Btw, in my opinion BTC is still in the category of interesting and profitable investments. Of course, the capacity of funds owned by a person is also different. In addition, users of this method are also required to be consistent and sustainable in its application. The conclusion that I can draw, if we focus on investing in BTC with any technique in adding to the burden I am sure there is no such thing as wasted words.
Being consistent and persistent shows dedication to the investment, yet surely sometimes people have problems with their cashflow and/or they have problems with their will power.. So there is ONLY so much that can be done in terms of whether people continue to invest or not.. or whether they choose to invest into bitcoin aggressively or whimpily.
Yes, most of the investors are forced to end their aggressive journey midway and deprive themselves of huge profits due to lack of proper management of valuable assets.
And surely, our backup funds should go beyond just our emergency fund, and how much we need to keep for various back up funds likely relates to our various ways that we spend money or how complicated our expenses and/or our cashflow might be.
Give me time to become more educated and I thought that the need to distinguish between backup funds and floating cash was not important. So we must prioritize these two funds for investment which can positively influence the long term trend of investment. It can be a bit difficult for newbie or low income investors to manage two funds simultaneously. However, I think it would be advisable to keep the backup fund for a maximum of 6 months and the floating cash fund should be for a maximum of 1 year. Later, as their financial situation improves, they can increase the amount of their cash fund proportionally with the increase in Bitcoin in the portfolio.
It may not really matter so much what we call the various kinds of back up funds, except to try to communicate some of our ideas with some level of understanding, and if you put the ideas into practice then it might start to make more sense why we might have various kinds of back up funds. Surely anyone who is managing their own finances (which might even still apply when living with your parents) should be learning how to categorize differing kinds of priorities, determining monthly income versus monthly expenses, and yeah maybe some additional complication comes from investing into something like bitcoin for 4-10 years or longer since there would be some needs to be able to put the money aside and not to think about it for a long time. Sure you can look at it and analyze it, yet it seems that to really get the value out of the investment in terms of also considering it as a long term investment, there should not be any need to tap into it while it is still being built, and surely in traditional systems it tends to take 30-40 years or more to get to fuck you status (which means that you would be able to quit your job and live off of your investment), and so with bitcoin there could be some abilities to cut that time in half to 15-20 years, yet it still tends to take a long time to build an investment, build good habits and to resist tapping into the good investments or trying to trade the good investments (such as bitcoin).
Even if the bitcoin investor might not necessarily be looking to getting to fuck you status, there seems to be values in regards to building a bitcoin investment over many years of one or two cycles or more rather than merely thinking of playing the investment wave with it.
Maybe I can try to clarify the terms..? There are various kinds of back up funds, which is emergency funds, reserve funds and cash float.
Emergency funds should be something that you do not tap into absent a real emergency such as loss of income and/or unexpected increase in expenses, and they should be at least three months of expenses.
Reserve funds would be funds that could be tapped into or even set aside for various reasons, and they could be or should be used prior to tapping into emergency funds.
Cash float is merely various amounts of money that you might keep from month to month that carry you over within the month when you might not be sure exactly about your exact expenses or your exact income amounts
If you are new to investing, you might not have very good cash management practices, and they might not even be necessary, so many normal people who do not invest may well ONLY keep between about 2 weeks and 4 weeks of extra cash cushion, yet when you invest in something long term and so volatile as bitcoin, I would think that it becomes a priority not to tap into the bitcoin investment for any reason except completely of your own choosing, and so even when bitcoin is going up and down in the first 4-ish years of investing, it could become tempting to tap into it, yet it may well not be a good idea, especially if you are trying to build it to get up to some kind of a meaningful size, which like I suggested could take a quite a long time to get there for most normal folks. .and they may well never get there if they are not engaging in good practices to continue to be building their bitcoin investment by ongoingly buying it, especially in their first cycle or two.
Sure there could be some exceptions of guys who are able to build their bitcoin investment faster and able to front load their bitcoin investment, yet most commonly those are going to be folks who might have already been investing for a while, rather than a brand new investor more likely would be mostly working from his cashflows and trying to increase his income and to keep his expenses under some kind of meaningful control in order to allow himself to invest at the level of aggressiveness that is comfortable to him.
But if they follow the DCA method regularly with a proper action plan and make a logical combination of Bitcoins with strong real assets along with forming a backup fund, the chances of getting a decent portfolio would be greatly increased.
In order to have strong cashflow management skills, there is no reason to invest in other assets besides bitcoin and cash.. especially for beginners. For beginners, the most important thing is cashflow management - not asset management, so don't be getting mixed up into bullshit ideas that there are needs to invest beyond bitcoin and cash... at least in the beginning.
Yes it is very important that a newbie investor should give more importance to cash flow as with discretionary income they will accumulate bitcoins regularly and should continue this process until the stack size is decent. An investor should opt for asset management at the next level of decent holdings. I totally agree with you because an investor's abundance of wealth depends on adequate holdings.
You are still implying that there is some kind of need for various assets besides bitcoin and cash, which truly is not the case for beginners. If you happen to have other assets besides bitcoin and cash then yeah you might need to account for those other assets, yet if you are referring to fucking around with shitcoins, then you are likely bringing your own level of complications, which is not necessary. it seems that earlier you had referred to physical assets, and you were suggesting that there was some kind of need to manage such things, and yeah, if you already own some other assets, then you might need to consider how to manage them, but if you don't already have them, then I see no reason to be getting worried about managing any assets beyond just bitcoin and cash, at least not for your first cycle or maybe even your first couple of cycles.. Sure at some point, maybe you bitcoin stash and even the amount of cash that you are managing might justify that you start to put some cash in other investments, perhaps properties, equities, bonds, commodities and/or cash/cash equivalents, yet those are not beginner level requirements, and even someone investing $100 to $200 per week (or maybe 10% or more of his discretionary income) into bitcoin might still take 5 years or longer just to get to the point that he had invested a whole year's income into bitcoin.
Ultimately each person has to figure out for himself when he might start to feel that he has too much allocation into either bitcoin and/or cash and if there is some needs to invest in other assets.
