. Emergency funds should be kept in cash.
Not just in cash, but some of it should also be kept in the bank for security purposes, because it's quite dangerous to be having a large amount of money kept in cash , since it may attract robbers to your home, if news get out that you have such amount of money on you. The only reason all the money should not be kept in the bank is that you can be locked out by your bank during emergencies, which is why some of it is kept in cash, just in case of such thing playing out, but be rest assured that keeping your emergency funds in fiat currency is the best.
Since the goal is to address life's emergencies, choosing fiat cash is clearly a good option. But if that's not the case, other options might be much better. As for saving these funds, of course, everyone can separate them into several options, including a smaller amount via bank transfer.
The rest can simply be put into Bitcoin as a future investment, although the risks should be fully understood, as any investment nowadays carries a fairly balanced risk.
Don't be retarded @G_Besar.
Emergency funds (or back up funds) do not go in bitcoin.
You seem to be trying to rationalize overinvesting in bitcoin, and then getting stuck in a situation in which you have loss of income and/or increases in your expenses, and at the same time, you have absolutely no back up funds (except your bitcoin) because you were too retarded to keep extra funds.
In other words, your failure/refusal to keep sufficient back up funds caused your to have to sell some or all of your bitcoin at a time that was not of your own choosing, and the main reason was based on your own mistake and your own greed rather than your figuring out a reasonable balance that would put you in a place in which you would never have to sell your bitcoin absent some major emergency, but instead, the fact that you had little to no preparations and little to no back up funds, because you put those back up funds into bitcoin, you ended up selling mot if not all of your bitcoin due to a condition that you caused by engaging in gambling rather than investing.
This is an investing thread, and I recommend against gambling and/or trading with bitcoin..
Emergency funds should be kept in cash.
Is it really important how you keep your emergency funds ?, I think you can decide to keep it in fiat or you want to keep it in bitcoin,
Don't be retarded @Jostern. I just responded to this same question.
Yes. Back up funds are kept in cash - not in bitcoin. Don't be dumb. Don't be a gambler, and don't be failing/refusing to recognize/appreciate why back up funds are kept in cash and not in bitcoin.
The main two ideas are volatility and liquidity.
Sure, bitcoin is liquid, yet since you are investing in it (supposedly), you should be working towards an investment timeline that is 4-10 years or longer, so how do you expect to hold onto your bitcoin for 4-10 years or longer if you do not have back up funds and you put all your money in bitcoin?
You have not used your brain to think through the rationale, right?
Think about it.
the most important thing is that when you have an emergency that you need money will have the opportunity of having access to your money, having a back up funds is important, if you want to be keeping your emergency and backup funds in cash is also good, it’s essential to have access to that money all the time because you absolutely don’t know when you’re going to have an emergency to use the money.
At least you recognize that you might need money at some point in time, and in that regard, income could come down and/or expenses could go up, so then how are you going to deal with your shortage of discretionary funds?
You think that selling bitcoin at any random time is a good approach to plan your investment for 4-10 years or longer?
You need cash.. Cash is liquid, and cash is not volatile...
so then there can be a question of how much physical cash versus other ways of holding cash that still may well be available, so the more cash you have, then the more ways that you can hold it.
Also the more bitcoin, you have, then the more you likely have to protect, especially if you are striving to not sell your bitcoin at a time that is not of your own choosing for 4-10 years or longer.
Or maybe you still have not figured out that bitcoin is something that should be held for 4-10 years or longer?
Perhaps you think that bitcoin is a trade (or a gamble?) rather than an investment? Are you sure that you are in the correct thread? This is an investment thread. Not a trading and/or gambling thread.
It is no doubt that everyone as a newbie coming into Bitcoin investment are not the same. Some are coming with zero knowledge of Bitcoin and/or emergency funds, while some too must have been investing in other things such as gold or real estate or whatever, and they are coming into Bitcoin with an already existing emergency funds, so they might tend to react to setting up emergency funds differently like the ones who are just coming in without any na k up funds.
Whichever way, emergency funds are important, and must be built since it's very important. However, the fresh Bitcoin investor with zero emergency funds must ensure to start building his back up funds immediately and simultaneously alongside his investment. On the other hand, the investor who already has some built up emergency funds prior to joining Bitcoin investment might exercise some liverage and pay much attention to buying more Bitcoin and putting little amounts into his emergency funds. In all, emergency funds must be kept readily available.
Hypo 13, 14 and 15 are a great help in understanding who needs to focus on aggressive Bitcoin accumulation and who needs to build his emergency funds in addition to bitcoin accumulation. One thing that should be very clear is that if you have zero emergency funds then you must build them along with investing in Bitcoin but don't delay investing in Bitcoin due to emergency funds. Once you have sufficient emergency funds in place then one can focus on increasing his funds for buying Bitcoin.
Likewise if we move to
Hypo 10 to 12 then they gave us idea of people who have been investing different amount in Bitcoin for last few years and the one who now have adequate number of Bitcoins can continue following DCA on buying the dip only. While those who are yet far from having adequate number of Bitcoins in there portfolio must continue the aggressive buying approach until they have good number of Bitcoins in there portfolio. After that they can decide about how much money should be enough for normal accumulation of Bitcoin.
For sure, guys can work hard, and also figure out in which category (hypothetical) they fit, and it takes time to move from categories 13-15 and into categories 10-12, and we really cannot change our starting points, even though there could be ways that we work on our own systems to try to change our locations while we are in them, so yeah, with time, we might find ourselves in categories that we had not expected to find ourselves based on our recognizing where we are at and recognizing where we would prefer to try to get.
I appreciate that you are grappling with the
various Hypothetical examples, since they can be very helpful for guys to attempt to understand how various investing approaches might play out depending on whether guys are aggressive or not and also depending on how much financial resources that any guy might be able to muster up.
If you are referring to the hypotheticals, as a courtesy to other members, you should provide
the link so that they can easily find your reference.
If you read my
initial post where I talked about Hypo-15, there I provided the link to Hypo-15. I do agree that I missed to do that in my subsequent post. I will make sure that I will properly reference every HYPO or other relevant data in my posts from now onward and I have already started that practice from my above reply.
Yep. It is a good practice to try to present your posts in "self-contained" kinds of ways, even though I understand that it can sometimes be burdensome to provide links, and many times, even when we provide links, guys won't click on them.... Yet, at the same time, guys might read one post, and not even go back to older posts, and sometimes we will get members really starting to grapple with the issue based on the link being there (in the post), rather than not.
While some emergencies require cash, and you may experience network issues at any moment. For me, the best thing is to keep emergency funds anywhere you can easily get them when needed, and ensure they remain safe and use it for just unexpected situations.
The
very essence of all this debate is where is best suited for easy access when emergency situation comes. Having your emergency funds in the bank and in cash is not a bad idea, because if the situation at hand needs fast transfer of cash, you can do that with ease from your bank app, and if the situation demands raw cash, it will still be available, but I think that the main reason we should also keep our emergency funds in cash is that our bank network may be bad, and we might not be able to withdraw or transfer money that important time of emergency, so at that moment what will save you is your emergency funds you kept in cash, so it's very important that it is also available in cash for easy access.
I wonder about your choice of the term "debate," since in the end guys can do whatever they like, and if they fail to keep sufficient back up funds or they do not keep them in ways that are practical for their circumstances, then they may well end up getting fucked by their choices in regards to how to keep their funds and perhaps how much to keep in various places. There is likely no one place that is completely free of risk and/or downside, so guys likely need to think through their choices, and sometimes they might not realize any mistakes that they made until it is too late to fix such mistake(s).
. Emergency funds should be kept in cash.
Is it really important how you keep your emergency funds ?, I think you can decide to keep it in fiat or you want to keep it in bitcoin, the most important thing is that when you have an emergency that you need money will have the opportunity of having access to your money, having a back up funds is important, if you want to be keeping your emergency and backup funds in cash is also good, it’s essential to have access to that money all the time because you absolutely don’t know when you’re going to have an emergency to use the money.
Of course how you keep your emergency funds to so much extent explains the purpose of the funds and so it's very important how it's kept. If it's not important, then it means emergency funds
can be kept in Bitcoin, stock, use for different businesses and etc and when this happens that changes automatically the purpose of the funds by implications.
Maybe I need to start to delete posts that are repeating confusing ideas like this?
Emergency funds are kept in local currency or in ways that are not in bitcoin, since we are talking about bitcoin in this thread and using emergency funds as a way to protect our bitcoin since bitcoin is quite volatile.
But no, because when that is the case, then it means this funds won't be readily available for immediate usage as it may be, all this other areas of keeping are direct opposite to the resources that should be used in emergency not that you can't have access to it, but you need immediate and direct access to it.
The ideas of emergency funds is non-volatility respective to how expenses are paid, and being easy to access.
One of the dangers of bitcoin is that it is quite easy to access which causes temptations to tap into it (or even no choice but to tap into bitcoin since it is the only thing available).. Keeping an emergency fund may well protect guys from themselves by giving them options... and yeah, if bitcoin prices are up, then guys may well be tempted to tap into bitcoin, even when they should not be tapping into it...
Guys end up selling too much bitcoin too soon and/or failing to continue to buy bitcoin, merely because they see short term abilities to tap into bitcoin and to "make profits".. so yeah, they have fun staying poor and perhaps waiting to buy back rather than ongoingly buying bitcoin and making sure that they are not selling when they are supposed to be building their stash.. stashes do not get built by selling bitcoin, since it turns the sure thing of buyinb and building into gambling and hoping that the price will drop, when maybe it will drop and maybe it won't). We shouldn't be gambling with our bitcoin, especially if we had already recognized and told ourselves that we are in our accumulation phase.
[edited out]
Since there is an issue of inflation, it is said to keep an amount equivalent to 3 to 6 months of expenses as a backup fund. I do not think there is a need to keep more than this.
In this thread, I have repeatedly asserted that guys better have pretty big justifications for holding 6 months of cash, so it seems a bit inappropriate to be talking nonsense about keeping 6 months or more worth of cash unless either your bitcoin stash is already quite big or you have some pretty damned good reasons.... so let's talk about getting our back up funds up to 3 months. .and then going from there, since it is quite misleading to be proclaiming it is a good idea to have 6 months worth of cash.. especially given how fast cash is debasing in value and poor people will be spending their full time accumulating cash without every buying any bitcoin if they are trying to keep their cash up to that high amount.
Of course if the bitcoin investor has 1-2 years or more of value of their expenses in bitcoin (that they put in and/or that the bitcoin had appreciated towards), then there could be some justification in keeping so much cash.. or maybe if they know for sure that they are going to have loss of income and/or increases in expenses that is going to deplete their back up funds, then it might be good to keep up to 6 months.. but those are likely exceptional circumstances and not good guidelines for normal (and/or regular) people.
