7 Great Ways to Reinvest Your Cryptocurrency Earnings

These steps will help you after the next bull run

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With Bitcoin reaching a new all-time high in 2020 and possibly breaking $20,000 this year, this may be the time to start thinking about your cryptocurrency earnings. A wise person will not hold on to their cryptocurrencies too long since there is always a chance of a big correction wiping away your gains. You need to have some solutions on what you’ll do after a big win with cryptocurrencies.

Too often, investors look at winning with Bitcoin, Ethereum, Cardano, Polkadot, or some other cryptocurrency. Everyone does and there is nothing wrong with that. There is a big problem when you do this.

Many times, people do not ask themself what if their cryptocurrency has a 50X or more return? Most likely an investor will go crazy and buy their Lamborghini or another expensive car.

This could be dangerous as you blow your money on a depreciating asset. As you may have seen from time to time, people who come into a lot of money, are suddenly broke because they spend all their money, give money to their long lost cousin and friends, or they have no idea what happened.

Don’t let this be you.

You need to have a plan on what you will do with your crypto earnings. You may have some ideas, but take the time to figure out some possibilities you’ll do with your earnings. This could be one of the few times, you will see a 10X or 100X return from your cryptocurrency investment.

You have seen Bitcoin go from a low of $3967 this year to a high of $19,901 in a matter of months. Many cryptocurrencies followed along and saw big gains with more gains likely coming. Altcoins could take off and see some incredible returns in this market.

As Bitcoin most likely goes higher in 2021, altcoins follow along, and you will see a huge increase in the value of your investment. Take your profits. Don’t get greedy and hope for another 10X gain. Set your target price before you sell.

Once you do that, here are seven ideas you should consider. You don’t want to be a story about how you blew your money after the 2021 cryptocurrency bull run. Take the time to find some smart people to help you wisely invest your earnings. This is the time to connect with those people.

By the time cryptocurrencies have taken off, you won’t have the time to find out who these smart people are. Use the time now to call, email, and research people who will help you out. The next seven ideas will help you with your post cryptocurrency bull run.

Seven things you should do after the bull run

1. Donate or give to charity

Whether you are religious or not, you should donate some of your earnings. Maybe you want to support your church, a favorite charity, food bank, or another charity.

There are charities that could use the money to help others. With the coronavirus, many people are suffering and charities need money to help those in need.

From churches to food banks to many other charities, they can use your money. Plus once you make a donation, you should feel good about helping others. Also, the donation could be tax-deductible helping offset some of your cryptocurrency gains.

You don’t want to be a scrooge and hoard all of your earnings. Giving back to help others will make you feel good about yourself. There are always people who are less fortunate and need help in one way or another.

2. See a tax accountant

You may not like this, but be ready to pay your taxes. The government will take a big portion of what you earned.

Trying to avoid paying taxes could run you into a lot of trouble. You may have seen some people serve time in jail or pay their fines for avoiding to pay their taxes such as Wesley Snipes, Chuck Berry, Ozzy Osbourne, Shakira, and others.

Don’t try to avoid paying the IRS. In the past, they have sent letters to over 10,000 people for them to verify that they have paid their earnings from cryptocurrencies or to make any corrections. The next bull run will not be any different.

To date, the IRS has not created further guidance on buying and selling cryptocurrencies for altcoins. Hopefully, the IRS releases guidance on this soon. This would give some more assurance to many cryptocurrency investors.

3. See a lawyer

Once you have made a lot of money, you need to establish a will and trust. If for some reason, you unexpectedly passed away, the state will likely take your money. You want to delay that and allow others to get their rightful share.

Taking the time to set up your will and trust will allow others to use the money and prevent any delay. You may want to pass your money on to family members, friends or a charitable organization.

Setting up your will and trust will help keep money in the rightful hands. This is the best time to set up these legal documents. Don’t wait to find the right person to help with your legal matters.

4. Pay off your current bills

You may want to go out and buy a new car or something. However, if you have any debt, this is exactly what you should pay off first. Pay off your credit cards, department store cards, and other expenses you owe money to.

You don’t want to keep giving free money to these companies which is what you do with debt. The interest continues to accumulate and you are giving free money to these banks and companies. These companies are making money off of you since you are paying interest on your debt obligations. Pay off these bills and then you’ll have more time to have fun with your money.

5. Invest in a rental property

There is no better way to earn income from your cryptocurrency investment than with rental properties. If you buy the right rental property, you can turn that into an income stream for life. This could be challenging for someone who has never invested in real estate but if you build the right team, do your research, this could be the best investment you could make.

6. Buy dividend stocks

If rental properties are not for you, then dividend stocks could be the next best investment. Dividend stocks pay their investors from their earnings. There are companies such as Apple, Microsoft, Intel, and others that pay you every few months. If you set up your dividend plan correctly, you could receive income every month from your stock investment.

7. Reinvest back in cryptocurrencies

Lastly, you could reinvest for the next bull run. Maybe you want to be around for the next Bitcoin all-time high. There could be an altcoin that want to see achieve a new high. Just make sure you have taken some of your gains off the table for this bull run.

Your next step

Take the time to set your cryptocurrency strategy for the bull run which will most likely happen in 2021. You have the time but the next few months will go by very fast. Get your post bull run plans started today.

Make time work for you and don’t waste it. Find the right people and resources who will help you out. You don’t want to end this next bull run in a worse situation than when you started.

References

Bitcoin holders can’t escape the IRS

CARES Act added a $300 charitable contribution for 2020

Tom Handy is a top writer on Medium, former Quora writer, and father of two kids. He retired from the Army and sits on several non-profit boards. You can find him on Twitter @tomhandy1 and his publication Life is Like a Game.

This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.

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