for cryptocurrency is about 3-6% of your portfolio.
Understand that, just like any other investment, cryptocurrencies are also subject to volatility. Many people make the mistake of blindly investing in cryptocurrency after they’ve heard stories about how much its value has rocketed. These very people lost huge amounts of money when the market eventually crashed. Unlike investing in gold or shares, this investment does not pay you back in dividends, interests, etc.
In addition to this, most countries are still developing regulations related to cryptocurrency. Hence you should expect anything from favorable regulations to an outright ban. Due to all these reasons, it is ideal to start with smaller investments.
2. Do your research and choose the type of cryptocurrency
Although it is most likely that the only cryptocurrency you’ve heard about is Bitcoin, you need to know that there are several other currencies too. Besides investing in Bitcoin, other prominent cryptocurrencies you can consider are Ethereum, Litecoin, Tether, Cardano, etc. If you’re serious about investing, then you need to do thorough research on which type of cryptocurrency you’ll be investing in. You should also go through the whitepapers of each coin you are investing in to know what you can expect from investing in it.
3. Choose the right platform
The next most crucial step in your journey to investing in crypto is choosing the right platform or exchange. You can find exchanges that offer either fiat to crypto or crypto to fiat. The most prominent exchanges in the world are centralized, where the exchange platform acts as the intermediary. However, if you dont want an intermediary, you can go for decentralized exchanges. When choosing an exchange, you need to do extensive research again. While choosing an exchange, some of the most important factors include its geographical location, the level of transaction fees, liquidity and volume, exchange interface, and security features.
Geographical location is vital because you do not want to choose an exchange platform that is not accessible from your location. Volume and liquidity can help you decide the platform’s credibility, while transaction fees can help you compare between the different exchanges. A user-friendly interface obviously matters, and security is of utmost concern since you do not want to lose out on all your money.
While you’re at it, do some research on how the exchange will store your money. Many centralized exchanges are infamous for cyberattacks, so keep that in mind while making a decision. If you will frequently use your cryptocurrencies, a hot wallet that operates on the cloud is the better option. If you’re, however, storing money for a longer time, go for cold wallets. They are much more secure since they are physical and do not operate online. You can also choose from hardware wallets and paper wallets.
WazirX is the best and most trusted cryptocurrency exchange in India. It lets you trade a wide variety of cryptocurrencies on different platforms and offers exceptional security features. Their platform interface is not just excellent but allows faster transactions as well.
Now that you’ve got all the information you need on the best investment options, you are all set to start investing in cryptocurrency.
Frequently Asked Questions
How To Invest In Cryptocurrency?
There are two ways of investing in cryptocurrency, mining and via exchanges. Cryptocurrency mining is considered the procedure of verifying and adding transactions to the blockchain public ledger. Another option is via cryptocurrency exchanges. Exchanges generate money by collecting transaction fees, but there are alternative websites where you can interact directly with other users who want to trade cryptocurrencies.
How Many Cryptocurrencies Are There?
There are over 5000 other digital currencies available on the internet in addition to Bitcoins. The only problem is that they haven't gotten the users' attention. Besides Bitcoins, a few other digital currencies have gained popularity among users. It's been more than ten years since Bitcoins were first released, and now they've achieved new heights thanks to their phenomenal success.
Is Cryptocurrency Safe To Invest In?
Cryptocurrency investments are subject to market risks, but if sufficient security measures are not taken, trading accounts can be maliciously accessed. Investments come with risks and uncertainties, and we cannot claim that any digital currency investment is risk-free. Buying and selling cryptocurrencies can be risky even if the trader is knowledgeable about the market and treats their coins carefully.
Which Cryptocurrency Is Best To Invest In 2021?
Many altcoins are flourishing to invest in. Some cryptocurrencies with great potential are Ether, Ripple, Tron, and more. Investors are trying to diversify their portfolios and are flocking to the leading cryptocurrencies. Many growing businesses are already accepting cryptocurrency as acceptable payment methods.
What Is Crypto?
Crypto or a cryptocurrency is a digital currency protected by cryptography, making counterfeiting and double-spending nearly impossible. Blockchain technology is used to produce cryptocurrencies (a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are distinct in that a government does not issue them. The word "cryptocurrency" refers to the encryption methods employed to keep digital currencies and the network secure.
Who Invented Cryptocurrency?
Satoshi Nakamoto invented cryptocurrencies and the technology that makes them function in 2009. The presumed pseudonymous individual or persons who invented Bitcoin used this identity. In addition, Nakamoto created the first blockchain database. Even though many people have claimed to be Satoshi Nakamoto, the person's identity remains unknown.
How To Invest In Cryptocurrency Stocks?
Cryptocurrency can be purchased in two ways: through mining or exchanges. The process of confirming and adding transactions to the blockchain public ledger is known as cryptocurrency mining. Cryptocurrency exchanges are another option. Exchanges make money by charging transaction fees, but there are alternative platforms where you may communicate directly with other cryptocurrency traders.
What Is Cryptocurrency?
A cryptocurrency is a digital currency secured by encryption, due to which chances of activities such as counterfeiting and double-spending taking place get close to impossible. Cryptocurrencies get created on blockchain technology ( a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are unique in that they do not get issued by any central authority. The term "cryptocurrency" comes from the encryption techniques used to keep digital currencies and the network safe.
Is Pi Cryptocurrency Safe?
Pi Network (PI) is the newest digital token to catch the cryptocurrency community's interest, even before it has wholly debuted. Some users see it as a chance to get engaged in a cryptocurrency from the beginning and profit in the future, similar to how early Bitcoin adopters made huge profits by mining and keeping the coin. Other users have compared Pi to a worthless multi-level marketing (MLM) scheme.
What Is Virtual Currency?
Virtual currency is a type of uncontrolled digital currency that can only be used online. It is exclusively stored and transacted using designated software, mobile or computer applications, or unique digital wallets, and all transactions are conducted through secure, dedicated networks. Because digital currency is just currency issued by a bank in digital form, virtual currency is not the same as a digital currency. Virtual currency, unlike ordinary money, is based on a trust structure and cannot be issued by a central bank or other banking regulatory organization.
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
