JJG’s Outline of Bitcoin Investment Ideas

[Silikiem]

You literally mixing things up here, the definition of  discretionary income with that of a budgeting strategy. By the definition in finance, discretionary income is the money that is left after all your basic necessities, living costs, and short term obligations ( including emergency savings) are taken care of.  Read more : https://www.investopedia.com/terms/d/discretionaryincome.asp

In the aspect we’re you are taking money out of your discretionary income to build up your emergency fund than that money was never a discretionary in the first place. It was essential financial obligation.

For your 3 part split strategy, it fine to allocate leftover cash. But calling money discretionary before your emergency cushion is built that really dangerous. Once a real life emergency happens and you haven’t built up your cash fund yet, you are going to be forced to dump your Bitcoin at a loss to pay for it. A safety net first then a true discretionary stacking.

Remember that the discretionary income is the cash left  after sorting out your basic needs, and also it is this discretionary income we are to use and start investing In bitcoin. So, If you are classifying the Emergency funds as a part of the basic needs that an investor must need to fulfill before investing In bitcoin then you’re asking people to first build an emergency funds before they can start buying bitcoin. Is that what you’re trying to achieve?. I don’t think the emergency funds is a part of our basic needs in life, a man’s basic needs for his daily survival includes housing or shelter, food, clothing, and payment of other utilities like electricity, water etc. the emergency funds is just a financial safety net which can come after sorting out the basic needs and even when the investor have started buying bitcoin and HODL so it’s not a basic needs but an important part of our bitcoin investment which provides us a safety net when in an emergency situations.

It is from your discretionary income you can now  decide how much of that discretionary income you’ll want to allocate towards buying bitcoin and how much of it you will want to use for building the emergency funds and that’s why I think the emergency funds is a part of the discretionary incomes and not really part of the basic needs income.

[LodBtcFast55]

You are right, and to add to it, aside DCA making it very easy to invest, it doesn’t delay your investment. It helps you invest the very minute you have your discretionary income. We know there are several strategies in bitcoin, but this thread also prioritize using the DCA.

Instead of thinking of using other strategies like buying the Dip, why not take advantage of the dip and lump sum instead of waiting and possibly missing out on investing in bitcoin.

We all know bitcoin investment is never meant to be delay, other strategies will only allow you to wait. DCA have several advantages over other strategies, so why use them.

Avoid all such challenges like changing or making decisions repeatedly based on the current market situation and use the DCA strategy. It will keep you free from those challenges. Many people expect to buy at a good price according to their wishes, but in the end, they miss the opportunity to buy at a good price. Only proper planning and strict decision-making are effective methods for investing. Every wrong decision and short-term plan that you make can cause you to lose money because Bitcoin is a long-term asset. The DCA strategy is suitable for everyone, so investing through it is an effective method.

[Jewan420]

Yes as an experienced investor this is the best advice you can give to someone who wants to start Bitcoin investment, because there are people whose own research isn't enough but advice like this will actually boost their confidence. Bitcoin price can fluctuate and waiting for it to dip before buying will make someone stay for a long time without having anything in their portfolio. Meanwhile someone who uses the DCA strategy will keep growing theirs because they don't have to wait for a dip to buy. That's why DCA is considered the best strategy for both rich and poor because it saves them from sitting on the sidelines for years.

In addition to continuous buying, DCA frees you from complex issues such as market analysis and frees you from complex decision-making. When doing DCA, you do not have to search for the right time and do not have to be afraid of missing the right time. Market volatility will not affect you in terms of buying and DCA gives you relative freedom in determining the amount. By being active with the market, you will also get the opportunity to buy at lower prices.

[Joeboy]

~snip~

In addition to continuous buying, DCA frees you from complex issues such as market analysis and frees you from complex decision-making. When doing DCA, you do not have to search for the right time and do not have to be afraid of missing the right time. Market volatility will not affect you in terms of buying and DCA gives you relative freedom in determining the amount. By being active with the market, you will also get the opportunity to buy at lower prices.

I think that you folks are mistaking DCA for something that it isn't...DCA wouldn't make you or anyone escape volatility and it is best for you not to think otherwise..If your decision is to invest in Bitcoin, then volatility is unavoidable, inescapable and it is something that gets to affect the value of your portfolio at any time..This means that you could buy Bitcoin when the price was around an amount and in a couple of minutes or hours the price drops down or say surges up again...And implementing DCA cannot stops this price movement from happening, nor does it even guarantee that the value your money investment will keep surging upward...What I know for sure is that DCA  enables folks to spread out their buys over a period of time so as to reduce the pressure which is mostly associated with market prediction and price timing..However you will still be exposed to the same market volatility as any Bitcoin investor.

[Lembo69]

It is from your discretionary income you can now  decide how much of that discretionary income you’ll want to allocate towards buying bitcoin and how much of it you will want to use for building the emergency funds and that’s why I think the emergency funds is a part of the discretionary incomes and not really part of the basic needs income.

I think that an investor should keep a larger portion of the money he keeps for his investment from his discretionary income to buy Bitcoin. And he should keep a small amount for emergency fund. For example, let's say 70% for buying Bitcoin. And 30% for emergency fund. In simple terms, if someone has discretionary income of $100, then he should invest $70 and $30 for emergency fund. In this way, he should manage his investment. Emergency fund helps us to sustain our investment in case of emergency, so without emergency fund, investment is incomplete. An investor can do whatever he wants with his investment. But if he does not apply his own judgment while investing, then he will put his investment at risk. So we should be calm and make all decisions while investing. And pay attention to other management including emergency fund.

[Agbam]

Yeah he’s got it all wrong and mixed up, the discretionary income is used for investing but that doesn’t mean you should invest all of it unless you have already have a substantial backup funds then you can afford to be 100% aggressive into bitcoin.

To make one slight correction on your part @Big Dirams; Discretionary income isn’t just free money or extra money without any responsibility because it has it’s own responsibilities. As you use your main income to satisfy your needs your discretionary income satisfies your wants. It is used to invest, save and/or discretionary spend.

I  do not see anything wrong if someone decides to go all in with their discretionary income if they have or sees an opportunity to do that, since the job of the discretionary is to invest so there is nothing wrong because you will still grow another one from your source of income. discretionary income is an extra cash, a leftover cash, remaining cash after all needs must have been taken care of but yea, this does not mean it is not useful of course it is very useful yet it is someone that will make it to be this useful because there are people who make their discretionary income look useless by using it wrongly.

The purpose of the discretionary income isn’t just to invest, it is from this money you build your backup funds that’s your emergency and reserve funds. It’s also from this money you take yourself out for a treat, gamble, buy gifts etc…

Now If you put all your discretionary money into bitcoin and you do not have a backup fund when an emergency hits you, you’ll be forced to sell part or all of your bitcoin to offset it. This makes all your efforts to invest a waste and brings you back to square one. That’s also you being over aggressive beyond your means which is not an advisable strategy.

[cyberninja2]

The purpose of the discretionary income isn’t just to invest, it is from this money you build your backup funds that’s your emergency and reserve funds. It’s also from this money you take yourself out for a treat, gamble, buy gifts etc…

Now If you put all your discretionary money into bitcoin and you do not have a backup fund when an emergency hits you, you’ll be forced to sell part or all of your bitcoin to offset it. This makes all your efforts to invest a waste and brings you back to square one. That’s also you being over aggressive beyond your means which is not an advisable strategy.

I believe a good investor isn't one who focuses solely on profits and, conversely, doesn't have to worry about losses. Therefore, we need to balance our reserve funds or emergency funds with the goal of providing a cushion for when circumstances don't go as we intended. Having a balance will make our investments safer. The purpose of investing is not only to enrich ourselves but also to ensure that our finances are strong enough to build our portfolio for the future. If we achieve more than we expected, it will be a bonus for us because we have protected our finances well for the future.

[Cgrexp]

Yeah he’s got it all wrong and mixed up, the discretionary income is used for investing but that doesn’t mean you should invest all of it unless you have already have a substantial backup funds then you can afford to be 100% aggressive into bitcoin.

To make one slight correction on your part @Big Dirams; Discretionary income isn’t just free money or extra money without any responsibility because it has it’s own responsibilities. As you use your main income to satisfy your needs your discretionary income satisfies your wants. It is used to invest, save and/or discretionary spend.

I  do not see anything wrong if someone decides to go all in with their discretionary income if they have or sees an opportunity to do that, since the job of the discretionary is to invest so there is nothing wrong because you will still grow another one from your source of income. discretionary income is an extra cash, a leftover cash, remaining cash after all needs must have been taken care of but yea, this does not mean it is not useful of course it is very useful yet it is someone that will make it to be this useful because there are people who make their discretionary income look useless by using it wrongly.

The purpose of the discretionary income isn’t just to invest, it is from this money you build your backup funds that’s your emergency and reserve funds. It’s also from this money you take yourself out for a treat, gamble, buy gifts etc…

Now If you put all your discretionary money into bitcoin and you do not have a backup fund when an emergency hits you, you’ll be forced to sell part or all of your bitcoin to offset it. This makes all your efforts to invest a waste and brings you back to square one. That’s also you being over aggressive beyond your means which is not an advisable strategy.

In reality, the sole purpose of surplus income is not to invest. It is necessary to build an emergency fund from this money, be prepared for uncertain situations, and make arrangements to fulfill hobbies or personal desires according to one's ability. Surplus income should be divided in such a way that a balance is maintained between current needs, future security, and investment. The main problem is not investing in Bitcoin, but not keeping a proper distinction between the money allocated for emergency needs and the money for long-term investments. The price of Bitcoin may increase in the future. But it is not possible to say for sure in advance when an emergency will arise. Therefore, there must be such a financial system so that your investment does not have to be broken in unexpected situations. However without an emergency fund, all efforts to invest in Bitcoin will not be in vain. Even if someone is forced to sell Bitcoin his previous investment experience and savings habits do not become completely meaningless. It is more reasonable to invest by ensuring one's financial security, preparing for emergencies and keeping long-term goals in mind.

[liasbaa]

The purpose of the discretionary income isn’t just to invest, it is from this money you build your backup funds that’s your emergency and reserve funds. It’s also from this money you take yourself out for a treat, gamble, buy gifts etc…

Now If you put all your discretionary money into bitcoin and you do not have a backup fund when an emergency hits you, you’ll be forced to sell part or all of your bitcoin to offset it. This makes all your efforts to invest a waste and brings you back to square one. That’s also you being over aggressive beyond your means which is not an advisable strategy.

I believe a good investor isn't one who focuses solely on profits and, conversely, doesn't have to worry about losses. Therefore, we need to balance our reserve funds or emergency funds with the goal of providing a cushion for when circumstances don't go as we intended. Having a balance will make our investments safer. The purpose of investing is not only to enrich ourselves but also to ensure that our finances are strong enough to build our portfolio for the future. If we achieve more than we expected, it will be a bonus for us because we have protected our finances well for the future.

To maintain this financial balance you need to be careful in fund management. You should not have excess reserve funds or allocate more than you can afford to invest in Bitcoin. It is always wise to maintain a balanced financial system. An investor should regularly DCA for Bitcoin accumulation and have reserve funds available and emergency funds at a balanced level. To maintain balance in each of these financial systems, discretionary income should be used reasonably. Long term DCA system needs to be structured in such a way that there should be funds to meet emergency needs. It is better to keep a reserve floating fund that is available for additional daily expenses and sometimes aggressive Bitcoin stack buying. I understand the issue of having a cushion as a balanced state of cash flow to be at a comfortable investment level.

[Charcol]

It is from your discretionary income you can now  decide how much of that discretionary income you’ll want to allocate towards buying bitcoin and how much of it you will want to use for building the emergency funds and that’s why I think the emergency funds is a part of the discretionary incomes and not really part of the basic needs income.

I think that an investor should keep a larger portion of the money he keeps for his investment from his discretionary income to buy Bitcoin. And he should keep a small amount for emergency fund. For example, let's say 70% for buying Bitcoin. And 30% for emergency fund. In simple terms, if someone has discretionary income of $100, then he should invest $70 and $30 for emergency fund. In this way, he should manage his investment. Emergency fund helps us to sustain our investment in case of emergency, so without emergency fund, investment is incomplete. An investor can do whatever he wants with his investment. But if he does not apply his own judgment while investing, then he will put his investment at risk. So we should be calm and make all decisions while investing. And pay attention to other management including emergency fund.

Your specific formula doesn't seem realistic, which is what you're trying to make a rule of. You might agree with me that not everyone has the same income, expenses, responsibilities, job stability, family stress, and emergency risk. Someone may already have a solid emergency fund, regular income, no debt pressure, and can hold on to it even if the bad times come for a few months. For such a person, putting 70% in Bitcoin is quite normal and he may not feel any stress. But for someone else, putting that same 70% in Bitcoin may be an additional risk, if he has less cash security or more family responsibilities.

That's why I would say that no single formula may be realistic for everyone. First, meet your essential expenses, then set aside your discretionary income. Then, based on your own situation, you will have to decide how much to put in Bitcoin, how much to put in your emergency fund, and how much to keep for personal needs.

[Just Say]

Yes as an experienced investor this is the best advice you can give to someone who wants to start Bitcoin investment, because there are people whose own research isn't enough but advice like this will actually boost their confidence. Bitcoin price can fluctuate and waiting for it to dip before buying will make someone stay for a long time without having anything in their portfolio. Meanwhile someone who uses the DCA strategy will keep growing theirs because they don't have to wait for a dip to buy. That's why DCA is considered the best strategy for both rich and poor because it saves them from sitting on the sidelines for years.

In addition to continuous buying, DCA frees you from complex issues such as market analysis and frees you from complex decision-making. When doing DCA, you do not have to search for the right time and do not have to be afraid of missing the right time.

The main point of DCA investment is to make the initial or entire investment process much easier for investors. That is to eliminate thinking about complicated things like market analysis, thinking that finding the right time to start Bitcoin investment is not advisableand it will be easy to understand that one can buy and hold Bitcoins at regular intervals (eg daily, weekly,fortnightly and monthly).

Market volatility will not affect you in terms of buying and DCA gives you relative freedom in determining the amount. By being active with the market, you will also get the opportunity to buy at lower prices.

Basically we all know that there is no strategy in Bitcoin investment which can prevent i.e. reduce the market volatility but it can be said that those who are investing using DCA method may not be focused on the market volatility and are not afraid of the market volatility because they are adopting this method to ignore this issue and increase their portfolio size by investing regularly and with a long term mindset.

[Princess Leah]

In addition to continuous buying, DCA frees you from complex issues such as market analysis and frees you from complex decision-making. When doing DCA, you do not have to search for the right time and do not have to be afraid of missing the right time.

The main point of DCA investment is to make the initial or entire investment process much easier for investors. That is to eliminate thinking about complicated things like market analysis, thinking that finding the right time to start Bitcoin investment is not advisableand it will be easy to understand that one can buy and hold Bitcoins at regular intervals (eg daily, weekly,fortnightly and monthly).

Market volatility will not affect you in terms of buying and DCA gives you relative freedom in determining the amount. By being active with the market, you will also get the opportunity to buy at lower prices.

Basically we all know that there is no strategy in Bitcoin investment which can prevent i.e. reduce the market volatility but it can be said that those who are investing using DCA method may not be focused on the market volatility and are not afraid of the market volatility because they are adopting this method to ignore this issue and increase their portfolio size by investing regularly and with a long term mindset.

Some people may want to time the market, wait for a certain price before buying and end up getting a wrong timing due to how volatile Bitcoin is, you never can tell whether it would go up or down, so the DCA eliminates that stress of timing it, regular buying makes it possible to buy at different dips without timing it.
 
 Another thing it does is to help investors overcome emotions that comes with the dip and also maintain discipline by building consistently for a lomger period.

[Lembo69]

Your specific formula doesn't seem realistic, which is what you're trying to make a rule of. You might agree with me that not everyone has the same income, expenses, responsibilities, job stability, family stress, and emergency risk. Someone may already have a solid emergency fund, regular income, no debt pressure, and can hold on to it even if the bad times come for a few months. For such a person, putting 70% in Bitcoin is quite normal and he may not feel any stress. But for someone else, putting that same 70% in Bitcoin may be an additional risk, if he has less cash security or more family responsibilities.

That's why I would say that no single formula may be realistic for everyone. First, meet your essential expenses, then set aside your discretionary income. Then, based on your own situation, you will have to decide how much to put in Bitcoin, how much to put in your emergency fund, and how much to keep for personal needs.

Since we are in an investment thread, I will give more priority to buying and investing in Bitcoin. Suppose you are going to buy a car and you are saving money to buy that car, and your next step is to know that the car will definitely need oil to run. Now, which one will you save money to buy or to buy oil?
You will definitely save money to buy the car. In that case, I have said it in such a way that most of the discretionary income should be kept for Bitcoin. If you have a goal to buy a car, you cannot forget about oil. So even if you have an investment goal, you cannot forget about the emergency fund. An investor can invest in the way he feels comfortable, if he wants, he can save an emergency fund first. But while doing this, he may definitely fall behind in his investment.

Yes, for those who have more family responsibilities or less cash, my plan may not be reasonable. Such a plan may become unrealistic for them. But they will be able to take the matter easily. For example, suppose an investor has a very small discretionary income. He has to adapt to personal expenses and other things from that money. Suppose 50% of 100% is for some personal expenses and the remaining 50% of the money is left with him, if he invests, then I would say to keep the amount of Bitcoin higher, such as 30% Bitcoin and 20% for emergency funds.

Or if someone wants, they can keep it at the same level, suppose 50% of 100% is for Bitcoin investment and 50% for emergency funds. In both cases, in the case of 50/50%, 25% can be invested and 25% for emergency funds. However, it is better to take a disciplined decision according to the situation of an investor.

[SmartCharpa]

Everyone is free to decide on an investment strategy, but if someone makes a foolish decision, it is also important to provide them with the right guidance and it is the responsibility of an experienced investor. A person who wants to start Bitcoin should first be advised that no one is out of risk. Applying a good investment strategy can reduce that risk to a large extent. DCA is one of the best investment strategies through which investors of any level, rich or poor, will be able to reach a strong investment position.

They do not have to wait for the price to decrease or get excited to sell as soon as the pumping occurs. They have to regularly accumulate Bitcoin in the long term DCA method and grow their portfolio. The market is moving, sometimes there will be a decline and sometimes a bull run but those who do DCA regularly buying Bitcoin in every market reaction.

Yes as an experienced investor this is the best advice you can give to someone who wants to start Bitcoin investment, because there are people whose own research isn't enough but advice like this will actually boost their confidence. Bitcoin price can fluctuate and waiting for it to dip before buying will make someone stay for a long time without having anything in their portfolio. Meanwhile someone who uses the DCA strategy will keep growing theirs because they don't have to wait for a dip to buy. That's why DCA is considered the best strategy for both rich and poor because it saves them from sitting on the sidelines for years.

Even though advice can increase a newbie confidence to invest in Bitcoin, they also need to do their own research to understand many other things about Bitcoin. Advice alone isn’t enough to help anyone understand about Bitcoin, a newbie needs to do their own research, because the person advising them may not have enough time to explain everything about Bitcoin.

In addition, a newbie should not wait for a dip to buy, once they gain more knowledge and advice from an experienced investors, they can start investing. I believe the more someone invests, the more they will understand and experience more about Bitcoin. There are some parts of bitcoin that we cannot fully understand without investing. You need to buy and experience what other people go through while holding.

[Morayoam91]

I believe a good investor isn't one who focuses solely on profits and, conversely, doesn't have to worry about losses. Therefore, we need to balance our reserve funds or emergency funds with the goal of providing a cushion for when circumstances don't go as we intended. Having a balance will make our investments safer. The purpose of investing is not only to enrich ourselves but also to ensure that our finances are strong enough to build our portfolio for the future. If we achieve more than we expected, it will be a bonus for us because we have protected our finances well for the future.

It is important not to focus solely on building an emergency fund by stopping investing because the current price of Bitcoin may not be what it is in the future. Therefore, the main effort should be to take advantage of current opportunities. It is not enough to buy continuously, but it is also effective to take advantage of your various opportunities. Delaying investment is never a good idea. On the one hand, you will miss out on opportunities, and on the other hand, you may have to invest at a price higher than your investment value and you will regret it. Investing through the DCA strategy will free you from such challenges as when to enter or when to exit, which will help you maintain your consistency.

When there is a sudden danger in your life, from which you may need a lot of cash to get out of, then the need for an emergency fund comes to the fore. It could be medical treatment, loss of job or loss of source of income. However, the need for an emergency fund may arise at such times, but it cannot be guaranteed that the emergency will meet all your needs and then you will have to give up your long-term holdings, but it will be mandatory for you which is different, but it cannot be guaranteed that it will happen to everyone. Even if this happens, if you are financially well-off, you can usually solve it. There are also people who are not so financially well-off, but they can increase their income through hard work or create multiple sources of income from which they can increase their income a lot, from which they can maintain the continuity of investment even after meeting all the needs of their family. It is useful to invest gradually through the DCA strategy without focusing entirely on building an emergency fund.