I was not trying to say that a person has to have an emergency fund prior to buying BTC. I am frequently saying to start investing in BTC as soon as possible and also I am saying that sometimes more than one thing can be accomplished at the same time, and yeah, there may be risks involved if the emergency fund is not very strong, but there may also be preferences to make sure to invest into BTC on a weekly basis and to build the bitcoin investment, even if there might be an inadequate emergency fund and other ways that the person's finances are fucked up.. such as not having his debt under control...and so maybe he is paying off debt too... .. and sometimes the earliest days of getting your finances and psychology in order can take a bit of time, maybe even 6 months to 18 months, or even longer, but maybe at the same time there is at least a minimum amount of BTC that is bought.. and maybe there was a past practice of not having any emergency fund, so there was a past practice of always panicking and just the creation of an emergency fund is going to bring progress and the more and more that the emergency fund is built, the more aggressive the person likely is going to be able to become in terms of his BTC investing.
Okay,,, now I get the point, like we all know that Bitcoin is heading to the top and looking at the price today, Bitcoin is about $46700k and yesterday it was $47k, this shows that Bitcoin is rising and people should start investing instead of waiting.
Personally, I am not so much focused on short-term BTC price moves, even though surely some of that can be taken into consideration; however, the main idea with any investment, including bitcoin is to get the fuck started and don't be diddly daddling around, and sure to do so in a kind of practical and reasonable way.
Sure, if someone's finances is in so much of a mess that every day is emergency mode, then he should get his finances in better order prior to getting started investing; however, it seems to me that an overwhelming number of people are not constantly operating in emergency mode, but instead they have some kind of understanding of their own finances in terms of knowing how much money they generally have coming in and how many expenses that they have, so right from the start they will have a general framework for understanding how much money that they have available each month or each pay period.
However, on the other hand, many people do not really study and practice their personal finances in a detailed kind of way, and when they invest, they likely need to get into better practices regarding both how closely they look at their financial situation but also in regards to both building and maintaining an emergency fund if they had not been in the practice of creating an aggressive emergency fund.. .. so most likely a lot of people know that they keep a certain amount of a float in their finances so that they are not always panicking, so they already know how to do those kinds of things, yet if there is a desire to seriously invest into a volatile asset such as bitcoin, there needs to be more seriousness in terms of buttressing an emergency fund that goes beyond their regular practices.. .. so that building of an emergency fund can be accomplished at the same time as building of the investment, so their is no need to delay getting the fuck started in bitcoin (and I am not talking about FOMOing in merely because the BTC price happens to be going up, but instead it is always the case in regards to bitcoin that getting started is the thing to do rather than waiting around.. and finding insubstantial reasons to delay).
Like now, if one is accumulating a $50 Bitcoin weekly it will not be a bad idea but it might be a bad idea if the person just stop accumulating because he or she might not have money to keep accumulating.
For sure people have to figure out their own situations, and if they are fairly new to bitcoin and maybe they are investing around 10% of their salary into bitcoin, which maybe is around $50 per week, like you suggested, then it is going to take them around 10 years to have reached a whole year's salary invested into bitcoin.
On the other hand if they had been more aggressive and they are investing around 25%, then they would have a whole year's salary invested in 4 years.
So what they do and how they manage their cashflows in order to make sure that they are able to continue to invest no matter what has to do with various aspects of how regular their income and expenses are and they may find ways to establish minimum amounts that they invest every week and maybe being able to max out at higher rates depending on how much money comes in that week or month or whatever is their pay period.
I frequently suggest to be as aggressive that you are able to be without overdoing it in such a way that you end up losing your bitcoin.. ..... so some of that may have to do with how much cushion exists in an emergency fund that can be being built and maintained at the same time that the BTC investment portfolio is being built.
BTC price is only one of the 9 factors to consider.
These principle individual factors that influence your decision whether to invest into bitcoin and how to invest into bitcoin have financial, skills and psychological components that include:
1) your cashflow,
2) how much bitcoin you have already accumulated,
3) your other investments (including cash reserves),
4) your view of bitcoin as compared with other investments,
5) your timeline,
6) your risk tolerance,
7) your time, skills, goals (investment/lifestyle targets, which includes figuring out the extent that you are in BTC accumulation, maintenance or liquidation stage),
8 ) your abilities to strategize, plan, research and learn along the way including tweaking strategies from time to time,
9) your considering your time, your abilities and whether to trade, reallocate from time to time, to use of leverage and/or to use financial instruments... (and for sure the use of financial instruments, leverage and margin trading involve higher level skills and are not even necessary to still become richie in bitcoin's already existing asymmetric bet.)
Note: price fits within number 4.
Sometimes, a lot of people encounter such situations because they don't have a constant cash flow, and for someone who don't have a steady cash flow to safe for emergency cases he or she will also find it very difficult to hold and accumulate Bitcoin.
The more instable (or irregular) the cashflow, then the more need for a larger emergency fund, but the mere fact that someone has a unstable or irregular income does not necessarily mean that he cannot invest into bitcoin. However, if he does not have enough money to cover his expenses, then he does not have disposable/discretionary income, so he does not have money for investing, and one of the first principles that we already established is that investment money should be coming from funds that are not needed in the next 4-10 years or longer... so if someone is taking money from his expenses or that he would otherwise, need, then he is gambling rather than investing.
On the other side, yeah it can be uncomfortable if the BTC price does not dip and you have money waiting to buy on dips that does not get used, and you have to figure out yourself how you want to treat that money or to readjust your considerations of the setting of your buying price points from time to time in order to attempt to best prepare for what you believe that the BTC price might do in that portion of the money that you have available for that purpose, and at the same time it would not necessarily mean that you stop DCA buying within the terms that you have set for that category of funds..
That's one thing I don't ever want to experience that's why I have to keep one building up the investment instead of waiting for the dip that might no even get dipped.
Well, you might not be in a position to have that problem; however, after you invest 4-10 years or longer, there might be a point in which you are starting to feel that you can change your strategy. You have to be the one to figure out what is the best strategy for yourself in terms of whether you believe that you have enough BTC or too much BTC or if you might need to balance things out, and I had already mentioned that if you have less than 25% of your annual salary saved up, then you likely do not really need to worry about diversifying beyond having some cash and/or an emergency fund, but maybe once you start to get up to higher levels of BTC accumulation, such as 25% to even 2x of your annual salary into bitcoin, then you might start to want to consider some other strategies and/or variations on your already established strategies, and the level of BTC accumulation or the size of the BTC accumulation that you establish prior to adjusting strategies is likely going to differ for people.. and maybe some people will want to adjust their strategies once they get up to 25% of their annual salary accumulated into bitcoin, and others 100% and others 2x.. and there can also be considerations regarding whether you are changing your strategy based on the amount that you had invested or the current value of your BTC holdings, whether you use the 200-week moving average to value your holdings or if you use the BTC spot price, and personally, I have already argued many times that it is better to value your BTC holdings based on the 200-week moving average rather than BTC spot price, even though you surely can do both. (you can see some of my discussion and the website in
my sustainable withdrawal thread).
Ones one have the one to buy there is no need to wait for dip, although everyone have their own ways of investing, just like the way I am using the DCAing method, others might not 2ant to use it like I do.
Some plans are better than others - both in terms of their practicalities but also in terms of their attempts to tailor the practice to the individual circumstances, and generally, it sounds to me that you are doing the right thing, especially if you are in the earlier times (or years) of your BTC accumulation, your building up of an investment portfolio that maybe is mostly focused on BTC for now.
I have made some similar mistakes in the past, and frequently i have to make some tweaks in order to account for the mistake, and hope that the mistake is not too large... and so sometimes I have mistakenly bought when I meant to sell, and other times I have mistakenly sold when I meant to buy...and sometimes I don't realize that I made the mistake until several hours or even several days later. I will usually have to figure out some kind of a solution that I consider to be acceptable to wait out a price move that might correct the mistake in one direction or another or I might force some kind of a resolution... and if there are likely fees to take into account, then that would also be something that is calculated into what can be done or should be done.
Interesting.
However, everyone has made a mistake already and most time mistakes are meant to be made because it will help us to learn more about what we made the mistakes for, so that next time will be more careful.
If mistakes are to mode then a lot of people would have not learned what they have learnt today.
Of course some mistakes are greater than others, and we don't always completely learn from our mistakes or even realize our mistakes in a timely manner, but yeah, if we are trying to improve then we should be figuring out ways to make sure the levels of our mistakes are with our tolerance levels and we perceive ourselves to be making progress, and maybe when you are in your first few years of being involved in bitcoin, you do not have as many experiences or you might not be venturing out, but there are several kinds of parts of bitcoin in which any of us could choose to experiment with various kinds of wallets or various exchanges or various ways to directly interact with people in bitcoin and maybe to figure out if we are going to wait for confirmations before we give bitcoin for cash, and there can be differences if we are a vendor with an established business versus if we are meeting a stranger in the parking lot of a Starbucks.
I hope that he wont do that because I have read some newbies that did invest and did the wrong decision of investing what they cant afford to lose. And when they are in need of money, they were forced to sell the bitcoins that they have bought. While the situation of the market was unfavorable, instead of making a profit, they have made a lost that they have regret. That is why you are right that he shouldn't invest all that he has got.
Investing according to our respective abilities is wise enough in any condition because everyone will never disturb what they have invested when they suddenly need money in their own lives. So that the investment will continue without any obstacles or sell immediately when you need money, but beginners who often make wrong decisions when investing can also learn by themselves through the wrong method so that they can have the right mindset with their next investment in the future by not using all the money just for investment.
A lot of the win or lose scenarios can be ameliorated in regards to position size.... so for example if a guy usually has $200 per month extra that he could invest or do whatever he likes with, and if he is brand new to bitcoin then maybe he would choose to invest $10 per week while he is learning, rather than investing higher amounts, and as he becomes more comfortable, he might start to feel that he can invest more and more and maybe some day even reaching the max amount, which is $50 per week in this hypothetical.
