Topic: The Higher the capital the higher the returns - page 10. (Read 1909 times)

What you said makes sense but look at OP's example, if your capital is 100k and your profit is only 5% but you can already make 10x more profit than someone with 1k capital $ with 50% profit. That means you still make more money, are richer, and I don't think inflation will affect you if you spend like someone with $1k.
That's why rich people who own millions of dollars will choose investments that bring small profits but have high safety like gold and they are still richer than bitcoin investors with capital small.

It's best to start with the little that you can. Most of the big time investors and rich magnates are telling that to anybody.

They have the money to start big but they started with the least that they can.

We understand that the higher capital, bigger return is the logic in investing. But if you don't have that much capital, you really to have somewhere to start with the little that you can.

Bro just said skill issue, just get rich lol. While I do agree somewhat, it's more like higher capital invites more opportunities to create higher quality forms of investments in general. Oversimplifying it with higher returns make it seem like an advantage but it also invites an equal amount of possible loss. 5% profit for 100k is indeed 5k, but a loss of 5% is also 5k. What I'm describing by "opportunities" here is that by that point of 100k, 5k is probably just peanuts or something you can earn rather easily lol.

It's a known fact that bigger capital results into higher returns, but it's not happening all the time. It's certainly a case to case basis, if you invest in a potential coin with bigger capital, it's expected that you will also gain bigger amount in returns.

However, if you invest a huge capital into a newly coin in the market that has not proven its potentials yet, most likely the result won't be the same with your expectations. In fact, with this type of investment, the chances to lose more is even greater than the opportunity to gain bigger profits, simply because you invested in a coin that has not been trusted in the market by majority.

What this slightly ignores is the level of risks involved. It's obvious math that you can earn more money if you start with more money. However most people don't feel comfortable putting large amounts in a high risk situation for a 5% return, because there is often the possibility in a worst case scenario that all your money could be lost. In the world of investing, bitcoin is up there in the extremely high risk category, like investing in a small oil driller in a volatile African country, which could get wiped out if rebels invaded their operating area. Investing is a massive matrix of risk Vs reward and you cannot only focus on one aspect of it to get good returns.

You have missed also the other side on which if we do base up with the % then it would be understandable or would be something in mirror on how much you would potentially lost too on the moment that the market would go south and this is something that you should really be that considering out rather than on making yourself that being too optimistic just because you've seen that bugger capital would be giving out that bigger profits on which its true but we do know that when it comes to loses then it would really be just that the same. If you are someone whose really having that lots of money then you wont really minding that much.Whereas, into those people who do have just that less and trying out to strive on making their small capital to make it big then it would really be something a serious matter when it comes to gains and loses.

It would really be having its pros and cons too on which it would really be just that depending on you on how you would really be that handling yourself on such condition or situation.
Always take up some consideration about risks management on which this is something that mainly you would really be needing on the moment that you would really be deciding on having
that engagement into this unpredictable space.

While not incorrect, it is an oversimplification.

Higher capital (amount to invest) will often open up better quality investment opportunities (lower fees, higher potential returns for a given level of risk, etc.) than a smaller investment.

Yes, if we want to start a business or any kind of business, it would be better if we only need sufficient capital in this case, even if the profits are small, but if we get this regularly, of course this will be a learning or experience for us. Don't start with large capital, at least we have to look at the market share first, if we have found the rhythm of the market share, it would be better to increase the business capital or business. Those who prioritize big profits have their expectations too high in this case, whether it's their thoughts of wanting to get rich quickly, and wanting to get money quickly. So he spent a large amount of capital, of course the results he got were even greater. Of course, if we are not accompanied by knowledge, no matter how much capital you spend, of course you will experience losses forever.

Well it's that having bigger capital will allow you to gain bigger amount of money if you are winning in a trade. A lot of day traders use this technique in the stock market using a huge margin provided by the broker. In that case, they are able to square off the trade faster. But it's not possible for the small traders to have such capital.

But please understand the risk part of it. It someone is not winning in a trade, it's easy for them to loose a huge amount of money in a matter of time and also if a suitable stop loss is not added.

Yes of course but we must not forget the risks. A  bigger capital makes you benefit more but it may expose you to a greater loss. Losing 50,000$ for example is not the same as losing 5,000$. In my opinion the higher the budget the higher the returns and the risk of loss as well. 

The thing that everyone may agree on here is that with a small capital with the necessary planning and work, may help you obtain a bigger capital and greater benefit.

You can try bigger capital when you already have lots of experience to predict future prices, but if you are just the same as the newbie guy who is still in the trial and error phase, stick to having less capital that you can throw and just keep learning.

So many of them tried to make huge profits by starting big capital and then just ended up thinking how wrong it was after they lost the capital.

Now, how can someone achieve $100,000 if they born from poor parents and live in poor countries?

It's easier to said than done, not all people can get high paid job, they need to invest their money as young as possible to hedge against inflation, they also need to pay taxes, not to mention if they fell sick or their family needs money in hurry.

If we all have a choice to pick either born by rich parents or poor parents, everyone will choose the rich ones.

This is a well-known fact and it is the secret of most of the rich guys you see or read about, it is not that they are super in thinking or are harder workers the way many people think but it's because they have the leverage that most people do not have, which is the adequate funding and the ability to buy people's brain to increase their productivity. This is why I do not look down on anyone who finds it difficult to be rich having tried enough, they may not be privileged to have access to the needed money.

Well, if I may ask, how do you get the bigger capital when you do not have it? This is why you see people chasing the bigger return. But as true as your advice is, it is still possible to chase the bigger return, but systematically. For instance, if you want to trade Gold with a broker and dream of using 1 lot size (10x) despite having $250 in your trading account. Fine, your dream is to get there, but you don't just risk the whole $250 to get there immediately, that is suicidal.

You might start with a small risk and continue to accumulate your gains and manage your account to success. Over time, if you are a good trader, in about 6 months, you might be using that lot size comfortably. That is the only smart way I can think of because if you never chase the goal, you may never get there since the capital will not fall from heaven.

Sometimes its not all about high capital but the understandings towards the investment structure you are dealing on. Since if you only have a lot of money but you don't know what to do then you go on certain investment schemes because you think their offer is good and you can earn a lot from them then chances to lose a lot of money is so high. If we also go on trading then same situation will happen especially if you can't handle the situation also your emotion.

So try to learn a lot of things about crypto investment before wasting or trying to risk your capital because if you already acquired a great knowledge about bitcoin or crypto investment or trading then maybe all what you have been said here has a lot of sense.

That’s true but it’s not always true.

Investing huge capital is important as businesses have more chances to grow if capital is higher but it doesn’t always guarantee that your profit will be higher just because you had higher capital. There are situations where because there is so much capital, the profit needs to be extremely high as well which are not met. Thus, losses are formed.
In the context of bitcoin, higher investment means higher profit yes. But you also have to factor in how you will manage this investment and be able to extract maximum profits.

Wow, you really thought this over, right?
Chase capital? What the fuck does it even mean?

Your advice is basically telling people to have more money to invest, how do you get more money, by having better returns, which then nukes your whole statement! For god's sake, those ideas and advice that would get you an F- in elementary school are really becoming boring!

A good product can also attract capital to itself. As an entrepreneur creating an innovative product, if the demand is high even when you have little capital investment you can attract investors with deeper pockets who are interested in the potential profit margin. In essence; more capital also chase bigger returns, they just have enough money to bear the risk that comes with it.

You're right, but it's known advice, and emphasising on the importance of capital will drive smaller investors to small cap coins. They believe their investment amount is too low and they need to get an unknown token worth 0.1cents and dream it gets to a dollar.

Yes it's actually true that the higher the capital the higher the returns, but you also need to be aware that it's vice versa, if you can make a whole lot of money in a very short period of time with bigger capital, you can also lose a whole lot of money in a very short period of time, so it's not always green, but to me, as long as it cryptocurrency generally, it's very much advisable to invest only what you can afford to lose, so that if things went south, you wouldn't have to be in a very difficult situation.

So in essence is that, it's very much important to invest only what you can afford to lose, so that your emotions can be in check if your investment isn't playing out as expected.

This is dependent on a few things. It may be true in most cases, but it's not entirely correct in all areas of investment.
When you're taking just one asset or investment into consideration, then it's correct. Like what you did with Bitcoin, but even that is also to a certain extent.
People who bought $100 worth of Bitcoin in 2012 have made more profit than people who bought $10,000 worth of Bitcoin in 2024. Obviously, the one who bought with $10,000 has more capital and spent more, but the one who used just a hundred bucks has made far more profit. If he didn't sell he'll have about 8-9 bitcoins now because the price of bitcoin then was about $13.

When I said it's not entirely the same when you put different investments into consideration, let's say one person invests in Bitcoin and another person buys shares of a company. If one buys shares worth $200k and gets a dividend of 4%, he gets $8000 at the end of the year, while someone who uses $100k to buy bitcoin at the same time would most likely make more than 10% at the end of the year and that's about a $10,000 profit.

So the time of your investment and the assets you're investing in matters. Also, how long you're going to leave that asset is a consideration. Most times the longer the asset stays before liquation matters.

It's not always black and white.

Yeah it's true having bigger capital will make you to earn high return, you still need to pay attention with the percentage.

You need to overtake inflation in your country, I'm not sure which country you live, but in my country the inflation rate stated by central banks is 6%, but the reality the inflation rate is around 10%-15%.

So, earning 5% is still not enough, in the long run your money will lose the value.