When I received an inheritance from the sale of my grandparents' house, I did something I believed would honour my money-smart grandfather's memory.

Back in January, I bought Shiba Inu.

A lot of Shiba Inu.

In August 2022, I am now 61% down on my SHIB investment (sorry, Grandpa).

But because the funds had a legacy to uphold, I was more motivated than ever to recover the lost capital.

I've read The Intelligent Investor by Benjamin Graham. I've watched hours of YouTube. I've reached out to everyone I know for investment advice.

I wouldn't be sharing this embarrassing story with you if I didn't think it would help you to avoid the mistakes I've made in crypto – since June I've made a 20-30% return even during a bear market.

Despite all, I believe that losing money is the best lesson you can get in investing. It's not just about avoiding pain. It's also about valuing the effort that goes into grinding out the income you need to claw your portfolio back.

When you've skipped whole weekends and busted your back to make a buck, nobody takes it from you without a fight.

Still, if you can learn all this without losing money like me, I'll be waiting for you in nirvana.

Let's jump in.

1. First, invest in yourself

You probably read that subheading and thought 'skip'.

Don't do it.

When the crypto market began to tank in May (disclosure: I had holdings in TerraUSD on Anchor Protocol too) I spent every spare minute scouring forums, checking price tickers and filling my brain with investment wisdom.

And then I watched an interview with Warren Buffet.

I was expecting some moment of financial enlightenment. Instead, Buffet said this: "You are your biggest investment."

When I got paid in June and cryptocurrencies were falling to their lowest prices for 18 months, I didn't invest. I desperately wanted to get my portfolio back. But instead, I put all my leftover income into a pricey course to develop skills in my line of work.

Why is he telling us this? You ask.

Because since then I've had triple the monthly cash leftover to re-invest. I'm not dipping into any emergency savings. Most of all, I'm not worried about my portfolio falling in value.

I'll survive it.

Trust me, when you've lost your late grandfather's hard-earned cash in Shiba Inu during a devastating crypto crash, your wife is heavily pregnant with your first child, you've just got kicked out your rental accommodation by a law-breaking landlord and you haven't the cash to take him to court, a few % in the red is nothing.

I worked so damn hard during the crypto crash to stay afloat that I busted my back, busted my mind and couldn't sleep at night.

Don't get into that kind of cycle. When you put your health at risk, you're losing hold of your greatest asset in life: that chunk of white stuff between your ears.

The concept of investing in yourself first should teach you these two principles:

1. Only invest money you have after basic living costs are covered

2. You should rely on your income – anything you make from crypto investing is a bonus

2. Study tokens going through a growth stage

OK, now we get into some investing – or what financial educator Robert Kiyosaki calls 'making money work for you'.

In his best-selling book Rich Dad, Poor Dad, Kiyosaki says he only invests in small cap companies.

What does that mean?

It means he and his wife intensively study a few businesses right at the beginning of their growth stage. Their market capitalisation is small (small cap). Sometimes the companies never make it – but when they do, Kiyosaki sells up to recover his initial investment + a decent ROI and still has some stock left over to keep holding onto.

This is a great strategy to apply to crypto investing.

When I bought into Shiba Inu in January, it had already undergone its growth stage.

I was too late.

While watching my SHIB portfolio plummet (and reading Kiyosaki) I began heavily researching small cap cryptocurrency projects. One of the assets I bought into – EverGrow – will really surprise you how great they are and how little they are known about.

Let me go through a few principles in identifying small cap cryptocurrencies using EverGrow as an example:

Utility

In January, Shiba Inu had no utility beyond being a meme-coin. Pure hype. It worked great for a few investors – and now the lead developer team in Shiba Inu is frantically working to get some applications out, a new blockchain platform and more coins to bring investors in.

EverGrow is different. EverGrow has utility (and a market cap of just $90 million right now).

Utility basically means: what this cryptocurrency actually do.

EverGrow is a reflection token that rewards investors in the Binance-Pegged USD stablecoin (BUSD). It has one of the best mechanisms for passive income generation in crypto (a.k.a. its core utilities didn't collapse during the crypto bear market, like so many other passive income projects in DeFi).

More importantly, EverGrow is gifting me passive income to be able to reinvest when I have no other funds left. When utilities have that kind of value, there's potential in a small cap project.

Roadmap

The Shiba Inu roadmap is much broader now – but back in January, it was little more than an impossible cry to 'take Shiba Inu to $1'.

Think about it.

Shiba Inu would need to burn more than 99% of its current circulating supply to bring prices to $1. In the past 12 months, Shiba Inu has only managed to burn 0.01% of total supply. The math doesn't add up.

EverGrow is useful here because it has a built-in function for burning tokens – buyback and burn. Without getting too deep into the white paper, EverGrow charges a transaction tax from which 2% is set aside to buy back tokens.

Before even hitting its first birthday EverGrow has burned through 53% of its initial circulating supply. All the applications it aims to roll-out in the next few months (an NFT marketplace, a content subscription app, a cloud-streamed metaverse play-to-earn gaming arcade) will be used to generate more profits to burn the circulating supply.

Before buying into the hype or FOMO, always read a project's white paper.

Ask yourself: do I see this project winning over new investors in 1,2 or even 5 years' time?

If the answer is 'I don't know', then keep on looking.

Transparency

Crypto is still an emerging industry. Scams are tragically common.

While Bitcoin set a precedent with an anonymous founder, the majority of top 20 cryptocurrencies have a lot of transparency at the top.

Binance for example has risen to become the leading crypto exchange by daily trading volume – the CEO (Changpeng Zhao) is very much a known figure who consistently drives home his purpose of protecting users.

In the wake of collapsing projects, hacks and outright scams, transparency will become increasingly important in crypto. But aside from security – wouldn't you want to know your crypto investment is handled by a competent team?

One of the things I liked about EverGrow is how the chairman, Sam Kelly, is an experienced investment professional. He regularly Tweets about how the EverGrow roadmap is coming along, any changes or developments in the team – he even publishes his own wallet address so investors can audit his claims about being an investor just like everyone else.

After investing in Shiba Inu where the lead developer only goes by the pseudonym Shytoshi Kusama (and puts out a lot of cryptic info with not a lot of backup details) I feel much more confident investing in a small cap cryptocurrency where I can ask questions and find answers.

3. Buy at the bottom

When I first bought into Shiba Inu I didn't understand anything about price indicators.

I'd read an article about Shiba Inu and the ShibArmy's goal of taking it to $1.

My thinking was literally this:

• Shiba Inu is worth $0.000021
• If Shiba Inu gets to $1 that's about a 4,761,805% percent growth!
• I'm buying Shiba Inu right now

Now that I am 61% down on my SHIB portfolio, that obviously ended well.

Patience is a scarce resource when crypto investing. So much of the industry – and its marketing – induces hype and FOMO that it's hard to keep a level-head. This is made especially hard by the fact that Shiba Inu did grow 47,618,948% between January and October last year.

A few lucky investors could have become millionaires off a $2 investment inside 11 months.

My story represents the 99.99% of investors who weren't that lucky.

Before investing in Shiba Inu or any other crypto, I highly recommend you take the time to fully understand the following price indicators and figures:

• Simple moving averages (especially 20-week and 200-day SMAs)
• Relative strength index (especially the 14-week RSI)
• Bollinger bands
• Money flow (i.e. money entering and exiting an asset in a given time period)
• Daily trading volume

These indicators will help you identify the most fundamental concept to grasp in any investment: you should always buy at the bottom and sell at the top.

It seems obvious, but so many first-time investors buy when prices are high and FOMO is strong, and sell when prices fall and panic sets in (aka panic-selling).

Don't do that.

When prices started falling during the crypto crash I began buying small amounts of cryptocurrency every time the indicators suggested prices were hitting the bottom. This strategy has helped me be currently up 35.4% on a large investment into BNB.

The EverGrow I bought has been making me a 15% APY in stablecoin passive income that I have already into BNB and more EverGrow. The BNB I bought alone has almost made back my losses into Shiba Inu in a third of the time.

That's the kind of investment strategy I want for you (minus the Shiba Inu loss).