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However, it is not wise to invest all the extra money, except for emergency savings in Bitcoin because if someone needs money in an unexpected situation, he/she may be forced to sell Bitcoin during unexpected moment or a market crash.
Are you reasonably distinguishing guys who have already built up large back up funds, including emergency funds and/or reserve funds and those who have not?
We have to consider how back up funds work. If we keep adding to them and we are not using them, then their size increases. We do not need to continue to add to them if they get to a sufficient size, even though surely it seems to me that the larger our bitcoin holdings becomes, then the more likely that we may want to keep additional value in cash, cash equivalents or even other assets that we might want to be able to access prior to accessing our bitcoin in the case that we run into situations where we might have to tap into our back up funds without having to tap into our bitcoin.
I would suspect that even guys who are very new in their building of back up funds, they are not necessarily going to want to be locked into not being able to use them, yet surely they get more empowerment and likely more flexibility the larger they build their back up funds, yet they could still end up getting themselves into situations where they have needs and/or wants that greatly exceed their discretionary funds, so they have to figure out how much back up funds they have and/or how risky it might be to deplete certain aspects of their back up funds, and maybe they even end up considering how fast that they believe that they are going to be able to replenish whatever back up funds that they end up using for their needs and/or their wants.
Sometimes guys might even exercise bad judgment and use up some of their back up funds in circumstances in which they should be keeping greater amounts, yet they might not be able to resist and maybe they calculate that they are expecting to receive some large payments in the near future that will allow them to replenish their back up funds (even though at the time, they have not yet received the large payments and it might be risky to place too much faith in the receipt of future funds that might not end up happening).
Guys can engage in conservative practices, and maybe once in a while engage in more risky behaviors that end up in draining down their back up funds. I personally tend to not engage in that kind of behavior to drain down back up funds, yet sometimes guys might have confidence that income is coming in or they might even have some extra sources of back up funds that they know that they could draw from, so they choose to take chances that they are going to be able to replenish back up funds.
On the downside is that sometimes guys end up getting themselves in a pickle, since sometimes even highly likely events (such as income coming in) does not end up happening on schedule or in the amounts that had been expected, and so guys in those kinds of situations may end up scrambling because what they had calculated as the less likely scenario ended up happening.
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Thanks for the numerous corrections you made in the above post. I see a lot of members deluding themselves into thinking that one can start up Bitcoin investment without having good financial inflow. I for once don't believe that someone with a lot of responsibilities, and an income that doesn't satisfy all his responsibilities can comfortably invest in Bitcoin—it's not just feasible.
Since we are in a bitcoin thread here, we frequently strive to encourage guys to both get started buying bitcoin and to stay invested in bitcoin by ongoingly adding to their bitcoin stash, even if the amounts are small.
Yet, at the same time, each guy has to figure if he has enough money, and also there surely are guys who have little to no assurity that they are going to be able to keep their income for several months, so they end up having to build and maintain higher level of cash than they would prefer to, and so they consider themselves as ineligible to invest into something like bitcoin where the investment needs to be 4-10 years or longer.
Surely one of the selling points of bitcoin is that there is potential that it could help guys to get out of poverty, yet surely one of the requirements of investing is to have discretionary income and even prospects to be able to keep income coming in that is going to be able to continue to pay for expenses and to have some money left over for discretionary spending.
This is my theory: investment should commence when you have less responsibilities, and a decent cash-inflow.
I am not a big fan of waiting, especially for poor people who likely need to work on ongoingly building and investing, even if it is small amounts.. yet at the same time, surely there is discretion that each person has to exercise in making determinations for themselves in regards to whether they have discretionary funds and if the amount of discretionary funds is enough for them to stack away $100 per week, $10 per week or whatever might be an amount that they are able to stack away. I am not in this thread to discourage folks from investing in bitcoin, and if possible they should be figuring out ways to increase their discretionary income so that they can invest in bitcoin..;. but if they are in a situation where they cannot increase their discretionary funds and they do not have enough discretionary funds, then yeah, they cannot buy bitcoin if they do not have discretionary funds.
In a situation with much responsibilities, before investing, you need to have a good cash-inflow that can satisfy all your responsibilities and have a considerable reserve left. You just can't invest whenever, however, and wherever. The thought of "start investing now, don't wait" is a delusional thought to me, and it won't be sustainable or feasible along the line.
It is your judgement, ultimately. I understand that some guys are in quite tough circumstances, and I can recall going through times (especially 30-ish years ago when I was younger) in which I did not have extra income, and surely I was lucky to be able to go to school and to get some certifications and even some connections that allowed me to get promoted and then all of a sudden to have way more extra money. Not everyone is able to figure out how to do it or even to have abilities to increase their job prospects, which then results in higher income.. and sometimes with higher income, we might choose to continue to keep our expenses low (which was the case with me), which then allows to invest much, if not most, of the additional income... so yeah.. some times it can be difficult to get additional income or even to cut expenses and also sometimes guys have age, health and even some family relationship situations that greatly limit what they are able to do in terms of increasing income and/or cutting expenses.
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This is my theory: investment should commence when you have less responsibilities, and a decent cash-inflow. In a situation with much responsibilities, before investing, you need to have a good cash-inflow that can satisfy all your responsibilities and have a considerable reserve left. You just can't invest whenever, however, and wherever. The thought of "start investing now, don't wait" is a delusional thought to me, and it won't be sustainable or feasible along the line.
Your theory is good on paper but in reality, there will never. Omr a time when a human will have less responsibilities. I have even noticed that the more money you have, the more your responsibilities increases, so shoulf one continue taking up these responsibilities until hey disappear before he make investment in Bitcoin? This is why we have to differentiate between basic needs from other responsibilities.
I largely agree with you @Moreno233, yet at the same time, it seems to me that responsibilities fit into the need category rather than the want category, even though sometimes we can figure out how to shave off some expenses that are considered our responsibilities, yet these are very individualistic determinations and may not always be easy to cut some of those kinds of expenses.
If you are able to do this, then you will tackle just the basic needs and start investing part of what is left while managing other responsibilities.
I agree with you that sometimes guys have some of their wants categorized as needs and there may well be ways that they can change things around so that they might not be paying as much or maybe they are sharing expenses or some other creative ways to increase their discretionary income.
I recall that there were several times in my history that I purposefully choose to share expensive items, and I even purposefully rented places for myself that were much larger than I could handle, yet my purpose was to sub-lease portions of the housing, so then there was sharing involved, I was still responsible for all of the bills, but Iw as also able to largely recoup my own costs by sub-leasing.. so then my otherwise BIG ticket item became a lot cheaper, I had quite a bit of autonomy (and authority) over the arrangement and there were even times that I was making money out of the deal rather than paying.. but then there were other times in which my costs were higher than normal based on my being responsible when some guys might not pay their part or if I was in situations that I was looking for a replacement lodger who I considered to be sufficiently compatible, which sometimes was challenging to accomplish.
If you want everything to be perfect before you invest in Bitcoin, you will likely not get started because there will always be something to do with money.
For sure, there are guys who sometimes are overly searching for perfection rather than really figuring out ways to make their own current situation work as it is, and even once they start investing and better organizing their cashflows, they may well think about ways to become more efficient and to cause themselves to have more discretionary funds based on their better organizing themselves and identifying opportunities that are available to themselves that they had not previously recognized.
If you want everything to be perfect before you invest in Bitcoin, you will likely not get started because there will always be something to do with money.
Everything doesn't have to be perfect, but they have to be well attended to or else they'll turn around to bite your"investment" in the butt—that's just the truth. Unless you have somewhere you can use as a cushion to your investment when the going gets tough—maybe a loan, a friend, family member etc.
Without getting into too many details, frequently I like to suggest that the more complicated a person's income and/or expenses situation, then the more back up funds he needs to keep in order to account for those additional complications. Family responsibilities fall into the area of complications, and business income/expenses can end up being complicated too. So, yeah, ultimately greater complications can contribute to a lot of uncertainties (or deficiencies) in income and/or (or increases) in expenses.
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I believe a lot people are not getting it right and not taking their time to read to understand what JJG is saying. I think what he is trying to make us understand is before anyone starts bitcoin investment you have to understand your financial strength first, this will enable how much for one to invest in Bitcoin and also to meet up with expenses and savings.
But I would like to ask a question so that it will be a benefits to others who are struggling to understand bitcoin investment ideas.
If i am earning an amount and i have been able to purchase the basic things and their is a remaining balance and what i have in mind to do with the balance is to buy bitcoin, and to cover up little debt, transportation and just small pocket money. Someone in this finacial state can still go ahead investing bitcoin?
There are basic aspects of buying bitcoin, such as making sure that a guy has extra money then he can buy bitcoin, yet at the same time, there can be complications in terms of projecting out income, expenses and even abilities to continue to hold onto bitcoin or even abilities to buy more bitcoin.
Guys do not have to have all of their financial circumstances figured out in order to be able to start to buy bitcoin, since all they need to do is to make a determination that they have discretionary funds that they can use to buy bitcoin with those discretionary funds.
At the same time, keeping an investment going can involve more juggling and even more persistence to make sure to build back up funds and bitcoin holdings at the same time, and perhaps figuring out how to prioritize spending during periods that income might go down and expenses go up.
That right, when investing in bitcoin the most important Thing is to get discretionary income and start investing, it your discretionary income is big enough to start saving for your emergency funds, then it fine, but in case where the discretionary income is barely enough, then you will need to start your investment first. So as you are investing, you will be looking for way to get more discreet income so you can save for your emergency funds.
Using discretionary income is not that bad, but in some circumstances you can use everything from the discretionary income you have to keep some also for emergency funds, and for more convenience, your discretionary income has to be more than enough to get you what you want because the amount of money matters a lot because it can go round for both your investment and your emergency funds.
Am I getting something wrong here? How can you have discretionary income without emergency funds?
Literally, discretionary income is money left after you already covered everything you need and that includes foods, light and water bills, miscellaneous and of course your emergency funds too.
Do you keep repeating the same nonsense? or are you not reading this thread?
Emergency funds are built from discretionary funds, and they are not part of basic expenses.
You can not have discretionary funds before emergency funds unless you want your discretionary funds to become your emergency funds.
You are retarded, and you are repeating incorrect information and acting like you know what the fuck you are talking about when you do not.
How the fuck can emergency funds be the same as basic expenses?
Basic expenses need to be paid and cannot be deferred - for example food and water.
Emergency funds are built from extra money (aka discretionary funds) so that they could be used to buy future basic expenses (such as food and water). Emergency funds are not being used to buy current food and water because there is enough food and water, so emergency funds are kept for the future, whether the future is the next day or 6 months down the road.
Investing with your discretionary funds emergency funds will only force you to sell your coin prematurely when emergency case arises.
This sentence does not even make sense. Maybe you need to try to understand what you are posting before you post it?
I should not have to clarify such a basic concept.. .. and maybe in the future it might be better to just delete your disinformation and confusing post.
Clarification:Whatever money is remaining after accounting for basic expenses is discretionary income.
Discretionary income can be used to 1) invest, 2) save (put into back up funds, such as emergency funds and/or reserve funds) and/or 3) discretionarily spend.
I doubt that more explanation is needed, and just from that above clarification, guys should be able to figure out what options that might be available for them, even if they might have to practice understanding the difference between each of the categories.
If i am earning an amount and i have been able to purchase the basic things and their is a remaining balance and what i have in mind to do with the balance is to buy bitcoin, and to cover up little debt, transportation and just small pocket money. Someone in this financial state can still go ahead investing bitcoin?
You are to take care of your basic needs and your monthly expenses before you can call the leftover your discretionary and not only your basic needs. Your transportation money, electricity bills and
debt falls under monthly expenses.
You are generally correct that debt servicing should be considered as part of basic expenses, even though there can be circumstances in which debt servicing may or may not end up falling under basic expenses depending on how such debt (debt servicing) might be structured and the extent to which it can be reasonably deferred.
I tend to like to consider the minimum payments of debt servicing as part of my basic expenses, yet if there are no penalties to delay payment, then there could be flexibility in terms of paying the debt and/or deferring payments.
Guys might also purposefully choose to pay off their debt faster than the minimum payments amounts require, so the extra payment amounts become optional in terms of whether to pay that month or to defer into future months.
If after doing that, you still have extra left with you, you can use part of it to buy bitcoin. Your pocket money should fall under your discretionary consumption.
No need to confuse matters, since discretionary funds can be used to invest, save or discretionarily consume (whether you call it pocket money or whatever)
