JJG’s Outline of Bitcoin Investment Ideas

[Moeralife11]

If someone doesn't have an emergency fund but is willing to invest and has discretionary income, they don't need to wait for an emergency fund. They can start investing at the same time and focus on building an emergency fund. Just because you can do both doesn't mean that there are no trade-offs in your money allocation decisions.

For example, if you have $100 in discretionary income after deducting all your monthly expenses, you have $70 in your emergency fund, which would be $30 to buy Bitcoin. If you put $70 in Bitcoin, you can put $30 in your emergency fund. Here, you are both investing and saving. But the speed at which you accumulate Bitcoins and the speed at which your emergency fund grows will not be the same. This is where the money allocation decision becomes important. If you already have some emergency funds but have a small amount of Bitcoin, you may want to give more importance to buying Bitcoins.  On the other hand, if someone has no emergency fund at all, they may need to temporarily focus more on their emergency fund.

Yeah it makes sense but one thing we have to understand that the financial situation and responsibilities of every person is different. Doing both like savings money for emergency and investment with low income is a good idea but if someone has low income and he/she save a little amount then first of all he/she has to increase the income and during this phase they have to save some amount first may be a little but just saving for sometime when they have a reasonable amount saved they can start investing while continuing to build their emergency fund because if any emergency situation happened and there is no emergency fund or it is less and also the market is down as well may be a person sell there assets in loss.

I agree with this. We never know what negative events might befall us in the future, but they are very likely to happen. Therefore, I agree that people should build an emergency fund first before finally starting to invest. Increasing income, as you said, is clearly something that must be done, and only after they’ve saved enough to cover at least six months of expenses including unexpected expenses should they begin investing.
This emergency fund can prevent you from having to take out a loan when financial problems arise, meaning you’ll be debt-free, your financial issues will be resolved, and your Bitcoin accumulation will continue.

No i disagree on that statement saying people should build emergency funds of about six months expenses before they start to invest in bitcoin because it will put fear in many newbies not to start investing in bitcoin as they might think is too expensive for them. since what they need to buy bitcoin is just a discretionary income then i think they can start investing in bitcoin even if they dont have emergency funds yet because they can build it along the line as they are investing. those who dont have it should not use it any form of  an excuse for them not starting bitcoin investment, what is important for them to use and start is just discretionary income.

[SPIDERMAN008]

Ofcourse it's a trap, the emergency funds is set aside for emergency situations/challenges not for profits so investing it in an asset makes no sense so keeping it in fiat is the best option i could think of. However keeping it in cash is tempting cause you could easily want to spend it knowing there's a physical money at home.

Unless a guy does not understand and / or know the reason as to why they are saving that money that they could easily want to temper it whether it is in cash or in the bank, while those investors who knows the reason why they are keeping money for emergency wouldn't temper with it no matter how the situation might be; they would rather temper with the money in their reserve funds instead of their emergency funds. So with this illustration it's clear that those who end up tempering Their emergency funds when its been saved in cash obviously don't know the reason why they are saving it,  probably just want to follow what other investors are doing. of course some investors like coping what other investors are doing without even trying to know the reason why they are doing all of that, that is why they usually end up making a mistake in their investment.

You are right. A person needs to have this sense of responsibility, through which he can understand what the job of a fund is and when to use it. If after keeping money in his room locker as fiat, he wants to use it it means that he does not understand the main purpose of the backup fund. As a result, he can face big losses in long-term investments. Just as no one can know in advance when an emergency will arise, it is also impossible to predict when the price of bitcoin will decrease. Now a person wants to use the backup fund. He spent that fund thinking that he will create a backup fund again in the next 4 to 5 months. But as soon as he used the backup fund, unfortunately, after a few days he lost his job. His family started needing money for medical purposes and at that time the price of bitcoin also started decreasing. So just think, how much risk that person put him in just one wrong decision.

[sotelorene]

No i disagree on that statement saying people should build emergency funds of about six months expenses before they start to invest in bitcoin because it will put fear in many newbies not to start investing in bitcoin as they might think is too expensive for them. since what they need to buy bitcoin is just a discretionary income then i think they can start investing in bitcoin even if they dont have emergency funds yet because they can build it along the line as they are investing. those who dont have it should not use it any form of  an excuse for them not starting bitcoin investment, what is important for them to use and start is just discretionary income.

I don't know the kind of orientation some people get that will make them want to build emergency funds before starting investing in Bitcoin, I am not disputing that emergency funds is not good no but rather I am  just trying to let some folks  know with this mentality that it is not the best or right thing to do because your priority as an investor especially as no coiner is to start growing or purchasing Bitcoin first and then grow your emergency funds along side.

[JayJuanGee]

So it is always good that a balance is struck between accumulating Bitcoin and then building backup funds...Both goals can be worked towards simultaneously by the investor simply by making his investment while also building their emergency funds alongside it... They both should always have an equal importance in the minds of investors, no need for trade-offs..

If someone doesn't have an emergency fund but is willing to invest and has discretionary income, they don't need to wait for an emergency fund. They can start investing at the same time and focus on building an emergency fund. Just because you can do both doesn't mean that there are no trade-offs in your money allocation decisions.

For example, if you have $100 in discretionary income after deducting all your monthly expenses, you have $70 in your emergency fund, which would be $30 to buy Bitcoin. If you put $70 in Bitcoin, you can put $30 in your emergency fund. Here, you are both investing and saving. But the speed at which you accumulate Bitcoins and the speed at which your emergency fund grows will not be the same. This is where the money allocation decision becomes important. If you already have some emergency funds but have a small amount of Bitcoin, you may want to give more importance to buying Bitcoins.  On the other hand, if someone has no emergency fund at all, they may need to temporarily focus more on their emergency fund.

What about your discretionary consumption?

You think that you can allocate all of your discretionary funds towards bitcoin and emergency funds?

How long is that going to last? 1 month?  4 months?  a year?  4-10 years or longer? 

You might not have though through your situation very well @Charcol

For example, if you have $100 in discretionary income after deducting all your monthly expenses, you have $70 in your emergency fund, which would be $30 to buy Bitcoin. If you put $70 in Bitcoin, you can put $30 in your emergency fund. Here, you are both investing and saving. But the speed at which you accumulate Bitcoins and the speed at which your emergency fund grows will not be the same.

This method you use as an example is not the best, and it is division like this that makes some investors to run into trouble because it's unsustainable, because since you fail to make provision for discretionary consumption, you may not be able to sustain the investment, since you may live a life where you will deprive yourself of so many things, that keeps the body and soul together.

So dividing your discretionary income into three equal part is the best. One place for investment, one to strengthen your back up funds and the last part for your discretionary consumption. It is only when you think that your emergency funds is big enough to sustain your investment for three months, you can pause that aspect of it and channel that money to buying consistently.

Yes @Finebone.  Part of the problem could be deprivation, yet another problem could be that @Charcol does not understand the difference between needs and wants, and is miscalculating wants as if they were needs, so then @Charcol is miscalculating how many discretionary funds he has available each week/month.

Having emergency funds in the bank and cash is actually the best option at personal discretion, anything bond is just the same as reinvesting your emergency funds in Bitcoin which is a total no.

You just making shit up, @Obulis.

When we hold cash in our back up funds, we are tending to hold it in our local currency based on the likelihood that our bills can be paid that way, so we tend to think in terms of having our funds available (liquid) and non-volatile.  Bonds tend to be pegged to a local currency or they might be pegged to the dollar.

Bitcoin tends to be quite liquid, yet we are using bitcoin as a long term investment, perhaps 4-10 years or longer, so we should be putting systems into place so that we do not have to and/or we are not tempted to tap into it whether it is up or down during that period, since many folks (probably an overwhelming majority of normal people) tend to take a long time to build up their bitcoin investment.  Bonds might end up saving them from having to tap into their bitcoin...and of course, bonds would supplement other forms of holding back up funds, and there likely is some variation in terms how long it would take to cash in bonds.. a few days or maybe a week or two.

[Dxdiax26]

What about your discretionary consumption?

You think that you can allocate all of your discretionary funds towards bitcoin and emergency funds?

How long is that going to last? 1 month?  4 months?  a year?  4-10 years or longer? 

You might not have though through your situation very well @Charcol

I think this is one of the most difficult things for anyone to do because it's related to income, so one must differentiate between the three.
Adjustment is essential when something like this happens. If we make a mistake, it's likely due to a mistake in organizing or adjusting to meet the management needs to survive, both for basic needs and other things, such as investments. I disagree with someone allocating all discretionary funds solely to buy Bitcoin and an emergency fund, as this can lead to a decline in our health by refraining from using our funds because they are allocated to an emergency fund and buying Bitcoin.

[JayJuanGee]

What about your discretionary consumption?

You think that you can allocate all of your discretionary funds towards bitcoin and emergency funds?

How long is that going to last? 1 month?  4 months?  a year?  4-10 years or longer? 

You might not have though through your situation very well @Charcol

I think this is one of the most difficult things for anyone to do because it's related to income, so one must differentiate between the three.

I am having trouble understanding what is so difficult?

Sure.  Guys might need to practice figuring out their income and their basic expenses so that then they can determine how much they have remaining to spend their discretionary income.

And, discretionary income has three ways that it can be spent.  1) invest, 2) save, 3) discretionarily consume.

These are basic skills, and sure guys might need to practice, but they are not hard to learn with practice, even though sure, some guys might take longer than others to practice and figure out their situation.

Adjustment is essential when something like this happens. If we make a mistake, it's likely due to a mistake in organizing or adjusting to meet the management needs to survive, both for basic needs and other things, such as investments.
 

 I think that an an overwhelming majority of adults learn how to organize their finances, and all that they need to know is basic math skills, and the remainder comes with practice.  If guys do not know basic math, then sure, it is better to learn basic math skills, involving adding, subtracting, multiplication, division.

I disagree with someone allocating all discretionary funds solely to buy Bitcoin and an emergency fund, as this can lead to a decline in our health by refraining from using our funds because they are allocated to an emergency fund and buying Bitcoin.

Normal people are not saving and/or investing, so you seem to be exaggerating as if there is a problem when there is not.

Most normal people think about all the various ways that they want to spend their money, and so yeah, normal people are used to spending money, even if they might not be used to distinguishing between needs and wants and also organizing their money so that they can also invest and save some portions of their income (especially connected to their discretionary income).

[B-BossMan]

When we hold cash in our back up funds, we are tending to hold it in our local currency based on the likelihood that our bills can be paid that way, so we tend to think in terms of having our funds available (liquid) and non-volatile.  Bonds tend to be pegged to a local currency or they might be pegged to the dollar.

Bitcoin tends to be quite liquid, yet we are using bitcoin as a long term investment, perhaps4-10 years or longer, so we should be putting systems into place so that we do not have to and/or we are not tempted to tap into it whether it is up or down during that period, since many folks (probably an overwhelming majority of normal people) tend to take a long time to build up their bitcoin investment.  Bonds might end up saving them from having to tap into their bitcoin...and of course, bonds would supplement other forms of holding back up funds, and there likely is some variation in terms how long it would take to cash in bonds.. a few days or maybe a week or two.

I agree with you and that's a smart plans in bitcoin investment journey, it even more relevant to keep our backup funds in our local currency for easy acesss and spending for our daily expenses. Doing that would actually help us protections our bitcoin holdings, but alots of newbies failed to understand that bitcoin is not short-term investment,that's why they do sell thier bitcoin early or forced to sell due to small emergency, but atleast, to yield a good growths, one needs to have the mindset of holding bitcoin for 4 to 10 years or even more than that, so to have a peaceful investment journey, you don't invest anyhow money or all your funds, you only invest discretionary income and bitcoin has made everything easier for us that you don't need to have a huge amounts of money, even with the little amount, being it newbies or experienced investors, DCA strategy is safe for gradual buying and holding it for long-term period.

[Futurexxx]

I don't know the kind of orientation some people get that will make them want to build emergency funds before starting investing in Bitcoin, I am not disputing that emergency funds is not good no but rather I am  just trying to let some folks  know with this mentality that it is not the best or right thing to do because your priority as an investor especially as no coiner is to start growing or purchasing Bitcoin first and then grow your emergency funds along side.

Sometimes it's not just about poor orientation or any of them being misled, but it may be that the newbie investor is doing what I call ITK, which is "I too know" when they knows nothing. Such types of people believe that common sense can help them figure out everything the right way all the time, without knowing that they are just trying to fuck themselves up by applying common sense on everything.

An inform investor knows that Bitcoin accumulation and putting down your backup funds in place is done simultaneously, not by pay more attention to one and neglecting the other.

[Princess Leah]

Sometimes it's not just about poor orientation or any of them being misled, but it may be that the newbie investor is doing what I call ITK, which is "I too know" when they knows nothing. Such types of people believe that common sense can help them figure out everything the right way all the time, without knowing that they are just trying to fuck themselves up by applying common sense on everything.

An inform investor knows that Bitcoin accumulation and putting down your backup funds in place is done simultaneously, not by pay more attention to one and neglecting the other.

ITK sounds funny, you should know that lack of understanding can make some do irrational things cause if the person understands they he/she mustn't necessarily build emergency funds before investing then the person won't do it. Well if someone already has an emergency funds before concedering Bitcoin as an investment option then that's a plus to the investment.

 However if there no emergency funds available, it can be built together with the investment instead of building an emergency funds before investing, that's another form of procrastination that people don't understand cause they're delaying their investment journey in the name of building an emergency fund.

[abaeze]

So it is always good that a balance is struck between accumulating Bitcoin and then building backup funds...Both goals can be worked towards simultaneously by the investor simply by making his investment while also building their emergency funds alongside it... They both should always have an equal importance in the minds of investors, no need for trade-offs..

If someone doesn't have an emergency fund but is willing to invest and has discretionary income, they don't need to wait for an emergency fund. They can start investing at the same time and focus on building an emergency fund. Just because you can do both doesn't mean that there are no trade-offs in your money allocation decisions.

For example, if you have $100 in discretionary income after deducting all your monthly expenses, you have $70 in your emergency fund, which would be $30 to buy Bitcoin. If you put $70 in Bitcoin, you can put $30 in your emergency fund. Here, you are both investing and saving. But the speed at which you accumulate Bitcoins and the speed at which your emergency fund grows will not be the same. This is where the money allocation decision becomes important. If you already have some emergency funds but have a small amount of Bitcoin, you may want to give more importance to buying Bitcoins.  On the other hand, if someone has no emergency fund at all, they may need to temporarily focus more on their emergency fund.

At the same time, investing in Bitcoin and creating an emergency fund is a good decision. Because when it comes to investing in Bitcoin, it is necessary to have a sustainable plan that can invest regularly and build financial security, but along with that, personal expenses must also be considered. Because if someone's plan is too strict, they may get frustrated and be forced to stop/quit investing at the wrong time. Also, it isn't right to assume that you can put all your extra money into Bitcoin and emergency fund year after year because it can affect your lifestyle.

Accumulating Bitcoin is a long term journey. So your strategy should be one that can be maintained for years, not just a few months. Before deciding how much money to invest, you should consider how much money you can deposit regularly without sacrificing emergency needs, income stability, and other important things. A good financial plan doesn't only depend on how much Bitcoin you can accumulate but also how long you can realistically continue the plan.

[JayJuanGee]

I don't know the kind of orientation some people get that will make them want to build emergency funds before starting investing in Bitcoin, I am not disputing that emergency funds is not good no but rather I am  just trying to let some folks  know with this mentality that it is not the best or right thing to do because your priority as an investor especially as no coiner is to start growing or purchasing Bitcoin first and then grow your emergency funds along side.

Sometimes it's not just about poor orientation or any of them being misled, but it may be that the newbie investor is doing what I call ITK, which is "I too know" when they knows nothing. Such types of people believe that common sense can help them figure out everything the right way all the time, without knowing that they are just trying to fuck themselves up by applying common sense on everything.

I don't know why you are bashing on common sense.  What is needed to get started in bitcoin is discretionary funds and common sense, which means that you do not need more.  Sure, common sense will help guys to identify what they need to know and what they do not need to know, so for example, a guy who is struggling with math might need to learn and/or practice math, and common sense may well help him to identify what he needs to know.   Also a guy who has $100 in discretionary income that comes in each week, his common sense might help him to realize that he needs to not invest all of his discretionary income into bitcoin and he likely needs to save some for savings and discretionary consumption... And his common sense might help him to figure out how much to start with, maybe less than $30 per week to go into bitcoin while he learns and orients himself.

You seem to be bashing common sense when you seem to be referring to guys who either do not have common sense or they are not employing common sense.  Yes, common sense is a confusing topic because it does not describe any specific knowledge yet might describe good judgment and ongoing learning and moderation in the things that we choose to do and what we choose to investigate.

An inform investor knows that Bitcoin accumulation and putting down your backup funds in place is done simultaneously, not by pay more attention to one and neglecting the other.

A new investor might not know exactly what to do or how to invest into bitcoin, yet you might be correct that if newbie investors into bitcoin are exercising common sense, they may well come to the conclusion that they can ONLY invest with discretionary funds and that their discretionary funds can be used to invest, save and discretionarily consume.  They may also come to the conclusion that bitcoin is a long term investment rather than a trade, but they still might not come to the correct conclusions right away.  Common sense does not necessarily lead people to the correct answer on the first try, and they may well end up making several mistakes prior to coming to the correct answers (or the better answers).

By the way, your assertion of ITK being a problem.  Sure.  You are likely correct that there are guys who believe that they know more than they know, and frequently, normal people go through periods of making mistakes before they come to realize that they were wrong in what they thought that they knew, and so it may well be the case that some guys are more humble than others and more receptive to learn, yet it also does not mean that guys who are wrong are always going to be wrong and that they might not be able to fix some of their errors in their thinking and/or errors in their actions.

Sometimes it's not just about poor orientation or any of them being misled, but it may be that the newbie investor is doing what I call ITK, which is "I too know" when they knows nothing. Such types of people believe that common sense can help them figure out everything the right way all the time, without knowing that they are just trying to fuck themselves up by applying common sense on everything.

An inform investor knows that Bitcoin accumulation and putting down your backup funds in place is done simultaneously, not by pay more attention to one and neglecting the other.

ITK sounds funny, you should know that lack of understanding can make some do irrational things cause if the person understands they he/she mustn't necessarily build emergency funds before investing then the person won't do it. Well if someone already has an emergency funds before concedering Bitcoin as an investment option then that's a plus to the investment.

 However if there no emergency funds available, it can be built together with the investment instead of building an emergency funds before investing, that's another form of procrastination that people don't understand cause they're delaying their investment journey in the name of building an emergency fund.

Many of us came to understand that it is important to get started investing in bitcoin sooner rather than later, and that waiting to start is not a good approach to bitcoin, yet it still can end up taking brand new bitcoiners time to get started and they might need to figure out some comfortable amount to start out with.

Many times we expect that it should be easy to figure out how much discretionary funds that we have, yet there are many folks who are not very aware of the specifics of how much money that they have and the extent to which they can divert money towards bitcoin (and savings) and still have enough money to cover all of their expenses.  It can take practice to get used to buying bitcoin and also putting away money each week for back up funds, and making sure that there still is enough money to cover all of the basic expenses.

There are probably quite a few of the regular bitcoiners who have gotten into a practice of projecting forward their income and expenses, so maybe they started out by projecting forward by 1 or 2 months, but then they likely come to realize that they can better plan their bitcoin investment amounts if they project their income/expenses several months in advance, so that they largely have a good idea about how much extra money that they have each week and how much they can feel comfortable to put into bitcoin and how much to put into their savings.

They might not have had been good at figuring out their income/expenses until they practiced for extended periods of time and also made several mistakes in the process so that they got better at projecting their income/expenses after they made a few mistakes and after they practiced carrying it out for several months and verifying that their system largely worked for them and also worked for them in a variety of contexts.

[Promocodeudo]

Sometimes it's not just about poor orientation or any of them being misled, but it may be that the newbie investor is doing what I call ITK, which is "I too know" when they knows nothing. Such types of people believe that common sense can help them figure out everything the right way all the time, without knowing that they are just trying to fuck themselves up by applying common sense on everything.

An inform investor knows that Bitcoin accumulation and putting down your backup funds in place is done simultaneously, not by pay more attention to one and neglecting the other.

So are you saying that common sense does not work, even though I agree with you point that both Bitcoin stacking and building a back up funds done at a go, I still think that common sense can apply here as long as it works, I was not expecting anyone to criticize common sense when it comes to anything especially in Bitcoin investment, I'm very sure that you understand why almost everyone here kick against creating an emergency funds before starting Bitcoin investment journey proper, it is not that it is bad, but the reason is that, the energy that will be channeled in having your emergency funds first can as well be channelled to doing the two concurrently which is using one stone to kill two birds, instead of preparing to safeguard what you don't have.