Part 2: 10x Investors And Their 10x Factors

In Part 1, we’ve covered the first three 10x Factors that make up a 10x investor under the Mindset category.

In Part 2 (this post), you will discover the other two 10x Factors.

Once you have these first five 10x Factors, you’re all set to deploy the right Strategies as a 10x investor coming in Part 3 of this series.

Let’s dive in.

10x Factor No.4. Emotionally Resilient

Investing involves risks.

It doesn’t matter what the asset is.

Some assets will be more risky than others.

But some riskier assets also give you much higher returns.

So it’s a balance between how much returns you want from your investment, and the amount of risk you can tolerate.

You need to be mentally prepared for the ups and downs that will inevitably happen.

10x investors do the following to be emotionally resilient:

1) Staying Calm

The markets can be brutal.

Wild swings, sudden downturns, and unexpected crashes are common.

Emotionally resilient investors understand that panic is their worst enemy.

You stay calm when others are losing their heads.

During the 2008 Subprime Crisis, many investors sold at a loss out of fear, only to regret it later.

But those who stayed calm saw opportunities instead of panic.

Buffett famously said, “Be fearful when others are greedy and greedy when others are fearful.”

Emotional resilience means not allowing emotions like fear or greed to take control.

Instead, it means trusting your research and keeping calm when the market is anything but.

During the dot-com bubble back in the year 2000, many people bought stocks based on hype and fear of missing out (FOMO), only to see their investments crumble.

The emotionally resilient investor avoids these traps by sticking to their strategy, regardless of the noise.

Whether it’s a market boom fuelled by excitement or a crash driven by fear, staying calm under pressure is essential.

In crypto markets, investors often get caught up in bull runs or sell-offs.

But those with emotional resilience stay focused on the bigger picture, not letting temporary emotions cloud their judgment.

This mindset is crucial as 20% - 50% swings or higher in a short period of time can occur in this market.

For example, in April 2021, bitcoin’s price was more than $63,000 each.

In July, its price was $29,000. 

This is a depreciation of 50% in just a couple of months!

But those who remained calm and stuck to their plan either held their positions or bought more bitcoin as its price went down.

They understood that bitcoin’s long-term outlook still looked promising.

As of the time of this post, bitcoin’s price is above $63,000 once again.

Staying calm also means having the ability to pause and think logically before acting. 

When others are making snap decisions, emotionally resilient investors take a step back, assess the situation, make informed choices, and take calculated risks.

2) Trusting the Strategy

Emotionally resilient investors know that a good strategy is meant to be followed —especially when things aren’t going well in the short term.

Long-term index fund investors are a great example of this.

Your strategy is simple.

Keep investing no matter what.

The 2020 COVID-19 market crash saw many panic and sell, but those who trusted their long-term plan held on and enjoyed one of the fastest recoveries ever seen.

The same principle applies in the crypto market.

In a well-researched plan, crashes and dips are just part of the process.

Investors who trusted bitcoin’s long-term potential and held their position through crashes saw substantial gains.

The key is trust.

Trusting that your strategy will pay off in the long run, even when things look bleak.

Trusting the strategy also means avoiding the temptation to constantly tinker with your investments.

You understand that overreacting to every market fluctuation can do more harm than good.

Instead, you focus on the fundamentals and remind yourself why you chose your strategy in the first place.

This level of discipline helps you stay the course, even when the market throws unexpected challenges your way.

Now it doesn’t mean that you cannot eventually be wrong with your strategy.

If you are wrong, so be it (see No.3 below).

It’s still better to stay the course than to constantly overreact all the time because overreacting doesn’t mean you’ll always come out on top anyway.

3) Expectations

Losses are inevitable.

ALL investors face them.

What sets you apart is how you respond.

Instead of panicking or feeling defeated, you view losses as learning opportunities.

Ray Dalio is a perfect example.

Early in his career, he nearly lost everything due to a bad market prediction.

But instead of quitting, he took a hard look at his mistakes, adjusted his approach, and went on to build the largest hedge fund in the world (Bridgewater Associates).

As an emotionally resilient investor, you know that losses are just part of the game.

You don’t dwell on them.

You learn, adapt, and move forward.

This mindset is especially critical in crypto, where quick downturns can erase gains in a flash.

The key is to keep your confidence intact and focus on improving your approach for the next opportunity.

Having realistic expectations is also crucial.

By setting realistic expectations, you avoid the disappointment that comes from expecting constant gains.

In accepting this reality, you are better prepared to handle setbacks without losing your composure.

Emotionally resilient investors also practice self-reflection.

After a loss, you take time to analyse what went wrong and how you can improve.

This continuous learning process helps you become better investors over time.

You look at what went wrong, as well as what you did right and how you can replicate that success in the future.

10x Factor No.5. Connections

Just as a 10x entrepreneur will have a good network of people who can help him in his business in some way, so does the 10x investor.

The following are your benefits:

1) Good Intel

A 10x investor knows that succeeding in investments cannot be done in isolation.

You need a network of mentors, advisors, and peers who can guide you, share opportunities, and provide valuable insights.

Building a strong network requires effort and genuine relationship-building.

For example, venture capitalists often rely on a network of founders, entrepreneurs, and industry experts to identify the next big startup.

Take Peter Thiel.

His connections in Silicon Valley allowed him to become an early investor in companies like Facebook, LinkedIn, Airbnb, Stripe and SpaceX.

Similarly, in the real estate market, having a network of brokers, developers, and financiers can give you early access to deals before they hit the public market.

Note that YOU don’t need to know everything about every market.

A 10x investor leverages the expertise of others to enhance their own investments. 

For instance, hedge funds often employ specialists with deep knowledge in areas like biotech or technology to guide investment decisions.

Instead of trying to master every field, they rely on experts to provide insights that might otherwise be overlooked.

Some investors partner with developers to better understand the technical aspects of a project before investing.

By collaborating with experts, you can make more informed decisions and reduce your risk of making errors in unfamiliar territory.

Having good intel means tapping into the collective knowledge of your network.

You need to ask questions, stay informed, and use the information shared by trusted contacts to enhance your decision-making.

The right information at the right time can be the difference between making a hugely profitable investment and missing out.

2) First Access

Your network often gives you access to deals and opportunities that aren’t available to the general public.

For instance, private equity investors often rely on their network to get into pre-IPO deals or exclusive rounds of funding.

Early investors in companies like Uber or Airbnb were often friends or colleagues of the founders.

Similarly, in real estate, being well-connected can give you first dibs on prime properties before they are listed publicly.

Your network can be the key to getting into these exclusive deals before others even know they exist.

3) Wisdom

One of the biggest advantages of being well connected is that you can learn from the experiences of others.

Instead of making mistakes yourself, you can hear about what went wrong for someone else and avoid that pitfall.

In traditional investing, hearing how a mentor avoided the 2008 Subprime Crisis or overcame the COVID-19 pandemic can give you insights that protect your own portfolio.

In crypto, you can learn from the mistakes of those who invested in scams or poorly managed projects and know what red flags to look out for.

For example, the collapse of major projects like TerraUSD (UST) in 2022 which tried to overcome the risks of algorithmic stablecoins unsuccessfully.

To understand how this happened, you need to understand the nature of cryptocurrencies.

Cryptocurrencies are famously volatile.

This is because no single entity has control over them, unlike fiat currencies.

While this is a benefit for investors who can make a huge amount of profit due to their wild swings in prices in a short period of time, it can also hinder cryptocurrencies’ broader adoption among the masses.

Some businesses are reluctant to exchange their products and services for cryptocurrencies that can decrease in value by 20% - 50% within weeks or months.

Although they can also benefit from their appreciation in value by the same amount in the same period of time, but most entrepreneurs fear losing more than winning.

Stablecoins therefore combine the benefits of cryptocurrencies like decentralisation, security, and speed with the stability of traditional fiat currencies or other stable assets.

Stablecoins are designed to be pegged to the value of the US dollar, ie. 1 unit of a stablecoin should always be equivalent to 1 USD.

There are 2 types of stablecoins.

The first type are stablecoins backed by the US dollar, gold, or other assets.

The second type are algorithmic stablecoins without any backing.

In theory, algorithmic stablecoins appeared to be a huge innovation where only computers and its algorithm (computer code) are relied upon to keep each stablecoin’s value at or around USD1.00.

But the reality is that it couldn’t really work that way.

In the process, billions of dollars of investors’ money were eventually wiped out when UST’s value crashed from USD1.00 to near zero.

Investors who are well-connected would have heard warnings from others in the space before the crash occurred, saving them from significant losses.

This is because TerraUSD is not the first stablecoin to fail.

IRON (IRON Finance), ESD (Empty Set Dollar), DSD (Dynamic Set Dollar), BAC (Basis Cash) and USNBT (Nubits), all algorithmic stablecoins, had failed to maintain their peg to the US dollar before UST came onto the scene.

Thus if you have some people in your network who could highlight the dangers of algorithmic stable coins to you, they would become a real-time source of lessons, allowing you to sidestep mistakes or avoid algorithmic stable coins altogether and focus on more promising cryptocurrencies.

By having open conversations with your network about both successes and failures, you gain a well-rounded understanding of the market you’re interested in.

For example, hearing about a failed investment like the above stablecoins example might highlight red flags you hadn’t considered, while learning about a success story can reinforce the strategies that work.

The more you engage with your network, the more you build your own knowledge base, allowing you to grow as an investor.

So if another algorithmic stablecoin pops up today, we know with a high level of confidence that it has to be more than just an algorithm.

In other words, you now know that the only way a stablecoin can work is when an asset of equivalent value are deposited to back each unit of stablecoin.

This then makes it NOT an algorithmic stablecoin at all.

Which means that you should avoid algorithmic stablecoins at all costs — especially when you have so many other different types of cryptocurrencies to consider investing in.

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And that completes the 10x Factors of 10x investors in the Mindset Category.

In Part 3, we will look at some of the 10x Factors under the Strategies category.

This category is where you apply winning strategies to have the highest chances of 10x’ing your investments.

Cheers!

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