If a poor person is building up his back up funds and his bitcoin investment at the same time, then it may take him a couple of years to get to a point that he has 3 month of expenses built up in each, and that may well be quite a great accomplishment that gives him a lot more options, including that his standard of living might be capable of being raised.. yet at the same, time the logical thing may well be to keep on building each, whether he just focuses on adding to only the bitcoin portion or he adds value to both... Normies (including poor people) have to be responsible for their own decision, even though I know practically poor people are going to become tempted to tap into their funds rather than keeping on building them, and no one can stop them from such mistake, even though they iikely would not be considering their paying themselves as a mistake - until maybe 10 years later when they realized they fucked up and they are never going to get out of poverty based on their own inability to stop themselves from tapping into their bitcoin and/or their back up funds with too much too soon.
The question is does a situation like this not place an undue burden on the individual involved?
Of course, whenever there is deferred gratification, money that could be used to consume right now is deferred until the future, and the ability to consume right now is a certainty, whereas the ability to consume into the future is uncertain based on a large number of reasons, including the uncertainties about the future related to the investor's own life and/or health and/or uncertainties regarding the state of the economy and/or the future person's various circumstances.
Some guys become rich based on deferred gratification, and it is not guaranteed what will happen, and a lot of guys stay poor forever and ever and ever based on their inabilities, unwillingness and/or unreadiness to invest.
No one can answer the question for you in regards to what you should do, yet the fact that the future is uncertain justifies that any discretionary income that is generated should be divided between 1) investing, 2) savings (back up funds) and 3) discretionary spending. How you apportion between these is up to you and surely your future-self (to the extent that you are still alive) could end up thanking you or blaming you for your earlier allocation choices.
In my view while such a situation might be extremely arduous it could potentially be manageable for someone who possesses sufficient income adequate both for covering necessary expenses and for funding the activities in question.
Sure. The more income that you have, the more options that you have, yet you have to work within whatever income that you have and take whatever actions you are able to do to increase your income and/or cut your expenses... yet the balance is ultimately up to you.
However speaking personally I believe this scenario severely restricts our freedom to engage in activities other than this specific one particularly for individuals as you mentioned who fall into the low income bracket. The exception would be those who straddle the line into the middle income category for them I believe there is an 80% probability that they would be able to successfully manage it.
I am not proclaiming any of this to be easy, and there are surely a lot of injustices in the world in terms of what kinds of employment (and/or income) might be available to some people around the world, and if they are able to figure out ways to increase their income or to be more efficient on a long term basis with managing the income that they have in order to continually build both their bitcoin holdings and their back up funds in a meaningful way that ends up putting them in a better position for having had invested into bitcoin as compared with if they had not, and surely historically there have been guys who had profited stupendously from bitcoin, yet they still ended up selling too much of their bitcoin too soon because they wanted to lock in their "profit," but then years down the road, they realize that they will never be able to get back the quantity of bitcoin that they had ended up selling, even though at the time that they sold them, they felt good about how they used the money that they were able to generate (and/or profit) from making the sales.
The past does not dictate the future, and surely currently the levels of attacks on bitcoin are not comfortable to watch, so we might always be worried that even if we accumulate bitcoin, what kinds of ways that we might be coerced into potentially giving up those bitcoin and/or revealing our bitcoin holdings that are not within the rights of governments, institutions and/or other individuals to know about our bitcoin holdings.. and I am not even proclaiming that there should necessarily be any problem with our having some bitcoin wallets that we might choose to selectively reveal to others, such as if we might have lightning network wallets in which we might make transactions to buy goods and/or services or even to carry out those transactions on chain to the extent that it might make sense to execute those transactions on chain.. .but there continues to be problems in regards to the need for any of us to have to reveal our identities and/or our coin history to anyone with whom we are transacting.
If one chooses to make such a decision, I feel it is absolutely imperative that they are capable of balancing the demands of that choice. Furthermore come what may they must not complain about the consequences of the path they have chosen. This is because generally speaking those in the low-income category often struggle to sustain their endeavors. Broadly speaking the decision they have made must be executed with maximum effort and dedication so that they may ultimately join the ranks of those who have successfully realized the outcomes of the choices they carefully deliberated upon.
I understand that it may well be tough, since even if a poor person might figure out that he may well have the capacity to successfully invest $30 every week into bitcoin, at the same time, he may well prefer to error on the side of precaution and to ONLY invest $10 per week into bitcoin until his back up funds are of a sufficient size that he could perhaps slowly increase his investment amount from $10 per week to $30 per week and perhaps even increase to higher levels in the event that he is able to improve his financial situation in the future. At the same time, the poor guy may well have a lot of concerns that his small amount of investment into bitcoin may well not be enough to make any meaningful difference in his life.. so the future consequences might not be clear, yet guys still can ONLY do what they can and they have to live with the consequences of their choices whether they are able to dedicate a certain amount of investment into bitcoin or if they might consider that they prefer to make other choices in regards to how much to allocate into their bitcoin investment, their savings (back up funds) and/or into their discretionary consumption.
10 years down the road? Will such poor person have regrets or not in regards to the earlier choices that they had made and that they will not be able to go back in time and to change those earlier choices once the 10 years passes... and time does pass fast and we cannot go back.. so sometimes we might not be clear about our options, even though we still have to live with the consequences.
Emergency fund and reserve fund are just as important as your bitcoin investment, because emergency fund cover things like medical bills, job loss and unexpected expenses, without emergency fund you may be force to sell your bitcoin investment at loss or take high interest loan, emergency fund protects you from making bad financial decisions under pressure.
Reserve fund on the other hand helps you stay financially stable without touching your bitcoin investment, and it also help in settling expenses such as rent, repairs and school fees for your children. Conclusion the same way you think your Bitcoin investment is important, that is same way your emergency fund and reserve fund is also important so don't play.
I think your main problem Joy- maker is that you do not fully understand how expenses are extracted from gross income and how discretionary income is identified, I'll try to break it down a little.
There are normal living expenses and there are periodic expenses and all must be accounted for before you conclude to having discretionary income to invest into bitcoin.
Let's say you earn $1000 monthly and the cost of settling your monthly family needs like, feeding, transportation, clothing, e.t.c costs you $400 monthly(which can still vary), the other $600 isn't immediately your discretionary income. If your rent is $800 yearly, you use $200 for family medical checkups quarterly and your kids school fees is $2000 yearly and gas refill plus house appliance mantenance costs you $400 yearly, it is important you sum your other expenses which is $2000 + $600 + $(200*3) + $400 = $3600, now this $3600 you can choose to divide it by 12 to allocate funds to them on a monthly basis which would be $300 monthly.
Now, every month you've $700 or more as an expenses budget (depending on the variation of normal expenses or the emmergence of another periodic expense to be considered) and for little tolerance, you can remove $750 instead which after taking care of the expenses,
you can redirect the remainder to your discretionary income, thereby leaving roughly $250 as your discretionary income monthly from which you can invest into bitcoin and build out backup funds.
I am not sure how a guy is redirecting any funds to discretionary, since discretionary income is any income that is remaining after all of the basic expenses are accounted for, and sure, sometimes there might be abilities to recategorize some of the basic expenses as discretionary.. such as if a person had been spending $400 per month on rent, and then he is able to either move to another location or perhaps get someone to move in with him (to share) and then cut down the monthly rent amount down to $250 or even $200 per month based on such sharing of rent cost expenses.
One thing about projecting income and expenses through the year is that they likely will have some variance from month to month, so it surely could be the case that a person who projects that he has $300 in discretionary funds each month, yet if his income and/or expenses end up varying from his projections, he might have some months in which he ONLY has $100 in discretionary funds and other months that are as high as $1k in discretionary funds. I surely try to urge guys to buy bitcoin as aggressively as they are able to and to try to figure out ways that they are able to buy bitcoin every week, yet at the same time, they may well need to make choices, like you mentioned DubemIfedigbo001, that involve (each week or each month) figuring out how much of their discretionary funds they are going to be able to dedicate to 1) investing into bitcoin, 2) saving (back up funds) and/or 3) discretionary consumption.
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Investment without a safety cushion can really turn into gambling but if people think the situation is completely hopeless either while there are definitely interested challenges and rising costs putting pressure on the individual focusing on what's with in one limit still matters a lot building skills managing expenses where possible and gradually creating room to investment if it is little it's not easy especially in rough Time but little consistent steps can still make really big difference over time.
There is nothing wrong with your post, Crytohillss, yet I wonder why you have to quote the whole post.. It seems unnecessary to cite the whole post, and out of courtesy to folks who are reading this thread, it is even better if you were to cite ONLY the portion of the post that you are responding to.
Although I agree with you on other points, I do not agree with your opinion on buying Bitcoin. Because here, those who have low income can buy a small amount of Bitcoin and save it for a long time and invest it. Here, it is best to invest on capacity. I do not believe that those who have low income will not buy Bitcoin. Because those who have low income can also buy Bitcoin and invest it. But I think it is more important to invest in Bitcoin, even if it is small.
Investing in bitcoin is absolutely a good idea and afterall we know that we are investing in a valuable asset which has high potentials. Let not sit back and
wait till we make high amount of money before we can start to think of investing in bitcoin, we can invest in bitcoin even with our little funds. If we try our possible best and make provision for discretionary funds then our investment journey can start as soon as possible and we wouldn’t have to worry about waiting for big funds to come before we can invest in bitcoin.
DCA method has help us to understand that it not until one has huge funds before we can invest, with little money we can invest, no more procrastination. But the one thing we need to put into consideration is aiming for future growth not short term profits, have the mindset of long term growth and enjoy the investment journey.
so seeing people talking about the possible reasons why they should invest in bitcoin seems like they are in the wrong thread. In this thread we speak about investment ideas, we speak about how you should try to hold on your investment for as long as possible.
I would not consider this thread to be advanced, even though surely I would prefer if guys try to stick to the topic of the thread.
At the same time, newbie bitcoin investors can be at any level of knowledge about bitcoin in order to get started, and the more uncomfortable they are with bitcoin would likely meant that they adjust their starting investment amount down while they are learning about bitcoin and/or their cashflow situation.
Its also got something to do with what economic conditions they were born into. Some people live in countries with good welfare, good benefits, good pension. Some of us tho have none of that. Totally on your own, and parents rely on you once they retire. Hence the natural logic of emergency funds... because we have no safety net.
Then again I guess the ultimate issue is people still see 'investment' as a gamble. Of course all investments are practically a gamble but gamblers see only big potential, ignore the downsides.
If you do not have enough income to generate discretionary funds that you can stock away for 4-10 years or longer, then you don't have enough income and/or you have too many expenses for you income. You would not be able to invest if you are not able to increase your discretionary income.
If you invest without sufficient discretionary funds, then you are gambling rather than investing, just like you mentioned.
I surely don't know how any guys are able to solve their problem of insufficient income and too many expenses.. and surely there are governments, financial institution and even status quo rich who are ongoingly plotting to keep people poor and to attack various aspects of the normies income - and such attacks are ongoingly happening all over the world, and some regions (areas) are worse affected than other.
That sort of logic is not what a lot of younger people (or even those my age of late 30s early 40s) believe in. They see things in periods of 1 year, 2 or 3 max. So they end up for example selling BTC before a full year cycle because the 'investment failed'.
In this thread, I am trying to share my various ideas about investing, and I am not trying to control what people do. They can do whatever they like, even dumb shit.
I recognize and appreciate the difficulties that many newbies might have to think about investing 4-10 years or longer, so I understand that there may well be a lot of guys who might be willing to start investing into bitcoin, yet they are unwilling to mentally commit to 4-10 years or longer, and sure maybe after a year or more of investing into bitcoin (and studying bitcoin and their financial situation at the same time), they might come around to accepting and being able to commit to staying in bitcoin for 4-10 years or longer for every new purchase of bitcoin that they make, so they might be able to train themselves to become an investor into bitcoin rather than a trader.
In the end, it is up to each newbie to figure out if there might be some way to attempt to follow longer term kinds of ways of getting into bitcoin and staying in bitcoin, and at the same time, they have to figure out their position size, so maybe instead of investing $100 every week into bitcoin, they would be better off to invest just $30 per week into bitcoin until they can really get themselves into being able to both commit to longer term investing into bitcoin (such a 4-10 years or longer) and also to accept that they are the ones who is arriving at the conclusion that 4-10 years or longer is investing rather than trading, and bitcoin is better to be entered into as an investment rather than a trade.. and yeah, it could take some time for any newbie to develop such conviction within their own ways of thinking about how to approach their bitcoin accumulation and/or holding process.
I like this word 'discretionary income' here we say 'disposable income' but I think yours is more accurate when I think about it. Kinda reflects the way our societies think
Either word can be used, and they pretty much mean the same thing when we are speaking in the context of investing.. but yeah, maybe "discretionary" is a bit more descriptive of having a choice.. even though "disposable" also means that we can do whatever we want with such extra money, including throwing it away, if that is what we want to do with such extra money... hahahahahaha
Some guys continue to think that the mere fact that they have discretionary income, then they can spend the whole 100% of it on bitcoin investing, and they might conclude that especially if they have a sufficiently decent size of back up funds in place already, and sure that could be the case, but it seems a bit problematic to fail/refuse to account for money that we may well need every single pay period to discretionarily consume. Perhaps some guys are mixing up discretionary consumption with basic consumption, yet not all consumption is created equally, and we have some consumption that each of us has to do every single month, such a food, lodging and perhaps even consumption that is related to our abilities to maintain a job (transportation/communication), and so some of our basic consumption cannot be deferred even though some folks might have situations in which someone else is paying for some or all of the basic consumption costs, or maybe they enter into debt in order to pay for basic consumption costs.. yet the point is that some costs cannot be deferred (which would likely be basic consumption costs) and other costs can be deferred or even not entered into (such as the cost of going to a concert or going out for a drink or upgrading to an iphone 17 versus a less expensive model in the event that some communication device (such as phone) is actually needed versus wanted).
About governments and status quo? I fully believe they are after you, after us, and don't have our interests. Despite proof all the time that this is true, still many believe the government is good towards them. This is the feeling displayed each election here.
There may well be a lot of reasons that governments are responsible to identify the public good and to carry out policies that are in the public good, yet it seems that so many times they get distracted from their duties, and also perhaps various government systems have put governments in states of desperation, which might not have had even been completely of their own causing, yet they also might feel that they are ready or able to carry out policies in the public interest because they might consider the public interest to be contrary to their own self-preservation concerns, which seems to inevitably lead them to monitoring, controlling and/or manipulating the public - whether through monetary policies and/or even free transactional and/or free communication matters.. .which is too bad, and surely some areas of our lives are more under attack than other areas.. which is also too bad.
It's true as you mentioned that with that timeframe it's absolutely necessary to have an emergency fund that matches the specified timeframe.
The back up funds help to make it possible to not tap into the bitcoin and for the investor to meet his goals... so they likely are building the back up funds as they go in the event that they do not have back up funds prior to getting started with bitcoin.
Very helpful and very important. In my opinion, a reserve fund is one of the things that must be considered, prepared, and never forgotten if someone wants to get involved in Bitcoin accumulation. You've already stated the goal: if something unexpected happens in life that requires you to spend money, your Bitcoin accumulation will remain safe because of the reserve fund; you won't need to sell it.
This strategy or preparation is very helpful for investors in
achieving their goal of maximizing long-term profits.I am not very excited about the idea of framing investing in terms of profits, since guys can have goals in regards to their investing into bitcoin beyond merely thinking in terms of profits. Profits seems to be a trader's way of framing matters, and it seems an incomplete way of framing why people are in bitcoin.
Even though we don't know who is Satoshi, yet would we proclaim that Satoshi got into bitcoin for "profits?" Personally, I doubt it, and I think that profits does not adequately capture motives of individuals, even though surely profits might be part of the explanation.
