[editing out]
The 33%-33%-33% division may not be applicable for everyone. Because not everyone's income, expenses and responsibilities are the same. There are many whose backup fund is already strong, while some have so many responsibilities that if the backup fund is zero, it becomes more important to make it strong as well as dca in bitcoin .
Then the investment in Bitcoin and the backup fund money may have to be divided and allocated as about 50%/50%. When investing in Bitcoin from discretionary income, the fund should be allocated in such a way that sustainability is important. The person who will invest will decide this by calculating his financial status and expenses.
I personally am not in favor of keeping such a fixed ratio. A person will make DCA from discretionary income according to his financial status at that time and put it in the backup fund. And dividing the emergency fund, reserve fund type in the backup fund may seem complicated to a new investor in the beginning. So the simple thing is a person will create a backup fund and invest in Bitcoin according to his convenience.
You are downplaying the 33% in each allocation of discretionary funds, and so you provide some reasonable reasons to change the allocations, yet when you end up proclaiming some kind of an allocation that you consider to be reasonable, you end up ONLY focusing on two of the categories, and you completely ignore (or discount to zero) one of the categories, which is discretionary consumption.
You also talk about emergency funds and reserve funds in such a way that causes me to speculate that you might consider them to be two different categories, even though you acknowledge each of them to be within back up funds.
In other words, you are speaking in somewhat unclear ways in regards to both your criticism of Emjay24 and also in terms of your proposed reframing of a supposed better way forward.
The 33%-33%-33% division may not be applicable for everyone. Because not everyone's income, expenses and responsibilities are the same. There are many whose backup fund is already strong, while some have so many responsibilities that if the backup fund is zero, it becomes more important to make it strong as well as dca in bitcoin .
Then the investment in Bitcoin and the backup fund money may have to be divided and allocated as about 50%/50%. When investing in Bitcoin from discretionary income, the fund should be allocated in such a way that sustainability is important.
Talking about the highlighted statement, I think that the only set of people these methods of division of our discretionary income is not applicable to are those that have already stack up their back up funds to protect their investment, but as for those that are just starting out, it is very necessary, in other for your investment to have a solid foundation from the start.
To me, it seems practical that on a regular basis none of the fields would go to zero, even the back up funds field, except maybe if a person is considering that they are way overstacked in the back up funds arena.. otherwise, maybe if priority is given to investing in bitcoin, then there would still be some value that is used for discretionary consumption and some value that would go into back up funds, even if there might be some weeks (or whatever your investment period might be) that the amount going into back up funds and/or discretionary consumption might only be 1% to 5% in each of those categories.
Think practically, and thinking in terms of 100% and 0% does not seem to be very practical on a regular basis, even though sure, once in a while, there might be extremes, yet the normal mode of operation would have some amounts that go into each of the categories, even though from week to week there could be variability, too.
Additionally, their should be no point in your investment journey that you should divide your discretionary income 50/50, uses one place for investment and one place to strengthen your back up funds because you have practically neglected your discretionary consumption funds.
Ok. this seems to be similar to my point, too.
You may not make provisions for your back up funds from your discretionary income if your backup funds is already strong enough to sustain you for more than three months of expenses, and you can channel that money to invest aggressively, but you see the discretionary consumption funds, it should not be neglected no matter what.
My additional point is that none of the fields should be neglected, even though surely there could be some recognition that the back up funds have enough or more than enough contained therein.. which surely may depend on future income/expenses that are expected... so of course, there is likely to be individual variance in regards to how to strike the various balances and how to prioritize from week to week or even how some goals might be being attained and even the extent to which there might be perceptions of enough life balances that can also change from time to time.
[edited out]
There is no need to wait until a large amount of capital is accumulated to start investing. Regular DCA can be started with small amounts within the capacity. This creates an investment habit and there is no need to risk a large amount of money at once. Increasing the amount must be consistent with the person's cash flow or income growth.
It is not right to suddenly bring a large part of the income into investment due to interest in Bitcoin or the hope of higher profits in the future. The basis for increasing the investment amount is to increase capacity, not interest. The investment will grow gradually but will not create unnecessary pressure on one's financial capacity.
I agree with everything that you said @Cgrexp, except I would suggest that there might be times in which guys might purposefully choose to increase or decrease their level of aggressiveness within parameters that they consider to be reasonable and sure they might get it wrong and we might not agree with their approach, yet at the same time, each bitcoin buyer is free to make those kinds of allocation and/or level of aggressiveness determinations even if they might end up getting it wrong and even with a recognition that there is no "perfect" way in going about these matters, and since we are human sometimes our emotions get in the way and we get things wrong, while at the same time, we have to figure out a balance (including psychology) that is mostly comfortable for us within how we are thinking and/or feeling at the time that we make our balancing decision(s).
[edited out]
You need to understand the concept of percentages, keeping a fixed ratio does not stop the person from investing according to his financial strength, the ratio is calculated from his available discretionary income. It is in a bid to help him manage his cash-flow properly. If there is no pre-determined sharing formula for his discretionary income, it is easy for the investor to invest over aggressively, giving less priority to backup funds and leaving their portfolio vulnerable in the face of an emergency.
The investor can still tweak the percentages how it suits him in his investment, it is just a guide to good cash-flow management.
It is always better to plan finances very well before taking actions on it.I would phrase your last sentence differently, and perhaps I would suggest that it would be better to phrase it something like this:
"It is good for bitcoin investors to ongoingly pay attention to their levels in each of the three categories and to tweak in accordance with their own balances and priorities"
[edited out]
It is not compulsory to build an emergency fund as one begins to invest Bitcoin and there is no measurement or time frame for when one is supposed to build an emergency fund. One can start investing in bitcoin but even if the emergency fund is not avaliable this doesn't mean you dont need it or you can invest without having it. If emergency fund is not available while you begin bitcoin investment, building and investment still needs to be considered and should be in the plan provided when one can start building it. Emergency fund is very important, the only thing is that it can come later while investing bitcoin is on.
Your statement is confusing @Sobz.
Of course, having a full emergency fund is not needed before starting bitcoin, yet a bitcoin beginner needs to have some back up funds to start so that he does not invest beyond his discretionary funds, and if a bitcoin beginner is starting with low levels or close to no back up funds, then it is likely important that he gives a reasonable amount of priority to making sure that he is building his back up funds along with his bitcoin, right from the start and not fuck around with either ignoring back up funds or considering them as something that can be deferred until some later point down the road.
Any newbie who is serious about making sure that his bitcoin is an investment rather than a gamble, has to pay attention to back up funds so that he does not end up having to sell any of his bitcoin at a time that was not of his own choosing, and surely even if guys might not agree to a 4-10 year or longer investment plan with their bitcoin, many of us recognize and appreciate that investing in bitcoin is a 4-10 year or longer commitment, even if the newbies might still be in the process of figuring that out.
