In the wake of a bullish cryptocurrency market, many first-time crypto millionaires find themselves grappling with sudden and significant wealth. With the promise of financial freedom comes the challenge of sustaining and growing this newfound fortune.
Dalu Akabogu’s thoughtful insights, shared in his recent viral Twitter thread, and Subomi Plumptre’s decade-long experience in wealth management, provide a roadmap for navigating these uncharted waters. Here’s a closer look at their advice and its implications for new crypto millionaires.
Dalu Akabogu: The Experienced Voice of Caution
Dalu Akabogu, known on X as Ewgi(@Ssaasquatch), has been an investment professional for over a decade. His career spans corporate finance, investment banking, and private equity. According to him, he stepped into the crypto space in 2016, purchasing his first Bitcoin at $900. By 2021, he turned that initial investment into $650,000 at the height of the bull market, only to lose most of it when the market turned. This experience shaped his investment philosophy, emphasizing sustainability over high-risk gains.
Dalu shares practical tips for first-time crypto millionaires:
1. Embrace Defensive Strategies: Convert Gains into Stability
Akabogu advises converting 30% of a crypto portfolio into stablecoins like USDT and USDC. This prudent move locks in gains while safeguarding wealth against market volatility. By increasing stablecoin allocation gradually to a maximum of 60%, investors create a safety net without abandoning market opportunities.
Why It Matters: “The market giveth, and the market taketh away.” The crypto market is inherently volatile. Stablecoins act as a safeguard, reducing exposure to sharp price swings and securing a portion of your wealth in less volatile assets.
2. Diversify into Fiat Currencies
Dalu Akabogu also emphasizes the importance of holding a portion of your wealth in fiat currencies. He advises opening accounts with crypto-friendly banks like Xapo and Mural, providing a secure and accessible option for managing funds. Notably, he discourages keeping money in Nigerian domiciliary (DOM) accounts, citing limitations and inefficiencies in their operations.
Why It Matters: While cryptocurrencies offer high growth potential, their volatility remains a significant risk. Diversifying into fiat provides a safety net, ensuring you have liquidity during market downturns or emergencies. Using international, crypto-friendly banks enhances financial flexibility and security, especially for those operating in less reliable banking environments.
3. Real Estate Investment: Sustainable Wealth
Dalu suggests using your crypto windfall to enter the real estate market, particularly in regions like the U.S., where properties can yield consistent rental income.
“It’s not about being aggressive; it’s about sustaining your wealth,” he explains.
Why It Matters: Real estate provides a dual advantage: steady cash flow from rent and the potential for property value appreciation over time. It also diversifies your portfolio into tangible assets, reducing risk.
3. Explore Exchange-Traded Funds (ETFs) and Stocks
For those less inclined to actively trade, Akabogu recommends delegating stock and ETF selection to seasoned investors or automated platforms.
These options provide diversified exposure to global markets. These instruments deliver stable returns of 8% to 12% annually and require minimal active management.
Types of ETFs
1. Equity ETFs: Track stock market indices like the S&P 500, Nasdaq-100, or MSCI World Index.
2. Bond ETFs: Invest in government or corporate bonds, offering a fixed-income option.
3. Commodity ETFs: Track the price of commodities like gold, silver, or oil.
4. Sector/Industry ETFs: Focus on specific industries like technology, healthcare, or energy.
5. Thematic ETFs: Centered around trends or themes, such as renewable energy or artificial intelligence.
6. International ETFs: Provide exposure to global markets or specific regions like Asia, Africa, or Europe.
Why It Matters: ETFs spread risk across a basket of securities, allowing you to participate in market growth while avoiding the pitfalls of individual stock picking. For first-time investors, this is a low-maintenance way to achieve steady gains.
4. Consider Startup Investments
For those with a higher risk tolerance, Dalu highlights the potential of investing in startups through vetted platforms like Hoaq.co. While the risks are high, the rewards can be substantial if you hit the right opportunities.
The Lottery Effect: Dalu likens startup investing to a lottery. While many ventures may fail, the few that succeed can deliver life-changing returns. Diversifying across multiple startups reduces the risk of total loss.
5. Invest in Self-Development
“Sustaining wealth requires skills that go beyond crypto,” Dalu advises.
He suggests investing in education and personal growth to build financial literacy and industry knowledge.
Why It Matters: Long-term success isn’t just about investments; it’s about understanding how to manage and grow your wealth. Self-development equips you with the tools to make informed decisions in any market.
Subomi Plumptre: Lessons from a Decade of Wealth Management
Subomi Plumptre is another seasoned investor with over ten years of experience in crypto and traditional finance. Her story mirrors Dalu’s, having made her first significant earnings from crypto a decade ago. Today, Subomi is the founder of a wealth advisory firm and a fund management company dedicated to helping others build financial security.
Subomi shares her three guiding principles for managing newfound wealth:
1. Build a Long-Term Stock Portfolio
“I started a long-term stock portfolio comprising blue-chip stocks that I don’t need to track daily.”
Subomi emphasizes the importance of blue-chip stocks, which provide stability and consistent returns.
Why It Matters: Blue-chip stocks—shares of well-established, financially stable, and reputable companies—offer a reliable foundation for wealth preservation. Unlike the volatile crypto market, blue-chip stocks provide steady, long-term growth and dividends. They act as an anchor in a diversified portfolio, reducing overall risk.
Strategic Insight: Investing in blue-chip stocks like Microsoft, Apple, or Coca-Cola can provide a balance between stability and growth. This approach is especially crucial for individuals transitioning from high-risk assets like cryptocurrency. By adopting a long-term perspective, you’re not just chasing returns—you’re building a portfolio designed to weather economic fluctuations.
2. Investing in Wealth Management Services and Education
“I got a fund management license and now run a wealth advisory firm that helps people create wealth too.”
Using her experience, she helps others create sustainable wealth through structured financial planning. She first started out by getting the knowledge, writing required exams and then meeting capitalisation requirements.
Why It Matters: Education and certification are powerful tools for financial empowerment. By obtaining a fund management license, Subomi not only elevated her knowledge but also positioned herself as an expert capable of helping others. This move underscores the importance of understanding your wealth and taking control of its management.
Strategic Insight: For first-time crypto millionaires, education is key. Whether through formal training or advisory partnerships, learning how wealth works ensures informed decision-making. Subomi’s example illustrates how expertise can be monetized, turning personal wealth into a sustainable business model.
3. Diversify into ETFs
“I started buying ETFs, as my risk profile is no longer high.”
As her risk tolerance has decreased over time, she now prioritizes ETFs for their stability and steady growth potential.
Why It Matters: Exchange-Traded Funds (ETFs) are a safe and effective way to diversify wealth. They allow investors to gain exposure to a wide range of assets, such as stocks, bonds, or commodities, in a single transaction. For Subomi, ETFs were a strategic shift towards lower-risk investments that align with her evolved risk appetite.
Strategic Insight: ETFs are perfect for new millionaires looking to stabilize their wealth. They offer diversification, liquidity, and cost-effectiveness, making them an excellent option for anyone looking to shift from high-risk speculative investments to a more balanced portfolio. For example, investing in global market ETFs or sector-specific ETFs like technology or clean energy ensures exposure to growth sectors while minimizing volatility.
Why This Advice Matters for African Investors
For African crypto investors, the stakes are often higher due to economic volatility and underdeveloped local financial systems. Diversifying into stable assets like real estate and ETFs not only mitigates risk but also opens doors to global financial opportunities.
The Cost of Doing Nothing
Failing to act after a financial windfall often leads to the “trench effect”—a term Dalu uses to describe those who lose everything in market downturns. History is rife with examples of investors who failed to protect their gains, offering a cautionary tale for today’s crypto millionaires.
Final Thoughts
Dalu Akabogu and Subomi Plumptre’s advice isn’t just about investing—it’s about redefining how you approach wealth. By diversifying into stable assets, investing in self-growth, and prioritizing long-term planning, crypto millionaires can ensure their newfound wealth translates into lasting financial freedom. Their insights provide not just a playbook for financial success but also a call to action: Use this moment to build a legacy that outlives market cycles.
