After this, when the accumulation stage is completed, an investor can take profit from Bitcoin investment according to his financial condition.
You don't need to even rush into taking profit. When you have reached your over accumulation stage, you transit into the maintenance stage where you are just only holding and allow your portfolio to just be compounding in value.
After your maintenance stage and it's time to take little profit, you don't do it based on your financial condition so that,you don't sell too many bitcoin too soon so you don't end up a low coiner again because you feel that your mission have been accomplished. You are to use the sustainable withdrawal method that allows you to with little part from your bitcoin either using a particular time or using a particular price in order for your bitcoin investment to continue compounding without being affected by your little withdrawal.
Yes, basically, when we're in the overaccumulation phase, or at least our Bitcoin accumulation goal has been achieved, we must also remember that the holding target may not have been reached. It's possible that someone might conduct a DCA on Bitcoin and ultimately reach a target, and that purchase target is met halfway through. Therefore, the holding period is still far from being reached.
Therefore, I believe that while waiting for the holding period to be completed successfully, it would be better for all of us to continue buying Bitcoin with DCA. This will undoubtedly allow us to buy more Bitcoin once our holding period is reached. So, that's basically what I'm thinking right now. Holding and the amount of Bitcoin are different goals, but both must be met effectively if our Bitcoin investment is to run smoothly.
You might need to give an example @Gallar in order to explain what you are talking about.
I would imagine that so many guys might take a very long time to reach overaccumulation status, so even if a guy is able to invest 10% of his income into bitcoin, it will take him 10 years to have had invested 1 year of his income into bitcoin.
A person likely can measure his goals by his current income, since his current income helps to establish how much he might be able to put into bitcoin, and of course, if guys are able to increase their income without substantially increasing their expenses, then it becomes likely that they would be able to accumulate more bitcoin faster, which would then allow them to potentially get to overaccumulation status faster.
Another thing is how much their bitcoin might grow in value, yet how much the bitcoin might grow in value is a factor that is less within their control as compared to their being able to figure out how much of their discretionary funds that they are able to put into bitcoin which should help to give them guidelines for what they might consider to be practical targets to try to reach in terms of their bitcoin accumulation levels - even though sometimes surprises could end up coming in term of their potentially receiving greater amounts of income that they might be able to end up investing into bitcoin.
A quick reminder to those investors who are planning to take out loan to invest in bitcoin, if you take out loan to invest in bitcoin just know that you're not investing from your discretionary fund that's the fund/ wallet where our Bitcoin investment money is supposed to come from, and failure to do that could cause damage to our Bitcoin investment even though some investors have this confident or believe that nothing will happen to Thier Bitcoin investment if they take out loan because they have way to pay back, my question is what if that source you're hoping to get the . money that you will use to pay back the loan didn't work out? You know life can happen at times that is why we need to avoid whatever thing that will give us borden.
It's true that quite a few people take out loans to invest in BTC, and quite a few are successful because the price of BTC rises and there's always money to repay the loan. However, there's always a risk. If, for example, we default on the loan or are unable to repay it due to, for example, a company going bankrupt or being laid off, many will experience losses because they don't hold BTC long-term and sell their BTC at a price below the purchase price.
The bottom line is that borrowing money to invest in BTC carries a high risk, while using discretionary income is certainly more reassuring and provides a more comfortable mentality. However, the choice is yours, and the risk is yours.
This is what i called double jeopardy. Taking the risk of borrowing money from the bank and at the same time investing in another risky business. Although borrowing for business is good but not Bitcoin. Bitcoin is too volatile to say the least. If you have what i call free money then you can invest in Bitcoin. Sincerely speaking, Bitcoin has broken some hearts and amended some. Why i said it's a double jeopardy is this. If Bitcoin fails because of it's nature,then you will certainly default in paying back the loan you borrowed
Many times people can justify getting a loan to invest in a business if they might be trying to use the business as a way to leverage their labor so that they can make more money than what they might make by working for someone else. Of course, businesses struggle to make sure that they make enough money and that they are also profitable enough to be able to pay back the loan.
Bitcoin is a passive investment, so it is not really the same as a business, even though it still could be justifiable to get a loan to buy bitcoin so that future income would be used to buy bitcoin yet then less bitcoin would be able to buy later, since the money that was borrowed would have to be paid back during the term of the loan, and yeah there may well be many times that they terms of the loan are not really good, so they do not necessarily justify getting into the loan situation, even though each person can decide for himself, and from my perspective it makes more sense to get a loan if the terms are reasonable such as lower than 6% annual interest rates and that the term is long such as 4 years or longer, yet there should be ways to pay back the loan, such as a solid future income and/or other assets (besides bitcoin) that could be used to pay the loan in case the future income dries up. Loans do add more risk, and they are not necessary, yet individuals can make those kinds of choices to the extent they believe it might be advantageous to get a loan rather than just buying bitcoin from their discretionary funds and not taking so many risks that come from including a loan.
Historically bitcoin has been such a great investment, so then it might not have had been justifiable to add more risk to it, so many of the folks who lost money in bitcoin over the years have been those persons who added too much risk.
Investing in bitcoin requires focus, as lack of focus will lead to a halt in our Bitcoin accumulation journey.
We need to manage our time and thoughts, and set aside a portion of our funds to regularly purchase bitcoin as part of our Investment plan for the future.
Without proper planning, Investments will typically be short lived due to a lack of focus and a lack of goals. As a principle of life, we understand that developments change everything. This era is a technological era, and Bitcoin is an asset with immense value due to its superior concept to fiat. Therefore, we must completely forget about investing in other assets and focus on bitcoin for future success.
Investing in bitcoin should not stop person from investing in other long time investment. If person can comfortably invest in bitcoin and other long time investment assets, there is no reason to limit it just one.
What matter is your have the discretionary income to invest and that the other investment they you are doing doesn't make you to pause your bitcoin accumulation. Bitcoin investment isn't some rocket science that can take away all of your time and energy form doing other things. You can invest and still have time for other things..
Even though guys can do whatever they want, I am not too excited about the idea of investing in other things, besides bitcoin.
There are advantages in focusing on bitcoin and cash management, yet surely if there might be other opportunities, such as employers who offer retirement funds that guys can invest into, then it might make sense to have some other investments, even though there can be distraction and dilution when time, energy and/or value are diverted to other potentially inferior investments. But, yeah, guys make choices.
Some people are even yet to reach a good stage of their Bitcoin investment journey yet they choose to diversify into shitcoins instead to focus on managing their Bitcoin investment properly so they'll achieve good result in the future. Diversifying to shitcoins while trying to build a better Bitcoin portfolio would definitely lead to complications.
If someone has chosen Bitcoin as an investment option then it's best to focus on it, instead of adding distractions in the name of diversifying to shitcoins which is less worthy of giving attention to. It's the kind of things that disrupt investors from achieving their investment goals.
When diversifying, you diversify into a different asset and not an asset of the same line with bitcoin. Shitcoin isn't diversifying because Bitcoin controls it's price and Bitcoin is the best so, it becomes a problem when bitcoin price is down because it means that all your asset will depreciate in value. Shitcoin is gambling don't forget.
If you want to diversify, you diversify into asset of different line like stock, bond, equity and cash equivalents in other to balance your loss in case bitcoin price is down the other one can be doing fine to balance up for you.
We diversify in other to preserve the value of your wealth and not because you just want to do it.You need to have the knowledge on whatever, asset you want to diversify into to avoid losses and regret in the future. If you don't have the knowledge, it's better to focus on building your bitcoin portfolio alone.
You are correct to point out that diversification tends to be a wealth preserving mechanism rather than a wealth building mechanism, so in that sense some wealth likely needs to already have had been built before diversification starts to make sense.
It might be o.k. to start to diversify once the bitcoin investment equals 6 months or more of the expenses of the investor, yet some people might wait until the bitcoin investment reaches 1 or 2 years of the expenses. These are judgment calls. Also, maybe if a person is growing his bitcoin investment and his cash at the same time, he likely is not going to like to keep so much value in cash (especially when the cash starts to become higher than 4 months of expenses), which could start to justify keeping some value in other places and perhaps even considering the extent to which the other places are liquid and/or non-volatile to the extent that those funds might also be serving as back up funds.
I can still tell that there are many newbies that are still facing little challenges on this, as a newbie, knowing how to figure out your financial stability is very paramount. But it's not necessarily till you must figuring out the starting amount before investing, it all depends on the availability of your discretionary income, even In practicing process one can can get to understand how or what exact amounts to be investing either weekly,like $10 or $20 worth of bitcoin depending on the person's financial status.
However, having a mindset of learning while investing gives newbies a hints on how to balance thier status along the line, moreover, the most important thing newbies should know, is to start with the little amounts of thier discretionary income and when they get comfortable on it, then they can adjust based on what may feels right to them.
investors should invest according to your income and cash flow. Many people struggle to invest even 10% or more of their income. That is, it can take 5 or more years to invest the equivalent of our 1 year's income.
If you want to invest 1 years of your income over 5 years, then you need to invest 20% of your income each of those 5 years, which is not easy for normal people to accomplish that high of a level of investment.
So you should try to be realistic about your capabilities. Bitcoin is an investment that has the potential for huge asymmetric gains. So whatever amount we pursue, it should be within our budget and realistic in implementing responsible and long-term plans, so that we feel comfortable with the habit of regular savings and investment. And as our income increases, it can be a prudent approach to gradually increase the amount.
For sure, it is likely good to try to be realistic around a person's income, and many times it can be difficult to increase income levels and to maintain expenses at low and/or manageable levels.
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Expressing my personal opinion, I can say that if a person has the financial capacity and can comfortably invest in real estate, gold or other conventional assets along with Bitcoin. Bitcoin gives us extraordinary returns and financial freedom. We have to remember that Bitcoin is the best 'hard money'. Therefore, a large part of our portfolio should be in Bitcoin. Also, if one has an extra budget, there is no harm in investing in real estate or any other reliable long-term asset. The main thing is that we do not stop depositing Bitcoin (DCA) while investing elsewhere. If it is possible to balance both together, then that is the biggest advantage for an investor.
Maybe you @Stive009 need to give some examples from where you believe all of the money to invest would be coming from?
Generally it tends to take times to build up wealth and to build up holdings, and surely many guys around here recognize the idea of building up both bitcoin and back up funds which could take 6-12 months or longer just to build up a bitcoin holdings and back up funds that each equal in the ballpark of 3 months of expenses.
So are you expecting that normal people can just diversify for the sake of it, or are you expecting normal people to be able to invest more than 10% to 15% of their income into bitcoin and/or other investments?
