A wise saying - dating back to the sixteenth century - says that it is good to save for a rainy day; meaning it is beneficial to set aside part of your income for unforeseen expenses. There are several ways to do this. One of them is through crypto and Binance. Binance is the most popular and widely acceptable platform that supports the trading and exchange of crypto.
As a crypto holder, you will probably know that making money can be incredibly profitable. However, it can also be extremely time-consuming and stressful. This is because you must keep track of the recent happenings in the crypto world to monitor potential opportunities and risks. Additionally, you have to constantly track your investments to know when to pull out.
On the other side of all these hassles are ways you can continually earn, and one of these ways is “auto-investing.” If you have an auto-invest plan, you will easily be earning passive income without you going through all the rigorous processes that others go through. In this post, we will help you understand what auto-invest is and how you can take full advantage of it.
What is Auto-Invest?
Auto-invest is an investment plan that involves automatically investing available funds in your wallet based on your selected parameters. This is a plan that allows you to curate your crypto portfolio and conveniently set up a recurring purchase plan.
Auto-invest can be likened to regular currencies that are being invested to earn interest (passive income). The only difference here is that this is not a manual investment plan. From the start, you will have to fill out a form outlining the cryptos you want to buy, the amount you would like to invest from time to time, and the recurring cycle of how often you would like to invest in these cryptos.
Binance is much preferred because on it, you can customize and allocate several cryptos to a plan. Additionally, you can have as many auto-invest plans as you want i.e., you can have different cryptos of your liking in a plan and have several other plans containing other cryptos.
Among the various ways you can earn passive income through crypto, auto-invest is the best strategy. It is the simplest and most straightforward way of earning passive income from crypto as it requires no in-depth knowledge to get started and all the details of your plans are customised by you.
Now that you know what auto-invest is, let’s discuss how you can set up your auto-invest plan.
Steps to Set Up an Auto-Invest Plan
Setting up an auto-invest plan is easy and straightforward. To get started, all you must do is to go to this page and complete these three steps.
Step 1: Choose the cryptos you would like to buy. Take a look at some of our videos for up-to-date news on the major currencies.
Step 2: Curate a plan by selecting the amount you would like to invest on a recurring basis, and choose your preferred stablecoin (either USDT or BUSD).
Step 3: Choose a recurring cycle specifying how often you would like to make this investment. It could be on a daily, weekly, bi-weekly, or monthly basis.
Before you start an auto-invest plan, it is imperative that you have a portfolio plan. In the next paragraph, we will elucidate on what a portfolio plan is and the benefits it brings to the table.
What is a Portfolio Plan?
Commonly, portfolio plans are used in corporate organisations. But what is a portfolio plan, and how does it affect the making of passive income with crypto and Binance?
A portfolio plan is a long-term investment strategy that influences every decision made daily in an organisation. A portfolio plan is an overall strategy that is constructed based on an investor’s objectives and risks, among other things.
To better explain what a portfolio plan is, the definition given by Investopedia is most suitable. According to Investopedia, a portfolio plan is a blueprint for selecting investments that spells out an investor’s goals and expectations, as well as taking cognizance of the risks involved. Other factors that influence a portfolio plan include an individuals’ investment horizon, potential liquidity needs, and tax burden.
Before setting up an auto-invest plan, it is highly recommended that you have constructed your portfolio plan beforehand. In the case of investing in crypto, which happens to have an unstable market, you must ensure that you carry out a proper research, weigh all your options, and consider the pros and cons of all your options.
There are many cryptos available now and the number is certain to keep increasing in the coming years. In fact, as of now, if you attempt to count the number of cryptos that exist, you will lose count. This shows that you have so many options to choose from, which means that you will be presented with several potential benefits and risks. So, you need to have a standard plan that will help you in selecting the cryptos that are best for you.
Luckily, Binance supports you by having numerous auto-invest plans. So, if you end up with a long list of cryptos that you would like to invest in, you can invest in all of them. All you must do is group all of them based on the objective you want to achieve, create several auto-invest plans, and fix these cryptos in the categories they belong to. By doing this, the specific financial goal you want to achieve with each category will be accomplished.
Importance of a Portfolio Plan
A portfolio plan is unique and highly beneficial in the sense that it helps you in actualising your financial goals better and faster with less risk involved. Below are some of the other importance of having a portfolio plan.
Right Investment Choice: A portfolio plan provides high levels of visibility to things that you wouldn’t take notice of in the normal sense. It sheds light on your vision both from a tactical and a strategic perspective. When you have a standard portfolio plan, you will be able to make a more informed and better decision. You will have full knowledge of the cryptos that will yield more profit.
Also, with the knowledge of the right cryptos to invest in, you will be able to allocate your resources equitably. This is very beneficial if you don’t have enough resources to go around all your preferred choices. A portfolio plan will help you in drawing your scale of preference.
Maximise Return on Investment: One of the benefits of investing is making returns on your investment. Well, a portfolio plan puts more sugar to the cake – it increases the returns that you will have on your investment. A well-thought-out and planned portfolio plan will ensure you always make the right call will be more conscious of every decision you make, thereby maximizing your chances of return on investment.
Technically, a portfolio plan helps in the analyses and selecting of the best cryptos that suit your needs, which in turn increases the passive income you will make.
Minimize Risk: What do they say about risk? It is commonly said and proven that risk is certain in every business and investment, but when the business or investment is well planned, the risks involved can be minimized. A portfolio plan teaches you to invest in different types of cryptos instead of putting all your resources in one, thereby reducing the chance of you facing a huge risk.
Diversification is one of the fundamentals of a portfolio, so constructing a well-structured and solid portfolio plan only means that you will invest in multiple cryptos, and in return, your profitability rate will be increased.
Track Performance: The processes involved in setting up a good portfolio plan involve investigating the record (previous success and failure) of the cryptocurrencies you want to invest in and evaluating if they will do well in the future. Additionally, a portfolio plan involves you tracking and monitoring the performance of your investment.
This is one of the benefits that Binance provides. It shows you your portfolio profit and loss record at any point in time. Judging from that, you will know how well your investment is fairing and whatever step you need to take.
Management of Liquidity: A well-structured portfolio plan can account for the
occasions when you are low on cash and you need to take out of your investment. It enables you to set up your auto-investment plan in a systematic manner where you can choose to sell any of your cryptos when you need funds.
So, you can be rest assured that you won’t be stranded just because you put your money into an investment. You can easily trade your cryptocurrencies for fiat money whenever an urgent need arises.
How to Buy Multiple Crypto with a Portfolio Plan
After you’ve finished constructing your portfolio plan, the next thing to do is to learn how to buy cryptocurrency, especially in multiples.
The easiest way you can buy multiple cryptos at once using a portfolio plan is through crypto exchanges. A crypto exchange is a platform that allows you to trade your digital or virtual currency for normal fiat money. A very good example of a crypto exchange is Binance.
On Binance, you can easily buy as many cryptocurrencies as you want with ease. Binance is the largest and most acceptable crypto exchange, and this is because it does not accredit any type of crypto. It only trades cryptos that are trusted and credible, so with this platform, you can rest assured that your investment is safe. With Binance, you can buy/sell several cryptos, such as Bitcoin, Ethereum, Matic, Cardano, and so many more.
Depending on your portfolio plan, you might need to buy all your favourite cryptos at once or create multiple auto-invest plans to compare performance. If you have a portfolio plan that is focused on achieving a singular purpose, you can buy all your favourite cryptos at once and put them in the same auto-invest plan.
On the other hand, if your portfolio plan is multi-faceted, you can create multiple auto-invest plans and insert your cryptos in their corresponding plans. Mostly, this is done to track and compare the performances of auto-invest plans. Also, it is used to mitigate the potential risks involved in the investment. For this selection, you can allocate 2 to 10 cryptos per plan to get the best result.
Major Acceptable Cryptos for Purchase Funding
It is essential to highlight that only two cryptos are accepted across all cryptos for purchase funding. And these two cryptos are USDT and BUSD. With these two digital currencies, you can purchase all other digital currencies.
Both cryptos are stablecoins that have their price pegged at $1 i.e., unlike other cryptos like Bitcoin or Ethereum, which change value due to the volatility of the market, USDT and BUSD don’t change value. Other than using them for purchase funding, they are also used as a mode of storage of value. When your cryptocurrencies are in USDT or BUSD, their value will remain stable; the total value won’t reduce or increase no matter how the market changes.
USDT, which is also known as Tether, is blockchain-based crypto whose tokens are in circulation and it’s backed by an equivalent amount of US dollars. It’s a stablecoin that’s tied to the US dollar, i.e., it is a virtual representation of the USD. According to Binance Academy, USDT is the first stablecoin in the world, and it was first published by a Bitcoin investor (Brock Pierce), an entrepreneur (Reeve Collins), and a software developer (Craig Sellers) in the year 2014 under the name, Real coin.
USDT was specifically created with the goal of providing users with stability, transparency, and low transaction fees by bridging the gap between fiat currencies and cryptos.
BUSD, which stands for Binance US Dollar, on the other hand, is also a stablecoin, but it was created by Binance and Paxos. It was specifically created to have a crypto that would be supported by the US dollar. One of the most distinguishing features of BUSD is that one unit of BUSD is equal to one US dollar. As a result, it varies directly with the US dollar.
BUSD allows traders and crypto users to transact with other digital and cryptocurrencies while limiting the risk of volatility due to its stability in relation to the USD. Using a stablecoin like BUSD to hedge against market volatility is very beneficial.
BUSD has been able to perform extraordinarily well, and it has established itself as a leader in the cryptocurrency world due to its inherent features as a stablecoin. BUSD has performed so well since its inception in 2019 that it now has a market cap of over $10 billion.
Redemption of Crypto Portfolio and Tracking of Portfolio Growth
To generate passive income, your purchased cryptocurrencies will be automatically deposited into your Flexible Savings account. You can easily redeem these cryptocurrencies at any time. All you have to do is to click on (Wallet) – (Earn). When you do this, you will get a list of all the Flexible Savings products to which you’ve subscribed. Head on to the asset crypto portfolio you want to redeem and click on the icon (Redeem).
You can also track the growth of your portfolio over time to see its performance and trend. Binance has a feature that allows you to see the behaviour of the crypto space in relation to your assets through its Profit and Loss (PNL) feature.
The PNL feature provides an analysis of the highs and lows of your assets over a period. It could be divided into several sections, such as Cumulative PNL – on this section, you have the option of seeing the analysis of your assets for the last 7 days, 30 days, or customize it to your preference. You could also have other sections like Daily PNL, Profits, Assets Allocation, and Asset Net Worth.
This feature is very important as it shows you data from which you can reference and make estimations.
Earning passive income with crypto and Binance has never been easier. This is the best and most simple way of making continuous income without having the headache that other traders and crypto users have.
While, making money with cryptocurrency is enticing, at the same time, it’s time-consuming and if you want to ensure that you don’t lose, you will have to continually keep up with the trends in the crypto space. However, when you have a solid portfolio plan, and you draw out your auto-invest plan, you won’t go through further stress, and you can earn passively without putting the time you could use to achieve other things in crypto.
You can enjoy this benefit on several crypto exchanges. The best and most preferred for all classes is Binance as it practically educates you through the processes involved. Also, it’s the most trustworthy crypto exchange, so on this platform, the safety of your assets and personal information is guaranteed.
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