JJG’s Outline of Bitcoin Investment Ideas

[Loyang]

Dividing discretionary income into 3 parts may not be a logical decision for everyone, because the same formula may not work for every investor. For example, there are two users who have $300 of discretionary income per month. The first of them may already have an emergency fund and a stable income. The other does not have an emergency fund and even his income is uncertain. In this case, the same 1/3, 1/3, 1/3 formula may not be realistic for both of them. Because the first person may be comfortable giving $200 in Bitcoin. But the second may be more concerned with putting a larger portion of his discretionary income into an emergency fund or reserve fund.

Each person needs to make a decision based on their situation and financial situation. A person who already has an emergency fund ready does not need to create a new emergency fund. These decisions should be taken by the first person you imagine according to his situation. A person whose income is unstable and does not have an emergency fund can divide his income into three levels. Each person should take each decision according to his own convenience, another person has done one thing does not mean that it will be right for him to take the same decision.

But yes, the more our fund, the better or more secure our holding will be. For example, we can divide our funds into how many levels, such as emergency fund, reserve fund, other fund, the more our number of funds, the more our security level will increase. But yes, it is not necessary to keep the same amount of money in each fund. We can use the emergency fund as our main, protective, layer and in the emergency fund we can keep an amount equal to 3 months of expenses or we can keep an amount equal to 3 months of income. We can keep some less money in the reserve fund and in other funds we can keep less money than the reserve fund.

[Gragebox]

The first one might think he is comfortable with putting everything in bitcoin because he will soon definitely realize that his discretionary consumptions are being ignored and can't be ignored forever, maybe he already has his emergency fund but that doesn't mean he has his reserve fund in place too, having a stable income isn't a guarantee of anything because it can change at anytime. So even if you account for all of his backup funds you will still need to account for his discretionary consumption and as long as that exists he will no be able to continuously invest in bitcoin with all of his discretionary income.

That is actually true that putting 100% of funds in Bitcoin may have issue when it comes to the future. Even you may have money saved on the emergency plan and consistent salary, we human have unavoidable expenses such as paying daily stuffs, the emergency situation when something popped out from nowhere or even when one spent it on their self not in the business. Otherwise it’s a problem that at some point, you are going to withdraw Bitcoin during the down part just to buy.

But a diversified income is always the solution - essential costs, saving, and personal spending together with investing, you can still have the biggest investment which is Bitcoin but would not create you stressful life every day.

Building a long term, step-by-step plan to do something is all we need here to survive in the next 20 to 50 years.

[PERtua]

Dividing discretionary income into 3 parts may not be a logical decision for everyone, because the same formula may not work for every investor. For example, there are two users who have $300 of discretionary income per month. The first of them may already have an emergency fund and a stable income. The other does not have an emergency fund and even his income is uncertain. In this case, the same 1/3, 1/3, 1/3 formula may not be realistic for both of them. Because the first person may be comfortable giving $200 in Bitcoin. But the second may be more concerned with putting a larger portion of his discretionary income into an emergency fund or reserve fund.

Each person needs to make a decision based on their situation and financial situation. A person who already has an emergency fund ready does not need to create a new emergency fund. These decisions should be taken by the first person you imagine according to his situation. A person whose income is unstable and does not have an emergency fund can divide his income into three levels. Each person should take each decision according to his own convenience, another person has done one thing does not mean that it will be right for him to take the same decision.

But yes, the more our fund, the better or more secure our holding will be. For example, we can divide our funds into how many levels, such as emergency fund, reserve fund, other fund, the more our number of funds, the more our security level will increase. But yes, it is not necessary to keep the same amount of money in each fund. We can use the emergency fund as our main, protective, layer and in the emergency fund we can keep an amount equal to 3 months of expenses or we can keep an amount equal to 3 months of income. We can keep some less money in the reserve fund and in other funds we can keep less money than the reserve fund.

I do agree that a set 1/3 formula will not work for everyone as everyone is in a different financial position. If you have a stable income and have a fully funded emergency fund, you can more easily invest in Bitcoin; if you have an uncertain income, you should work on increasing your financial security first. Creating separate categories such as an emergency, reserve, and investment fund can make the plan safer, but there is no requirement that they be the same amount. The key is to have a sufficient cash cushion for unforeseen costs before deciding how much money to invest in Bitcoin.

[Fara Chan]

I do agree that a set 1/3 formula will not work for everyone as everyone is in a different financial position. If you have a stable income and have a fully funded emergency fund, you can more easily invest in Bitcoin; if you have an uncertain income, you should work on increasing your financial security first. Creating separate categories such as an emergency, reserve, and investment fund can make the plan safer, but there is no requirement that they be the same amount. The key is to have a sufficient cash cushion for unforeseen costs before deciding how much money to invest in Bitcoin.

What you're saying is part of a strategy that every investor should follow if their income is stable, because almost everyone has realized that long-term investing can be difficult without a stable income. Even if there's a little self-compulsion to create reserves and emergency funds, the difficulty immediately arises when there's no remaining funds to invest, even a small amount. So, I think almost everyone has realized this by now, because becoming a long-term investor is clearly not easy, even if there are simple ways or methods.

[avp2306]

that discretionary spending should take priority over accumulating Bitcoin. While knowledge is a wonderful thing and can help us find out what the safer path is, the understanding of risk and avoidance of common mistakes, knowledge alone cannot replace the money that is available for investment. Even a minor market downturn can cause additional stress and panic selling if someone allocates money that is required to pay rent, food, bills or funds for emergencies. With the extra cash to spare, investors will have the time to ride the ups and downs of the market and continue learning. Thus, it is logical that the first question in mind before buying Bitcoin is how much money we can put to work safely.

Learn how to separate financial security from bitcoin accumulation, don’t get them mixed up.

You don’t have to wait until everything is perfectly in place before you can start to get some exposure to the bitcoin market.

As long as you have been able to take care of your essential expenses, if you happen to have some emergency cushion available to you at that point in time, putting in a small portion of genuine surplus into Bitcoin can let you have some exposure without putting yourself under too much financial pressure.

IMO, adjusting your bitcoin allocation to the kind of level where it now matches your financial situation is of greater importance than trying to follow some fixed formula made up by some bloke you don’t even know.

Bitcoin accumulation and that financial security thing is truly different. Also I agree with you that they should not mix it up.

Because once their basic essentials are totally covered. Then they have emergency funds. Putting some small part of their real surplus funds on Bitcoin is truly reasonable so they could get early exposure on Bitcoin, without putting anything that create strain or pressure on their budget.

The ideal action to do is to adjust their allocation then base everything on their financial situation, they should not follow the other people strategy. Because for sure they have different financial capabilities.

[Olatundespo]

Bitcoin accumulation and that financial security thing is truly different. Also I agree with you that they should not mix it up.

Because once their basic essentials are totally covered. Then they have emergency funds. Putting some small part of their real surplus funds on Bitcoin is truly reasonable so they could get early exposure on Bitcoin, without putting anything that create strain or pressure on their budget.

The ideal action to do is to adjust their allocation then base everything on their financial situation, they should not follow the other people strategy. Because for sure they have different financial capabilities.

Bitcoin should not be taken as a burden as some people make emotional decisions. Although the issues of saving Bitcoin and financial security are different, the two are complementary. If you have some understanding of where financial insecurity can come from, it will be easier for you to predict and defend it for the future.

Some emotional decisions, although they may seem good at first, will have a negative impact on your financial situation in the long run. For example, even if we think it is positive about the decision to invest in Bitcoin lump sum if you do not have a backup fund to meet the needs of an emergency it will not be easy for you to maintain your Bitcoin holdings.

The fund that remains after meeting your basic needs is discretionary income or funds. Accumulate Bitcoin from this fund regularly and in the long term. One or more cycles or a target of 4-10 years of Bitcoin accumulation. Don't invest the entire amount of funds available to you.

[Princess Leah]

What you're saying is part of a strategy that every investor should follow if their income is stable, because almost everyone has realized that long-term investing can be difficult without a stable income. Even if there's a little self-compulsion to create reserves and emergency funds, the difficulty immediately arises when there's no remaining funds to invest, even a small amount. So, I think almost everyone has realized this by now, because becoming a long-term investor is clearly not easy, even if there are simple ways or methods.

When someone doesn't have a stable income to sustain the discretionary funds for long it would be easy to give in to emotions that comes with the dip, especially for small investors which is why investors need ensure that figure out how to generate more income to maje the investment sustainable and avoid future complications.

 Well not everyone has realised that, do not forget that there are people who're new to the investment that are yet to figure certain things and would figure it out later but for most of us that are not new it's something we would've realised by now as you said.

[Showlove01]

What you're saying is part of a strategy that every investor should follow if their income is stable, because almost everyone has realized that long-term investing can be difficult without a stable income. Even if there's a little self-compulsion to create reserves and emergency funds, the difficulty immediately arises when there's no remaining funds to invest, even a small amount. So, I think almost everyone has realized this by now, because becoming a long-term investor is clearly not easy, even if there are simple ways or methods.

I know Bitcoin investment may not be a bed of rose but if one understand what he needs to do by figuring out their discretionary income and by also knowing how much that will be okay to be using from the discretionary based on the capacity of cash flow they have I think this kind of investor will do well regardless of the obstacle of not having a steady or stable source of income as a matter of fact the issue of stable source of has been ironed several times here, we don't need stable source of income before we can hold for long term I know it can be tough but mindset and plans superceeds all.

[samadam007]

What you're saying is part of a strategy that every investor should follow if their income is stable, because almost everyone has realized that long-term investing can be difficult without a stable income. Even if there's a little self-compulsion to create reserves and emergency funds, the difficulty immediately arises when there's no remaining funds to invest, even a small amount. So, I think almost everyone has realized this by now, because becoming a long-term investor is clearly not easy, even if there are simple ways or methods.

I know Bitcoin investment may not be a bed of rose but if one understand what he needs to do by figuring out their discretionary income and by also knowing how much that will be okay to be using from the discretionary based on the capacity of cash flow they have I think this kind of investor will do well regardless of the obstacle of not having a steady or stable source of income as a matter of fact the issue of stable source of has been ironed several times here, we don't need stable source of income before we can hold for long term I know it can be tough but mindset and plans superceeds all.

Tbh I don't even know why they keep bringing it up as if it’s a must to have stable income before figuring discretionary income and starting. Someone with an unstable income can still invest, but the should be realistic about what they can afford and avoid investing money they need short term. Everyone has different responsibilities. There are instances where the unstable income earns higher amount, but is irregular. Does it mean he can’t plan with that ?

Long term holding is easier when your investment amount matches your actual financial capacity and fit your plan.  When you understand your cash flow, you will surely know how much to separate and allocate.

[JayJuanGee]

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Knowledge is no doubt important but I think the  most important thing someone need before they start buying bitcoin is discretionary income, because with discretionary income you know you extra money left after you might taken care of all basic need that you invest with and hold for long without fear.

And don't forget it only involves risk if you buy bitcoin not using discretionary income but with money meant for essential needs.

What you mentioned is also part of the knowledge that everyone who wants to invest in Bitcoin should have first. This means that a higher level of knowledge before directly acquiring income is the most important thing that everyone must have in mind, because many people are reckless enough to invest even though they themselves don't have sufficient knowledge about how to invest long-term.

So, investment knowledge should remain the first priority, supported by capital generated through business or our own monthly income, or capital that can be used directly for investment after meeting basic living needs. That is why I never ignore knowledge because it is like a guide in life because without it it will always be easier to suffer losses because the path and method are not clear or more often wrong when executing by guessing or feeling.

You don't need to acquire extra knowledge before starting.  The main thing to start it having discretionary funds and then you can learn as you go. There is no need suggesting that guys need to have perfect knowledge before starting, but they can start from where they are at and adjust their starting out position size to their level of knowledge.

As long as you have been able to take care of your essential expenses, if you happen to have some emergency cushion available to you at that point in time, putting in a small portion of genuine surplus into Bitcoin can let you have some exposure without putting yourself under too much financial pressure.

Just because you have some emergency savings doesn't mean it's safe to buy Bitcoin. Because if your emergency savings are very small, you may need to sell Bitcoin if your income or expenses suddenly stop. Then investment risk and financial-security risk come together. However, there is no rule that prohibits taking Bitcoin exposure until your financial security is 100% perfect. So first decide what is right for you according to your ability. Because what is right for Lil may be risky for X.

In this thread, we are talking about investing in bitcoin and also about getting started rather than fucking around trying to make everything perfect before starting.

If a bitcoin newbie can determine that he has discretionary funds, then he can get started buying bitcoin.

Also, he may or may not be starting with having back up funds, and so there may be a requirement that the bitcoin newbie at least has some bare minumum of back up funds, such as one week of his expenses, so that he does not invest in bitcoin with money that is beyond his discretionary funds (or what he has until the next time that he expects to get paid).  Otherwise, if he is sure that he has enough back up funds to assure that he is not investing into bitcoin with non-discretionary funds, he can get started buying bitcoin and build his back up funds at the same time, so for example a guy who knows that he has around $100 per week of discretionary funds could choose to put $33.33 into bitcoin investing $33.33 into his back up funds, and use $33.33 for discretionary consumption.  After a year of doing exactly those amounts into each of the categories, then he would have had invested $1,733, he would have put $1,733 into his back up funds and he would have had discretionarily consumed $1,733 - which seems like a good place to be after a year for someone who has $100 per week in discretionary funds.

In the end, how much to invest, save and/or discretionarily consume is a product of both how many dissretionary funds are available and also the preferences of each person, and since we are talking about bitcoin investing in this thread, we are also giving preference to investing in bitcoin.

On the other hand, if the price of Bitcoin drops by 50% and you don't have to sell Bitcoin to anyone for months or years, will he/she be able to handle their essential living expenses and emergencies? This answer will not be the same for everyone.

If guys are beginner investors into bitcoin, they should be investing an amount that they can afford to lose, and so therefore, they likely would not be focusing on price for at least a whole cycle, so if they already have a budget to buy bitcoin every week based on their discretionary funds, they should not be concerned about price and they are continuing to buy, so if the BTC price ends up going down 50% then they are getting 2x the amount of bitcoin that they had been getting previously each week for the same amount of dollars.

Similarly, if the answer is yes, then investing a small portion of your surplus in Bitcoin is quite reasonable. But if the answer is no, then it is more important to strengthen your financial cushion first than to buy Bitcoin.

There is no reason to focus more on back up funds than bitcoin, unless a person already knows that he does not have stable discretionary funds.

So if a guy has situations in which he knows that his income might be low and/or his expenses might be high, then he has to make sure that he is prepared for that financially (and psychologically).

Yet if the guy has steady discretionary income, then it is more than reasonable (as I already outlined above) that the bitcoin newbie should be able to divide his discretionary funds into three parts and to build his bitcoin and his back up funds at the same time while keeping some money for discretionary spending too.

The first one might think he is comfortable with putting everything in bitcoin because he will soon definitely realize that his discretionary consumptions are being ignored and can't be ignored forever, maybe he already has his emergency fund but that doesn't mean he has his reserve fund in place too, having a stable income isn't a guarantee of anything because it can change at anytime. So even if you account for all of his backup funds you will still need to account for his discretionary consumption and as long as that exists he will no be able to continuously invest in bitcoin with all of his discretionary income.

That is actually true that putting 100% of funds in Bitcoin may have issue when it comes to the future. Even you may have money saved on the emergency plan and consistent salary, we human have unavoidable expenses such as paying daily stuffs, the emergency situation when something popped out from nowhere or even when one spent it on their self not in the business. Otherwise it’s a problem that at some point, you are going to withdraw Bitcoin during the down part just to buy.

If you expect to have extra stuff that you consider to be basic expenses to be popping up between pay periods, then you have to hold money aside for that, perhaps it would be part of your float between pay periods. 

On the other hand if you have expenses that fit into the discretionary spending category that pop up between pay periods, then you would likely have extra reserve funds for that, since reserve funds allow you a lot of flexibility on how to use it.

If you just cannot control yourself whenever anything comes up and you cannot determine if it is a basic expenses (a need) versus a discretionary expense (a want) then yeah you may need to just keep extra cash on-hand for those kinds of expenses, and if you prioritize investing in bitcoin rather than merely fucking around with it (trading and/or gambling with it), then you would make sure that you are protecting your bitcoin investment so that you are able to keep investing into it, buying more of it and maybe merely holding it during times that you don't have extra money to be able to hold it for 4-10 years or longer without tapping into it at a time that is not of your own choosing.

And, yeah, maybe you are not very serious about actually investing into bitcoin and you are just looking for a reason to tap into it, which just shows your own lack of discipline and planning rather than something that you should not be able to prepare for both financially and psychologically.

But a diversified income is always the solution - essential costs, saving, and personal spending together with investing, you can still have the biggest investment which is Bitcoin but would not create you stressful life every day.

Building a long term, step-by-step plan to do something is all we need here to survive in the next 20 to 50 years.

Sure.  Having a plan and following it in practice, such as accumulating bitcoin every week while you are in your bitcoin accumulation phase is a good start, and I would imagine that you are ongoingly investing, and your circumstances are likely changing over the years, whether that is 10-20 years or longer, then you might need to make adjustments to your plan from time to time, and likely accounting for your 9 individual factors and how they may well change over time.

[ejikeme24]

What you're saying is part of a strategy that every investor should follow if their income is stable, because almost everyone has realized that long-term investing can be difficult without a stable income. Even if there's a little self-compulsion to create reserves and emergency funds, the difficulty immediately arises when there's no remaining funds to invest, even a small amount. So, I think almost everyone has realized this by now, because becoming a long-term investor is clearly not easy, even if there are simple ways or methods.

I know Bitcoin investment may not be a bed of rose but if one understand what he needs to do by figuring out their discretionary income and by also knowing how much that will be okay to be using from the discretionary based on the capacity of cash flow they have I think this kind of investor will do well regardless of the obstacle of not having a steady or stable source of income as a matter of fact the issue of stable source of has been ironed several times here, we don't need stable source of income before we can hold for long term I know it can be tough but mindset and plans superceeds all.

Perhaps you didn't understand what @Fara Chan is trying to say, for sure a person who does not have stable income can invest in Bitcoin of which @ Fara Chan is aware of that. What he was actually trying to say is that there might come a time when those that does not have stable income will exhaust Thier discretionary income in Thier Bitcoin investment and then put Thier Bitcoin investment on hold until they figure out discretionary funds for themselves, and in most cases some might say "this is the end of my accumulation journey" .

However, a guy who does not have a stable income can still look for a flexible approach if they can't maintain the regular buying of bitcoin. I frequently suggest that instead of waiting to get a stable income before getting started with Bitcoin investment we can use this method of buying whenever we figure out discretionary funds without even considering how Long it would take for them to get discretionary funds, at first a guy might think that he's playing around Bitcoin investment but a time will come when they will no longer see it that way. Bitcoin investment might seem difficult when we have not started it but once you get involved in it you will realize how simple it is and it might probably make you increase your performance because you wouldn't want to be left behind, that is why it's important to get started.

[Cgrexp]

What you're saying is part of a strategy that every investor should follow if their income is stable, because almost everyone has realized that long-term investing can be difficult without a stable income. Even if there's a little self-compulsion to create reserves and emergency funds, the difficulty immediately arises when there's no remaining funds to invest, even a small amount. So, I think almost everyone has realized this by now, because becoming a long-term investor is clearly not easy, even if there are simple ways or methods.

I know Bitcoin investment may not be a bed of rose but if one understand what he needs to do by figuring out their discretionary income and by also knowing how much that will be okay to be using from the discretionary based on the capacity of cash flow they have I think this kind of investor will do well regardless of the obstacle of not having a steady or stable source of income as a matter of fact the issue of stable source of has been ironed several times here, we don't need stable source of income before we can hold for long term I know it can be tough but mindset and plans superceeds all.

It is not mandatory to have a stable job for long-term investment. Even if a person's income is irregular, if he can determine his discretionary income correctly. And can fix the investment amount based on his real cash flow. Then he can continue to invest in the long term. Mentality and planning are not a substitute for real financial capacity. In case of irregular income, the investment amount should be flexible. The investor has more discretionary income in the month when he has sufficient income and if the income decreases, it is part of the plan to reduce or temporarily stop the investment. The main thing is not to continue investing in a fixed amount but to maintain long-term discipline in accordance with financial capacity. One should not invest with money for future necessary expenses. Mentality and planning are effective only when they are consistent with real financial capacity.

[Son Of Blockchain (SOB)]

Tbh I don't even know why they keep bringing it up as if it’s a must to have stable income before figuring discretionary income and starting. Someone with an unstable income can still invest, but the should be realistic about what they can afford and avoid investing money they need short term. Everyone has different responsibilities. There are instances where the unstable income earns higher amount, but is irregular. Does it mean he can’t plan with that ?

Long term holding is easier when your investment amount matches your actual financial capacity and fit your plan.  When you understand your cash flow, you will surely know how much to separate and allocate.

Having a good cashflow for discretionary income so as to easily invest consistently is not a bad idea infact it's a big advantage to ones investment journey but not a barrier to start investing cause the discretionary income is what's needed to start those who don't have steady cashflow would see reasons to  get more source of income or a stable job so they can be more consistent with their investment.
 Yes everyone should invest according to what they can generate for discretionary income, no one should be pressured on doing otherwise all in the name of being consistent, i do let people know that it's not a competition so invest within your limit.