I have been reading about investing in this forum for the past few months before opening an account here. I have even continued to study in this thread.@JayJuanGee Your thread is food for thought. Although you have written a lot of things over a long period of time which can be difficult for me to keep in mind, because what you have written is important, it also takes a lot of time to read....I definitely appreciate your advice. I have written some important things in the form of notes over the past few months as per your advice, and the things I have understood are:
One of the reasons that I frequently emphasize that guys get started investing in bitcoin as soon as possible, so long as they figure out that they have discretionary funds that they are able to put into bitcoin (that they are willing to lose) and that they have common sense, since no one gets into in an investment to lose money, there should be a perspective that investing in bitcoin is likely to put them in a better position 4-10 years or longer as compared if they had not invested in bitcoin, yet the whole matter takes time, practice and perhaps starting slow with a very small position size to the extent that there might be uncomfortableness when starting out... so experience will tend to help to build knowledge in more solid ways rather than just thinking about the matter.
While investing, we must have an emergency backup fund which is at least equal to the cost of living for 3 to 6 months. If this suddenly gives us a financial crisis, then there will be no need to sell the investment. And you have advised many times to build an emergency fund along with the investment, instead of focusing on the emergency fund in the beginning. So that the investment can be started quickly.
I surely have hesitancies in terms of trying to figure out how much a guy should have for his back up funds, so in some sense most normal people should be able to start from wherever they are at, especially if they have discretionary funds on a fairly regular basis... so then the BIGGER question might be the extent to which the discretionary funds are enough in order to dedicate some portion of the discretionary funds towards investing into bitcoin and locking up that value for 4-10 years or longer.
I give those numbers as guidelines, yet you should be able to imagine that if a person is ONLY able to invest around 10% of his income into both his bitcoin investment and his back up funds (perhaps 5% in each of those), then after 10 months, he would have ONLY put around 1/2 of a month's income into each.. .. ... and sure his expenses are lower, yet it can take a lot of time to build up both the bitcoin investment and the back up funds... and so then there can be questions regarding how much of a guy's income is he even ready, willing and able to put into his back up funds..
and surely I have been trying to error on the side of 3 months minimum to build up into the back up funds rather than recommendations of 6 months that so many financial management folks tend to recommend.. which from my perspective seems like a whole hell-of-a-lot of non-working capital... that might be o.k. as a person becomes more and more wealthy, yet when he is starting out he both has to get some investment going but at the same time when he is starting out he is more vulnerable to fucking up since he does not have any wealth built up... the building up of wealth takes time but it gives options, and it is problematic to be thinking about wealth building in terms of the fiat, even though the fiat is necessary to protect the tapping into the bitcoin investment - at least to mitigate how long it might take before a guy might end up having to tap into his bitcoin stash since the back up funds give options that can come in very handy if there are times in which the income might end up going down and/or the expenses end up going up.
At the beginning of investment, we should have a desire to invest and start investing with a small amount. And invest with the money that remains after meeting our basic needs. You called this discretionary income. And I remember these words of yours.
Yes... Discretionary income or disposable income are the terms that are usually used to describe that money that we have left after we have already covered - or accounted for whatever basic expenses that we have for that pay period.. and sometimes depending on how often we are paid, we may well have to adequately account for basic expenses that cross over more than one pay period, and frequently we talk in terms of monthly periods based on bills that might be due in monthly intervals, yet there may well be some bills that are due over yearly periods or even over several month periods, too.
So at minimum we likely need to be careful in terms of considering all of our discretionary income to be available for investing, since sometimes we could end up making mistakes in our accounting and failing to adequately account for some changes that might come in our income and/or our expenses.
You have given more importance to DCA in the opening post 3 of this thread and in other threads as well. I have studied in different places and tried to understand what DCA is. I have come to know that DCA creates the average purchase price of our investment. And I find it quite interesting. Here is a question for you, can't people with irregular income keep their discretionary income in hand and slowly run DCA on a weekly or monthly basis?
I tend to like to try to encourage guys to try to get their finances to a point that they are able to buy bitcoin every week, yet of course, if their income and/or expenses are irregular then they likely need to attempt to make preparations for being able to accomplish weekly buy of bitcoin.. .so surely I consider DCA to be advantageous based on the ability tailor it to your own cashflow situation, so then price might not be as big of a concern, even though surely a person who is buying weekly could try to figure out ways to buy bitcoin during periods that he perceives bitcoin to be dipping during the week, yet at the same time making sure he make his weekly buy no matter what.
So for example, if a guy has an irregular income that might range between $500 and $1,500 per month, and perhaps an average around $1k per month, and maybe his expenses per month are between $600 and $900 with an average of $750, so he knows that on average he has $250 of discretionary income, yet he still has to prepare for those irregular periods in which his income might be down and his expenses are up... .so maybe the guy saves up an extra cash fund of $400 that he specifically is going to use to buy $20 of bitcoin every week no matter what.. so that he knows that fund can cover 20 weeks of bitcoin buys.. so then he may well refresh that fund from time to time .. but then he has to have some other funds too in order to cover his expenses - especially during those months that he ONLY brings in $500 for the whole month..
The longer we practice, the better that we can become at reaching some kind of a balance so that we are not putting ourselves into stressful situations based on lack of cash and we continue to buy bitcoin no matter what.. and yeah, maybe we might get into a system in which we are buying between $20 and $100 worth of bitcoin each week, and maybe on average it is about $45, but we try to make sure to buy $20 no matter what based on both a priority that we give to buying bitcoin, yet also a system that we have customized to ourself and put in place in order to accomplish our priority.. and if our income and/or expense situation improves in the future, then we already have a system in place that we can tweak to increase our bitcoin buys based on increasing our discretionary income levels (and/or discretionary income reliability).
You have forbidden waiting to buy at low prices in many places.
Sure, frequently I state my opinion and preferences and my suggestion that bitcoin should be a priority for everyone who has discretionary funds, yet at the same time, people have to decide for themselves and to live with the consequences of their actions and/or inactions.
I do tend to suggest that guys should have a 4-10 year or longer time horizon to actually be investing into bitcoin, even though I recognize that beginners might not know if they are able to commit to 4-10 years or longer - so ultimately people have to decide for themselves in regards to whether they are going to get into bitcoin with 5% to 25% of their income (or their investment portfolio) and/or if they choose not to.. including if they choose that they are going to get into it, how they are going to do it, which is also their responsibility to figure out what works for them, even if they might end up making several mistakes along the way, if they have some level of common sense (rather than being a degenerate gambler), then perhaps they will figure out ways to build a bitcoin stash through ongoing investing.. or even reallocating into bitcoin from other investments that they might have.
Because no one knows when the price will come down. And when the price comes down, the market is called DIP.
Our long-term goal while investing should be at least 4-10 years....Here my question is how can I build mental patience and confidence for such a long period of time?
If you already know that your investment timeline is long and you know that bitcoin is quite a volatile asset, you should try to invest accordingly, and perhaps you don't need to rush.
i personally think that if you tell yourself that you are going to invest within your budget and try to buy bitcoin every week, then at least once a year (of course, you can asses and reassess more frequently if you like), you will go back and look at how you are doing and your progress in regards to both managing your bitcoin building yet also your cashflow management systems/practices. You likely will see improvements each year, whether or not your bitcoin holdings are in profits or not... and of course profits are not guaranteed.
Another thing is that many folks who do not have other investments when they start bitcoin, they are likely going to take more than 10 years to build up their bitcoin investment, unless they run into some streaks of luck in which they are able to put more money into bitcoin during certain periods of time... I think that the only reason to have less than a 10 year investment timeline would be based on age and/or health considerations.
Now, if you are thinking that if you invest in bitcoin for more than 10 years, then you are going to be suffering through your youth, which surely you have to figure out ways to bring balance to what you are doing, so even if you are giving a certain high priority towards investing into bitcoin and building up (and maintaining) your back up funds, you also have a responsibility to yourself that you make sure that you feel good about what you are doing and perhaps even to make sure that spend on your own consumption and/or luxuries from time to time.
Even though there aren't any guarantees how your bitcoin investment and your organizing yourself will end up in profits, it seems quite likely that you will end up in a better position for having had invested in bitcoin and organized your finances as compared if you had not.. yet in the end, the choice is yours and the consequences are yours too.
Please correct me if I am wrong in my understanding. I have noted several other issues which will gradually become clear after discussing with all of you. I would like to seek everyone's advice and discuss with everyone. So those who are experienced in this matter, please help me out with some of your valuable time.
I don't consider myself to be giving or receiving advice.. so hopefully, you figure out how to take responsibility since we are sharing ideas here.. and so in the end, you make choice about what you consider to be the good, bad or the ugly ideas, and you choose the extent to which you want to pursue some of the ideas through actions that you take, and you have to figure out your own action and what fit with your own financial and psychological circumstances.. including considering your personal and financial goals.
.Here my question is how can I build mental patience and confidence for such a long period of time?
Before you start your bitcoin investment have a long-term investment mindset and a bitcoin target that you will focus on accumulating gradually with DCA from part of your discretionary income that will not affect your financially and emotionally.
As a new investor, you can start out with little amount of money as low as $10 or more to build your confidence in bitcoin through experiencing the market ups and downs as you buy regularly every week with consistency and persistence. When your bitcoin accumulation is ongoing, your confidence will increase in bitcoin as a good asset for the long-term.
This raises a good point too.
You (referring to Aventas' question) likely want to create goals that are achievable.. so you will have short, medium and long term goals.. so when you are first building your goals might be merely to figure out your expenses versus your income so that you know how much money that you actually have available and maybe considering and/or reconsidering your spending habits as well as the extent to which you consider your income to be adequate or in needs of improvement.
You also might consider that the various kinds of work that you are doing are not really good for improving your financial status or your future income, so you might consider if there might be some skills that you need to learn or networking that you need to make or even some folks will attend college or a trade school or try to get into an internship, which can take years to play out.. so your bitcoin investment might not get as much priority if you are building your own skills and/or future income possibilities. You have to figure out some of those personal matters to the extent that they might be lacking or contributing towards your difficulties to think in longer term kinds of ways.
