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Thank you so much for your quick response which I appreciate so much. Just to make more clarifications Sir, I do not invest my business money into Bitcoin, what I invest is part of my profit.
I was attempting not to presume any kind of separate treasury that you might keep in regards to your business, yet surely there will be some businesses that build up capital over time, and the business might own real estate, buildings, equipment, inventory and perhaps have various contracts that might be valuable and/or resaleable, including customer lists and/or vender lists.
For sure with bitcoin, there should be expectations that any investment quantities of bitcoin would be held 4-10 years or more, yet there could be some different dynamics if your business were to engage in transactions in bitcoin, such as receiving money or spending in bitcoin, so then you might have to adjust your thinking to account for those kinds of dynamics including how much bitcoin cushions that you might want to keep on your books for those kinds of transactions and/or if then you might start to save in bitcoin, yet surely you had not mentioned that any of those kinds of circumstances are currently applicable to you or your business.
I was attempting to just consider your business as a source of income for you as you seemed to be implying from how you framed your questions, and presuming that your business is going to have inconsistencies in its income and expenses as you seemed to be describing some of the various kinds of ways that your business is inconsistent in terms of shipping costs and shipping options, which surely are specific to your own business.
The business I described is very profitable and hardly record any loss because what I'm supplying is based on demand for which I buy low here and the selling price already cover the logistics with my profits added and everyone is happy at the end of the day.
For sure, any business person should feel quite happy and/or lucky if they are able to find a kind of business that is largely profitable, so that should end up giving you more flexibility in regards to making sure that you build up various kinds of reserves to lessen your chances of having financial/psychological stresses, but also should be better for you to be able to consider that if you are able to put strong systems in place, then you can have greater confidence that any money that you are extracting from the business as income could potentially be invested into bitcoin based on the extent to which the income coming from the business is greater than your various personal expense, like we had already gone over some of the aspects of those kinds of considerations too.
I have learnt from this thread the need to only invest my discretionary income and never money meant for other serious needs.
It can surely be difficult for anyone to really come to a realization that bitcoin is a long term investment of 4-10 years or more, otherwise we are gambling, playing the waves and/or trading, and I am personally not going to recommend that kind of an approach to bitcoin, and sure you might be correct that some people might not even realize that they came into bitcoin with the wrong mindset and then they ended up fucking up a great investment opportunity by failing/refusing to structure their bitcoin approach for some kind of longer and/or more meaningful timeline, such as 4-10 years or longer... and another thing that anyone new to bitcoin might not realize that it can take many many years to build a large investment into bitcoin, and even some people are able to lump sum into bitcoin and even to front load their bitcoin investment,
and it still could take many many years to really build up your bitcoin position and to get really comfortable with where it is at in terms of size and how you are managing it and protecting it.. to the extent that you custody all of your bitcoin or hopefully at least over the long term, then a large proportion of your bitcoin stash such as 90% or greater should probably be in some kind of self-custody, even though in your early stages of investing into bitcoin you might still just be needing to get used to bitcoin and perhaps still learning about various self-custody options. It would not be good for someone to jump into bitcoin and then lose his bitcoin because he ended up fucking up his self-custody.
This rule I have kept in mind and have been working with it ever since. That why I state in my post before that I am investing part of my profits into Bitcoin and I plan to keep them there for as long as possible as my way of saving for the future
If you keep building your bitcoin stash and learning about bitcoin, then surely your own learning will help to inform you to the extent that you might need to adjust any of your practices in regards to how you are holding your bitcoin or how you are allocating to bitcoin as compared to any other place that you might be needing to spend for either investment purposes, for consumption purposes, for daily living purposes, for relationship building/maintenance purposes or any other purposes that you have, there likely are going to be ongoing needs for balancing your various needs including that if you are able to establish and maintain strong cashflow management practices, then you may well be in a way better position to increase your aggressiveness in regards to your bitcoin investment, yet at the same time, each of us has to be careful to make sure that our level of aggressiveness is not going to end up causing us to partially or completely reck ourselves based on our having had taken too many chances or to have engaged in too much risks, such as not keeping sufficient/adequate back up funds or keeping sufficient track of our cashflow projections, which can be a much BIGGER issue with any one who has more complicated finances, such as your mentioning your business, and also family situations can also add complications and inconsistencies in both expenses and income.
Frequently the more complications that we have, the more we need to maintain some additional levels of cash cushions and back up funds, since none of us should be wanting to have emergencies where we end up having to sell things that we don't want to sell, especially if we might have had been able to better able to prevent such emergency circumstances if we had kept better cash back ups and/or to project our income and/or our expenses in better kinds of ways.
Many of us likely know and/or have met people who seem to be having an emergency every week or every other month, and surely we likely can recognize and appreciate that those people may well be putting themselves in their own emergency situations in terms of the ways that they are managing their cashflows, so when folks have very poor cashflow management, they likely are not in a position to be investing into anything and perhaps even especially bitcoin since bitcoin tends to be so volatile relative to the dollar (or other fiat).
More to the essence of your question, the more erratic or irregular a persons income and/or expenses, the more likely that they are going to be having to hold way more quantities of various kinds of back up funds and emergency funds that likely cover longer periods of time, and if he is going to invest into bitcoin, he has to keep in mind that he should not be wanting to include his bitcoin as part of his emergency fund until maybe many years down the road after he had already gone through a couple of cycles.
This is very helpful for which I say thank you Sir. I will definitely keep this to mind and do a lot of planning to be able to efficiently manage this process of investing in Bitcoin, this was why I came back for more knowledge and I am not disappointed at all. Right now I never set up emergency funds even though I have heard about it in the previous times I was a little active in this discussion. Going forward, I will make some adjustments to enable me set up some emergency funds so I will never resort to touching my business capital for investment neither will I think about selling my Bitcoin for whatever reason since I'm holding for a long term basis.
For sure, most people will have some kinds of float and back up funds in their regular cashflow, even if they are not investing into anything, yet it becomes more important to have more back up when you are investing, and maybe even more important if the asset is quite volatile in comparison to the fiat that you end up paying your bills... .. so another mistake that people make is either to presume no emergency is going to come or their backup plan would be that in the worst case scenario and there is an emergency, then they will end up just using their investment as their emergency fund, which truly is a highly impactful consequence to cause a guy to have to sell BTC at a time that is not of his own choosing, and it may well end up playing out as the worst time to sell bitcoin, since bitcoin prices may well be down right when forced to sell them... a lot of newbies never make progress beyond investing into bitcoin for one whole cycle because they do not put good cashflow management and back up funds into place.. and sometimes it can take a whole year, just to build up 3 months of emergency funds and other reasonable other kinds of back up funds... so if you are able to build up those funds faster, then you are in a stronger position to employ more aggressive bitcoin accumulation practices without worrying about recking yourself.. of course, even if any of us are aggressive, we also have to learn not to over do it, since if we fuck up and we over do it, then we might not even realize until it is too late.. so it is better to practice your level of aggressiveness and to slowly increase it to make sure that you are not miscalculating and you will feel much better and stress free if you have relatively strong cashflow management systems in place.
So, in essence, if a guy with irregular income/expenses wants to regularly invest into bitcoin, such as weekly, then he may well need to hold some or all of that in advance so that he is able to keep up with keeping track of his irregularities of his income and/or his expenses.
Let's say that a guy has some income that comes in every week, and other every month and other every 2-3 months. Most of his expenses are staggered to be monthly, but he also has some irregularities involving his expenses too. Guys in these kinds of situations may well need to project out their income and their expenses for 12-24 months or more in advance so that they can see various places that they might have short-comings and surely the next 1-3 months are more important in regards to the specifics as compared with timelines that are 12-24 months into the distance, even though the 12-24 month timelines might still have some ballpark ideas about projected best case scenarios and projected worse case scenarios, and frequently, it is way better to project out worse case scenarios so that you know that you have enough to cover those worse case scenarios, so for example, if your monthly income ranges between $1k and $4k per month, and your expenses range between $1,500 and $3k per month, then you likely should be projecting out your income to be $1k per month and your expenses to be $3k per month and making sure that you have enough cash to cover the difference for several months into the future, and so you might not be able to invest any money into anything including bitcoin or anything else until you are sure that all of your expenses are covered, and maybe you resolve these matters on monthly basis or maybe it is a bit more irregular in regards to various determinations and resolutions that you are able to make.
Let's say that you want to invest $100 per week into bitcoin, but you believe that if you commit to that, then you might not be able to cover your other expenses, so perhaps you have some reserve funds that are set aside that are primarily for buying bitcoin, yet if your other reserve funds run out, then you will have to tap into that fund that is set aside for buying bitcoin.. so perhaps you have a fund that is $1k in total value, and you tell yourself no matter what you are buying $10 per week in bitcoin from that fund, and if things are going well and the fund remains at $1k, then you will invest $100 per week into bitcoin, yet if the fund goes down to $500, then you are ONLY going to invest $10 per week into bitcoin.. .and so you do what you can to keep from tapping into the fund, and you might even say to yourself that if the fund goes below $200, then you are going to have to stop buying bitcoin, but you work hard to make sure that the fund does not go below certain thresholds. Perhaps if the fund becomes larger than $1k, then maybe you would authorize to allow yourself to buy more than $100 per week in bitcoin. .up to a certain amount as the cash is extra in that reserve account, you already have established various thresholds in which your behavior is going to change as the money is coming in, yet at the same time you have are maintaining certain reserve amounts.
This is comprehensive enough to give me all the information I needed, I will work with this and make the investment process better and easier for myself. I love how you explain things and how you go all out to draw examples with different scenarios. If I may ask, are you a lecturer in the university or have you taught in any school before?
For sure if I give some examples, then you may well be able to relate, yet one of the best ways to learn is to try to apply the various systems and then to attempt to customize them to your own circumstances, so you might consider that I have given you a couple of really decent pointers, yet then after you go to apply them, you realize that for you, it would be better to tweak the amounts in one direction or another, and you might even realize that one category of funds has a higher priority than another category of funds, so then you figure out which one is more important to spend from first. You also might find out at the end of one month that you had really screwed up the previous month because you ended up spending all of the funds that were supposed to be available to buy your daughter the bicycle that you promised... so then you ended up putting yourself into a pickle because you were over confident and you miscalculated some categories that you are likely going to end up costing you, and surely some levels of mistakes have higher consequences than others, and many of us don't really like to lose money... so sometimes if we make a mistake, and then we end up missing a window of opportunity, then later we find out that our mistake cost us $450, yet if we had not made the mistake, our costs would have had been $300, so we might end up kicking ourselves because we pretty much ended up throwing away $150 based on the way we executed and the mistakes that we made.
Many times guys will also come to measuring progress by whether their bitcoin quantity is continuing to go up... so in the beginning it might go up a lot in terms of percentage, but then if you buy bitcoin for one or two years, every time you buy might ONLY be adding a very small fraction of a percent to your overall BTC holdings, yet you can still measure progress by seeing that each week or each month or each quarter (however you are measuring), you are increasing your satoshis... so maybe after 10 months you have 0.14216742 BTC, and you are very excited by having had been able to accomplish that quantity of satoshis locked away....and so the next month you are able to add to your stash and you end up having 0.14633278 BTC, and even though it was a tough month, your BTC stash has gotten larger.
You are not really very confident regarding how many BTC that you are going to need, yet you want to continue to monitor your progress and you have some tentative goals for various times you are going to assess where you are at.. and you might even have some tentative ideas for where you might be after 3 years, 6 years, 10 years and, sure you might not know exactly, but you have some ballpark ideas and some ballpark goals, and perhaps even some specific and personally tailored aspirational goals that you know might not be reachable, yet you still consider that you have some systems in place in which you are ongoingly working towards such goals on a very regular basis, so you are taking action rather than just thinking about the matters.
I would not mind saying some things about teaching and learning and the various context that it could come, and surely any of us likely realize that it is much more self-satisfying for any of us if we might share some information with another (whether we call them student or not), and they come back and show some of their incite regarding how they attempted to apply the ideas, and they might have some of their own ideas regarding how to tailor to their situation and to show some others (call them students or not) how they had accomplished their set up and perhaps they might even describe some mistakes that they made and how they learned to fix the mistakes. It can take a while this teaching and learning process, and surely I have gotten better in my own applications when I try to explain what I am doing and why I am doing it that way... Sometimes I have to change what I am doing, and other times I have to say it in a different way in order to better explain why I am doing it that way.
It surely could be that you are not even planning to hold bitcoin for more than 4 years or more, and if that is true, then you are trying to trade bitcoin and to play the wave rather than investing into it... so personally, I don't recommend using bitcoin as a trade rather than an investment, yet at the same time, I know guys are going to do what they like..and surely for investment, you need to figure out systems to strengthen your cashflow management and to main various kinds of reserves so that you can continue to invest into bitcoin for 4-10 years or more and so that you will not have to sell any of your bitcoin at a time that is not completely of your own choosing, which hopefully would be 10 years or more, unless you have some kind of age or health kind of issue that might cause you to have a less then 10 year investment timeline.
With reference to my early response, what I'm doing is not trading at all because it is a long term deal with Bitcoin.
That is good. Frequently business people can have short-term demands on their income, so then they fail/refuse to keep enough of a back up, which even if there was no intention to trade bitcoin, the poor cashflow management and/or lack of preparation may end up in selling the bitcoin really early and not even holding the bitcoin through a whole cycle.. which as I mentioned, I would describe that as trading rather than investing, even if they came to bitcoin with the intention to invest rather than to trade.
I don't want to sound dramatic but I am convinced that Bitcoin is where the future is considering how the world is changing and technology is evolving. I don't want to miss out of the future that is to come so I have been investing part of my profits into Bitcoin with the mindset that it is my saving for the future. I don't have any need of the money I am investing in Bitcoin for now, my business is running smoothly and I am meeting up with my bills and other expenses as someone that lead a moderate life and contented with that. So 10 years might even be too short to describe how long I want to hold as I am looking at holding until a time I will even hand over my business to my children and relax to enjoy my old age.
To me, it seems that if people come to an investment like bitcoin with a time horizon that is even longer than 10 years, then they can figure out a level of aggressiveness in their investment timeline that is reasonable and balanced for their circumstances. Surely there are some folks who are so elderly (or they have health issues), so they are not even able to establish a 10 year or longer timeline for their investment into bitcoin and surely it still could be acceptable to have a 4-10 year target, but it is likely not going to be as comfortable to invest with shorter timelines, even though it is not unreasonable to put money into bitcoin for those shorter 4-10 year timelines.
Another thing is that we are likely to have various expenses along the way, whether it is raising kids or even training kids or someone else to help us with our business with a purpose that they take on more and more of the responsibilities of the business. Surely sometimes if we invest, we might end up in a place that we had not expected to get.
When I came into bitcoin in late 2013, I understood that there were some decent upside scenario possibilities, yet at the same time, I told myself that I would be more than happy that if bitcoin could largely perform similarly to other investments that I had, and historically (over about the 20 years prior to my coming to bitcoin), I had been getting returns that were about 6% annualized.. Sure not the greatest, but not the worst either, especially I knew that I was investing and saving way more than my peers since almost always I would strive to put aside in the ballpark of at least 10% of my income into some kind of investment and/or savings... so yeah over time some of this just builds up.
Regarding my bitcoin, my first 3 years between late 2013 and late 2016, were mostly negative, yet I am pretty sure that I was in the ballpark of breaking even in late 2016 and starting to show some profits through my having had ongoingly bought into bitcoin for the prior 3 years... yet by now, I probably can average out the returns to be somewhere in the ballpark of 75% per year or so, and that is including various mistakes that I have made to screw up some of my costs per BTC and some other mistakes, and so frequently I like to proclaim that my average cost per BTC is somewhere in the ballpark of $1k per BTC, so it makes it somewhat easy to look and see that my bitcoin holdings is somewhat in the ballpark of 93.5x as I type this post, but it did get up to about 108x, and in late 2022 it had fallen down to being merely 15.5x. .but mostly in 2022 and 2023 it stayed above 25x. .not completely, but mostly...
So if I ONLY expected 6% per year returns and I got 75% per year returns, then surely my options have increased quite a bit, including abilities to not to worry about the costs of certain things.. so yeah, I went to get that steak and it used to be $5 per pound, and now they are charging $20 per pound, so it costs way more, but I still want the steak, so I buy what I want without giving too much thought about it having had gone up 2x, 3x or 4x in the past few years, even though we are lied to frequently and told that costs have only gone up 5% or 10%, which makes hardly any sense when I look at the prices of various things, and sure, I sometimes might hesitate, but even if I tell myself that my BTC went up around 10x since 2020, yet the cost of things went up between 20% and 4x, so I am still doing better in regards to have had kept decent amounts of value in bitcoin as a way to supplement any of my other income sources, yet at the same time, it feels a little bit unfair in terms of the advantage that my purchasing power has as compared to folks who failed/refused to buy bitcoin.
Another thing is that in 2019, maybe in the USA we might find a nice to medium priced house for $250k, and that would have cost around 32 bitcoin, and so let's say these days that same house might cost anywhere between $500k and $1million... let's just say $750k.. so now it is going to cost me around 8 BTC. It should be clear that the bitcoin is buying me more everything, including more house, if I were to want to wait and buy the house (or the real estate) at a later date and to build up my bitcoin holdings in the meantime while I am likely giving myself more options by keeping decent amounts of my value in bitcoin.
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That's the thing though with those individuals who might have been somewhat late in Bitcoin investment. As for me I started in 2017, didn't bother to accumulate until the next bear market and it really felt very good. Of course I might have regret not holding all throughout in 2017, but that is a lessons learn that's why in the next cycle I try my best to budget and align my goal in setting up weekly buying at least $100.00 as that was the funds that was available to me.
So maybe this newbie will have to go to that pattern or at least have the mindset that they might not see that price. So if they shift everything, and start to accumulate as this price and have the resiliency and mental toughness, then they will say that DCA is a very effective method.
In the whole scheme of things, it may not have made a whole hell of a lot of difference whether you started accumulating bitcoin before the 2017 price run or after the 2017 price run was over. Of course, in the short term, you would have had been in profits more from waiting for the dip, but you would have had more bitcoin if you had started earlier, and it would have all worked itself out.. especially after a cycle or two.
Starting to invest $100 per week on
February 1, 2017 would have resulted in $41,500 invested and 4.8413 BTCStarting to invest
$100 per week on March 1, 2018, would have resulted in $35,900 invested and 2.6322 BTC.
I think that most of us would prefer to be the first one rather than the second one, even if as the first one, we would have ended up investing around $5,600 more... we still ended up with nearly double the BTC.. strange as that seems.
Many times it is better for normies to get the fuck started no matter the price, and even don't be fucking around trying to figure out position size except just figure out how much of our income we are able to dedicate towards investing into bitcoin, and then perhaps after one or two cycles, then work out the details later in regards to some adjustments that we might want to make.
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Well, it's better late than never, atleast you've learnt that holding Bitcoin is very important and that's one mindest every Bitcoin investor should have. Well, you're on the right track and it's not too late, since bitcoin is still at it's early stage, you still got more than enough time, coupled with the chances of buying and holding at this point that the price is way cheaper than what it would be in the future, that's a golden opportunity that every investor shouldn't miss out on, the regret would be very painful for those who couldn't grab some portions of bitcoin, in the future.
Any Newbie investor that start doing the DCA till the next circle would be very proud of themselves, the person would definitely testify of how effective the DCA can be when it comes to accumulating bitcoin. He/She can decide to do a weekly or monthly interval so far it's suitable to their financial status either ways goal in the future is max profits, that's one beautiful thing about bitcoin and using the DCA strategy for accumulation.
You guys can believe whatever you like. To me, it seems way better to get started as soon as possible, and maybe learn from your mistakes, even though we cannot turn back the clocks and do it over, we can still try to learn from our mistakes.. including suggest getting the fuck started and work out the details as you go.. especially when it comes to something like bitcoin, it is way better to start rather than to wait...and it will be even more important to have had started.. especially if we are looking 10 years back and we see that we waited a year or two and then perhaps we were whimpy in our investment approach because we were so busy trying to figure out the price. When we look back 10 years, we are going to likely view our younger selves as retarded... but hey whatever, if anyone believes in the waiting strategy when it comes to bitcoin, then that is on them. They can have fun staying poor. hahahahahaha
