Investments: 5 false myths to dispel

Investments: 5 False Myths

It’s a common misconception that you must constantly follow the markets to invest. Discover the five most prevalent myths about investing.

What are the common myths about active market investors? Many misconceptions exist, much like the popular beliefs that wholemeal bread has fewer calories than regular bread, that eating carbohydrates in the evening causes weight gain, and that dogs perceive the world in black and white. These false myths permeate our daily lives until we accidentally uncover the truth, often by reading a revealing article like this one. When it comes to finances, these myths can resemble urban legends. So, what are some of the most prevalent misconceptions in the world of investments?

In this article, we will examine various myths, including the unrealistic time horizons that young investors often believe they have, as well as the paradox of the over-informed investor who ultimately harms themselves.

The CAP is the best way to invest.

What? We started with a cannonball, huh? Is this a myth? Hold on, don’t run away; I’ll explain. The CAP, or Capital Accumulation Plan, is undoubtedly a great way to build wealth, especially if you don’t have large sums of money available or if the idea of investing everything at once makes you anxious. 

Regularly setting aside a small amount of money not only reduces the risk of entering the market at the wrong time, but it also helps you develop self-discipline—much like a Tibetan monk—especially when you use automatic deposits. Plus, let’s be honest: it lessens the emotional toll of experiencing the market’s ups and downs.

However, there is always a caveat: this approach is not the most mathematically efficient way to invest. Statistically, putting all your capital into a single, bold solution (PIC) offers higher returns. Why is that? It’s simple: all your capital works for you immediately, allowing you to fully benefit from the power of compound interest from day one. Additionally, since markets tend to rise over the long term, the likelihood of buying an asset at a lower price today is generally higher than it will be tomorrow or the day after.

The effectiveness of a Premium Allocation Contract (PAC) in managing purchase prices during bearish market phases is somewhat limited, particularly if the portfolio is still in its growth phase. Initially, payments into a PAC are more likely to influence the average price positively, but this effectiveness tends to decrease as the portfolio matures.

That said, I want to emphasise that a PAC remains a strong investment option while also providing a savings mechanism. For many investors—likely the majority—it is the best solution available. Although it may not be the most efficient option in absolute terms, the peace of mind it offers can often outweigh the benefits of marginal gains.

More risk means more return.

This may sound controversial, almost like a challenge to the popular saying “no pain, no gain.” How can the concept of balancing risk and return be deemed a myth?

To clarify this, we need to explore the physical and statistical idea of ergodicity. In simple terms, a system is considered ergodic if, over the long run, the time average of a single path equals the average across all possible paths. If this sounds confusing, you’re not alone.

Let’s use a more relatable example. Imagine your favourite motorcyclist, who is exceptionally talented and often finishes on the podium. However, he rides recklessly—he brakes at the last moment and performs wheelies in corners, which leads to frequent crashes and injuries. For simplicity, let’s say he has a 20% chance of winning each race but also faces a 20% chance of getting seriously injured and missing the rest of the championship. What are his chances of winning in a 10-race championship?

Intuition might suggest that with a 20% chance of winning each race, our hero could expect to win about 2 out of 10 races. This seems logical. However, the situation is more complicated than it appears. The high risk of injury is a significant factor to consider. Supposef our daring competitor suffers a serious injury—there’s a 20% chance of this in every race—his dreams of glory could come to a swift end. An injury would prevent him from participating in the rest of the championship, effectively eliminating his chances of overall victory. He could win two races and then spend the remainder of the season watching from the sidelines, perhaps with a leg in a cast.

Non-ergodicity is a crucial concept to understand in this context. It emphasises that a person’s skill is closely linked to their willingness to take risks, which can sometimes lead to “ruin”—especially in sports. Similarly, in investments, taking high risks, even with the potential for significant returns, can result in the investor’s downfall and render historical averages irrelevant. In non-ergodic situations, the focus shifts from maximising yields to ensuring survival. To reduce these serious risks, diversification is essential; it helps lower the chances of facing losses from which one might never recover.

To invest, one must be informed

It may surprise you, but sometimes an investor who is blissfully unaware of market happenings—meaning they choose to ignore the noise—can be more effective. Yes, you read that correctly. This is because those overwhelmed with information, charts, opinions, and alarmist tweets are more likely to make impulsive decisions.

Additionally, investors who see themselves as the next Warren Buffett—always well-informed and on top of everything—might be tempted to experiment. They may use complex financial instruments that seem straight out of a science fiction movie, buy ‘exotic’ assets, or develop strategies so intricate they would challenge a NASA engineer. The outcome? Often, they take on more risk and lose control. Sometimes, the overly informed investor ends up like a cook who ruins an otherwise good dish by adding too many ‘special’ spices.

Young people have a long-term horizon.

More than just a common misconception, we are facing a logical fallacy—a classic error in perspective. Many people believe that young individuals have decades ahead of them to invest: twenty years, twenty-five, thirty… it feels like an eternity! This mindset stems from thinking of ourselves as if we are playing a video game, to maximise our final score, which in this case means accumulating capital for retirement.

However, the reality is quite different. Suppose you are young and take a moment to reflect. In that case, you may realise that the money you plan to invest might be needed long before you reach your golden years—if those years even include a pension, given the uncertainties around social security. You may need that money for a down payment on a house, a wedding, an expensive master’s degree, or that dream trip you’ve always wanted. In short, sooner or later, you will enjoy—or need—to use that money.

Investing exclusively in equities simply because “there’s still time” is similar to preparing for a marathon by consuming only sweets. It’s essential to include a mix of assets with varying risk and return profiles in addition to stocks, as these may take time to generate positive results. For example, consider incorporating bonds or bond ETFs, as well as cryptocurrencies or commodities, to diversify your investment portfolio.

The global ETF is the holy grail that faithfully replicates the world economy

We arrive at a fundamental principle for forum investors known as ‘VWCE & Chill’ (or its global equivalent). This philosophy resembles a way of life, almost akin to a religion, complete with excommunications for those who dare to stray from the established path of the global index. Many investors adopt this nearly blind faith approach, overlooking the true nature of their investment choices.

It’s crucial to understand that the stock market does not comprehensively represent the entire world economy. Instead, it only reflects a large subset of companies that choose—and are able—to go public. In the United States, financial culture and demand for the stock market are so ingrained that a significant number of large companies are publicly listed. In contrast, many successful companies in Europe and other parts of the world opt to remain private, choosing alternative forms of financing. Consequently, a global equity ETF, no matter how diversified, may overlook essential segments of the real economy.

How can we exclude the crypto world from this discussion? Bitcoin, in particular, has become a focal point in recent years due to its relatively predictable growth, which results from the cyclical nature of its price movements. It has created fortunes for many investors and has become one of the most popular assets globally, thanks in part to exchange-traded funds (ETFs) issued by major American investment firms. Often referred to as “digital gold,” Bitcoin serves as a crucial haven asset in today’s financial landscape.

Bitcoin’s mathematically finite supply and decentralised nature position it as a safeguard against unregulated monetary policies and missteps by central banks. In the context of soaring U.S. government debt and ongoing turmoil that erodes confidence in traditional currencies, Bitcoin is not merely an alternative; it is a resilient solution and a strategic store of value. Thus, it becomes an essential component of conscious asset diversification, helping to protect against the evident and increasing vulnerabilities of the traditional financial system.Bitcoin’s volatility is undeniable, but it is also a hallmark of a revolutionary asset class that is still working towards global acceptance. Ignoring Bitcoin in today’s financial climate would be akin to repeating the mistake of those who underestimated the internet’s potential in its early days.

ESG and sustainability: ethical investment towards an uncertain future?

ESG and sustainability: ethical investment towards an uncertain future?

ESG and sustainability were once fashionable terms in traditional finance. Recently, however, the climate has shifted, leaving the future uncertain. What has happened?

Sustainable ESG (Environmental, Social, and Governance) investment has been a hot topic for several years. A Google search for ‘ESG’ in 2022 yielded over 200 million results. This aligns with a historical period marked by heightened awareness of climate change risks and the implementation of green policies by various institutions. However, recent data suggests that we may be experiencing a shift in this trend. In this article, we will explore what ESG investments are and examine why their popularity might be waning. Enjoy your reading!

ESG: meaning, criteria and ratings

ESG stands for Environmental, Social, and Governance, representing the key pillars used to evaluate a company’s or investment’s sustainability, Corporate Social Responsibility (CSR), and ethical impact. ESG is part of the broader concept of sustainable and responsible investing (SRI). The emergence of ESG can be traced back to a historical moment characterised by a heightened focus on environmental issues. In essence, ESG investing involves selecting and supporting companies that actively protect the environment and uphold human and workers’ rights. This selection is based on specific criteria.

ESG (Environmental, Social, and Governance) criteria are categorised into three main areas and are essential for assessing the sustainability and social responsibility of a company or investment. If you were the manager of a sustainable mega hedge fund tasked with evaluating a company for potential investment, you would begin by examining the environmental criteria. This involves assessing the impact of the company’s activities on the environment and its willingness to mitigate any harm. Key factors in the Environmental section include the use of natural resources, waste management, pollution, and overall environmental compliance.

Next, you would analyse the social criteria, part of the Social pillar, to evaluate the company’s relationships with its stakeholders, which include employees, suppliers, customers, and the local community. The goal of this assessment is to gauge the implications of the company’s operations and its demonstrated accountability toward the various stakeholders mentioned above.

Specifically, you should check employees’ working conditions, respect for human rights, product quality and commitment to local communities.

In conclusion, it’s essential to study the corporate governance model, specifically the governance criteria. This section examines the company’s corporate structure, decision-making processes, and policies to ensure they align with ethical principles and best practices. Key aspects to focus on include transparency, anti-corruption measures, the independence of board members, respect for minority interests, and gender diversity. You can conduct these assessments yourself or delegate the task to specialised agencies that provide ESG ratings.

ESG ratings are evaluations presented as numerical scores or alphabetical scales that aim to assess the overall sustainability of corporations. Their primary function is to provide investors with additional information to aid in their investment decisions. Globally, some of the most well-known ESG rating agencies include MSCI ESG Research, Sustainalytics, S&P Global ESG scores, and Moody’s ESG Solutions. Additionally, there are specialised providers like Standard Ethics, which focuses specifically on compliance with international standards.

However, there is often a significant gap between intentions and actions. Let’s examine some major defects associated with this financial trend, which contribute to the ongoing shift in its momentum.

ESG and contradictions: scandals and greenwashing

Sustainable ESG investing is a commendable effort that merges the pursuit of profit with an awareness of the real impact that economic and financial decisions have on our planet. However, some large companies and investment funds have taken advantage of the growing popularity of this ethical approach to enhance their image in front of investors and consumers, without genuinely fulfilling their promises. Their ultimate goal? To boost their revenues.

An example of corporate misconduct is the Dieselgate scandal of 2015 involving Volkswagen. Investigations revealed that the car manufacturer had been rigging emissions tests for its diesel vehicles to make them appear more environmentally friendly. This was part of an effort to position Volkswagen as a leader in green technology. Ultimately, the class action lawsuit was settled, with Volkswagen agreeing to pay $14.7 billion to affected owners.

Another case is that of Wirecard, a German digital payment services company. This scandal is particularly noteworthy because it also implicated ESG (Environmental, Social, and Governance) rating agencies. Despite receiving average ratings—considered neither outstanding nor poor compared to its competitors—Wirecard declared bankruptcy in June 2020 due to a $1.9 billion hole in its balance sheet. This situation recalls the 2008 financial crisis, when rating agencies incorrectly assigned triple-A ratings to subprime financial products.

On the investment fund side, a report by the European Securities and Markets Authority (ESMA) highlights that simply adopting ESG (Environmental, Social, and Governance) designations can lead to significant increases in investment. On average, there is an 8.9% increase in capital during the first year following the name change, with terms related to the environment—particularly those associated with the Environmental pillar—showing the most pronounced effects. However, the report also identifies a key risk: the potential for greenwashing, a marketing strategy that promotes an image of environmental sustainability while downplaying or concealing its negative impacts. To address this issue, the report provides guidelines for best practices.

One important factor that remains to be examined in understanding the decline in popularity of ESG sustainable investing is the election of Donald Trump.

ESG sustainability and Donald Trump don’t mix: ‘Drill, baby, drill!’

Last November, Donald J. Trump became the President of the United States of America thanks to an election campaign based on American isolationism and the desire to put an end to the ‘woke‘ ideology. This umbrella term also includes climate and environmental issues. At his inauguration speech on 20 January, The Donald immediately made things clear: ‘with my actions today, we will end the Green New Deal‘ – a plan of economic and social reforms focused on climate change and inequality. Suddenly, the scenario has changed, or, to stay on topic, the climate has undergone a change.

Global ESG sustainable funds, according to a Morningstar report, suffered record outflows of $8.6 billion in Q1 2025, compared to $18.1 billion in inflows in the previous quarter. The same report also tells us that investors in the US withdrew money from these funds for the tenth consecutive quarter. At the same time, Europe recorded its first net outflows since 2018, with $1.2 billion withdrawn, compared to $20.4 billion in inflows in Q4 2024. It is also worth noting that, despite this, ESG funds globally manage more than $3 trillion in assets. 

Another interesting statistic, again from Morningstar, concerns the closing and rebranding activity of ESG funds: as of 2024, 94 sustainable funds were closed in Q4, for a total of 351 in the year, while 213 European funds changed their names, according to the guidelines of the ESMA report we saw earlier. Of these, 50 introduced ESG references, 115 removed them, and 48 changed them

Finally, we get a survey from Stanford University that could provide helpful information for understanding the direction of the ESG trend. In 2022, 44% of young investors thought it was essential for investment funds to use their influence on the companies they invest in to prioritise environmental issues. In 2023, 27% thought so, while the latest survey, covering 2024, reveals that only 11% of the sample surveyed held the same opinion. When asked the same question about improving social and governance practices, the drop was even more pronounced: for social practices, from 47% to 10%, and for governance practices, from 46% to 7%

Sustainability and Bitcoin: an open challenge

When it comes to sustainability and Bitcoin, the primary challenge is the energy consumption required for mining, which we covered in depth in this article on Proof-of-Work from 2021. Considerable progress has been made since then, so much so that the CCAF (Cambridge Center for Alternative Finance) of the University of Cambridge, in a report published in April 2025, estimated that to date 52.4% of the energy used for mining comes from sustainable sources – of which 23.4% from hydroelectricity, 15.4% from wind power and 9.8% from nuclear power. 

There are also other innovative ideas, such as in the case of El Salvador, which is implementing a mining system based on the integration of geothermal energy from the volcanic region and solar and wind energy. In addition to production, there is also talk of energy recovery. MARA, one of the world’s largest mining companies, is mining Bitcoin by converting Associated Petroleum Gas (APG) into electricity. APG, put simply, is a gas that is discarded during the extraction of oil and then burned or dispersed into the atmosphere. Here, instead, it is recovered and converted into electricity through combustion to power mining centres, saving costs.

ESG in the future: What’s the point?

And so, as is often said, nobody has the glass ball. The dilemma is always the same: is this the end of ESG funds, or is it just a time of readjustment? What idea did you get from reading the article? If in doubt, subscribe to Young Platform and stay up-to-date on what’s important!

Long-term Investing ETF on S&P 500 or Bitcoin?

S&P 500 ETF or Bitcoin: Which Is Better for Long-Term Investing?

Is it still wise to invest solely in S&P 500 ETFs? We compare this traditional strategy with Bitcoin.

The long term is generally considered safe, but as Keynes noted, “In the long run, we are all dead.” The idea of the long run is often associated with investing in assets that have a medium to high risk and volatility profile, as time is the key factor that increases the likelihood of a positive return.

But is the best investment strategy really to simply buy an ETF that tracks the S&P 500 and wait 30 years?

The time horizon in which one invests is a personal factor

The statement that concludes this introduction is likely something you’ve heard before, and it holds a kernel of truth. Since the 1980s, the main index of the US stock market has increased by over 6000%. However, the investment horizon varies for each individual, primarily depending on the investor’s goals.

While a longer investment horizon—especially for equity investments—can increase the likelihood of achieving a positive return, it’s essential to recognise that this probability will never reach 100%. In other words, a risky investment can never guarantee a predictable return.

Time is our greatest ally as investors. Unless we want to bet against the market, it’s best to let it work in our favour. Time also enables us to maximise the benefits of compound interest, which is essential for achieving outstanding results over the long term.

While compound interest drives returns on established indices like the S&P 500, the modern market also offers instruments that promise exponential growth in potentially shorter timeframes, albeit with varying degrees of risk. This perspective aligns perfectly with the ongoing debate surrounding Bitcoin.

The alternative: Bitcoin

The approval of spot Bitcoin ETFs in January 2024 made an investment that was previously confined to complex procedures accessible to a wider audience. This raises a question: Can Bitcoin, or its ETFs, serve as an alternative or complement to the S&P 500 in a long-term portfolio?

The most obvious argument in favour is related to the potential asymmetric return: against a risk of total loss, there is a growth potential of several orders of magnitude, much higher than that of a mature index. Theoretically, then, Bitcoin could also act as a diversifier, given its historically low correlation with equities, although this tends to increase during periods of high financial stress.

However, the critical points are equally important. The first is extreme volatility. While the S&P 500 has suffered 30-50% crashes in conjunction with epochal crises, Bitcoin has regularly experienced 7 drawdowns of 0-80%. A very long time horizon may not be enough to recover if you enter a market peak.

Second, unlike the S&P 500, which represents the ownership of real companies that generate profits, Bitcoin does not produce cash flows. Its value is driven solely by the law of supply and demand, relying on trust and its planned scarcity. This makes it more like a digital commodity than a productive investment. Finally, regulatory uncertainty should not be overlooked: as a young asset, it is exposed to future regulatory changes that could drastically impact its value.

Conclusion: What is the best strategy?

So, can the Bitcoin ETF stand alongside or even replace the S&P 500 in a long-term perspective? The answer, again, is not unambiguous and goes back to the heart of our discussion: it depends entirely on the risk profile, objectives and awareness of the individual investor.

For those seeking stable, relatively predictable growth based on economic fundamentals, passive investing in the S&P 500 remains the most logical and proven choice.

For those with a very high risk tolerance, who understand the speculative nature of the asset and want to allocate a small portion of their capital to a potentially disruptive technology, an ETF on Bitcoin may be an interesting addition.Ultimately, the question is not which of the two is ‘better’ in absolute terms, but which is the most suitable instrument to help us achieve our personal goals, accepting a level of risk that we can live with peacefully over the long, and sometimes turbulent, period.

How to make money: beyond the promises of the gurus

How to make money: beyond the promises of the gurus

How can one make money? This question has been asked throughout history, and while many TikTok gurus offer dubious advice, this guide provides solid arguments. Let’s get started!

Sellers of miraculous amulets and infallible methods to become highly wealthy have always existed. Humans inherently desire to believe there are ways to achieve maximum results with minimal effort. With the rise of the internet, these merchants of false promises have multiplied, crafting increasingly absurd strategies. Today’s goal is to dismantle these ridiculous illusions and, more importantly, to provide you with serious (though more labour-intensive) alternatives for increasing your wealth. Enjoy the journey!

The Fuffa Guru, who tells you how to make money 

In 2024, the authoritative Treccani encyclopedia included the neologism “fuffa guru” in its vocabulary, defining it as “one who, exploiting marketing techniques, organises and manages courses, videos, and seminars on the internet for profit, while fraudulently promoting easy ways to make money.” This definition is perfect, elegant, and highly realistic. The fuffa guru is a merchant of illusions, presenting himself as a modern hero. 

Often emerging from the poorer segments of society, he may have experienced a childhood steeped in abject poverty, initially despised by those around him and later burdened with debt. He is an outcast who feels destined to remain among the marginalised. However, the fuffa guru refuses to accept this fate. Driven by an insatiable desire for wealth and an even stronger thirst for revenge, he ultimately realises,This is not my destiny.” He believes that “a change of mindset is necessary because poverty is a state of mind, not merely a lack of money.”

The fuffa guru shares his story of sleepless nights devouring books and completely renouncing parties, birthdays, and weddings, stating, “While others were busy collecting gigs, I was busy collecting skills.” He uncovers secrets that the masses- the 99%—%-overlook, takes the red pill, and exits the Matrix. The fuffa guru is now prepared for the climb to success. Armed with a new mindset and the knowledge he has gained, which will form his ‘method’, he proudly claims to have achieved wealth rapidly and exponentially. Reflecting on his journey, he expresses gratitude to himself “for not being weak and for not giving up.”

In the final phase of his story, he enjoys a life of unrestrained luxury between Dubai and Manhattan, travels on private jets, and drives Lamborghinis. This lavish lifestyle serves as concrete proof that his method is effective and that anyone, by adopting the right mindset and following his advice, can attain similar success, though it comes at a cost. But what does this infallible method entail?

Making easy money, fast and effortlessly: the fuffa guru’s formula

Despite the absence of evidence of his work experience or how he amassed his supposed fortune, this self-proclaimed guru insists on teaching you how to make money quickly and effortlessly. His motive, he claims, is to share knowledge and help you achieve financial freedom. How does he propose to do this? He charges hundreds, if not thousands, of euros for access to his seminars and webinars, where you can listen to him speak.

The formula for wealth he promotes inevitably revolves around the same side hustles. He talks about dropshipping, explaining how to create a successful online store without the need to hold inventory, all while promising high profits with minimal effort. Alternatively, he may introduce you to “passive” affiliate marketing basics. This method automatically generates enormous passive income through affiliate links, allowing you to earn commissions on promoted products.

Another recurring theme is network marketing, often accompanied by the enticing phrase “become your entrepreneur!” In this model, making money hinges on selling products (such as cosmetics, supplements, or services) while primarily focusing on recruiting others to join your network. These recruits, in turn, would earn money by bringing in even more recruits. Does that sound familiar?

It’s important to highlight the concept of real estate flipping, which involves purchasing, renovating, and selling a property for a higher price. This method is often combined with real estate arbitrage, where an individual rents a property long-term and then sublets it to generate a return on their investment. 

Additionally, we can’t forget about online trading, which is often seen as the ultimate opportunity by those participating. Many enthusiasts claim that ​​dedicating just a few minutes a day, it’s possible to earn substantial amounts of money through supposedly foolproof signals and highly confidential techniques taught in expensive, exclusive courses. But are these methods as effective as they claim to be?

What the fuffa gurus don’t tell you 

When they ‘explain’ how to make a lot of money quickly and effortlessly, the so-called gurus conveniently forget to mention the downsides of these activities, which, let’s remember, are legal and legitimate. 

For example, dropshipping comes with various expenses related to advertising, shipping, and supplier management, along with the need for customer service. Additionally, the market is highly competitive, and the risk of losing large quantities of unsold inventory is significant.

Switching to affiliate marketing, it’s essential to understand that generating passive income requires high traffic. This means that many users must purchase a product through your specific link. You might achieve this if you are an influencer with tens of thousands of followers. Otherwise, you must build a large audience, create valuable content, and invest in SEO and advertising—hardly a passive endeavour.

Multi-level marketing is essentially a refined and professional term for a pyramid scheme or Ponzi scheme. The profits predominantly come from new participants recruiting additional newcomers, and like any Ponzi scheme, it is, by nature, doomed to collapse.

When it comes to side hustles in real estate, many successful figures fail to mention that you need collateral and substantial initial financial resources to start a business in this field. Additionally, online trading— especially intraday trading that involves significant (and often unintentional) leverage — can be hazardous. It’s no secret that most retail traders (over 90%) who engage in these trades lose money. While it is possible to make money trading, it requires thorough research, strong skills, and capital to invest. Often, claims of infallible signals and secret techniques are ineffective or even scams.

Now that we’ve addressed the illusions of success, let’s move on to more serious matters.

How to make serious money: Patience is the virtue of the strong

Generating passive income is possible but requires time, patience, and financial investment. One popular method is affiliate marketing, which can be effective but often stems from prior work. To earn significant commissions, you need traffic, which can only be achieved after creating a quality product.

Being a content creator is a legitimate career today, but demands dedication, effort, passion, and specific skills. Investing in real estate is also a time-honoured activity that many Italians are enthusiastic about; we are fond of bricks and mortar! However, initial financial capacity and support from specialists for market analysis and legal and commercial advice are required.

A more accessible option could be real estate crowdfunding, a collective financing method where multiple individuals invest together in real estate projects to share profits. This type of crowdfunding is divided into two categories: lending crowdfunding, which allows lenders to provide funds for real estate transactions in exchange for interest; and equity crowdfunding, in which investors purchase shares in a company, becoming partners who share in both profits and losses.

In conclusion, we cannot overlook stock market investments if asked how to make money and grow our capital. However, it’s important to clarify that we are not referring to speculative trading, but rather to the art of long-term investing. John Bogle, the founder of Vanguard, strongly advocated passive investing through low-cost index funds. His philosophy was built upon several key principles, including broad diversification, minimal costs, a long-term perspective, and a risk-adjusted asset allocation. This approach involves holding funds that reflect market trends, such as the Total Stock Market or Total Bond Market, over many years, typically in the form of Exchange-Traded Funds (ETFs).

Long-term investing pays off, the data says so

Many gurus promoting easy money strategies overlook the importance of investments when discussing ways to make money. They typically start with the obligatory disclaimer:past returns are not indicative of future returns” because predicting the future is impossible. However, historically, long-term investing in the stock market has proven to be profitable. 

For instance, the S&P 500, one of the most well-known indices representing the 500 largest publicly traded companies in the U.S., has achieved an average annual real return of 6.5%, adjusted for inflation. Similarly, the MSCI World index, which includes the largest publicly listed companies worldwide, has reported average annual real returns of 5.6%

It’s important to factor in the power of compound interest, which Albert Einstein called “the eighth wonder of the world.” Practically, leveraging compound interest means reinvesting the returns earned to generate additional returns. This creates a “snowball” effect: as the snowball rolls down a slope, it accumulates more snow, increasing its size and accelerating its speed.

Let’s consider an example involving a TikTok guru who offers lessons on making money through dropshipping. They charge €50 for an introductory lesson, €500 for a comprehensive basic course, and €2,500 for an advanced course, totalling €3,050. The question is: Will this investment be successful? It’s impossible to know for sure.

Let’s compare that investment with putting the same amount into the S&P 500 for 20 years. Based on historical data and reinvesting profits, you could potentially end up with around €10,500 at the end of this period. 

While neither scenario can guarantee a specific outcome, nearly 70 years of historical data and academic research inform our decisions regarding the S&P 500. In contrast, when it comes to the TikTok guru, we can often only rely on an inflated online persona supported by fake followers and rented cars for show.

 An inflated online persona supported by fake followers and rented cars for show.

The road to making money is long and winding, and the gurus know it.

Understanding how to earn a substantial amount of money without enduring long waits or struggles is a human desire. Even those who sell false promises of happiness are often just looking for creative—and sometimes deceptive—ways to achieve this. Consider this: why would someone who travels in private jets, drives only Lamborghinis, and dines exclusively on Kobe beef tartare waste time attending lengthy seminars and engaging in one-on-one calls? Is it to “diversify”? Or to “help humanity”? Or perhaps because the real way to get rich effortlessly is for you to purchase their course? The answers are clear.

Instead of relying on dubious figures found online, it is wiser to roll up your sleeves, study, and explore more realistic and legitimate alternatives, such as long-term investments in the stock market. If you’re interested in this topic, we at Young Platform regularly publish content on subjects like why you should invest in Bitcoin for the long term. Subscribe below to stay updated!

Emergency fund: what it is and why it is essential

Emergency Fund: what it is and why it is essential

The emergency fund serves as a personal treasury for unexpected events, and it can be a lifesaver. How is it created, and what is its significance?

Many people recognise the emergency fund as a well-known concept, but often postpone creating it. The reason for this is straightforward: an emergency is an unpredictable and distant event that tends to seem less urgent than immediate issues with tight deadlines. However, when an emergency does occur, it can lead to significant stress and anxiety. In this article, we will explore why building an emergency fund is essential and provide a step-by-step guide on how to do it.  

Have an emergency fund: Be the ant in a world of cicadas.

The importance of the emergency fund has been part of human culture since time immemorial, if we think that Aesop wrote the fable of ‘The Ant and the Cicada‘ more than two thousand years ago. Admittedly, the Greek author does not tell us about the emergency fund, but he makes us realise how important it is to arrive prepared for the challenges that life, sooner or later, presents us with. The cicada sings all summer and does not worry about winter. At the same time, the ant slowly accumulates the necessary supplies: the cold arrives, the cicada goes hungry, and the ant serenely enjoys the fruits of its labour

This moral, although simple and obvious at first glance, shoves reality in our faces. We know perfectly well that the future will come knocking sooner or later, but despite this, we are only willing to take the initiative when we feel the breath on our necks. The result? Total unpreparedness mixed with panic and stress. 

The emergency fund serves precisely to avoid these unpleasant situations and to continue living our lives in peace, regardless of accidents, surprises or sudden desires. It allows you to buy a new phone, repair your car, or even go see Green Day in Florence without having to – a random example – sell the Ethereum you staked on Young Platform. Now that its usefulness is obvious, let’s see how to build an emergency fund, step by step. 

Creating an emergency fund is challenging, but it can be done.

Before proceeding to set aside finances, one must understand one’s savings goal because it is uninspiring and unwise to hoard money to the bitter end. To do this, you need to track and analyse your monthly expenses, fixed and extra, such as rent, petrol, food, subscriptions and so on. You can write them down in pen, use Excel or make your life easier with a budget management app. Now, multiply the figure by three or six, depending on your needs: the result of this complex mathematical operation equals your savings target, because the primary purpose of the emergency fund is to allow you to live without a fixed income. Once you have worked out how much you need to save, creating a strategy to make it a reality is time.

Putting money aside is a test of great discipline: the art of saving has to come to terms with the human soul and its irrepressible and impulsive desire for gratification. Moreover, it is exhausting when the goal is a large sum of money because it seems so far away. To reduce this cognitive load, specific strategies allow you to reach your goal by taking advantage of time, i.e., by installing the set amount in periodic instalments. Of these, the famous 52-week challenge would take you a year to build up your emergency fund. If, on the other hand, you want to speed things up, the advice is to make a kind of accumulation plan and withdraw a fixed amount of money. In this case, remember the teaching of the well-known book ‘The Richest Man in Babylon‘: if you receive a fixed monthly income, take it out and then live on the rest, never the other way around. This means that if you earn €1,300 a month, you first take out €100 and then recalibrate your life based on the €1,200 that remains, as if the €100 had never existed. 

Let us give a practical example to avoid any doubt. Our example is Mario, a 28-year-old boy living in Milan who works as an office clerk. Mario writes down everything for a month and discovers that his essential expenses amount to about €1,185, divided as follows: 

  • 750€ rent per month for a two-room apartment (he was fortunate)
  • 100€ bills
  • 45€ internet (Wi-Fi and mobile)
  • 40€ vehicle subscription 
  • 250€ supermarket shopping 

Mario decides it is time to start thinking about an emergency fund. He is 28 years old, young and knows that if he loses his job, he will be able to find another one in a relatively short time. His fund, therefore, should correspond to four months’ expenses: 1185 x 4 = 4740€. He rounds up and opts for the 5,000€. At this point, he will just have to figure out how to accumulate it. 

Perfect. You know how much you have to save, and you also know how to do it. The time has come to work on self-control. Of course, being rigorous and consistent in saving does not imply embracing asceticism: nobody is asking you to be the new Mahatma Gandhi. It just means concentrating and understanding what you really need. An interesting technique is to wait until the next day and ask yourself, “Do I still need that limited edition poster with Walter White and Gus Fring having lunch in Los Pollos Hermanos?” Yes, you will still need it. But you have been practising, and this exercise might save you a little extra next time. 

Nice but… the emergency fund has a big problem.

Your emergency fund now exists and is no longer just a good New Year’s resolution. However, it doesn’t end there, there is still one hurdle to overcome, the number one enemy of savings, the final boss: inflation. Indeed, in theory, this liquid treasure you have built up with so much effort, like a bit of ant, is destined to stay put for quite a while – knock on wood – because it is meant for emergencies. The problem is that time passes, inflation rises, and your emergency fund loses value.

You thought you had the solution ready to face the final boss, huh? Super Mario had to cross eight worlds to defeat Bowser and retrieve Peach. All you have to do is sign up below and read the articles we post about it, like this one. Until next time!

How to save money: the 52-week challenge

how to save money

How can I save money on a new phone or a trip to Spain? Here is a super method to make your wishes come true

If you’re struggling to save money and create an extra budget for yourself, you’re not alone, and we completely understand. Saving money can be exhausting, requires discipline, and often involves making sacrifices. However, there are strategies that can make this process easier. One effective method is the 52-week challenge, which enables you to save a significant amount of money without even realising it. Here, we explain how it works.

How to save money in 52 weeks: why get involved  

Saving money is essential and should be prioritised regardless of circumstances. Starting a savings challenge, like the 52-week money challenge, is beneficial because the perceived effort is minimal compared to the rewards. This challenge’s strength lies in its long-term goal of saving over a year, allowing you to build your savings without significantly disrupting your lifestyle.

Imagine walking past a music shop and seeing a beautiful Fender Stratocaster guitar that you fall in love with. You want it badly, so you go in to ask for the price: €1,149. While this is a substantial amount of money, you set your goal to have the guitar in three months. This means you would need to cut about €400 from your monthly miscellaneous expenses, leading to three months without dining out and strict spending on Friday and Saturday nights.

However, if you extended your savings plan to twelve months, you would only need to save €100 each month, a much smaller figure that has a less significant impact on your lifestyle and, as a result, lowers your perceived effort.

The 52-week challenge outlines a method for saving money without even noticing it.

Saving €1,149 over twelve months is undoubtedly easier than doing so in just three months. The 52-week method is specifically designed to prevent impulse purchases, as it allows for a longer time frame. This is crucial because, as we have discussed in this article, impulse purchases can hinder effective saving strategies. The 52-week challenge divides the savings goal into manageable portions, allowing you to think of it as a prepayment spread out over 52 convenient instalments.

The principle behind this savings method is straightforward yet effective: it involves setting aside an amount of money that corresponds to the week number you’re in. For example, during the first week (week one), you will save €1; in the second week (week two), you’ll save €2; in the third week (week three), €3; and so on, until the last week (week 52), where you will save €52. By the end of the year, you will have accumulated a total of €1,378. 

The last month can be particularly challenging, as you’ll need to save around €200. However, you can easily adapt the challenge to fit your needs. For example, you might choose to start from week 52 to tackle the most difficult savings first, double the weekly amounts to reach a total of €2,756, or even shorten the duration based on your specific savings goals. In summary, this system allows for flexibility and creativity, providing a gentle, low-impact way to develop your saving habits.

After learning to save money, make it work for you.

Congratulations! After 52 weeks, you now own a brand new Fender Stratocaster. Unbeknownst to you, this challenge has also helped you develop a valuable skill: the art of saving. Since you’ve gotten into the habit of setting aside money, consider purchasing a larger piggy bank. You can save a portion of your salary each month, not for a specific goal, but simply to build an emergency fund for any unexpected expenses.

However, it’s important to remember that saving faces a hidden threat: inflation, which gradually erodes the purchasing power of your money over time.

To protect yourself against inflation, it’s important to ensure that your money works for you, maintaining your purchasing power over time. For example, if a cup of coffee at a café cost €1 ten years ago, it now averages around €1.20. This means that purchasing power has decreased, as coffee prices have risen by 20%. In other words, inflation has reduced the value of that €1 coin by 20%. How can you beat this challenge? If you’re interested in learning more about it, Young Platform offers a wealth of content on the topic, including an article explaining how to shield yourself from inflation using Bitcoin. Remember, “If you don’t take care of the economy, the economy will take care of you.” So, don’t hesitate—subscribe below to stay informed!

Casino: The house always wins; investing your money instead of gambling is better.

casino

It is often said that “the house always wins.” The house does not always win but it wins more often than the players. What are the odds of winning at the casino, and why is it better to invest?

What is the expected value of playing casino games, and how is this concept measured in investments? Besides the inherent probabilistic laws that govern them, what commonalities exist between these two activities?

The house always often wins.

Interestingly, both casino games—colorful and vibrant—and what some might consider the duller financial assets can be statistically analysed and compared. Each has an expected value, but how is this calculated, and for which asset is it higher?

It’s often said that “the house always wins.” This popular saying underscores the undeniable advantage of gambling establishments (or the state) and effectively illustrates the underlying reality.

The fundamental statistical concept related to this is expected value. This concept is also prevalent in the investment world, where it is referred to as expected return. It is an essential tool for investors seeking to evaluate the potential outcomes of their decisions.

What is the expected value?

Before we delve into the formal definition, let’s consider a practical example to understand the concept better. Imagine we’re in a casino playing Craps, a game in which players bet on the outcome of a roll of six-sided dice. What is the probability of rolling a two?

The answer to this question is ⅙, as there are six faces on a die, and the probability of rolling each number is the same. To find the expected value, we sum the possible outcomes (the numbers on the die) and multiply each by the probability of that outcome occurring, which, as we mentioned, is ⅙.

Here is the calculation to be performed: 

(1*⅙) + (2*⅙) + (3*⅙) + (4*⅙) + (5*⅙) + (6*⅙) = 3.5

The next time you see a die rolled in a casino, you’ll understand that the expected value is 3.5. This means that if you roll a six-sided die many times, the average result will be 3.5. Now, let’s focus on a more formal definition.

“In probability theory, the expected value (also called mean or mathematical expectation) of a random variableX is a number denoted byE(X) formalises the heuristic idea of mean value of a random phenomenon.”

In summary, the expected value of an event is calculated by multiplying each possible outcome by the probability of its occurrence and then adding those products. In simpler terms, it can be understood as the weighted average of all possible outcomes. This definition will be helpful when discussing investments.

The house always wins: why it is not worth playing at the casino

Let’s teleport to a casino. Now that we understand expected value, everything shines a new light on the situation: this value is always negative for players but always positive for the house.

If this point went unnoticed, you may have missed an important detail: We have just scrutinised an industry that generated EUR 131 billion in revenue in Europe alone in 2023.

The explanation is straightforward. Gambling games are structured to give the casino an advantage, known as the house edge. This house edge ensures the casino’s business model remains viable; if the expected value were positive for players, running a casino would mean giving money away to customers over time.

However, not all games are the same. Some, like roulette, have only a slightly negative expected value, while others, such as SuperEnalotto, have such unfavorable odds that winning big is virtually impossible. Let’s look at the expected value of the most popular casino games.

A practical example: the expected value of Roulette

One of the most generous casino games for players is European roulette, which features a single zero. To illustrate this, let’s calculate the odds of a simple bet, such as on red or black, even or odd, or the ranges 1-18 or 19-36. In European roulette, there are 37 possible numbers: 18 red, 18 black, and 1 green zero.

For example, when betting on red:

  • Since there are 18 red numbers, the probability of winning is 18 out of 37 (approximately 48.65%).
  • The probability of losing is 19 out of 37 (approximately 51.35%) because, in addition to the 18 black numbers, there is also the zero, which causes red bets to lose.

The payout for a winning bet on red is 1:1. If you place a bet of 1€, you will receive a total of 2€ if you win, which includes a net profit of 1€. Conversely, if you lose, you forfeit the entire amount wagered.

Therefore, the total expected value will result from the difference between the expected value of the probability of victory (18/37) and defeat (19/37), resulting in a loss of 0.027€ per euro wagered. To simplify matters, we have not given the formula, but you can check it by calculating this difference after applying the same procedure as we did for the dice.

The Expected Value in Financial Investments

Now that you’re familiar with the concept of expected value in casino games, it’s time to discuss investments. Similar probabilistic principles estimate the future performance of financial instruments such as stocks, bonds, indices, and even cryptocurrencies.

First, it’s important to note that changing the reference system alters the approach to probability. We cannot analyse the financial world in a purely objective probabilistic manner, as it does not consist of perfectly symmetrical and well-constructed events (like a coin toss). In this context, probabilities are modeled based on historical data.

The expected value of investments, also known as the expected return, is the weighted average of the possible returns on an investment, factoring in the probability of each potential outcome. This definition closely resembles the one used in the context of casino games.

This article will explore the concept of expected value in finance using one of the longest-running stock indices: the S&P 500. The S&P 500 is one of the most significant stock indices globally, tracking the performance of the 500 most prominent and capitalised companies in the United States. With a historical data record spanning nearly a century, it is a reliable tool for estimating long-term stock returns. Historically, the S&P 500 has provided a positive average annual return.

The expected one is currently about +10%, considering historical data from 1928 to today, including reinvested dividends, over long periods. It would be interesting to do the same with Bitcoin, but unfortunately, fifteen years of history is minimal to evaluate a financial phenomenon from a statistical point of view. To date, the expected return would be 85%, analysing its performance from 2011 to the present.

Buy Bitcoin!

Why investing is not like gambling: conclusions

While both investing and gambling involve risking capital to make a profit, the key difference lies in the nature and sign of the expected value.

In gambling, the expected value is negative for the player. The system is effectively closed and operates as a negative-sum game: the house always keeps a portion of the bets as its margin. No matter how long a person plays or their betting strategies, the expected value remains unchanged. Systems like the Martingale can alter the short-term distribution of winnings but do not affect the predicted value in the long run.

In the long run, players tend to lose, on average, a percentage that reflects the house’s advantage. The saying “the house always wins” is not just a cliché; it is a mathematically proven reality due to the structure of casino games.

In contrast, financial investments, particularly in the stock market, typically offer investors a positive expected value. This is because the economy continuously generates new wealth: Companies grow, produce profits, and innovate, contributing to a long-term increase in value. Investors can participate in overall economic growth by investing in a diversified market index.

While there is always the risk of choosing the wrong investment or facing short-term downturns, these risks can be managed through diversification, setting long-term goals, and maintaining discipline. This level of strategic planning is impossible in gambling, where each bet is independent and inherently disadvantageous.

Volatility and expected value: the relationship

The final point to consider when comparing casino games with the world of investments is volatility, particularly in contrast to the certainty of incurring losses. In casino games, including scratch cards and Superenalotto, the long-term outcome is predictable—players can expect to lose a fixed percentage of their total wagers. As wagering increases, the volatility typically decreases relative to the volume played.

In investments, however, volatility does not diminish over more extended periods. It can lead to more significant uncertainty regarding outcomes in the medium term. Nevertheless, the likelihood of achieving a positive return increases over time because the expected value of investments is positive.

Holding a stock for just one day is akin to flipping a coin—it usually results in a 50% chance of a positive day and a 50% chance of a negative one. However, if you hold a stock for a year, there’s a good chance of achieving a positive return, although it’s not guaranteed. On the other hand, holding stocks for 10 or 20 years has historically always ensured a significant return.

In contrast, if you play roulette repeatedly for 10 or 20 years, you will likely have a negative net result that approaches the theoretical expected value unless you experience extraordinary and unrepeatable events.

In conclusion, wise investing is statistically successful over the long term, while gambling is guaranteed to lead to losses. Investment creates wealth within the economic system, whereas gambling merely redistributes value and often diminishes it, with a portion of the losses going to the banks. It’s important to note that investing involves risks; however, investors are rewarded with a premium for the risks they take. In contrast, gambling typically results in further disadvantages without any expected rewards.

Investing is simple but not easy: 5 paradoxes of personal finance and the crypto world

5 paradoxes of personal finance

Laziness is a virtue in the investment world! Discover five other paradoxical and counterintuitive (but true) assumptions from the world of personal finance.

What are the central paradoxes of personal finance? Our blog primarily focuses on cryptocurrencies but occasionally explores other areas of the vast investment landscape.

Recently, we came across an intriguing article by Dedalo Invest. The author, Andrea Gonzali, outlines personal finance’s 10 contradictions (or paradoxes). We decided to revisit this article because many of its points resonate strongly with the crypto world.

The investment world can often be counterintuitive. 

While the primary goal of those exploring the markets is logical—maximising returns and minimising losses—many investor actions can seem irrational, especially without the benefit of hindsight. In summary, the objective is clear, intuitive, and rational, but its methods can be complex.

There isn’t a single reason for this complexity. Historically, humans have developed intuition for two key purposes: to ensure the survival of our species and to perpetuate it through procreation. This focus does not include increasing financial capital. To quote the original article’s author, “The fundamentals are intuitive: save regularly, invest wisely, diversify your portfolio, and maintain it over the long term. It is the management of money that is complex.

Laziness is a virtue.

Let us start with perhaps the most paradoxical statement: laziness often maximises performance, while hyperactivity tends to hinder it. Of course, this observation is not meant to generalise; exceptions certainly exist, such as the highly active meme coin trader who is our friend’s cousin. However, when analysing broader investment and personal finance trends, many of society’s beliefs about the value of hard work and commitment are challenged.

It is essential to clarify that in this context, laziness refers specifically to the operational side of investing, such as the frequency of buying and selling or rebalancing, rather than the time spent studying concepts or theories. This idea also applies to the world of cryptocurrency. The more trades one makes in a particular timeframe, the greater the risk of making mistakes that can lead to significant losses, especially when dealing with certain types of cryptocurrencies.

In traditional finance, so-called “lazy portfolios”—portfolios that simply diversify among a few asset classes using financial instruments that require minimal intervention—have historically outperformed many more complex, actively managed strategies. The same can be said for portfolios predominantly composed of Bitcoin and a few altcoins, even over shorter investment horizons.

Several reasons account for this phenomenon. First and foremost, every trade made on a brokerage platform or a crypto exchange incurs costs and increases the likelihood of making errors. Due to the unpredictable nature of the markets, even professional investors do not try to time the market effectively—that is, they do not attempt to sell assets at their peak value or buy them at their lowest point. Finally, it’s important to note that any capital gains realised from trading are subject to taxation.

You have to follow your intuition

Intuition is crucial for our safety, alerting us to danger before it becomes apparent. However, relying on intuition can be risky when it comes to investments. While humans have only recently begun investing their money, our intuition and the cognitive biases linked to it have developed over hundreds of thousands of years. In simpler terms, our intuition evolved to protect us from threats like wild animals or poisonous plants, not to navigate the complexities of the post-Trump trade market crash.

These cognitive biases are mental shortcuts that shape our beliefs and influence quick decision-making, significantly affecting our investment choices:

1. Anchoring: We assign excessive and irrational value to specific price points. A notable example is the $100,000 threshold for Bitcoin, where many investors made mistakes during the 2021 bull market because they believed BTC would reach this level.

2. Overconfidence Bias occurs when we overestimate our knowledge, decision-making abilities, or predictions’ accuracy.

3. Confirmation Bias: This bias leads us to selectively seek information supporting our existing opinions while ignoring data that contradicts them.

For this reason, rigid investment approaches characterised by clear, unbreakable rules—such as a recurring and buy-and-hold strategy—tend to yield better results than those based on an investor’s instincts or subjective perceptions.

Sales do not attract buyers.

In finance, especially in cryptocurrency, a price decline often drives buyers away, contrary to what typically occurs in other markets. For instance, if we are interested in a pair of shoes and their price drops by 50%, we will likely welcome this reduction and make a purchase. This creates a paradox where, in the markets, the opposite behavior is observed. The well-known meme illustrating a long line of buyers when Bitcoin’s price is $100,000 and an empty line when it falls to $6,000 effectively captures this reality.

The herd effect can explain the concept: when everyone is selling, our instinct prompts us to follow suit, even though we know rationally that it might be the best time to buy. Discounts can be intimidating in the markets because falling prices are typically linked to negative news or behaviors, altering the perception of investors anticipating further declines.

Investing near the highs is the norm, not the exception.

Let’s shift our focus from the crypto sector to traditional financial markets, particularly the stock market. This shift isn’t because the concepts we’re discussing are exclusive to traditional markets but because crypto assets are relatively young compared to stock indices. As a result, we have insufficient historical data to support our thesis fully.

Those entering the investment world for the first time often fear buying at market peaks or feel they are entering too late. However, this concern is unfounded mainly when we examine the history of the S&P 500, the leading stock index that tracks the performance of the 500 largest companies in the United States and, in many ways, reflects general market trends. 

The S&P 500’s chart, which begins in 1957, shows that it spends a significant amount of time near its all-time highs. Between 1957 and March 2025, the index recorded 1,242 new highs. Typically, these all-time highs are separated by very short periods, although there have been a few notable exceptions, such as the seven-year gaps between 2000 and 2007 and between 1973 and 1980. 

In summary, reaching new all-time highs in traditional finance is not an extraordinary event but the norm.

The notion that investing during a bearish market is easier is often misleading. When markets collapse, fear and uncertainty prevail, making investing paradoxically more challenging, even when prices are significantly lower.

What about the world of cryptocurrency? Currently, Bitcoin cannot be compared to the S&P 500 due to the 50-year history that separates them. This difference contributes to Bitcoin’s value being more cyclical and subject to volatility. However, Bitcoin has recently reduced the time between reaching all-time highs, likely due to increased interest from institutional investors. Over time, although we cannot be sure, Bitcoin’s price movements will probably start to resemble those of traditional assets, with gold being a prime example, as both share the characteristic of scarcity.

Investing near the highs is the norm, not the exception

We arrive at the fifth and final point, aptly summarised by Daedalus Invest, in the following paradox:

  • It is essential to start investing as early as possible to benefit from compound interest
  • However, you cannot act blindly; you must fully understand what you are doing and educate yourself before you begin investing.

The first statement is straightforward if you know how compound interest works. It refers to the percentage return you earn on an amount that includes previously accumulated interest—essentially, it’s interest on interest. Nevertheless, jumping in without a solid foundation of knowledge can lead to mistakes that may be costly and disheartening, prompting individuals to step away from investing altogether.

So, how can you overcome this challenge? Start by exploring the wealth of resources available on our Academy and Blog!

How to stake. All the ways to get rewards from your crypto

Learn how to stake cryptocurrencies, what staking is for, which service to use and which tokens can be locked up in staking.

Staking is a common crypto mechanism that permits the functioning of Proof-of-Stake blockchains. In fact, to achieve network consensus – which is necessary to validate transactions – these particular blockchains do not use an external source such as electricity or computational power; instead, they use internal resources, i.e., user guarantees. In other words, staking is the basis of a blockchain’s validation mechanism. However, staking can also refer to the process of locking up cryptos to obtain rewards without necessarily becoming a network’s validator. This article will look at how to stake and all the options available to obtain rewards from cryptos.

What is staking for? 

People who choose to stake might have different goals. Some people stake to become a validator, while others lock up their cryptos only to obtain a reward, delegating to other users the task of transaction validating. Let’s take a look at the different types of staking: 

1. Staking cryptos to become a blockchain validator

The validating nodes of a blockchain are responsible for finalising the network transactions. Contrary to what happens in Proof-of-Work chains, no special technical equipment is needed to validate transactions in Proof-of-Stake chains – it is sufficient to simply stake your crypto. In most cases, people or entities already have some experience in the blockchain field who become validators. You have to open a node after staking a certain amount of cryptocurrencies. This type of staking requires downloading a wallet that enables staking in the chain you want to become a node of, and staying online 24/7. Some blockchains also stipulate a minimum share of crypto to be staked, for example on Tezos it is 8,000 XTZ, on Ethereum 2.0 it will be 32 ETH

2. Delegating your stake

If you do not want to manage a validator node, you can delegate your stake to an existing node. Delegation is a convenient alternative if you wish to participate in the consensus mechanism of a blockchain with a lower investment of time and money. When you delegate a node, the amount of cryptocurrency you have staked joins the node’s stake. This way, the validating node will also use your cryptocurrencies to contribute to the functioning of the network. The rewards obtained for the validation work are distributed proportionally between the node and those delegated. You can delegate a node through platforms (decentralised or otherwise) that offer this service. 

3. Staking cryptos to take part in a blockchain’s governance 

In some cases, staking is used to let users participate in blockchain governance. Whoever stakes a certain amount of crypto earns the right to vote on updates, improvements and the direction of the blockchain’s roadmap. This way, staking increases the decentralisation of a project’s decisions.

4. Locking up cryptos to get rewards

Cryptocurrency staking can also mean simply locking up your cryptocurrencies for a period of time to obtain rewards, calculated annually and expressed in APY. These rewards are the equivalent of what traditional finance calls an annual percentage return. Locked cryptocurrencies cannot be traded or sold until the end of the staking period selected. How can I take part in this type of staking? This option is particularly suitable for people who are not particularly familiar with the crypto sector because it does not require any technical expertise, all you need to do is find out about the third-party service you choose. Now let’s see where you can stake! 

Where can you stake?

You can choose different third-party services for staking cryptocurrencies – there are decentralised platforms, dapp, and exchanges (centralised and not), as well as offline options such as external hardware.  

1. Staking via hardware 

Offline staking is called cold staking. In this type of staking, cryptocurrencies are locked up and stored in cold wallets, i.e. wallets that are not connected to the internet. Cold wallets can be hardware, paper wallets or offline applications. Cold staking is often used when locking up large amounts of crypto and to avoid the potential risk of cyber attacks. This type of staking is highly secure, but the staking is managed autonomously, without third parties mediating. For this reason, you need to be familiar with the mechanisms. Even if they are offline, cryptocurrencies in cold wallets are always connected to the blockchain and rewards are earned as in online staking. 

2. Staking via a CEX or DEX

One of the most commonly used services for staking online is through exchanges. Whether centralised or decentralised, exchanges often provide step-by-step guides on how to use staking tools. Each exchange has its features, differing in the type of solution, supported cryptocurrencies, and offered APY. You can choose the one that best suits your needs.

On Young Platform, you can access a simple and intuitive staking solution directly. Currently, you can lock various cryptocurrencies that support staking and earn rewards calculated based on APY, proportional to the amount you decide to stake.

Young Platform offers two staking methods:

  • Liquid Staking allows for greater flexibility with staked crypto without long-term locking.
  • Proof of Stake enables active participation in network security while earning higher rewards than other solutions.

For more information: Staking introduction: an innovative way to put your crypto to work

3. Staking Pools: decentralised protocols and dapps

Many decentralised protocols and dapps offer different staking opportunities. For example, you can lock cryptocurrencies up in Staking Pools, i.e. smart contracts or features that aggregate stakes of other users. Staking pools are usually used by blockchain nodes to increase the size of their stakes and, thus, the probability of being chosen as validators. Furthermore, DeFi protocols and platforms also offer options for Derivative Staking and Liquid Staking, in which rewards are earned through derivative products.  

Staking NFTs

Staking doesn’t end at coins or tokens – the latest frontier of decentralised finance also includes NFT staking. This works similarly to traditional staking – you lock up your non-fungible tokens on unique platforms to obtain rewards in crypto. Not all NFTs are suitable for this practice. Moonbirds, by the startup Proof, is a collection that has implemented a staking feature. Staking NFTs allows people to maximise their digital artwork and sometimes participate in the governance of their projects. 

Young Platform: from crypto exchange to payment account

young platform payment account

Download the new version of the app. In addition to the Crypto section, we are developing the Save and Cash sections that will change how you manage your finances! 

In recent years, Young Platform has emerged as one of the leading players in the European cryptocurrency industry. Founded in 2018 as an exchange, the platform has always aimed to make the world of cryptocurrency accessible to everyone. Today, Young Platform is taking a significant step in its evolution by transitioning from a simple exchange to a crypto-native payment account. This change marks the beginning of a new era for the platform and its users, who will have access to more comprehensive and integrated financial tools.

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The new interface

Young Platform’s new interface features three main sections: Crypto, Save, and Cash. This structure allows users to manage their finances in a more organised and intuitive manner:

  • Crypto: This is the platform’s core, focused on buying, selling, and managing digital assets. Users can easily trade cryptocurrencies and utilise advanced tools like Smart Trades and Staking to enhance their trading experience. 
  • Save (coming soon): This upcoming section will enable users to manage their savings, set financial goals, and create automatic accumulation plans.
  • Cash (coming soon): This section will be dedicated to cash management in euros and equipped with advanced payment tools. Users will be able to receive salaries, make transfers, and use the Young card for everyday expenses.

This transformation marks a significant evolution in the industry, bridging the gap between traditional finance and cryptocurrency.

A revolutionised user experience

The platform has been redesigned to provide a smoother, more intuitive user experience. The interface ensures simple and accessible navigation, even for less experienced users. Users will be able to customise their homepage by setting up widgets and specific preferences to monitor their portfolios, profits, losses, and market performance.

Additionally, Young Platform has introduced a notification system that keeps users updated on portfolio performance and new opportunities, as well as the release of new features. Don’t forget to activate these notifications from the profile section and the newsletters!

Access to financial education is also a key focus of the platform. With a dedicated section for guides and insights, Young Platform aims to equip users with the necessary skills to make informed financial decisions.

The Box competition: win the Young Card!

To celebrate this significant change, Young Platform is launching “The Box” competition and offering exclusive prizes to participants. One of the most coveted prizes is the Young Card, which provides cashback of up to 3.6 %* and real benefits on everyday purchases.

The competition rewards our most loyal users and encourages them to explore the platform’s new features and embrace the ongoing changes. Participating is simple: Follow the instructions on the platform to accumulate gems and stand a chance to win exclusive prizes, including Apple devices, Sony products, Amazon vouchers, and more!

Discover The Box

Security and innovation 

With the transition to a crypto-native payment account, security has become a greater priority for Young Platform. The platform employs advanced protocols to safeguard users’ funds and data, and new authentication systems have been introduced to provide even more secure access.

Another significant innovation is obtaining a personal IBAN, enabling users to receive payments directly to their Young account. This feature enhances the platform’s versatility, making it suitable for a wide range of users, from experienced traders to those who simply want to manage their liquidity more effectively.

Towards the future: the integration of traditional assets

Young Platform’s evolution is ongoing. By the end of 2025, the platform intends to incorporate investments in traditional assets, providing an increasingly comprehensive experience. This shift will establish Young Platform as a leader not only in the cryptocurrency space but also in overall financial management.

Integrating ETFs and other traditional financial instruments will allow users to diversify their investments without switching between multiple platforms. The aim is to create a complete financial ecosystem in which every investor, regardless of experience level, can find the right tools to grow their capital.

This expansion is crucial to attracting a wider audience, particularly those who have previously viewed cryptocurrencies with scepticism. By bringing traditional assets into a native crypto platform, the aim is to break down the barriers between these two worlds and offer a practical solution for asset management.

The impact of regulation and Young Platform’s vision

Young Platform has recently achieved payment account status, enhancing its compliance with European regulations and providing users with a secure and regulated environment. By adhering to the MiCA (Markets in Crypto-Assets) regulations and obtaining the necessary licenses, the platform is taking significant steps toward being recognised as a key player in the financial sector.

This regulation offers excellent consumer protection and enables Young Platform to operate in a more stable and transparent environment. Young Platform aims to set an example of compliance and transparency, distinguishing itself from many international platforms functioning in unregulated settings.

Another essential aspect of Young Platform is the decentralisation of financial management. Drawing from the principles of the blockchain ecosystem, the platform empowers users to maintain control over their funds and investment decisions.

A new way of experiencing digital finance

The future of digital finance goes beyond technology and involves the mindset with which people manage their capital. Young Platform is redefining wealth management by providing tools that enable anyone to invest with knowledge and security.

In a world where bureaucratic barriers and rigid institutions often hinder access to financial services, Young Platform presents an innovative and inclusive solution. It aims to create an ecosystem where blockchain technology can coexist with traditional financial tools, all while maintaining security, reliability, and accessibility.

Download the new version.

Young Platform is evolving from a sole exchange to a complete ecosystem integrating traditional and crypto finance into a single interface. With the introduction of the payment account and the restructured Crypto, Save, and Cash sections, users will gain access to more advanced and organized investment tools.

The ‘Box’ competition marks just the beginning of this new phase. Young Platform is committed to continuous innovation and aims to provide an increasingly competitive, cutting-edge solution. In this true financial hub, users can develop their wealth growth strategies by combining traditional and innovative approaches.

*Cashback depends on club membership and level: the higher the level, the higher the percentage. Platinum Club members get up to 3.6%.