I am referring to a lump sum situation and not "a third of your cash" as you are describing. Let's say a situation in which a guy had been investing $100 per week for a whole year (which means that he had already invested $5,200 into bitcoin), and he was continuing to invest $100 per week for as long as he could into the future, unless he were to receive a raise of find some area to save money that would allow him to increase his weekly amount. If that same guy got a $2k bonus, then he can consider all three categories (of buy right away, DCA, and buy on dip) for that $2k amount and perhaps even allocate 1/3 of the amount for buying on dips as I mentioned. There is nothing outrageous about deciding in the way that I described, even if there are trade offs as you referred to in your disagreement.
I really get your point more better now, in that kind of situation, that person is already practicing normal regular DCA with the $100 weekly investment. So that extra $2k bonus become another opportunity to apply different strategies wisely. Like to share the bonus into different categories, like buying immediately or to continuing DCA process gradually, and also keep some for possible dips. it actually make a lot of sense because it balances market exposure, it is not about the DCA but about using additional money in more strategic way.
Many folks misunderstand lump sum investing as the entire funds must go in at once no matter the market conditions, which is not, in reality investors can still manage the lump sum intelligently depending on market situation. But the must important thing is that the person is already accumulating consistently and not completely relying on timing the market.
Frequently lump sums provide opportunities, and surely it helps that bitcoin buying systems are already in place, since sometimes when people get some kind of a bonus at work or they come accross unexpected cash, one of their first inclinations might be to buy something with the money rather than invest, since normal people might not be used to investing.
Another thing could be that even when a guy first comes into bitcoin, he has other investments and/or other savings amounts that he could authorize to put into bitcoin, yet he might not want to put any of that money into bitcoin in the very beginning, since he is still getting used to the whole process of buying bitcoin and maybe he even would prefer to learn self custody before he puts larger amounts into bitcoin, so he might start out DCAing some regular amounts before he authorizes himself to put higher amounts into bitcoin, and if they strategizing around putting those extra amounts into bitcoin mostly revolve around logistics rather than price, then I would consider that to be merely considering how to allocate the extra (lump sum) amounts, yet if the guy is ONLY focusing on the price and waiting for a dip, then perhaps he had already authorized the amounts, but he had already put the amounts into a buying the dip category rather than being more flexible and immediate with his staring to buy bitcoin right away rather than defering his buying based on BTC price moves that may or may not happen.
I don't tend to be a BIG fan of buying the dip, unless it is supplemented with other ongoing buying of BTC since I am not a big fan of deferring BTC purchases, except to ONLY balance out the cashflows and surely in the case of income coming in, the money is not even available to defer until it is in the account.
For example, guys could get paid on various kinds of timelines, and most guys either get paid weekly or every other week, yet there are some kinds of jobs in which the pay might ONLY be once a month or even at greater periods like on a job by job basis, yet it seems to me that if guys get into a practice of already buying bitcoin regularly, then the beginner guys can figure out ways to manage their cashflows so that they are trying to buy some bitcoin every week no matter what, for at least 1 or 2 cycles, and then maybe after a cycle or two, then they can think about if they need to reconsider their prior practices around bitcoin buying, and surely if they spend a whole cycle buying bitcoin on a weekly basis, then they likely will recognize and appreciate that the system that they had already established is working out fairly well, and they may well not have any major burden to continue to follow some very similar system going forward for another cycle or more.
Some guys really struggle to generate enough discretionary income to really be able to build their bitcoin stack size in a fast way, so even if they want to build up their bitcoin stack size in a fast size, they are limited in their abilities, and they should not become frustrated by their own limitations, especially if they are already engaging in practices that give a certain already existing priority to ongoingly buying bitcoin on a regular basis.
So then, whenever they get a lump sum amount, or for some reason have some extra cashflow in any given month, they have the luxury of having more options regarding how to allocate such funds in terms of investing, saving and/or discretionary consuming, and within the investing category they have the luxury of choosing between buying right away, deferring by DCAing and/or deferring by buying on dips that may or may not end up happening. Those are good options to have, and surely many normal guys might find that they only have a few times a year, at most, that they are coming into situations in which they have some extra funds that come available to them that are large enough to really cause them to want to strategize with their usage of such extra amounts.
That one big mistake some people make, when it comes to bitcoin investment we should know that when an individual is driven with the sole aim of making profit then He is a trader, and when an individual is driven with the sole aim of investing to have a good future then he is regard as an investor, immediately a person who invest with the aim of having a reasonable future begins to think about making profit then his mindset have changed from being an investor to a trader. So sometimes this cases are common and we know notice that we should the name to tag the person with.
When you busy buying with DCA And you are being consistent about it, so far you are using your discretionary income you won’t be tempted by profit withdrawal because your basic needs are being carted for.
There are many who first consider themselves investors, but later, out of greed, they think of quick profits and then their mentality becomes like that of a businessman. A skilled investor is a person who is patient, ready for all situations and remains steadfast in the long run. Even when he sees the price fluctuations increasing, he restrains himself from being greedy and considers it normal when the market falls. On the other hand, we should always remember this fact. The real purpose of investment is not only current profit, but it also plays a big role in creating financial security for the future. A real investor never allows himself to deviate from long-term plans.
In as much as times change and our experiences increase we should stick to the goal. Though sometimes life can happen and people would feel very disconnected from their initial goal in such that they feel like quitting because their worlds has turned upside down. Well in this case I hate to say it but bitcoin isn't more important than our lives, you have to find yourself first before you continue investing in bitcoin. But sometimes when things like that happens, if you had saved up enough backup funds you could literally use that to sustain yourself probably for like 2-3 months before you bounce back to your usual self. And that is exactly why we advice investor try as possible to secure at least 3 months of their monthly spending as emergency fund. What you saved up and end up saving you.
Guys do not need to save up 2-3 months of their expenses prior to getting started buying bitcoin, and frequently they can start buying bitcoin from whatever cashflow situation they find themselves as long as they can figure out that they have discretionary funds available in order to get started buying bitcoin. There could be some situations in which the income and/or the expenses are in a bit of a disarray, so there are difficulties figuring out the extent to which discretionary funds are available to get started... so then perhaps in those circumstances there would be delay in getting started until the discretionary funds can be determined.
There also can be times in which a person does not have time to really look into bitcoin and/or to figure out the extent to which they have discretionary funds available, yet they still might be able to adjust their beginning size of their DCA to a small enough amount that allows them to get started buying bitcoin based on a priority of getting started rather than fucking around waiting, even though they don't have time yet, to look into some of the various aspects of investing into bitcoin and/or cashflow management that they would like to sort out when they get more time to look into and/or organize those kinds of matters into a better place.
So, guys here need to ongoingly be careful in their seeming to emphasize emergency funds rather than getting started in buying bitcoin, since guys can get started buying bitcoin as soon as they can figure out that they have discretionary funds.. so they should not be delaying in their getting started, even though they may well need to start with a smaller bitcoin position size while they are sorting out their cashflow matters and/or other things that they might want to research into bitcoin.
Surely from time to time in this thread, we seem to be inclined to argue about what basic knowledge of bitcoin might be needed to get started buying bitcoin, and really the level of basic knowledge that any of us has about bitcoin in the beginning might be small, yet need not delay us in getting started since we can adjust our beginning buy amounts as long as we can figure out how we are going to initially source our bitcoin, whether that is buying on an exchange or some other way of buying coins.. and surely if we have a lot of things going on in our lives, we might set some small weekly buy amount for our bitcoin until we are able to dedicate some time towards sorting out our cashflow matters with better details and also look into any questions that we might have about what bitcoin is and why bitcoin is valuable and likely to continue to be valuable.
Take for example, someone who has been dealing with investments or managing cashflow for years, taking certain decisions may feel natural and less complicated but for someone who is completely new, those same things may not feel nearly as obvious because they’re still trying to understand risk, discretionary income, and what level of exposure they’re personally comfortable with.
That is exactly true.
There are some guys who might have had been managing their cashflows since they were a teenager, and they are in their 20s, and they already have a lot of experience in figuring out their discretionary income (funds) and making decisions based on such discretionary funds availability... and there may be other guys who never think about their income versus expenses, and they spend money when they have it, until it is gone and they take out loans without really planning how those loans are going to affect them down the road, and then the one guy is very organized and thoughtful in regards to his cashflows and the other guy is frequently putting out fires when he has income short falls and extra expenses that seem to come up without his realizing them to be pending.
I agree with this. We are individuals differences with different thinking capacities, there are people who are very smart right from thier younger age, they treat money like system instead of treating it like suprise, they actually understand what comes in and what goes out and also what remains after every important responsibilities while growing up, they can budget for thier little things like clothes, airtime and others. Because of that that mindset they, they do not confuse
having money available with having money safe and spend they clearly understand that discretionary income is the money left for investing, which is the type of money that's suitable for long-term Bitcoin investment.
What I am describing are characteristics and habits of individuals rather than talents, and surely the guy who had been practicing organizing his cashflows since he was a teenager may well not be any smarter than the guy who is unorganized, but his ongoingly creating and following a system of organizing his cashflows has likely taught him how to pay attention to those kinds of matters and to try to discipline himself within his cashflows, and part of my point is that the actual skills that are needed are likely available to almost anyone as long as they have common sense, yet they still have to practice their common sense in order to improve upon skills and abilities that they already have yet they had not been practicing such skills and abilities due to their own choices and perhaps their developing of bad habits that would likely be in their better interest to try to break their bad habits and to ongoingly deploy better practices, even if they might have to ease their way into focusing on the development of better practices by starting from where they are at and little by little working their way to better and better habits so that they can make sure to ongoingly free up some money to buy bitcoin and to also ongoingly set some money aside so that they are both creating and building up their level of back up funds so that they are in a better position to protect their bitcoin in the event that their income goes down and/or their expenses go up.
However, this gives the stronger advantages when using DCA strategy because their financial foundation is well stable, they can consistently buy thier bitcoin without panicking during market volatility or even an unexpected expenses, and less thier stress. While some folks simply spend thier money as it comes in without identifying or separating thier needs, wants and savings,
All of these matters are within common sense and able to be learned, even if a person might have had not been practicing good habits, they likely would be in a better position to improve upon some of the basic skills, even if they might have had been following bad habits through their whole life prior to focusing upon having a reason (investing into bitcoin) to motivate them to create better practices and to follow better practices so that they can get started buying bitcoin and little by little putting themselves into a better position by their both building up of a bitcoin holdings and also building themselves up by simultaneously building up their cash reserves so that they don't have to tap into their bitcoin at a time that is not convenient for them, and surely they might not immediately realize that buying bitcoin is a 4-10 year or longer endeavor,
so it seems that if they are coming to the conclusion that they have to protect any of the bitcoin that they buy for 4-10 years or longer, then they may well likely come to the conclusion on their own that they have to have some back up funds to serve as a cushion in the various cases that their income might go down and/or their expenses might go up, since if they do not have various back up funds in place, then they should be able to logically recognize that the bitcoin would be serving as emergency funds, which surely is not a good place to be for anyone who may well be trying to ongoingly build the bitcoin for 4-10 years or longer, and even though 10 years or longer seems like a long time, if a person is starting out slow in their investing into bitcoin, they may realize that their ongoingly buying bitcoin for 10 years may well be completely needed in order to really get their bitcoin holdings to a decently good place, and that logically it tends to take a long time to really build up an investment, including specifically something like a bitcoin investment (that the newbie is still in their earliest stages of learning about).
because there's no well proper financial planning or cashflow structure, investing becomes difficult for them because there's nothing to rely on.
Everyone is still in a position to get the fuck started buying bitcoin, as long as they can figure out that they have discretionary funds available and it seems that common sense tells an overwhelming majority of people that they would prefer to not lose money with any investment that they make, so it seems that their getting started (even if they have to start at a relatively slow pace) should help to motivate them to make sure that they are ongoingly buying bitcoin at a pace that is overall comfortable for their whole cashflow situation, and if they don't organize aspects of their cashflow situation, then they are not going to be able to accurately monitor the extent to which they might end up buying bitcoin beyond the amount of discretionary funds that they have available... so it could well take a decent amount of time to get accustomed to buying bitcoin on a weekly basis, whether it is $100 per week or $10 per week or some other amount (or time frame) that is comfortable to them, and they have to get used to hoiw the removal of that weekly amount from their discretionary funds ends up affecting other cash that they have available for either discretionary consumption or in the case of the guy who had not been sufficiently saving back up funds that he also needs to set money aside to simultaneously build up his back up funds so that his bitcoin stash does not end up inadvertently serving as his back up funds.. which would not be a good situation to end up buying bitcoin and then end up falling into a situation in which whatever bitcoin building had ended up in selling some or all of his accumulated bitcoin at a time that was not completely of his own choosing.
Moreover building wealth slowly through DCA is not actually mainly about having a high income, but managing money deliberately instead of allowing money problems to controls your financial decisions.
It is true that a large number of people can probably figure out ways to manage their funds in such a way that gives them enough discretionary funds to be able to dedicate some of the discretionary funds for investing, some of the discretionary funds for their back up funds and some of the discretionary funds for their discretionary consumption. And, surely in the beginning, many folks might well have to adapt and get accustomed to their having had added bitcoin and/or back up funds to their regular weekly (or whatever period) practices of how they use some of their available money, and they may well have to really pay attention to trying to figure out if they can figure out ways to increase their discretionary funds whether that is increasing their income and/or cutting their expenses, and at the same time, sometimes, they might be of an age that is young enough that they can learn some new skills, even though it might take time to build their skills in such a way that it ends up improving their income rather than costing them time, energy and money to build up their new skills that will hopefully have an effect of increasing their discretionary income at some point later down the road.
