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You said that even if people with fixed income invest, they will fail to do so in the long run, in that case I disagree with you, if you have a fixed income then he knows how much money he will get every month and you can set aside a small part of that amount for investment, you don't have to own a lot of assets to invest, you can start small, you can use the DCA strategy because through this you can invest in Bitcoin regularly or monthly, no matter what the price of Bitcoin is, the more consistently you buy Bitcoin, because it will help to grow your wealth and strengthen your investment.
I don't think we need to complicate this issue, because basically, if we don't have a steady income, how can we have discretionary funds? Discretionary funds exist and we can have them because we have a steady income.
Definitionally you are making a statement that is not true.
You do not have to have a steady income to have discretionary funds.
Your arguing the opposite creates confusion.
Sure it is nice to have a steady income, and so a person who has a steady income is more likely to have steady funds on a regular basis as compared with a person without a steady income, yet a steady income is not required to have discretionary funds.
So, the point is, we should not consider a steady income to be unimportant.
It is a good thing to have a steady income, but having a steady income is not required in order to have discretionary funds.
Because basically, it is from a steady income that we can have discretionary funds and also emergency funds.
You keep repeating the wrongness does not make it correct.
It is true that if we have expenses every month, then we have to have an income coming in - otherwise we are living off of our savings and/or our drawing down our investments, so sure it is better to have income coming in so that we do not have to draw down our savings and/or draw down our investments.
Nonetheless, we can still have discretionary funds without having a steady income.
Let's say that I had been without a job for 3 months, and usually, I had living expenses of around $900 per month. Previously I had been working pretty steadily and even investing in bitcoin for few years (let's go by your forum registration date - I been buying bitcoin since May 2022 at about $100 per week).
Maybe I even had some investments for a few years prior to bitcoin, so maybe I had some traditional investments that were around $5k worth of value), so I had already built up my emergency funds and other back up funds, yet when I got into bitcoin, I came to understand back up funds to be more important, so I worked on buttressing those emergency funds and back up funds. I had built up an emergency that was 3 months of my expenses (around $2,700) ,.. I also had reserve funds that were maybe 2.5 years (maybe $1,800-ish).
I went to work and I got 1 week's notice from my employer that he was cutting my work, or maybe there were some circumstances in which I could not get a replacement job right away, and maybe I decided to look for another kind of work that would pay more....and so my break from employment motivated me to look for another line of work. In those circumstances, I may or may not decide to continue to buy bitcoin at $100 per week from my various funds.. and since I did not have a job, I decided to cut back on my expenses to their bare minimum so they would be only around $500 per month, and so during those 3 months I took from my reserve funds, and so it cost me $1,500 during that period that I had not been working.....
And maybe at some point, I was able to land a contract that would require me to work for 2 weeks, and it would pay me $1,500. I would receive half of the pay ($750) before I did the job and then the other half $750 at the end of the 2 weeks, when the job was completed. I figure that if I can land similar contracts about once a month, then I would be making the same amount of money that I used to make for a month's work within 2 weeks... but I still did not have any guarantee of future contracts.. so when I get paid the $750 in the beginning and the $750 upon completing the contact, those are not necessarily reasons that I should not buy more bitcoin with extra funds that are available. i had largey cut my expenses down to $500 per month, and sure maybe I could go back to my earlier expenses of $900 per month, but I might consider that it is better to stick with some variation of less than $900 per month for my expenses during this period of unsteady and unknown income.
I don't see why a guy needs to have steady income in order to be able to buy bitcoin. He does need to have discretionary funds, and he might even have some uncertain times in regards to his income.. Let's say that this guy had also heard about an opportunity to travel to another location, and he could get a job for $2,900 for three weeks worth of work, yet his travel costs were going to be right around $700, and it was only around 75% odds that he would be able to get the job, yet he considered that it was worth taking the chance, and if he did not get the job, then he would have had spent $700 on a trip... I think the guy can still choose to buy bitcoin, and perhaps even keep up his weekly buys even though he has a quite a few uncertainties regarding his income situations, and he might have have to assign odds to various kinds of work that he could get, and he might even assign some odds to some other kinds of work that he might get if the primary job is not obtained so then he is in the process of working on having more back ups to the kind of ways that he can earn income from skills and connections that he is still building.
My example is largely to show that a guy might have a lot of things going on that causes him inabilities to have any assurances regarding the steadiness of his income, but he can still determine that he has enough discretionary funds in which he can choose to buy bitcoin with some of those discretionary funds, whether he continues at $100 per week or some other amount that he might consider to be adjustments to his weekly buys based on ongoing changes in his income and/or expenses situation.
Another example, might involve a guy who uses debt to help to smooth over his cash flow circumstances, and he might use some of the debt to buy bitcoin and other parts to increase his future income earning potentials. There can be good uses of debt, even though complicated, but if the terms of the debt are reasonably good, the guy could embark on using debt to bolster his finances and to get him through transitionary periods, and he may well even have ways to pay the debt that are based on future income that might not yet be established but he already has various ideas about where he might be able to get future income based on whatever he has going on or maybe some doors he considers that the capital might help him to open.
So for those who say that a steady income isn’t important, I think they need to rethink their position.
I doubt anyone is saying that a steady income is not important, but instead saying that a steady income is not required in order to determine to invest into bitcoin. The thing that is needed is discretionary funds, and discretionary funds can come from a variety of places, including from non steady income sources, or even prior building up of back up funds or even from the use of debt... and yeah, even though a steady income can make things easier, it is not required in order to be able to buy bitcoin.. .what is needed is discretionary funds.
Because in the realm of investment, such as with Bitcoin, we need to think realistically.
You are not thinking realistically since you are creating a requirement that does not exist. Yes it is nice to have a steady income, but it is not required in order to buy some bitcoin, whether it is consistently buying or intermediate buys of bitcoin.
So let’s not get the wrong idea about this. Because the consequences will be very severe if we misunderstand our own cash flow.
You are correct that if we spend beyond our discretionary income or our discretionary funds, then we could put ourselves into a bad situation in which we might have to spend from our bitcoin at a time that is not of our own choosing, yet that still does not mean that we need to have a steady income to either get started in bitcoin or to continue to buy bitcoin whenever we determine that we have enough discretionary funds at our disposal.
I agree with this, if there is a plan and discipline, long-term investment is possible and can be sustainable even with fixed income. If someone's monthly income is $500, he can invest at least $20-$30 after covering all expenses. In the DCA method, no matter what the price, if he continues to invest a certain amount regularly for five years, it will turn into a large number. Which is possible only through fixed income. There are many investors who have started with small amounts and have been successful consistently. The key to investing is discipline and consistency. If you start with a very small portion of fixed income, it will turn into a significant asset over time.
Only an investor with a fixed income can invest in Bitcoin.
[False]An investor must have a discretionary income to invest in Bitcoin.
[true]I answered the above statements to show that you have one wrong and the other correct... yet the fact that you got one of them wrong causes questions about your understanding in regards to what is necessary in order to invest in bitcoin.
Without discretionary income, if an investor invests with the income that meets his basic needs or with the emergency fund or the money provided in the emergency fund, that investment will not be sustainable because he will need money for various needs and he will be forced to sell the Bitcoins kept in his portfolio to meet the shortfall in that money.
You are jumping to conclusions. Sure a person needs discretionary income to buy bitcoin, yet he does not have to continue to have discretionary income in order to hold onto his bitcoin. and he also does not need to sell his bitcoin to cover future expenses unless his income or whatever funds that he has is not enough to continue to hold the bitcoin that he had already bought.
Another thing is that if a guy wants to buy bitcoin in the future, then he is going to have discretionary funds in the future, which he could get those discretionary funds by money he already has or by money that he earns in the future, even if he might not know about his exact future income situation.
Therefore, for investment, a discretionary income is needed that will come after a person's basic needs are met.
What you are saying does not follow - yet it is true that each time that a guy buys bitcoin, he should be buying from either discretionary income or from discretionary funds, so he needs to have discretionary funds at the time that he buys any additional bitcoin.
When a person invests in Bitcoin after meeting his basic needs and emergency fund, his portfolio will be much more sustainable.
There is nothing wrong with shooting to have sustainability in a guys bitcoin holdings, yet your proclamation that he needs to have a steady income is not a prerequisite towards either buying bitcoin or maintaining bitcoin without selling it.
maybe he would invest into bitcoin with $300 per month and use $150 per month to build up his emergency funds and/or reserve funds,
JJG Sir, I think,
Where should the money for the emergency fund come from? Money provided for basic needs or discretionary income? I think we should be a little clear on this.
Building your various back up funds, whether emergency funds or reserve funds comes from your discretionary income.. after you have already allocated or spent for your various expenses, then whatever is left over is your discretionary income and can be chosen to be spent on consumption, invested in bitcoin or set aside into your back up funds.
There may be some funds on a monthly basis that are held aside until the expenses are resolved, so that money would be float money... Once the expenses are determined or paid, then whatever is left over from the float woudl be considered discretionary funds.
The fact that back up funds are important does not convert them into being treated as expenses.. They are still discretionary in terms of how fast you choose to build them, and yeah, you might screw up if you make mistakes, but each of us has to figure out how to balance these kinds of matters, and if we screw up, then we will be the one who pays the consequences.
From my point of view, since emergency funds are very important to make our investments sustainable, I think the money for the emergency fund should be included in the money provided for our basic needs.
You can think about it however you like, and it seems to me your way of thinking about it is wrong and more likely to cause confusion based on your not understanding how to categorize funds.
By the way, some of us don't even know how to view basic needs, yet there can be levels of mistakes since it is likely reasonable to consider the size of our house, how fancy of a car we drive, some of our eating habits as standard.. yet sometimes when push comes to shove, we likely can realize that we could cut some of the expenses that we consider to be basic without really meaningfully sacrificing our standard of living.
Because an emergency fund is very necessary to sustain our invested bitcoins and to deal with any emergency situation.
What is necessary is that you eat and drink and have lodging in order to be able to live.
An emergency is a probability of a future event that may or may not happen, and there are a variety of discretionary ways to prepare for emergencies. An emergency fund is one of the ways. You can choose to put a very high priority on your emergency fund, and that is your choice, and it might cause you to underinvest in bitcoin or to delay your investment in bitcoin because you are choosing to hold way too much money in cash.. but hey, you can do what you like, including having fun staying poor.
There are all kinds of poor folks who keep 6-12 months or more of funds in cash and so they never end up investing in anything because they are too busy adding to their cash fund that degrades in value as fast as they are adding to it, and they are otherwise wasting their time and squandering away money that would be used in better ways to either grow in value or at least to preserve its value way better than holding so much cash on hand... and yeah, you and the other poor people can choose to do whatever you like with your money, your money management and your choices regarding prioritizing how you are going to balance your financial and/or psychological matters.
So even if a person cannot afford to invest, I think it is necessary to form an emergency fund even if his basic needs expenses are reduced to a minimum.
I would suggest that many normies are already in the habit of keeping anywhere between 2 to 6 weeks of back up funds, and sure some folks are better at it than others.
When normies come to bitcoin, it becomes more important to keep larger quantities of back up funds and to engage in better cashflow management in order to not be tempted to tap into their bitcoin at a time that is not of their own choosing including it can be tempting to prematurely tap into bitcoin when it is profitable.
If you don't have bitcoin, then what the fuck you trying to protect with your building up cash reserves?
People who save in cash and only in cash are called poor people... Even though it is uncomfortable to hear, Michael Saylor is known for this statement.
You are not gong to get ahead if you save too much in fiat and the more you save and hoard away fiat, the more likely that you are likely to be debased in your value faster than you can stack it away.. and so there is a need to complement any savings by putting the savings into investments of assets and/or bitcoin.
Sure if a person is not even able to generate more than 2-6 weeks of a cash cushion then maybe such a person does not have enough discretionary income to be able to be investing into bitcoin since investing in bitcoin is a 4-10 years or longer commitment, and some folks do not have enough discretionary income to be able to invest for 4-10 years or longer, so I would think that those kinds of folks need to figure out if there might be ways for them to increase their discretionary income so that they are able to invest, otherwise they are never going to get ahead.... which yeah, not everyone is able to increase their discretionary income.. I understand that real world complication.
Yes, when a healthy amount is accumulated in our emergency fund, we can bring it out of the basic needs, then we can put more money there if we want, or else we can use the money budgeted for the emergency fund to aggressively grow our bitcoin portfolio.
Sounds like a weird way of thinking about it, but yeah, you can do what you like in terms of framing of what you are doing and hopefully, your framing does not cause you to screw up your own financial matters or your bitcoin investing too much..
There are also many who want to aggressively buy Bitcoin in DIP at other times, they can create a separate fund with that money to buy Bitcoin in DIP.
Although I don't like to do this. I buy Bitcoin aggressively when I have discretionary income and when my discretionary income is low, I buy Bitcoin according to my ability.
I think that newbies need to get used to buying bitcoin regularly and also making sure that they have good cashflow management systems/practices in place prior to worrying themselves about whether there is a dip or not. In the end people can do what they like, even though I don't consider dip buying to be a productive way to use funds... but if someone insists on wanting to buy the dip, then maybe up to 20% of their DCA amount could be set aside for dip buying... but they still have to figure how much of a dip to buy and then whether to buy dip increments and how much to spend on each increment.. They may well be better served by persistent, consistent, ongoing, regular and perhaps even aggressive buying rather than waiting for dips that may or may not end up happening, and if they are buying bitcoin on about a weekly basis, then inevitably some of their weekly buys will end up hitting dip periods in the BTC price.
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Emergency funds! Aren't this fund coming out of surplus? Firstly, it's when someone has funds in surplus that he can think of having an emergency funds. Even though I understand where you're driving at, but in as much as one needs these Emergency funds just incase of an emergency as the name implies, we still need to consider that before this can be achieved, one can only keep this kind of funds out from his surplus.
Well, the general idea is that any money that a guy has left from his monthly income after he has allocated toward his monthly expenses would be classified as discretionary income (which maybe you are referring to discretionary income as "surplus?"). The guy can use his discretionary income to consume or to invest or to set aside into backup funds.
Backup funds are emergency funds and/or reserves.
Sometimes we might call these various funds by different names or even assign different purposes to them, yet the idea of reserve funds is that it has more flexibility than emergency funds, yet in the end, the lack of flexibility of emergency funds is something that we self-impose in order to keep money aside and not to deplete our cash too much especially if we are investing in something like bitcoin where we may well not want to put ourselves in a place where we would have to dip into our bitcoin at a time that is not completely of our own choosing and if we have no cash or back up funds then we would end up treating our bitcoin as our emergency fund, which does not seem to be a good practice. If we are investing into bitcoin, we create our priorities regarding how we might classify our funds into different kinds of categories, and to create limits upon how we might choose to use such funds. These are choices that are meant to help us to be able to stack bitcoin better and perhaps to be able to be in a better position to be able to hang onto our stash.
