This article is mainly written for those who haven't earned their first pot of gold yet. If your assets are already A8 (10 million+) or above, you can close this article; the content might not be suitable for you.
The origin of this article is actually a memoir of my first pot of gold that I wrote a few years ago. It has been in my community materials, mainly analyzing how I earned my first pot of gold from scratch. Recently, while reorganizing my content, I wanted to rewrite my core understanding of this money-making system.
I entered Web3 at the end of 2017. My starting capital was a monthly salary of 3,400 RMB, with a monthly fixed investment of 1,000 RMB. At that time, I still owed a friend 30,000 RMB. What I want to talk about is not how miserable I was, but that a good system, even with a very low starting point, can slowly form compound interest.
I don't think I am a "smart person" in the strict sense; in fact, I learn some things very slowly. What really got me rolling was the system I want to talk about today: Cash Flow, Core Assets, and Alpha opportunities.
Today, we won't talk about track theories or investment strategies; we'll go straight to this flywheel system. This system won't fail because you aren't smart enough. Regardless of your IQ, education, or cultural level, this is a system you can use.
If your goal is to earn ten million, relying solely on cash flow (10,000 a month) would take 1,000 months without eating or drinking. Relying solely on core assets with small principal requires finding an asset with at least a 100x increase. Relying solely on Alpha opportunities depends on the dividends of the era and a certain amount of luck.
What truly creates a compound interest effect is treating these three sectors like a flywheel, letting them feed back into each other so that the growth of the asset curve is exponential.
Wheel One: Cash Flow
The real meaning of cash flow is not to get rich, but to ensure you don't need to sell your assets for living expenses when they drop significantly.
In 2017, my monthly salary was over 3,400, and I owed a friend 30,000. At that time, I invested 1,000 every month without fail. If I had a bonus, I'd buy more. I never missed a month.
At the time, I didn't think I could really turn things around with this money. Later, I realized that the real role of that 1,000 was not "saving money." It was to ensure that in every subsequent crash, I didn't have to sell.
Cash flow cannot make you rich quickly, but it can prevent you from being forced off the train when you should be getting on.
I think many people haven't made big money on a specific target not because of lack of knowledge, but because they were pushed by life to sell at the lowest point.
Cash flow is not just job income; main jobs, side hustles, and financial management income all count. I have recently been expanding my Hong Kong stock IPO subscriptions. The core concept is the same: a stable cash flow ensures you aren't forced to sell core assets in extreme market conditions.
Wheel Two: Core Assets
In my values, core assets are for compounding. Their most important role is to amplify the principal. From the perspective of absolute returns, the size of the return depends on the size of the principal.
My definition of core assets is—the part of assets you dare to hold in heavy positions for the long term and won't be forced to sell even in extreme market conditions.
Objectively, there are many types of core assets, whether stocks, crypto, or real estate in first-tier cities. But everyone's understanding of core assets is different. I am not qualified to educate everyone on what a core asset is. People usually focus on the asset itself, but my thinking is:
Assets should focus more on an individual's perception of the asset—that is, what do YOU consider a core asset?
Some people don't believe in crypto but can hold US stocks; some believe more in Bitcoin and can hold it for several years. There is no right or wrong, and both can make money. So instead of arguing about what a core asset is, ask yourself—what do I consider a core asset?
I can't say other assets aren't good just because I made money on Bitcoin, because many people have made money on assets other than Bitcoin. So in my philosophy, a core asset is less about whether it's "excellent" enough and more about how much you believe in it.
A cruel truth is often ignored: many people say they can't hold core assets because their "cognition" isn't there, so they study, research, and summarize desperately to add "faith." I used to think so too.
The longer I stay in this market, I find that failing to hold core assets is likely not because your cognition is insufficient, but because you don't have a sum of money that you absolutely don't need to spend.
Suppose you have $500,000 worth of Bitcoin bought at $3,000, and now it's risen to $6,000, so your account has $1 million. You know it can rise many more times, but suddenly you need $500,000—illness, marriage, buying a house, having a child, a car accident, an emergency—you must sell half. This has nothing to do with your cognition of the asset; no matter how deep your cognition is, you have to sell.
So-called long-term investment—many people are just gambling that they won't have any accidents.
My own experience was the 3/12 crash in 2020. My assets shrank by about 75%. I held BNB, BTC, and ETH. I didn't sell a single one; I weathered it all.
The reason I weathered it wasn't because my cognition was so high, but because I knew I would have a salary coming in next month and didn't need to sell my assets to live. Later in the 2021 bull market, these assets took off, and I earned my first pot of gold.
The truth of this wheel is: Core assets use time for compounding, being a friend of time. But whether you can last until compounding happens depends on Wheel One.
Once you are forced to sell assets, time is no longer a friend but an enemy, because as time passes, it steals your assets.
However, to achieve the compounding brought by core assets, cash flow alone is not enough. What can achieve significant asset growth is the last wheel—Alpha opportunities.
Wheel Three: Alpha Opportunities
My definition of Alpha opportunities is—opportunities to exchange minimal cost for maximum returns.
I believe these opportunities are not just in the crypto circle. For example, the currently popular AI relay stations or the former Douyin live streaming, I think both count.
Most people in the crypto circle now make money through Alpha opportunities, but you will see some people make a lot of money on an Alpha opportunity only to return to zero a few years later or fail to achieve a significant asset leap. A big reason is—the huge profits from Alpha opportunities were not put into core assets.
In my values, the meaning of Alpha opportunities is not to get rich overnight; its meaning is to provide enough principal for core assets.
Suppose your goal is to earn 10 million and your current principal is only 10,000. No matter what method you use, you might earn your first 1 million. This step, where your principal increased 100x, is indeed very difficult. But the multiple you need later decreases.
From 1 million to 10 million, you only need to flip 10x, not 1,000x like from 10,000 to 10 million.
This is the meaning of core assets—it makes the required multiple smaller and smaller all the way.
When the principal becomes large, your dependence on Alpha opportunities will decrease. It's not that they aren't needed, but that the principal is large enough that you only need to find some relatively stable opportunities to let the assets appreciate slowly.
I first experienced the power of this system in 2019 after Binance started IEOs. At that time, I used BNB to participate in new listings to earn more BNB and never sold. In the end, not only did I earn more and more BNB, but the price also got higher and higher.
Even if I hadn't bought BNB then and just converted the earnings into BTC, my assets would have increased significantly because the principal increased, and the required multiple for the future became smaller.
Earning 10 million is the same; you don't necessarily have to earn A8 in one single opportunity. Earning A7 is also fine—suppose you earned 3 million; flipping it three more times gets you to 10 million.
This is the power of this system: you don't need to earn enough on a single project, nor do you need to find that asset with 100x growth. You just need to stay alive, earn some money on Alpha opportunities, and then transfer it all to core assets to be a friend of time.
Four: The Power of the Three-Wheel Combination
The power of this system combined is: Cash flow ensures you stay alive and allows you to buy assets slowly. Alpha opportunities significantly increase your principal; don't spend what you earn, keep buying assets. Finally, after all profits are invested, wait for the assets to appreciate and be a friend of time.
Later on, you might have even more profitable cash flow income. Like Hong Kong stock IPOs in the past year, if you have a principal of about 1 million and enough accounts, you can double your principal in a year—cash flow itself can also be expanded.
At the same time, the Alpha opportunities you can participate in are also getting bigger, like the Plasma presale last year—you earned as much as you put in. Alpha profits become more and more, and the tolerance for error becomes higher. You won't return to poverty because of a loss of tens or hundreds of thousands of dollars.
The reason I call it a flywheel system is that these three links are indispensable.
A single wheel cannot achieve compounding. I have come this way relying on this system: starting from a monthly salary of over 3,400 in 2017, slowly buying assets, constantly researching Alpha opportunities, and buying assets with the money earned to keep this flywheel turning. My starting point was not high, even very low, but that didn't hinder the flywheel's operation.
As my friend told me, although I don't have any "legendary profit stories" on projects, my assets have been growing steadily—because I have always believed this system is feasible.
As long as this flywheel turns, as time stretches, the asset growth is exponential. This isn't because I became smarter, but because the base became larger, the required multiple became smaller, and the system itself began to accelerate—the later it gets, the larger each turn is than the last.
Finally, a brief word on leverage: If you, like me, started with nothing, it is a way to gather initial principal, but only limited to off-market leverage. Don't touch on-market leverage, because it will turn you into that "forced seller," which is exactly the opposite of the logic of the entire system.
If you are not a genius trader, don't be an enemy of time.
Looking back, I haven't done any smart operations, nor do I have any great "legendary" stories; instead, I've done a bunch of stupid things. I think the only thing I did right was to keep these three wheels turning, never stopping any wheel because of wanting to get rich quickly, because of poverty, or because of FOMO.
The first cycle proved it could turn, and in every subsequent cycle, I never let it stop.
I can be very slow, but I cannot stop. That's all.
That's all the content. This is not investment advice, just the path I've taken. I hope this flywheel system can help everyone who wants to get rich.
