Is investing more than you can afford to lose inevitable?

[odolvlobo]

In my opinion, the idiom "don't invest more than you can afford to lose" is still valid, but the reasons have changed.

Originally, it was not clear that Bitcoin had no fatal flaws, or that it would even work. It was an experiment. It was not wise to buy bitcoins with money that you could not afford to lose because the whole system could have failed at any time and for some unexpected reason.

Now, after a few near-fatal incidents and 12 years of improvements, the failure of Bitcoin itself looks very unlikely. However, much of the infrastructure and systems built around Bitcoin are still new and are still failing. So, the main risks now are the price of a bitcoin and the failures of the services around it.

• Hypothetically, if you buy bitcoins at $60k and hold them in your own wallet and a fall of the price to $17k will cause you hardship, then you should not invest. It could happen again, even at the current price.
• You should still consider that any bitcoin-related companies that hold your bitcoins or that you might invest with could lose, confiscate, or freeze your bitcoins at any time. It happens all the time.

As for other coins, they could fail at any time without warning. They should be considered to be experimental.

[1715171497]

1715171497

[1715171497]

1715171497

[Finestream]

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.

That is why its not wise to invest all your hard earned money as everything may end up not as what you expected, so its better to prepare for it than to feel sorry in the end.  For me, we can always choose to invest what we can afford to lose because that's always the right thing to do. Save and invest. You have to prepare for your investment funds first separate from your savings funds to avoid financial struggles if you fail in your investment plan.

[Trapezium]

Yes. It could be very risky, especially if you are on a tight budget. So before investing make a plan. Beware of the risk. You should have something in your pocket for emergencies.

[KingsDen]

Originally, it was not clear that Bitcoin had no fatal flaws, or that it would even work. It was an experiment. It was not wise to buy bitcoins with money that you could not afford to lose because the whole system could have failed at any time and for some unexpected reason.

The statement of investing what you are willing to lose is beyond the scope of bitcoin. That statement has been in existence years before the creation of bitcoin. So, it is totally wrong to constrain its meaning to bitcoin and  its early adoption.
The fact is whether bitcoin is failing today or is lasting forever, you shouldn't invest what you can't afford to lose.
This statement originated from the stock trading, where trading volitile assets can be considered as gambling because you wouldn't predict accurately the next market move.
As long as you are sending fiat to something that isn't stable, that statement is for you. Bitcoin can only grow above that statement if it remains decentralized and secured but not volitile.

Technically, you can avoid investing more than you can lose by keeping part of your fund in stable coins (especially decentralized) and move the rest to bitcoin.
Moreover, no one is willing to lose any money even if it's a cent.

Edit:

...you can avoid investing more than you can lose by keeping part of your fund in stable coins (especially decentralized) and move the rest to bitcoin.

A stablecoin such as UST?

I emphasised on decentralized stable coin. Maybe like DIA.

[odolvlobo]

...you can avoid investing more than you can lose by keeping part of your fund in stable coins (especially decentralized) and move the rest to bitcoin.

A stablecoin such as UST?

[Victorik]

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.

What you can afford to lose today might be what you can afford to lose tomorrow because possibly the value might have appreciated.
As a thumb rule, besides investing in BTC and other coins, learn to convert your savings to stable coins like Usdt, especially for those of us who do not trust the conventional banking system. whenever you take your profit and you don't feel like converting into Fiat, convert it into Usdt and save for rainy days.

[Bambozled]

Yes, it could be if you are risking money that you require to sustain. Nobody becomes rich in financial markets overnight. Risk money that is surplus. The market is infamous for volatility, and it is great at breaking people’s expectations.

[Zlantann]

Although it is quit advisable to invest less than you can afford to loose. Which means that you must not borrow to invest. It is also improper to use money that is mapped out or budgeted for you or your family's basic needs such as feeding, medical bills, housing and others for investment. But sometimes when you are sure of making profit from an investment, you might be tempted to go beyond your limit. Although there is no investment that totally guarantees profit but there are some speculations, predictions or forecast that looks to solid to fail or too clear to be fake.   

[Rufsilf]

This is how I manage my money and I see this even working efficiently.
 - investment (40%)
 - holdings (20%)
 - necessities(30%)
 - others(10%)

I was focused more on investing and putting huge shares on there knowing that this is the only way to have financial freedom. I couldn't say this was beyond the limit, we could afford to risk more especially since we know that this could give us a passive return. I don't think this is like gambling that it needs luck, we endure this because we know ourselves that we can do it.