Well that is true. A guy could have such messed up finances that he is not really in a position to really determine that he has a sufficient amount of discretionary funds available to get started buying bitcoin, and availability of back up funds could be a part of that assessment, and it is hard to recognize any circumstances in which it would be justified to invest in bitcoin if there aren't any back up funds, unless the paycheck is coming the next day, and even then it could be risky, since paychecks sometimes do not come when they are expected to come.
The truth is back up funds are not even optional because it create discretionary funds. The more we dwell on this, the more it justify the need to invest with discretionary funds. Even with regular paycheck, it sometimes delay for one reason or another. If for instance, your investment in BTC today means you can't eat tomorrow if your pay is delay, then you are just gambling not investing.
There are things you need to put in order even if you don't have up to 6 months expenses. Who is saying that there is any need to build up to 6 months of expenses in cash? That is ridiculous.
I know that a lot of mainstream investment advisors talk about having 6 months of expenses in cash, yet it seems quite unrealistic for anyone who actually realizes the rate at which fiat is debasing, which is likely in the 7% to 10% or greater territories, depending on what is in a persons regular expenses and also depending on the strength of the cash that is being used and/or other geographical (national?) factors related to price.
Now if a person has been investing into bitcoin for several years and/or maybe if he has built his bitcoin investment up to be worth a year or more of expenses, then there could be some justification to continue to build up the cash or cash equivalents to higher levels, but then even a person who might have a lot of wealth in bitcoin to offset the cash reserves, there might be reasons to hold the higher levels of value, such as beyond 3-4 months in assets that are working rather than cash and perhaps to use those as extra cushions to be able to sell prior to selling bitcoin in instances in which the income goes low and/or the expenses go up.
You're totally right . i don't know why people see the “keep 6 months of expenses in cash” advice like it is general rule when it is really not. In an environment where fiat constantly loses purchasing power holding too much cash as reserves can end up costing more in the long run.
Having some emergency liquidity is fine but once a person already has enough Bitcoin and other investments then keeping too much idle cash start to look inefficient. At that point I think it makes more sense to let most of your money stay in assets that can actually preserve or grow in value rather than slowly depreciating in a bank account.
There surely is some value in having cash that is both liquid and non-volatile, so that bills can be immediately settled, to the extent to which quantities of money are needed beyond several weeks of expenses at one time, and so if cash can be gotten quickly, then there is value, yet if more and more value is being kept as back up funds, then it could be kept in forms that might not be as liquid or as non-volatile, even though surely it might take several weeks to get access to it or its value might fluctuate in relation to the dollar (or whatever might be the local currency).
So there would be judgements related to how much value to keep on hand and what kinds of circumstances might come up that might require tapping into back up funds and/or deplete back up funds and surely as the bitcoin investment size becomes larger and larger, then there might even be some acceptance that the bitcoin would get tapped into after a certain amount of depletion of other funds and surely in the cases of the more major emergencies that might end up happening... so then in some sense the cash, the cash equivalents, and other assets might get drawn from prior to drawing from bitcoin, and surely that may well save a person in the vast majority of emergency situations that were to take place and if the emergency were to be more major than there may well already be an acceptance that bitcoin would be available for those purposes, whether the BTC were to get completely drained or only partially drained, and surely if a guy had been investing into bitcoin for 10 years or more the there may well be a lot of surplus value in the BTC anyhow, no matter if the BTC price is in a dip or not.
You need to ensure your bill for the current cycle is covered. At least small buffer is necessary but most importantly, stable income is a must.
Many times we think about monthly cycles in terms of bills, yet surely folks might have their income and/or bills coming in different frequencies.
There is also no need to establish a "stable income" prior to getting started buying bitcoin as long as a person is able to determine that they have discretionary funds available.
There could be issues about continuing to invest in bitcoin for some folks who have unstable income and unstable expenses, yet each time that they are considering whether or not to buy some bitcoin, the main consideration remains the extent to which they then have an amount of discretionary funds that they consider sufficient to buy some more bitcoin, whether that is $100, $10 or some other amount that they consider to be reasonable within their own determinations.
A lot of people think investing only works when you have a fixed monthly income but that’s not true. You don’t need to be earning the same amount every month before you can start buying Bitcoin. What matters most is having some discretionary income left after taking care of your important needs and necessities. I also think many people misunderstand what consistency means when it comes to investing. They believe consistency means buying at strict intervals which is why they feel a stable income is necessary before getting started but consistency does not always have to be rigid, sometimes it simply means buying whenever your situation allows you to.
Even with irregular income someone can still gradually build their Bitcoin holdings as long as they prioritize necessities first and only invest money they can comfortably afford to set aside.
Investing into bitcoin with DCA provides advantages to adjust the level of aggressiveness and/or even the level of consistency to whatever extent that the investor wants to accomplish, so there could be times in which the investor chooses to be more consistent and/or aggressive and other times that the investor might choose to be less consistent and even relatively whimpy in his investment amounts and/or his investment timeframes, whether weekly or on some other periodic basis.
I agree. A beginner doesn’t need to master self custody before buying Bitcoin. The important thing is to start learning while accumulating.
A simple solution is for him or her to begin small on a trusted exchange, then over time move into self custody as his knowledge and holdings grow. That way, he avoids delaying his investment while still improving his security over time.
Aren't you neglecting basic knowledge? It may not take much time to acquire basic knowledge about self-custody wallets and acquire basic management skills. Even if you are a person of average intelligence, it may take you only a few hours to acquire general knowledge about wallets.
Get the fuck out of here, and stop trying to proclaim both that you know what any person should do in regards to their bitcoin and stop trying to proclaim a timeline in which you believe that any particular person should be ready, willing and/or able to self-custody their bitcoin.
Even though holding bitcoin on exchanges is not really bitcoin and it is an inferior way to hold bitcoin exposure, adults can choose whatever they want to choose, even if holding coins on exchanges is also not really good for bitcoin. It is not good for them and it is not good for bitcoin, yet they can choose how they want to hold their bitcoin.
Managing a self-custody wallet is relatively easier than managing an exchange.
What made you so smart about what is easier or what is not easier and why anyone might choose one option over another?
Especially before starting to invest, acquiring knowledge and skills on how to store Bitcoin in a self-custody wallet is part of the basic knowledge that is important to acquire.
No it is not. There is no factual or logical reason that self-custody is mandatory prior to starting to buy bitcoin and/or to invest in bitcoin, even though surely we know that if a person does not hold the private keys then someone else holds them, but it still is not mandatory that normie newbie bitcoiners are required to learn self-custody before getting started, even if you want to proclaim that it is.
You should not delay investing, but you should not be so hasty that you jump into investing without knowing the strategy to store your purchased Bitcoin safely.
You are repeating yourself with wrong information.
I would say, never delay acquiring the most important basic knowledge. If you delay investing for a few hours, you may only be delaying the investment, but you are putting your funds at risk by not learning about self-custody wallets. Don't be lazy and acquire the necessary knowledge quickly. We shouldn't be in too much of a hurry to start investing.
Even I suggest that normie newbies should try to start buying bitcoin as soon as possible once they figure out that they have discretionary funds, yet the decision in regards to when to start still remains with each person in terms of their own comfort level in regards to whatever else that they might believe that they might need to know or not know (beyond the determination that they have discretionary funds available) in order to begin buying bitcoin.
You need to ensure your bill for the current cycle is covered. At least small buffer is necessary but most importantly, stable income is a must.
Many times we think about monthly cycles in terms of bills, yet surely folks might have their income and/or bills coming in different frequencies.
There is also no need to establish a "stable income" prior to getting started buying bitcoin as long as a person is able to determine that they have discretionary funds available.
There could be issues about continuing to invest in bitcoin for some folks who have unstable income and unstable expenses, yet each time that they are considering whether or not to buy some bitcoin, the main consideration remains the extent to which they then have an amount of discretionary funds that they consider sufficient to buy some more bitcoin, whether that is $100, $10 or some other amount that they consider to be reasonable within their own determinations.
It’s very surprising that some people still have this mindset of thinking you need to have a stable income before investing in Bitcoin. And with the economy of some countries, some individuals find it difficult to have a stable income, but he assume everyone has to wait until they get stable income before they can invest in Bitcoin.
Moreover, having a stable income is not a must, as long as you have a discretionary income from what you earn whether weekly or monthly, you can invest in Bitcoin. The most important thing is having discretionary income, with any amount of your choice,
and you can figure out your emergency funds later.
For anyone buying bitcoin, they have to have at least a sufficient amount of emergency funds (or back up funds) that would give them assurance that they are not buying bitcoin with money that they need to cover their expenses until the next time that they get paid. They cannot start buying bitcoin with absolutely zero back up funds unless maybe they have a high level of confidence that they are receiving additional money (or pay) on the next day.
If a person buys bitcoin with non-discretionary money (money they need for expenses), then he is trading/gambling rather than investing. I personally don't recommend trading/gambling with bitcoin, and this is an investment thread, not a trading (gambling) thread.
I agree. A beginner doesn’t need to master self custody before buying Bitcoin. The important thing is to start learning while accumulating.
A simple solution is for him or her to begin small on a trusted exchange, then over time move into self custody as his knowledge and holdings grow. That way, he avoids delaying his investment while still improving his security over time.
Aren't you neglecting basic knowledge? It may not take much time to acquire basic knowledge about self-custody wallets and acquire basic management skills. Even if you are a person of average intelligence, it may take you only a few hours to acquire general knowledge about wallets. Managing a self-custody wallet is relatively easier than managing an exchange. Especially before starting to invest, acquiring knowledge and skills on how to store Bitcoin in a self-custody wallet is part of the basic knowledge that is important to acquire.
You should not delay investing, but you should not be so hasty that you jump into investing without knowing the strategy to store your purchased Bitcoin safely. I would say, never delay acquiring the most important basic knowledge. If you delay investing for a few hours, you may only be delaying the investment, but you are putting your funds at risk by not learning about self-custody wallets. Don't be lazy and acquire the necessary knowledge quickly. We shouldn't be in too much of a hurry to start investing.
Self-custody, wallet security, and seed words are certainly important for us. But the way you say it, it may seem like learning self-custody before starting Bitcoin is almost mandatory. And such an idea can actually delay beginners unnecessarily. If a new investor who wants to start is given the mandatory condition of so-called basic knowledge on the first day, it is possible that he may delay starting, and I even doubt whether he will start at all. Because preparing for so-called basic knowledge at the beginning can put a new investor under stress. One thing is repeatedly said here that putting a large amount on the exchange in the beginning and starting with a small amount with the aim of learning are two different things. Our ultimate goal is of course self-custody. But in the beginning giving small amounts to the exchange is not a bad thing. Rather, it can also save you from repeated transaction fees.
I agree that putting large amounts of value on exchanges and/or even to other third party custodians for the purpose of bitcoin price exposure does not tend to be a good idea, and it is not really bitcoin ownership, yet at the same time, each person is entitled to decide how they want to get started in bitcoin and/or getting exposure to bitcoin's price, even if some of the possible ways are inferior and not really "true" bitcoin. Many of us know that buying bitcoin on exchanges and/or even buying paper bitcoin (such as through bitcoin spot ETFs) is not really bitcoin, yet it seems to me that if a person is still brand new to bitcoin, they might not even know the difference between bitcoin and paper bitcoin and they might not even know the difference between holding bitcoin on exchanges and holding bitcoin in a self-custody wallet... They also might not know the difference between various kinds of wallets and/or UTXO management or the difference between onchain bitcoin and lightning network bitcoin and perhaps other ways that bitcoin might be held, such as liquid bitcoin, and personally, I would not expect them to know all of these differences, even if they might get started with one form of bitcoin or another, and surely many of us might recall wrapped bitcoin, and surely we would consider that bitcoin that is wrapped through a shitcoin is not real bitcoin, so I am not even proclaiming to suggest that some beginners might not end up making really dumb mistakes when they start, including that it used to be the case that many newbies were lured into b-cash (bitcoin cash) in earlier times, especially between 2017 and 2020, and surely there are still some newbies who are mistakenly getting into buying shitcoins rather then buying bitcoin based on their own insufficiently looking into bitcoin-related matters or even understanding the difference between bitcoin and crypto, and I am not even claiming that they have to have all those matters figured out prior to getting started, even though they are likely going to feel pretty dumb if they end up making those kinds of mistakes...so surely some kinds of mistakes are more problematic than other kinds of mistakes, and there is a certain amount of personal responsibility that comes to anyone who gets lured into some of the possible traps that relate to being a newbie to bitcoin and if they end up not knowing what they do not know but as adults they are still responsible to figure out.
Sure, I am presuming newbie bitcoiners to be adults, even though we know that there are also kids who get involved in bitcoin and get duped into various traps, too, which they are also responsible to figure out, even if they happen to be a kid.. and if they are happening to not verify with others (such as adults) so that they don't get robbed of whatever time, energy and value they end up putting into any purchases that they might end up making. There are some kids who are way smarter than adults in these bitcoin-related topics and cashflow management topics and even from time to time in the common sense arena, too... yet at the same time, many of us know that even smart and well functioning kids still have to get through their hormone and emotional stages and they sometimes end up making pretty dumb-ass mistakes due to various aspects of their immaturity that contribute to their not knowing what they do not know.
[edited out]
It's not neglecting, but when basic knowledge wants to cause delay in investing then it will have to be skipped for a while because nothing should stop you from investing as long as you have discretionary income available.
I think you need to understand that basic knowledge is important but nothing is as important as buying Bitcoin so no matter what it is once you have discretionary income available you have to hold whatever it is and invest. Don't stop investing because you want to learn about self custody and wallet security. It's not necessary, you can always start by storing you bitcoins in an exchange until you are able to understand everything about wallet, it's even more convenient for beginners at first but they shouldn't store Bitcoin in exchange for a long time. Learning can always be done alongside investing.
I agree with you to the extent that you are proclaiming that some things are not basic nor required, such as the need to self-custody coins or to learn about self-custody prior to getting started investing in bitcoin. I also agree with you that the most important thing for a newbie is to determine whether he has discretionary funds available that he believes is sufficient to get started investing in bitcoin and he can figure out what he needs to learn as he goes in his bitcoin investment.
I don't really agree with your attempted suggestion that guys cannot decide to hold bitcoin on exchanges, even though surely any of us who spent time learning about bitcoin realize that self-custodying bitcoin is superior as compared with holding bitcoin through third parties, such as exchanges, yet I would also suggest that guys have to figure out these ideas related to self-custody and bitcoin key management for themselves, and even if many of us already existing bitcoiners might prefer that they come to the same conclusions about the superiority of self-custody, we still need to be careful in terms of our own imposition of our values on them, even if we might not consider those who hold bitcoin on exchanges and who hold paper bitcoin derivative products as true bitcoiners, yet it still could take some time before some newbies are able to recognize and appreciate the difference between holding private bitcoin keys and not holding them.
I think what we should be asking is whether the investment is worth the risk and not if profit is guaranteed. There's no certainty in any investment including Bitcoin. Consistency, proper risk management, keeping emotions in checks when the market is volatile are the things that make one successful and not predicting profits or the market.
If we've invested, we already understand the risks.
If we are learning and adjusting as we go, then how are we going to know all of the risks in advance?
Sure it may well be the case that we are starting out with bitcoin buy amounts that are "no more than we can afford to lose," which largely already means that we have accepted the risk that we could lose up to 100% of what we had put into bitcoin.
The important thing is to have a strong mentality, because market conditions won't always be the same. There could be a severe downturn, but that shouldn't worry us because the downturn is an opportunity to Buy at a low price.
It is true that whether we are a beginner to bitcoin or we are ongoingly investing in bitcoin, we should be trying to make sure that we are ongoingly prepared both financially and psychologically for BTC price moves in either direction, even severe ones, and I surely agree with the idea of employing a practice to ongoingly buy bitcoin on a weekly basis for at least one or two cycles, unless we have resources in which we are able to front load our bitcoin investment in less than a whole cycle, yet even if we frontload our bitcoin investment, there still seems to be advantages to plan and put into practice systems of regularly buying bitcoin on a weekly basis or perhaps some other timeline that might be reasonable for our own circumstances.
There's no guarantee of getting rich, but we believe Bitcoin will offer better advantages than other assets. There are only 21 million Bitcoin coins. If all of them were in circulation and some Bitcoins were lost due to death or inaccessibility, scarcity would automatically occur.
What about the various paper bitcoin products that exist through exchanges and various derivative products such as Bitcoin spot ETFs, various MSTR bitcoin products and the various bitcoin products of some other companies pushing various paper bitcoin products?
We simply need to focus on buying and holding for the long term. Every investment has its trials and challenges, So our goal is a long-term investment Mindset and program.
Sure. .You have been registered here nearly as long as me, which is around or more than 12 years, and so many folks would have had presumed that you would have had already accumulated a decent amount of bitcoin by now.
