Is investing more than you can afford to lose inevitable?

[Z-tight]

Invest only what you can afford to lose is a very popular phrase for bitcoiners, but how do you manage to do it, many bitcoiners have lost fate in fiat currencies because of inflation, so they do not consider banks to be an option for holding. Some people say they only keep what they feel will be sufficient for them per month, and invest the rest of their income, will that not be investing more than you can afford to lose?

If i earn $400 for example, and i keep a $100 and invest $300 in bitcoin, with time my bitcoin will grow and i will have so much money in my wallet, but no money in my bank, and this is exactly how people claim they go about things because of inflation, isn't this investing more than you can afford to lose? And if you are in for diversification, and in addition to bitcoin investment you put some of your money into real estate, gold, and the rest, and only keep what can sustain you per month, isn't it investing more than you can afford to lose?

How do you go about this personally? I am asking because many people especially bitcoiners do not trust the banking system, with inflation and censorship problem, in that case does it mean that investing more than you can afford to lose is inevitable in this current system? Because your money is somewhere else, either bitcoin or other investment.

[KingsDen]

Good question, I will reply based on how I go about mine, others may have their own approach.

I know how much I earn per week or month. I send a certain percentage to my local bank account and that is for my living expenses.
I then send a percentage for my investment, which is steady but little. The remaining percentage will remain in my portfolio as a stable decentralized coin. It keeps growing for projects, other investments.
By this, I do not save in fiat and I do not also investment more than I can lose.

[Doan9269]

Invest only what you can afford to lose is a very popular phrase for bitcoiners, but how do you manage to do it, many bitcoiners

Truly it is better to play risky but yet maintain safety than having the opposite for an experience, many people even forget the risk associated in cryptocurrency and focus much on their selfish desires to make morr profit at the expense of others loosing but wouldn't admit the same situation come all over on them the same direction it started from, risk is the major key and we all fall a victim when we got over excitement of a particular cryptocurrency which is too real to believe.

[Charles-Tim]

I prefer it this way, trade with what you can afford to lose, because traidng is highly risky.

Invest what you can afford to lose on altcoins, because they are more volatile and many are not reaching all-time-high or taking more time to reach all-time-high, many become shitcoins and many become dead. Even many become pump and dump and many are just fake.

Bitcoin reach all-time-high in 2013, 2017, 2021 unlike many other cryptocurrencies (altcoins), it can be an investment for many people if it continuously reaching all-time-high unlike many altcoins. That is why you can see some people prefer to still hold bitcoin as well.

But bitcoin is a speculative asset in short term while a store of value in long term. Because of the speculative value of bitcoin and volatility, some people still prefer to advice people to invest with the amount they can afford to lose. But in long term, profit will be the result. If someone carefully study about bitcoin price history, bitcoin gives opportunity to be store of value in long term and also an investment asset, but volatility can make novices to fomo and sell in loss at the wrong time.

Real estate is a business and people see it not as risky as investing on assets like coins, the rule may not apply. It depends on how risky an asset is, there are some businesses that return are more guaranteed if legit.

But we should not forget that in life, almost all are like gambling, but the risks are better in one than another and some make profit certain than another.

[BitMaxz]

If you talking about Bitcoin if you invest in Bitcoin there is a possibility to lose profit that is why most other people said invest only what you can afford to lose because Bitcoin and other cryptos are too volatile and not stable as dollars unless if you are holding stable coins like USDT/USDC.

However, if you know the right time when to invest in Bitcoin then what you can only see is profit. Like others including me, blockhalving is the right time to invest but if you believe in Bitcoin right now you can start investing in Bitcoin and hold them tight for a long period of time but expect for price drop this coming few months.
What I would like to learn is that Bitcoin is volatile and you should learn to do some analysis on when is the right time to buy.
My tip is read the Bitcoin price history on Wiki you can find it here https://en.wikipedia.org/wiki/History_of_bitcoin then scroll down.

[Rengga Jati]

Invest only what you can afford to lose is a very popular phrase for bitcoiners, but how do you manage to do it,

Yes, this is very popular.
Actually, everybody will have their own rate or ability to afford it.
For me, for the first-time investment, I will only use free money in which I am able to let the money if they are lost when investing. Free money means that I will not use the money for other necessities. that is why as a beginner at that time, I only spent a few amounts of money on the investment. And of course, I will not take a high-risk investment of new coins or tokens.
So, when it's lost, there is no big problem.

After getting profits, I will use the profits to save, the purpose is that I can collect the profits until at least the capital that I spent at first.
So, if later, I get more profits, this is a bonus. But if there is no profit anymore, at least I have got the capital again or I only lose a few. and this is growing with some percentage of profits that sometimes I take to add capital for investment or trading.
I know that managing money for investment and trading is not easy, I learn from many mistakes actually. You will also do it later

[Oceat]

I think this serves only a guidelines for newbies to not go full when they aren't used to the market but if you are in this market for a long time that saying is less likely you were going to follow. Bitcoin investment may be risky but if you know what you doing then you proceed to invest as much as you can or buying the dip as much as you can since you already have a plan that you will be holding your investment for a long time.

And as what people are saying, the more it's risky the more rewards you will get.

[Kasabus]

Invest only what you can afford to lose is a very popular phrase for bitcoiners, but how do you manage to do it, many bitcoiners have lost fate in fiat currencies because of inflation, so they do not consider banks to be an option for holding. Some people say they only keep what they feel will be sufficient for them per month, and invest the rest of their income, will that not be investing more than you can afford to lose?

If i earn $400 for example, and i keep a $100 and invest $300 in bitcoin, with time my bitcoin will grow and i will have so much money in my wallet, but no money in my bank, and this is exactly how people claim they go about things because of inflation, isn't this investing more than you can afford to lose? And if you are in for diversification, and in addition to bitcoin investment you put some of your money into real estate, gold, and the rest, and only keep what can sustain you per month, isn't it investing more than you can afford to lose?

How do you go about this personally? I am asking because many people especially bitcoiners do not trust the banking system, with inflation and censorship problem, in that case does it mean that investing more than you can afford to lose is inevitable in this current system? Because your money is somewhere else, either bitcoin or other investment.

I doubt it as you have the full control on your funds and it’s your own choice if you invest more than you can afford to lose or just invest a small amount enough to lose. I think the best solution to avoid this is you only invest into another investment if you have made profits already in your first investment. Get back your capital and invest your profits only and roll it through diversifying.

[Natalim]

You can spend and invest more than you can afford to lose, perhaps it was your choice but never you'd think it was a smart decision as you are dealing with a high-risk investment. Rich people have a lot of money and a lot of resources that is why they are not afraid of spending more but for poor people, that is something different. Putting to the instance that if we have to spend everything we have, what had left us in case our investment fails? It is very important to think wisely and to think not just by today but also in the following days. This is not about thinking the negative but we also have to make ourselves prepared for it.

[qwertyup23]

If i earn $400 for example, and i keep a $100 and invest $300 in bitcoin....

I think this sums up your whole post, OP.

While the phrase "invest more than you can afford to lose" sounds compelling at first, you must always follow this with proper logic and common sense. Again, investments are investments- meaning you only delve into investing if you have the extra cash AFTER you have paid all of your obligations to yourself or to your family.
 
In the example that you provided, you took $300 out of the $400 that one earns per month. While this may be the case of "invest more than you can afford to lose," still, $100 for the whole month seems very impossible for an individual and financial problems would kick in this kind of example. Follow investment with logic- only invest the amount that you are willing to set-aside for future transactions.

[Z-tight]

I then send a percentage for my investment, which is steady but little.

Where do you send it to, your fiat bank account, or saving it in crypto, either bitcoin or some other coin?

The remaining percentage will remain in my portfolio as a stable decentralized coin. It keeps growing for projects, other investments.
By this, I do not save in fiat and I do not also investment more than I can lose.

Stable coins are centralized, so i guess you invest the remaining in a decentralized coin like bitcoin that is volatile, how then aren't you investing more than you can afford to lose, when you only keep a certain percentage for your daily expenses, and the rest are invested in assets that are risky. You know every investment has its risk right.

Bitcoin reach all-time-high in 2013, 2017, 2021 unlike many other cryptocurrencies (altcoins), it can be an investment for many people if it continuously reaching all-time-high unlike many altcoins. That is why you can see some people prefer to still hold bitcoin as well.

I know that bitcoin is for the long term, but the warning of "don't invest what you can't afford to lose" borders on both long and short term, as it saves you from running into trouble in both terms, your post looks to be in agreement that it is inevitable to avoid investing more than you can lose with bitcoin.

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My post is about if it is possible to avoid investing more than you can afford to lose as a bitcoiner. Are you in other words saying there are right times to do so? You also know that no matter how much analysis or studies you make it is difficult to game the network and get it right on time or perfectly, what if the time you feel is perfect turns out not to be, and you already went in with more money than you can lose. I am asking to know how people go about these thing as many no longer trust the banking system, do they just keep buying bitcoin, leaving only what is necessary for their daily expenses in their bank accounts, isn't that investing more than you can afford to lose?

[sheenshane]

Invest only what you can afford to lose is a very popular phrase for bitcoiners,..

Because many people invest and think that after a month they can cash out their profit knowing the fact that Bitcoin is very volatile and there's no time frame when the profit will come.  There's no need for you to borrow money and invest in Bitcoin hoping it will double the profit, just what you can afford to lose and don't invest that supposedly the budget for your daily needs or for the foods on the table.

Bitcoin is profitable if you're willing to wait for the perfect time when the bull trend will come, there will surely be a high return.
What I've noticed to gain reward is only sell when your profit was surely there and don't sell under the price where you've bought it, IMO.

[nakamura12]

In my opinion, I think it could also be the same as invest what you can afford to lose if you say that after dividing the money you earn like food, bills, clothes and other expenses then the rest will be for investment. Why would I say it is the same?. Because, you already have money for the things that you need as explained above so, the rest of the money left would be your pocket money as I call it or spare money then it means that you can afford to lose it. Just invest what you can afford to lose. For example, I earn $1000 where $200 is for the food, $300 for water and electric bills, $200 for clothes and $100 for fuel/gas then the rest will be for investment which means you can afford to lose it.

[Darker45]

Although kind of overused, that invest only what you can afford to lose is probably not being observed by a lot of Bitcoin supporters. But how much is that which a man could afford to lose? If half of somebody's wealth is into Bitcoin, could he/she afford to lose that? I don't think so. If a quarter? Still not.

I myself is heavily invested in Bitcoin and in the highly unlikely event that Bitcoin goes to zero, the first thing that I'd be doing is to update my CV and look for a job. And I guess there are a lot of people who have also gone into the rabbit hole too deep. But who can blame us? Fiat has been rampant with abuse.

I guess this advice is perfect to newbies, to those who have not cast the die yet, to those who are still emotionally affected by bear markets and dips. But there are some who have crossed the Rubicon and it's either a million or zero for them.

[SquirrelJulietGarden]

"Don't invest more than what you can afford to lose"

If you invest more than what you can afford to lose, what will you do when you actually lose it all? Suicide (don't please). However, if don't suicide and you already are bankrupted because over betting, what should you do next?

Back to work, from zero and even with lot of debt. You will have a long time to recover from your lose and repay all of your debt.

I think an advice like "Always invest with your own money and don't invest more than what you can afford to lose" is better advice.

[DdmrDdmr]

<…>

As usual, the threshold associated to the mantra is customized to the person based on multiple factors: current portafolio, income, expenses, expectancies, risk tolerance, preferences, responsibilities, economic freedom within the household, and so forth.

In general terms though, I’d be comfortable by assigning an amount that, if worst comes to worst and it is eventually lost, you can simply say fuck it and continue with your life without any real remorse nor significant impact on your finances.

<...> maybe including you too Ddmr can't say that too<...>

I did (specially with this or that crap of a coin/token)... I could have gone in way further, but I wouldn't have felt confortable, so I did say fuck it and that was that.

[Z-tight]

I myself is heavily invested in Bitcoin and in the highly unlikely event that Bitcoin goes to zero, the first thing that I'd be doing is to update my CV and look for a job. And I guess there are a lot of people who have also gone into the rabbit hole too deep. But who can blame us? Fiat has been rampant with abuse.

Thank you Darker, you got a complete hang of what the thread is all about, i am sure many of us invest more than we can afford to lose because of inflation and the loss of trust in the banking and traditional financial system, but we still advise others not to do the exact thing we are doing.

I guess this advice is perfect to newbies, to those who have not cast the die yet, to those who are still emotionally affected by bear markets and dips. But there are some who have crossed the Rubicon and it's either a million or zero for them.

So can we then rather say that: you can invest what you can't afford to lose if you have the ability to control your emotions and not be affected by bear markets and plunges? But if you can't do that, invest only what you can afford to lose.

In general terms though, I’d be comfortable by assigning an amount that, if worst comes to worst and it is eventually lost, you can simply say fuck it and continue with your life without any real remorse nor significant impact on your finances.

This is another way of saying invest only what you can afford to lose, but honestly how many bitcoiners can say fuck it if they lost all of their money in bitcoin today, i can't and i am so sure many of us here, maybe including you too Ddmr can't say that too, not that we may commit suicide or something, but we will be so damn affected by the loss, so are we investing more than we can lose then?

[Charles-Tim]

I know that bitcoin is for the long term, but the warning of "don't invest what you can't afford to lose" borders on both long and short term, as it saves you from running into trouble in both terms, your post looks to be in agreement that it is inevitable to avoid investing more than you can lose with bitcoin.

Exactly what I meant, there are some assets that are not worth it to invest into, some are just like ponzi schemes and some are like real casino and sport gambling, I mean highly how risky they are. But assets like bitcoin, you can still make more research, being patient, allow bear market to come and invest. As bitcoin has dropoed from all-time-high which was $68900 to $21000, that is a high drop for people not to miss another upcoming bull market, people that invested at $30000, should not also sell because bitcoin can not remain below $30000. In short term, bitcoin dropped but since bitcoin was created, up to 2021/2022, it always reach all-time-high, but it has period for this. The long term profitable assets like bitcoin and very low risky businesses, the rule does not apply at all, people will always want to make profit form such asset like bitcoin, although, experienced people will have a kind of investment regimen that will make them to invest appropriately and at the right time to maximize their profit.

[Lucius]

If i earn $400 for example, and i keep a $100 and invest $300 in bitcoin, with time my bitcoin will grow and i will have so much money in my wallet, but no money in my bank, and this is exactly how people claim they go about things because of inflation, isn't this investing more than you can afford to lose? And if you are in for diversification, and in addition to bitcoin investment you put some of your money into real estate, gold, and the rest, and only keep what can sustain you per month, isn't it investing more than you can afford to lose?

Your example is the opposite of most others, as most invest only a small portion of their income in Bitcoin and spend the rest of their money on regular living needs. Another misconception is that by buying more and more Bitcoin you will have more and more money in your wallet, because the value of that BTC can change at any time - so someone who bought BTC at $40k is today at a loss of as much as $20k if decides to sell.

How do you go about this personally? I am asking because many people especially bitcoiners do not trust the banking system, with inflation and censorship problem, in that case does it mean that investing more than you can afford to lose is inevitable in this current system? Because your money is somewhere else, either bitcoin or other investment.

Everything spent on things like cigarettes, alcohol, and even coffee is in some way lost and wasted money, and even going to expensive restaurants or visits to cinemas, considering that I have top-quality TV at home and can prepare the food I want, all with considerable savings. All the money I save that way can be invested in Bitcoin or something else, and that money is always something I am willing to lose at any moment since I know how I saved it.

[Darker45]

I guess this advice is perfect to newbies, to those who have not cast the die yet, to those who are still emotionally affected by bear markets and dips. But there are some who have crossed the Rubicon and it's either a million or zero for them.

So can we then rather say that: you can invest what you can't afford to lose if you have the ability to control your emotions and not be affected by bear markets and plunges? But if you can't do that, invest only what you can afford to lose.

Not really. I don't know. Perhaps if you're that convinced of Bitcoin, you don't really believe that you're gonna lose, that is, despite the most severe of bear markets. Or it just seems to me that the more you believe in Bitcoin and lose trust in fiat, the more you take the risk. And that which you can afford to lose grows higher and higher that even if you're 90% invested in Bitcoin, it seems you can afford to lose it because it's Bitcoin, and you somehow feel assured.

I hope I'm betting on the right thing, though. But to those who've been through 2018 and survived, what's happening right now is nothing worrying.