Why you should use spare money to invest

[mk4]

Nothing to see here besides just a slightly rephrased version of one of the most common bitcoin "investment advice" that has been frequently echoed through various communities since like, forever.

[Adbitco]

We have had lot of investment advises across the community but one thing I should let newbies knows about bitcoin is that " they should have this feeling that is very volatile to lose whatever they have invested". Whenever they have this mentality they know is normal for them to lose money so when venturing into the investment they will know what's involved before putting whatever amount they wishes to invest with, and is riskier than any other investment they have ever thought of.

So for those who focuses more on the profits aspect may not utilized the opportunities for short periods, it's better not to be in a hurry to invest with a higher amount rather Minor money that will not bug their hearts.

[worle1bm]

The basic rule is you must invest what you are willing to loose in this market because it's too volatile and you can loose all the investment in one go if the market conditions goes opposite to you.Some people take more risk and invest their savings into it which they can't afford to loose and becomes depressed after loss.We have seen lot of people facing this problem which is why it's advisable in the starting only that investment should be made on risk but what you afford to loose.

[Rockstarguy]

There is no normal being that loves getting losses on business, career, investment and trades that's why even company holders make financial policies to keep record of investment and profits flows. And unlike other business bitcoin also makes sales and losses if you do not investment wisely....is nice when you put in what can not put you sickbed or gives you hypertension, don't invest out of what you cannot withstand the loss.

Is better to use small money or learn risk management first before investing especially newbies.

Is not all about using spare money to invest as we think that it was not hurt when it lose but it is all about how prepared we are to start that particular investment. Even if it was only spare money, it also comes our hard work but we dare to invest and take risk hoping that it grow more and bring us wealth. So why we should keep thinking it was okay to lose this money when we have ways to avoid it and work harder? It is all about the mindset that we have. We must know how to value every penny that we have that is why we don't think about it was just spare money but I rather be thinking it was our hard-earned money.

Preparation matters a lot, it is not about using spare money to invest. If one is not prepared to face risk, volatility of the market,  the small money being used for the investment can still make one feel bad if the investment ends up not to be good. Preparation is everything when it comes to investment , without preparation investing with what you can afford to lose may not even be productive.  Learning to get understanding is the first step for preparation.

[lovesmayfamilis]

Is better to use small money or learn risk management first before investing especially newbies.

Is this your final result? By investing a small amount of money, you will always get a small profit. Don't forget about that too.
For a beginner who does not understand all the risks that can be associated with investments, it is better to stay away altogether. Do not rush; find out more about where and how much you can invest. Learn how to take care not to lose your investment, including all possible risks and ways to store it; be sure that you have other income that will not leave you and your family without funds; and only then make decisions.
If you think that today you will invest a small amount and tomorrow you will double it, in the end, you will lose everything.

[Outhue]

The basic rule is you must invest what you are willing to loose in this market because it's too volatile and you can loose all the investment in one go if the market conditions goes opposite to you.Some people take more risk and invest their savings into it which they can't afford to loose and becomes depressed after loss.We have seen lot of people facing this problem which is why it's advisable in the starting only that investment should be made on risk but what you afford to loose.

There are two things that can make someone to lose all their investments in one go, it's either you invest all your money in a scam project or you failed to diversify your money in different projects, meaning you put all your eggs in one basket.

Even if someone bought Bitcoin at 69,000$ because they lack the knowledge about crypto, they haven't lost their money until they sell their Bitcoin, buying at 69k is not good but getting the double of the money back when Bitcoin hit 150k is possible, all they need to do is hold their Bitcoin.

Do not invest the money you aren't ready to see go down in time, because it will happen even if you are buying the dips in this bear market, there will be time where your portfolio will lose 1000$ in value and it's fine only if you are here for the long term.

[demonica]

There is no normal being that loves getting losses on business, career, investment and trades that's why even company holders make financial policies to keep record of investment and profits flows. And unlike other business bitcoin also makes sales and losses if you do not investment wisely....is nice when you put in what can not put you sickbed or gives you hypertension, don't invest out of what you cannot withstand the loss.

Is better to use small money or learn risk management first before investing especially newbies.

Who wants to lose investments right? Even in business, it's still a risk that's why they they make policies to avoid losing profits. It's also same with Bitcoin and other type of investment. Mostly, people study and make their research before investing since they wouldn't want to lose.

It's already been said and advice a lot of time, that it's better to invest your extra money and if you can afford to lose it. Don't use your money that you loaned, or something that is reserved for some important use. It will be hard to move on from those losses if you really need that money. 

[Daniel91]

Many people are in a difficult financial situation and are desperately looking for a way out.
When they read in the media about big profits from cryptocurrencies, they often become euphoric and risk high stakes in the hope that it will help them financially.
Such investments usually end disastrously. To invest in anything, shares, Forex, crypto... you need to prepare very well, study a lot, analyze and make a clear investment plan based on detailed market analysis. It should be seen as a real job and not as a hobby.
In accordance with your financial capabilities, you should make a concrete investment plan and have a clear exit strategy. Everything else is not serious and a simple waste of time and money.
Of course, you should always be aware that crypto is a high-risk investment and only invest money you can afford to lose.

[pawanjain]

Snip~

So the bottom line is, invest what you can afford to lose in Bitcoin and other investments because the risk associated with investment is not only limited to Bitcoin alone but all other assets and investments.

Let me tell you a real-life story, I have a friend from whom I received the same amount as payment for our overtime travel work sometime last year 2022, and when we wanted to invest the money, he optioned into real estate because he feel it more secure and profitable than bitcoin, but I used my whole allowance and travel payment to buy more bitcoin.

At that time, the Bitcoin price was around 17k, but now, while my friend in real estate is waiting for tenants to rent his apartments, my own Bitcoin investment is already yielding of about 10 percent.

Considering the current price your investment in bitcoin should be yielding 50% and not 10%.
Choosing the investment option is all about belief. Your friend believes more in real estate and it's his choice.
Also, if he would have already invested in bitcoin and then chosen real estate even then it's not a bad choice because that way he is diversifying his portfolio.
Diversification is a good thing too.

Now that he has an apartment to rent he can get that rent and invest in bitcoin periodically.
That way he would be able to DCA his bitcoin investment and gain further more profits while owning an apartment.

[Ojima-ojo]

Considering the current price your investment in bitcoin should be yielding 50% and not 10%.
Choosing the investment option is all about belief. Your friend believes more in real estate and it's his choice.
Also, if he would have already invested in bitcoin and then chosen real estate even then it's not a bad choice because that way he is diversifying his portfolio.
Diversification is a good thing too.

Now that he has an apartment to rent he can get that rent and invest in bitcoin periodically.
That way he would be able to DCA his bitcoin investment and gain further more profits while owning an apartment.

That is right but the challenge is, most real estate investor do want to diversify since the real estate business consume a lot of money, this is why diversification is not easy for them. But then when it comes to Bitcoin, it's very easy to buy any amount and hold, the gain comes from how long you can hold and how well you calculate taking profits when the DCA price increase.


But then it's his choice and I have to respect that anytime any day, as long as it comes to investment it is better for the individual to calculate and take the risk on their own instead of forcing and convincing anyone onto an investment moot, especially in a high-risk investment like Bitcoin.

[reagansimms]

Investing is one of the risky activities, as you know, Investing in Cryptocurrency is not as easy as one might imagine, sometimes the expected results are not in line with expectations. You never get anything just by being silent, risks can shape your mentality to do new things. The main purpose of investing is only to get profit, but the risk is the same as the profit you get.

Learn from explorers who have sailed the vast seas, they dare to take risks just to find new places. They will be amazed when they see a place they have only seen in their dreams. This is just a small example of investing, without taking risks you will never feel how sweet it is to reap profits.

[Z390]

You can still lose your money even if you know how to keep your crypto wallet from bad actors, this is the first reason why you need to use spare money to invest in crypto only, importantly for a new beginner, there will always be some mistakes to make along the way before you get used to things in crypto space.

Another reason why you need to use spare money is because you will be able to hold your coins even if they are losing value, since you wont be needing the money any time soon, those who can't hold their coins comfortably use money they aren't ready to lose to buy coins which is a lame move.

[decodx]

I totally agree with you! I learned this lesson the hard way when I first started investing. I was so excited to jump into the market that I invested a sum of money without really knowing what I was doing. Needless to say, I ended up losing quite a bit.

It's been a few years now, and while I still experience some losses, I've learned to manage my risks. Diversification is always a good thing and it's wise to spread your investments across different assets to minimize risks. But with age and experience, I have come to realize that investing demands considerable research and study. I have learned the hard way not to throw my money into something I don't entirely comprehend, regardless of how profitable it may seem initially. Even with diversification, it's still important to do your own research and due diligence before making any investment decisions. That means taking the time to read up on all the relevant information. And don't be afraid to seek advice from professionals or experienced investors, but always remember that the final decision should ultimately be yours.

[Queentoshi]

Is better to use small money or learn risk management first before investing especially newbies.

I think you wanted to say spare money and not small money. Even talking about spare money these days, is our income really enough for our expenses that have been affected by increase in price of things that we still have some to spare? Investing in Bitcoin is no longer about spare money but money you can sacrifice, and you do not just have to do it once, but many times as well. Sometimes you will be able to sacrifice more and not so much other times, but if you can continue sacrificing a portion of what you have to invest, your investment will grow bigger than you expect, than you could have possibly sacrificed at once.

[Russlenat]

There is no normal being that loves getting losses on business, career, investment and trades that's why even company holders make financial policies to keep record of investment and profits flows. And unlike other business bitcoin also makes sales and losses if you do not investment wisely....is nice when you put in what can not put you sickbed or gives you hypertension, don't invest out of what you cannot withstand the loss.

Is better to use small money or learn risk management first before investing especially newbies.

Investing using your money you can afford to lose is one effective way that you will last longer in your investment. At least, if you lose in the start, you can still manage to recover easily that loss and then invest again on the coins you believe will work out in the market. That’s also one way to lessen the risk in any investment especially like bitcoin. Bitcoin cannot assure us that the whole investment will be profitable, so it’s best to invest only on the amount of money that won’t leave us regretting once they turn as a loss.

[Sexylizzy2813]

And unlike other business bitcoin also makes sales and losses if you do not investment wisely....is nice when you put in what can not put you sickbed or gives you hypertension, don't invest out of what you cannot withstand the loss.

Is better to use small money or learn risk management first before investing especially newbies.

Having so much money without knowing what to do with it is really disturbing for someone who wants more of it. After all your struggling from day one to the end as someone who's working, and you know it's time to rest I feel it's time to use half of your money to do something that you know would bring in more profit.
It is never best to use all you have labored for because if you do and it happened that what you expecting didn't go as planned then you have your self to blame.
Investment for starters is like gambling never start with a bigger amount unless you have something that much bigger than what you want to spend.

[lionheart78]

There is no need to risk even small money as a newbie, for experience it is better to use a demo trading account. Once you are confident in making profitable trades, then you can use your spare money.

The demo only helps you to understand some trading features, it will not help you make the same profits when you enter a live account.

As stated, the demo will help us understand trading features and aside from that the flow of the market.  It is the best way to test ideas without losing anything.  For newbies where the person is not accustomed to the features and flow of the market, it is the better first step than diving to the marketplace and trade directly.  It may not help a person for live profit but at least it will help a person to understand the market and avoid unnecessary losses.

Investing and trading is a risky activity, so if you are too paranoid about the risks that exist then please do not trade or invest. To become a successful investor and trader to earn returns, you must consider the risks even if you have to start with a small budget. Do research, learn more and gain experience.

Not only consider the risk but rather understand the risk involve, and learn how to counter or mitigate it in order for us to minimize our losses.  This is where risk management comes in.  I agree that before involving in any investment venture, one must do his research and learn from experiences.  Thus, a demo account can enable us to apply our learnings without any risk involve to enhance our trading knowledge and we can always shift to real trading and investment once we feel that we are ready.

[Distinctin]

Is better to use small money or learn risk management first before investing especially newbies.

Is this your final result? By investing a small amount of money, you will always get a small profit. Don't forget about that too.
For a beginner who does not understand all the risks that can be associated with investments, it is better to stay away altogether. Do not rush; find out more about where and how much you can invest. Learn how to take care not to lose your investment, including all possible risks and ways to store it; be sure that you have other income that will not leave you and your family without funds; and only then make decisions.
If you think that today you will invest a small amount and tomorrow you will double it, in the end, you will lose everything.

Always know that whatever amount you desired to invest, it also comes with possible losses. However, if you can prepare yourself before investing by obtaining more knowledge and investing skills, that will help you to prevent your funds from losing, or lessen the risk of losing. For me, it doesn’t really matter as to how much you start to invest, as long as you can manage yourself from losing them, the that’s the most important. Losses that will not trigger you even several years after that loss had happened.

[michellee]

There is no normal being that loves getting losses on business, career, investment and trades that's why even company holders make financial policies to keep record of investment and profits flows. And unlike other business bitcoin also makes sales and losses if you do not investment wisely....is nice when you put in what can not put you sickbed or gives you hypertension, don't invest out of what you cannot withstand the loss.

Is better to use small money or learn risk management first before investing especially newbies.

That is very true what @OP said. As inexperienced beginners, they can use small money first to learn to invest while learning more about Bitcoin so they can know how to invest properly. And even though they are still losing money, they can profit by holding their bitcoins.

But unfortunately, there are still many people who are not ready to see the temporary loss they are experiencing right now so they sell their bitcoins and leave it for a while. But people who believe in Bitcoin and have learned a lot about it will still hold on tight because they believe it will get a moment to increase.

And that's why we have to use the money we don't use for anything to anticipate if we experience a loss and not sell it when we face a sudden situation requiring money. That is so that bitcoin investment is not disturbed and we can still hold onto the bitcoin.

[Jawhead999]

True. Demo account only helps a beginner trader becomes more familiar on how the market works so he can anticipate on how he’ll take advantage on it. But it does not guarantee that whatever your outcome using demo trading will also be highly possible when you are already trading in the real trading scenario. Trading is unpredictable, and so the market is. That’s the reason it’s more advisable to use spare money every time you trade since trading result is always unpredicted, and once you lose, that’s totally a loss in your funds.

Although a demo account will give a real condition with the current market, but there's no adrenaline and you're not worried if you make a mistake. That's make them tend to make profit because they're buy it and wait for few second to sell, repeat. While the real market, they will buy, but the price only increase a bit and it's make them to wait until raise for at least 1-10%, but the reality isn't, the price keep decline.

I'd consider to trade with small amount money than using a demo account.