Stocks & Crypto Edition: Total Loss of almost $ 100K
Let me start by saying I love money—a lot. But even more so, I love the journey of exploring, discovering, and finding ways to make money. It gives me an incredible mental thrill, a lifelong challenge, and never-ending excitement. You might be surprised to learn that I have a rather simple life. My entire world can be counted on less than ten fingers: family, friends, my boyfriend, the gym, meditation, books/podcasts, learning, this blog, occasional travel, and investments.
My goal with investment is to maintain the freedom I have now and make it even better and more comfortable along the way. This includes the freedom to choose and engage in things I’m truly passionate about—even if they don’t bring any monetary value, like this blog—without having to worry about money. The freedom to spend time with whoever I want, doing whatever I want, whenever I want.
It sounds simple and small, yet it has taken me my entire adult life to recognize its existence and importance, and to experience a glimpse of it. I used to live a life—so busy, so accomplished, and so ambitious— that sleeping more than seven hours a night, having a slow, peaceful morning, or enjoying a weekend completely off work was a luxury and a far-fetched dream. Now, more than ever, I appreciate the simple, slow-paced life and the freedom I have. I hope to stay in this place of contentment and indulge in it every day until I grow old.
Please note that I’m not a professional investor or financial advisor; I’m an amateur investor with limited and somewhat biased knowledge. I tend to focus deeply on information that interests me, sometimes neglecting other areas. The purpose of this blog is to openly share some of my costly mistakes that added up to nearly $100K. Despite considering myself well-read, analytical, and business-minded, I’ve made some glaring errors that I believe are worth sharing so that others can learn from them and avoid making the same mistakes.
Mistake #1: Invest in Individual Stocks
If you’re interested in stock investment, it’s impossible not to notice that every book, podcast, investment article, and seasoned investor, all echoing the very same advice: amateur and beginner investors like myself should avoid investing in individual stocks at all costs. The reason is: it requires an extraordinary amount of time, commitment, and expertise to create and manage a well-balanced, diversified portfolio of individual stocks, and stay informed about company developments.
Time and time again, historical data has shown that even seasoned traders struggle to consistently beat the market over the long term. What are the odds for someone starting out? It’s worth remembering that there is only one Warren Buffett in the world. Can anyone realistically expect to match his success?
Think about the headlines we see where investment funds or managers make substantial profits from successful trades. Those stories are rare enough to make news. If such successes were commonplace, would they be reported so frequently?
Yes, I read all of those books and was totally aware of this lesson. Yet, I fell right into my trap, throwing every piece of knowledge outside the window, resulting in a total loss of almost $40,000 on individual stocks. Imagine how much more I would have lost if I had not been educated at all about the topic.
We often hear about people who win big in trades and make fortunes, but rarely do we hear about those who lose. For every winner, there is inevitably a loser—it’s a reality of the financial world. I want to shift this narrative by sharing my own story of financial losses in stocks and crypto. By exposing my mistakes and vulnerabilities, I hope to offer valuable lessons to others, especially young investors. Learn from my experiences and avoid the pitfalls that cost me dearly.
I started with a sensible strategy: allocating 10% of my budget to individual stocks—for fun and to satisfy my curiosity for high-risk investments—while placing the remaining 90% in the low-risk, low-cost, and long-term broad index fund (Vanguard FTSE All-World ETF). So far, so good. Smart and sensible, right?
However, when I began seeing significant wins and massive returns, I believed I was “smart”—I did my research well and had an excellent intuition for investing. To be fair, I had built quite some successful businesses and been armed with a lot of experience, so I assumed my success in business would naturally extend to stock trading.
But I overlooked two crucial factors: First, I was not an expert in stock trading; I was a beginner. Second, I didn’t devote the same full-time effort to investing as I did to my businesses. Unaware of these limitations, my ego inflated, and I overestimated my luck and capabilities. This led me to expand my individual stock portfolio from 10% to 50%, focusing solely on tech stocks instead of maintaining a well-diversified portfolio. I blamed this on the booming period of tech stocks in 2022, where everything seemed to yield incredible returns. I allowed my short-term wins and greed to cloud my judgment.
Except for Apple and Alphabet, which accounted for 20% of my portfolio, the remaining 80% (PayPal, Shopify, Alibaba, Lemonade, etc.) plummeted by over 83% in value since the crash in late 2022 and have shown minimal signs of recovery. I sold the majority of these holdings before the summer of 2024 because I realized I hadn’t conducted thorough research, and fundamentally, I no longer believed in these companies. So I cut my losses and reinvested the proceeds into my long-term and safe Vanguard index fund.
Despite Apple and Alphabet nearly doubling in value over three years, my overall portfolio still suffered a loss of -$40,000. This experience and journey in itself reinforced what I’ve read in investment books and heard from seasoned investors worldwide: beginner investors like myself should avoid individual stocks and opt for low-cost index mutual funds or ETFs that track the broader market. Remarkably, my Vanguard FTSE All-World ETF has generated almost 45% returns over three years, alongside several thousand euros in dividends, all without the stress, sweat, and constant monitoring required for individual stocks. While it may not match the high returns of Apple and Alphabet, it has shielded me from the pitfalls that come with high-risk investments.
Having gone through all of that, I will never touch individual stocks ever again. My sole investment strategy now is to consistently invest in the Vanguard FTSE All-World ETF. Nothing else!
Mistake #2 & #3: Not Doing My Due Diligence and Blindly Following Friends’ Investment Advice
I usually pride myself on always forging my own path, not following the crowd, and thoroughly doing my homework before making any decision. Unfortunately, this wasn’t always the case with my crypto investments, leading to a 92% loss in my altcoin investments. I’m still holding on to them, though I have little hope they’ll bounce back to their all-time highs.
I’m lucky to have a network of friends deeply involved in the crypto world who have made millions from it. I often received tips, tricks, and insider information about what to buy. For instance, when BTC was just $500, €1000, €1500, and then €2000, they kept urging me to invest. I didn’t. When it hit $2,500 in 2017, after years of hearing about it, I finally loaded $5,000 into my Kraken account to buy 2 BTC for fun. But I bailed out soon after, not because I thought the BTC price was too high, but becauseI didn’t know anything about it—a core investment principle of mine: never invest in what you don’t understand.
Sounds so smart, right? =)
Three years later, as BTC hit its all-time high of $45K, and with a better understanding of blockchain, I felt more comfortable with this new investment type. However, instead of doing my own research, I blindly followed my friends’ advice. After all, they had made substantial money in the past; it would likely happen again, right? Don’t get me wrong—my friends are kind, generous, and had no intention of leading me into bad investments. They wanted me to succeed just like them! But I overlooked that they were full-time investors with extensive, diversified portfolios that balanced each other out. It only took a couple of their 100 invested coins to go to the moon for their portfolio to multiply 100 times. Sometimes, the coins they believed in and advised me to buy didn’t perform as expected while the other coins did.
Secondly, they had excellent speed and trade execution, enabling them to buy and sell instantly. Thirdly, they had their own communities where information flowed instantly and daily. These factors allowed them to sell before a massive dump or buy just before a pump. As a hobbyist and amateur investor, I lacked these advantages.
A clear example was when Polkadot (DOT) was at $8 or $10. A very good friend of mine, Colin, gave me a heads-up to buy as much as I could that weekend because the price would skyrocket the following Monday. He even advised me not to be greedy and to sell everything by the end of Monday—any profit was a good profit. Indeed, the following Monday, the price went up to $18 and kept climbing until it hit $55 a week later. Seeing all of that and having the money to invest, I was scared of putting big money in, what if it dropped all of sudden like how crypto has always been? So I waited out for a bit, and then once I was ready—too late and too slow, I ended up buying at $45, almost at an all-time high, before the entire crypto market tanked shortly after. Now, three years later, Polkadot is at $5.82—an 87% decrease in value.
Two of my best friends—one a retired successful entrepreneur and the other an ex-treasury portfolio manager at one of the biggest banks in the Netherlands—also bought DOT because I, at that time, truly wanted my friends to make as much money as I wished for myself, so I passed on the advice. They ended up being stuck with DOT like me. Luckily, they did not blame me. Otherwise, I could have ruined our relationship with my good intentions but uneducated advice.
We are all smart people who manage our money well. Yet, we made this classic mistake. My point is, no matter how smart we are, we’re definitely not immune to classic errors. So always stay alert and do your due diligence.
There were many more coins that I bought based on friends’ advice that led to 95% or more decreases in value. Fortunately, I did one thing right: I only invested what I could afford to lose. So even though it was painful, the loss did not significantly affect my life.
In my crypto portfolio these days, I only invest in BTC and ETH. Similar to stocks, I don’t aim to become a full-time crypto investor. I just want a long-term portfolio that combats inflation, increases in value over time, and provides a great pension later in life. Obviously, BTC and ETH aren’t going to go 50 to 100X like altcoins and make me rich overnight anytime soon, and I’m totally aware and happy with that.
I can’t wait until BTC hits $250K and ETH $20K. I will come back and update this blog once they hit those prices. Hehehe!
Long live BTC King & ETH Princess!!!
Unavoidable Mistakes as a New Investor:
In investing, no one is immune to mistakes. No matter how smart or well-prepared you are, you’re going to stumble at some point. I’ve never met an investor who hasn’t faced setbacks along their journey. Even my friends who have made millions from crypto have experienced plenty of losses. Investing is not the easy, get-rich-quick path that many financial YouTube influencers portray.
Investing inherently involves risks. If you don’t know how to manage and mitigate these risks, then this game might not be for you. Like me in the past, you might find yourself on the losing end. But here’s the good news: the more you educate yourself and do your due diligence, the fewer mistakes you’ll make, and the smaller your losses will be.
If you happen to lose, that’s okay! Learn from your mistakes so you won’t repeat them, and move on. In the end, we learn more from our mistakes than from our successes. Two, three, or five years from now, when you look back, you may be thankful for the lessons those mistakes taught you, helping you become a better and wealthier investor.
Do I regret those bad investments? Truthfully, no! First, I lost money I could afford to lose, so although it was painful, my life continued. Secondly, I know myself well—I’m a huge risk-taker at heart—those mistakes were bound to happen sooner or later. I learn faster and better when I burn myself and bear the scars. Now, I can confidently say I’m a better investor than before. I’ve learned to do my due diligence thoroughly, view investment opportunities from multiple angles, and gather better, less biased information in a world overflowing with news and data.
My journey has taught me invaluable lessons, and I hope sharing these experiences will help you navigate your own investment path more wisely.
So, embrace the journey, learn from your mistakes, and keep pushing forward. Your future self will thank you for the lessons you learn today.
Happy investing! And remember, anything that sounds too good to be true probably is. Trust your instincts and stay smart!
** This chapter is part of a 4-chapter series— don’t miss any part of the story! Stay updated and read more chapters from this series here:
- Part 1: Introduction—Investment Mistakes To Avoid: My Nearly $1 Million Loss And Lessons Learned
- Part 2: Stocks & Crypto Investment Edition: My Journey of Losing $100K
- Part 3: International Real Estatement Investment Edition: My Most Reckless Mistakes, costing me $60K and more
- Part 4: New Business Acquisition Edition: Total Loss of $750K (Coming soon)
- Part 5: Start-Up Investment Edition: Total Loss of $23K and more (Coming soon)
