Before even thinking of having emergency funds first before investing, the question to ask oneself is "how much emergency funds is enough?", answering that question honestly, will reveal to anyone that keeping emergency funds first before starting Bitcoin investment is not a requirement and not necessary since it can keep happening while you keep buying Bitcoin.
This particular discussion has been here for awhile and will continue to be cause some people still misunderstand the whole thing, instead of creating emergency funds first as some people thinks that it should be, wouldn't it be better for such persons to invest along with creating emergency funds, in my opinion, I think it is far better for us to apply wisdom in doing things, the importance of emergency funds can not be overlooked, I think those that are reasoning this way, should first consider what if they do not invest after creating emergency funds first, from what I know, discreationary income first, then emergency funds.
For some time, I have been getting the sense that the label of "emergency fund" has been detracting from the ability to describe what is likely going on in the beginning, since it seems crazy as fuck that any of us would just set aside funds (cash) that is locked up, so the cash has to be flexible, especially in the beginning to cover any fluctuations in the income/expenses, and yeah, the more cash that we build up, then the more likely that some of the cash can be locked up as untouchable except for emergencies, yet emergencies are also likely not as dramatic as guys are making them out to be. Whenever a guy has basic expenses that cannot be covered by discretionary funds, then that could be considered an emergency since the back up funds have to be used to pay for the expenses, especially if the expenses cannot be deferred (or it is not practical to try to defer the expenses) until the next pay period.
So of course initially for guys who might start to buy bitcoin without much if any back up funds, they are largely making sure that they have enough cash to make sure that they are not spending beyond their discretionary funds, so that they have enough money to cover their expenses until their next paycheck comes.
The longer that both back up funds and the bitcoin stash is built up, then the more likely more and more extra cash will be building up that is largely not used and never tapped into, and guys might go 4-10 years or longer that they never tap into a certain amount of their cash that continues to build up and to become larger and larger, but never touched.. just sitting there as a cushion so that the bitcoin never would need to be tapped into... so yeah, there are likely priorities in which money can be spent from first and which money has more flexibility and guys might be loosey goosey in their labelling of the funds or they might try to be strict in how they label their extra money, yet in the end, if guys end up fucking up because they either keep too much back up funds or they keep too little, then hopefully they can learn from their mistakes, the mistakes, hopefully, are not too big, and then can adjust in regards to how much cash they are keeping in order to balance out how much bitcoin they are building up.
Over the years, there have been several guys who accurately proclaimed that it makes little sense to be creating emergency funds when there are no bitcoin to protect, and since we are in a bitcoin thread, we are emphasizing the getting started with bitcoin, the building of bitcoin and the utility of the back up funds in terms of building/maintaining a bitcoin stash that may well be 4-10 years or longer, and surely my own emphasis has been that bitcoin tends to be something that guys should be shooting for the building and/or maintenance for 10 years or longer unless they have some health/age considerations that might cause 10 year plus investment timelines to not be practical/reasonable.
So, part of the motivation of back up funds is to put guys into a potentially strong position to keep building and holding bitcoin for 4-10 years or longer, and surely in terms of practicalities, even a person who might have a timeline of less than 10 years, and even as low as 4 years, there may well be practicalities that they would never be selling any coins that had less than a 4 year timeline, even if they might have to start to slowly cash out of their bitcoin holdings.. so perhaps they build their bitcoin holdings for 4 ish years by DCA buying and then they spend the next 4 years selling what they had bought by selling the coins that they purchased first before selling other coins, so that none of the coins would have less than a 4 year investment timeline once they start to sell them.
Of course, we may well make bitcoin accumulation, maintenance and liquidation plans based on our preferences, yet at the same time, we understand that there might end up evolving some changes in our circumstances that cause us to have to deviate from what we thought was going to be our ways of building up and managing our bitcoin holdings.
I support your stance here because starting bitcoin investment requires a discretionary income and if you don’t have back up funds you can still start but it is better to have and start up with a little back up funds than not having anyone at all. The reason is because investors don’t need to be left with an empty wallet after they have finished buying bitcoin, they need a little funds to use and back themselves up after buying bitcoin so that they will still have something they can hold on to pending when they are able to receive another income where they can also figure out a discretionary income to use again to buy bitcoin.
You don't need to kill yourself if you don't have any form of backup funds on ground before getting started and that's the main reason why you shouldn't delay and build your emergency funds simultaneously with your bitcoin investment. You should know that you emergency funds is for a real life problem will play out during your bitcoin accumulation journey.
The money that you're talking about is float which is the funds that you set aside in case an expected expenses pops up during the period while you are waiting for your next pay. You should also have your discretionary consumption too. So, if you have float and discretionary consumption, you can settle this.
There is nothing wrong with the way that you are describing the situation of a beginner @Sim_card, since many of us understand that the main thing that a beginner needs to assure is that he is not using money past his discretionary funds to get started buying bitcoin, and if he cannot assure himself with sufficient satisfaction that he has enough money to cover all of his basic expenses until his next paycheck, then he does not have enough discretionary funds to buy bitcoin.
Many of us likely realize that there would be a considerable amount of risk if a guy were to be measuring his discretionary funds each week and coming close to maximizing his discretionary funds each week, and it would likely start to seem that the guy is gambling rather than investing if he is not also building up his back up funds on a weekly basis as he is building up his bitcoin stash.. and many of us consider something like an equal distribution to bitcoin stack versus back up funds stash to be reasonable and/or practical as long as the guy has income/expenses that are somewhat regular, but if the guy has a lot of potential irregularities in his income/expenses, then he may well have to start to build up his back up funds in a greater way so that he does not end up falling into a situation that he cannot cover all of his basic expenses, especially due to loss of income and/or increase in expenses, so then he ends up having to tap into his bitcoin at a time that is not of his own choosing.
And, yeah, if the newbie comes to bitcoin and does not really have much vision about his bitcoin timeline, it would seem that his buying bitcoin would motivate him to learn about it and perhaps figure out that he has to protect his bitcoin investment, which also ends up leading to an ongoing building up of back up funds, even if he might have had started out without much or any back up funds.
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You forget about your discretionary consumption which should also be considered when dividing your discretionary income because you don't need to deprive yourself from your wants. However, if I am going to share my discretionary income into three equal parts, it will be 1/3 for my weekly DCA, 1/3 for building my emergency funds and the last 1/3 for my discretionary consumption.
This indicates that you are quite good at adjusting these three things to avoid serious problems. By doing as you stated, all desires and needs are well-maintained and there will be no disputes, whether for consumption needs, building an emergency fund, or investing weekly so that all our desires can be achieved according to their respective procedures.
But what you need to understand is that many people don't follow the ideas you've outlined in this topic, and then they always have disagreements, with problems that end up with one of these three things being left behind and not running according to their wishes. This is caused by the lack of knowledge they have about how to divide their income so that they always have a deadlock in doing things related to the topic we are discussing here.
Just because others fuck up, don't know what they are doing, or fail/refuse to execute good practices, that does not mean that we should be modeling our own behaviors and/or plans around the fuck ups.
In other words, why would we want to be spending our time thinking about the various ways that guys fuck up unless we also might be wanting to figuring out good and better practices so that we might be able to follow the better practices rather than being preoccupied about the various ways that we could screw it up?
Each of us is responsible to come up with systems that work for us so that we can hopefully invest in bitcoin on a regular and ongoing basis while also finding some balance in how we are using our discretionary funds, and yeah, there could well be ways that any of us overcompensate in one direction or another, yet if we are ongoingly trying to pay attention to what we are doing and perhaps to tweak our systems/practices from time to time, then we likely will fall into practices that are well balanced for ourselves and our circumstances, including having better abilities to adapt whatever we might be doing from time to time.
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Bitcoin is not a lottery or a game of chance that must be bought with a gift from someone at the mercy of someone else. Our focus should be on a completely real and reliable source of income whether it’s a job or a business. What’s left over from your own hard earned income minus expenses is real discretionary income with which you can regularly deposit Bitcoin.
Get rid of the unreliable or fantasy of gifts. Strengthen your income stream stack Bitcoin with your excess cash flow and hold it long term in 4 to 10+year cycles that’s the only realistic and effective way.
Guys can buy bitcoin from any discretionary funds that they have, and guys do not need to have a reliable source income to buy bitcoin, whether it is getting started or continuing to buy bitcoin from time to time.
Of course, if we are striving to hold our bitcoin for 4-10 years or longer, it is quite likely that we will need to have ongoing income to cover our expenses, and we may or may not be able to continue to buy bitcoin or even to resist from selling some or all of our bitcoin holdings in circumstances that we do not have enough income to ongoingly cover our basic expenses.. so yeah, in the context of having ongoing basic expenses for the next 4-10 years or longer, we have to account for those kinds of matters in terms of our future, yet each time that we consider buying bitcoin or not, we can still determine based on present circumstances if we believe that our discretionary funds are sufficient to be able to afford to buy bitcoin, and the source of such discretionary funds need not be from a steady source of income.
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When you win the lottery or receive a cash gift from someone it is a sudden and irregular event. If you base your main financial plan on such an unreliable source you are basically thinking like a gambler. Regular Bitcoin is not possible with the money from a lottery ticket.
You seem to be reading too much into any bitcoiner's use of irregular income to buy bitcoin, and also you have ONLY been registered here for slightly more than a month, yet you want to lecture guys about how to buy bitcoin and/or how to deploy cashflow management practices?
There's nothing wrong with participating, and even providing contrary ideas, yet it seems problematic for newbies, such as yourself, to be coming in with dogmatic proclamation that don't even seem to be attempting to account for various income and/or expense scenarios that bitcoiners might be facing, whether we are referring to newbie bitcoiners or bitcoiners who might have been buying bitcoin for a while.
How about you? Have you started buying bitcoin, yet? or are you merely wanting to chime in about bitcoin buying theories? If you post about your own circumstances or even some variation of your own circumstances, then it might help to keep you more grounded, even though surely there are some guys here who seem to want to speculate that the circumstances of other guys are the same as theirs, which may well not be the case, either, especially related to any of
the individual circumstances that might apply. Have you read and/or thought about the application of individual circumstances and how they might vary?
No no my friend, I think you’ve gotten it all wrong. Backup funds is important and necessary even as you’re starting your investment. It is mandatory you start investing with some kind of backup funds that’s why it’s important you invest with your discretionary income because it gives you the flexibility to build both your investment and your backups simultaneously.
Don't you think you are missing the point here? I know that having back up funds is very important when investing in bitcoin but that doesn't mean an investor must have e everything in place before they can start investing in bitcoin, the reason why we are to use our discretionary income is that it gives the room to build your investment gradually while you set aside money for your back up and also other necessary funds like the emergency funds from your discretionary income as you continue to buy bitcoin.
for anyone to start investing in Bitcoin. If you have discretionary fund, you are ready to invest instead of waiting to build a backup funds, which is going to be a waste of time. The most important to understand before investing in Bitcoin is to invest what you can afford to lose. It should not money you may need in term of any financial emergency.
Backup funds is the money you set aside to save your investment when you get an emergency. You can use the emergency to cover expenses instead of spending your investment. Our
backup funds are not meant for investment, even if we are not comfortable to continue our accumulation, we should not use our backup funds to invest.
You just making shit up @SmartCharpa?
1) if a guy does not have any back up funds, then how is he going to know that he had not invested beyond the level of his discretionary funds?
2) Do you know that back up funds is a general category that describes emergency funds and reserve funds? Reserve funds are more flexible than emergency funds. Generally, guys here, including yours truly, like to consider emergency funds as being ONLY available to use on basic expenses that cannot be deferred until the next paycheck. So yeah, buying bitcoin with emergency funds would be a bad practice unless the emergency funds were excessive and they were really reserve funds rather than emergency funds. Guys have to figure out how they classify their funds, and surely if they end up screwing up by keeping too many back up funds or keeping too little back up funds, then they will end up having to pay the price for their screw up.
with the reason being that the emergency fund is an additional fund for us to invest in Bitcoin, especially if the portfolio we are building looks good in performance, so the use of the emergency fund is to purchase Bitcoin to increase the amount of our investment because with discretionary income alone, it looks like it is starting to improve, so it needs to be added to be able to have more assets in the future.
Emergency funds used to buy Bitcoin? How and why? This is so insane.
If you do that, just know that your accumulated portfolio as at great risk of been sold out unplanned and even at loss, because when emergencies show up, you would have nothing to tackle it.
I don’t why people keep mistaking emergency funds as discretionary income.
If someone use their emergency funds to buy Bitcoin, what are they going to use to solve unexpected problems? Emergencies do happen, and using emergency funds to invest is not a good idea. You will end up selling your Bitcoin at the end.
This part is true. Emergency funds tend to be the last line of defense that exists before guys would be forced to tap into their bitcoin, so it seems crazy for anyone to believe that it is a good idea to use emergency funds to buy bitcoin, when presumptively they have no other back up funds by the time they end up reaching their emergency funds.
There is no problem if an investor does not keep an emergency fund at the beginning. However, if a good amount of BTC is accumulated, then it becomes necessary for him to create an emergency fund. Because an emergency situation can come at any time, so in an emergency situation and in order not to have to sell the investment in any way,
I disagree with you on this. What happens if an emergency comes when the investor has barely started accumulating bitcoin, what if someone loses his job or a family member falls sick, and suddenly he needs money urgently. Where will he get it from?
Huh? What the fuck are you talking about @Grease5000? If a person is brand new to bitcoin (and thinking about buying bitcoin), you think that he has to build an emergency fund first?
What was he doing prior to bitcoin?
To me, it seems best that guys get the fuck started from whereever they are at. We are talking about investing in bitcoin in this thread and you want to proclaim that it is more important for guys to prepare for emergencies (preseumptively when they had not done so previously) based on their coming to bitcoin?
Why can't guys start from where they are at?
Tell us? Is this hypothetical bitcoin newbie that you are referring without any back up funds at the time that he comes to bitcoin, so then he figures that he needs to build up his emergency funds before he can get started buying bitcoin?
By the way, I can also imagine some bitcoin newbies who might already established back up funds that are equivalent to 3 months of their expenses, so then can those guys start buying bitcoin?
What about guys with 1 month of expenses built up?
How about 2 months of expenses?
How about 2 weeks of expenses?
Where is the line? and yeah, I get the sense that you are referring to a guy who is brand new to considering buying bitcoin, and maybe he has no back up funds or very little back up funds, and since you are putting so much emphasis in all of the things that might happen, the guy needs to prepare for those things that might happen before he can start to buy bitcoin. Right? That is what you are saying @Grease5000?
An emergency fund is never a reward for accumulating enough b itcoin, rather see it as a protection that helps you keep the bitcoin you already own.
Early you seemed to be describing the situation of a guy who did not have any bitcoin, and now you want to presume that the guy has some bitcoin. How long has this guy been accumulating bitcoin? Similar to you? Around 10 months? or some other timeline? How has he been balancing out his discretionary funds? Did he start to buy bitcoin with some back up funds already in place or did he start from zero?
Personally, I would imagine that the circumstances of guys who had been accumulating bitcoin for 6-10 months or more would be different from guys who are brand new to buying bitcoin, so in that regard, it is good to attempt to be clear about what kind of guy we are talking about and if he had already been building up his bitcoin and/or his back up funds, then maybe to give some sense of where he is at.
Many times we refer to the circumstances of the very beginners when we are talking about the status of their back up funds, yet surely many of us likely realize that guys may well stay in their fairly early stages of bitcoin accumulation for a whole cycle or more, yet the longer that they have their various practices in place, then they are affected by the practices that they had already been following rather being as concerned about how to get started, even though there are likely a reasonably decent number of guys who might get into bitcoin with false starts and/or needs to reformulate their start and/or to make some reasonably large adjustments to what they are doing or planning to do in connection with their bitcoin accumulation and/or their cashflow management.
You can be accumulating bitcoin while also building an emergency fund along side it with whatever discretionary income you have left and you equally build a backup fund with some the discretionary income you have.There is no point waiting until your bitcoin stash is big before preparing for a problem that can happen at any time.
O.k. At least you seem to acknowledge that both the bitcoin stash and the emergency fund can be built at the same time, even the you seem to be giving greater emphasis to building the emergency fund rather than the bitcoin stash building, yet sure, maybe you are responding to rebut some of the points that were being made by Lembo69 - however, I doubt that the mere responding to (or even attempting to rebut) the points of another member excuses when guys seem to be perverting various kinds of good/better practices - and surely each of us have to start out from where we are at, yet at the same time, where we are at may well affect how much emphasis we might give to bitcoin accumulation as compared with making sure that we have a reasonable amount of back up funds, and surely, I would expect that the longer that we are in bitcoin, the more solid our back up funds would end up becoming, even though surely some guys are able to build up their back up funds faster than others, and surely other guys might end up suffering some set backs when they had been building up their back up funds which surely might end up contributing to their taking longer to get their back up funds to a place that they consider to be reasonable.
I think that there have been plenty of times in this thread (and perhaps some other threads?) that I had suggested to build up bitcoin and back up funds at similar rates while at the same time recognizing that guys have discretion in terms of how much emphasis that they want to give to each of the areas, and at the same time, as a guy's bitcoin stash becomes larger, such as when he might have had invested a year or more of his income into bitcoin, he may well also start to feel that both his cash back ups need to be BIGGER, but also that portions of his cash back ups will likely need to be kept in forms that are "working" since it becomes more and more problematic to be trying to keep so much money in cash (or cash equivalents), yet at the same time, there tends to be value in keeping more and more cash, especially the larger a bitcoin stash becomes.
Since it tends to take quite a bit of time before many bitcoiners get to the stage of having a lot of bitcoin, we tend to spend way more time talking about problems that relate to building up and getting to those points rather than presuming that guys already have built up large bitcoin stashes.. Another thing with getting to larger sized bitcoin stashes is that the dilemmas do not necessarily go away, yet it seem that the options for dealing with various dilemmas change which also seems to contribute towards a lot more variation in regards to how guys might transition into higher stages of bitcoin accumulation or maybe even transitioning into variations of maintenance rather than bitcoin accumulation... but yeah, guys might not even make it to those more advance stages of their bitcoin journey if they do not follow strong bitcoin accumulation and/or cashflow management practices.
There is no problem if an investor does not keep an emergency fund at the beginning. However, if a good amount of BTC is accumulated, then it becomes necessary for him to create an emergency fund. Because an emergency situation can come at any time, so in an emergency situation and in order not to have to sell the investment in any way, it is necessary for an investor to keep an emergency fund. However, if someone thinks that he has to keep an emergency fund before investing, then he is wrong. Because first of all, you should come to investment and then think about the emergency fund.
It is not compulsory to start investing in Bitcoin and building an emergency fund at the same time; it is just very important for investors to start planning for their investment first.
Huh? Are you even in the same thread? Emergency funds come first? Since when? Aren't we in a bitcoin thread, and specifically my bitcoin investment ideas thread? You are not going to catch me proclaiming emergency funds need to come first, except to proclaim that any guys starting has to have enough back up funds to make sure that he is not investing beyond his discretionary funds, which actually continues to be the case throughout his bitcoin investment, since one of the principle underlying presumptions of investing in bitcoin is that guys are investing from their discretionary funds and not from funds that they need to cover basic expenses.
However, since it has been stated that those who are unable to manage both while beginning can go ahead, this shouldn't be an opportunity to ignore the emergency fund or to have a mindset that it is not too important.
Oh gawd.
You seem to be saying that it is better to establish emergency funds first, but since people are incompetent or screwed up, we are going to proceed with an inferior practice that involves building up the emergency funds in a more delayed way.
Get the fuck out of here @Rockstarguy. Maybe you should go start your own thread about how it is better to create emergency funds first.
While it is not compulsory to start with it, some investors can be careless and find pleasure in not doing the right thing. If you are able to start investing and meet all your expenses, then having an emergency fund should be considered, no matter how small it may be. I know it is not easy to manage everything, but investors need to focus on everything important related to investing in Bitcoin because they all play their own roles.
You seem to be kicking and screaming in regards to agreeing that it is o.k. to start bitcoin investing from where ever a person is and to build up an emergency fund at the same time.. but if you had your druthers, then you really would prefer to build up the emergency fund first.
