Growing both your Bitcoin and backup funds.

[Sky_T]

Your point are well utilized.  However, one does not necessarily need to have only one back plan. You can have as many as possible so that when one fails, you pick up the other continue your race. Bitcoin is not a get rich quick something. It requires time so much patient just like you said.

[Publictalk792]

You can have your asset in bitcoin and still have your backup fund in this same bitcoin, the only difference from the two will now be on where you will hold them, you can make use of a cold storage for your bitcoin holdings for it to grow as an asset while the backup fund can be held on an exchange whereby you can easily exchange it for fiat when needed at any time, this one on the exchange will be as little as something you can afford to take risk on, since its not your major investment in bitcoin.

That is great strategy to have both long term investment in bitcoin and backup fund in same currency with the main difference being storage location. Using cold storage for your main asset investment allows it to grow in value over time while keeping smaller riskier amount on exchange for easy access to fiat when needed. This approach always allows us to manage risk and potential losses as exchange held funds are smaller portion of your overall investment. It is smart way to balance asset growth and liquidity.

[Poker Player]

There is nothing new for me in this thread. For a long time I've been advocating about following some basic personal finance principles before you buy bitcoin and one of them is having a so-called emergency fund or backup fund as the OP says if you prefer. What I don't agree with is to grow it as well. Once you have your emergency fund fully funded you should stop adding to it. You don't need more, it's fiat and gets devalued, so you should only grow your investments.

[CryptoBuds]

You can have your asset in bitcoin and still have your backup fund in this same bitcoin, the only difference from the two will now be on where you will hold them, you can make use of a cold storage for your bitcoin holdings for it to grow as an asset while the backup fund can be held on an exchange whereby you can easily exchange it for fiat when needed at any time, this one on the exchange will be as little as something you can afford to take risk on, since its not your major investment in bitcoin.

That is great strategy to have both long term investment in bitcoin and backup fund in same currency with the main difference being storage location. Using cold storage for your main asset investment allows it to grow in value over time while keeping smaller riskier amount on exchange for easy access to fiat when needed. This approach always allows us to manage risk and potential losses as exchange held funds are smaller portion of your overall investment. It is smart way to balance asset growth and liquidity.

On the contrary, I don't consider this a great strategy. First, using bitcoin as an backup fund is a bad idea because when it comes to emergency funds, we need to keep its value stable and less volatile, not as volatile as bitcoin. A backup fund means we can use it immediately, at any time, and it has a stable value. The second thing is that leaving backup funds on exchanges is too risky because they can be frozen or lost at any time if the exchange crashes or goes bankrupt. Exchanges are not more safe and secure than banks, make no mistake about it even though they are both centralized institutions.

[HideYourKeys]

I believe you always have to keep some backup funds for emergencies... In any case, I would still "save" in bitcoin, consider it like a savings account

[lixer]

There is nothing new for me in this thread. For a long time I've been advocating about following some basic personal finance principles before you buy bitcoin and one of them is having a so-called emergency fund or backup fund as the OP says if you prefer. What I don't agree with is to grow it as well. Once you have your emergency fund fully funded you should stop adding to it. You don't need more, it's fiat and gets devalued, so you should only grow your investments.

Maybe some of what he wrote are still new to us but the the word that he highlight there which is called patience, is indeed very common and always been mentioned here across the forum. Another word that he highlight is backup funds, and this one is also new to me but IDK about you, though I'm sure that it was rarely being mentioned here.

The only thing is that a lot of us are already doing it because it is also important. I think that the word back up, can mean two things, and that is it's okay if it is only less superior and the other would be is it must be equal to the other that we currently have, so that there will be less problems that we will experienced.

[uchegod-21]

There is nothing new for me in this thread. For a long time I've been advocating about following some basic personal finance principles before you buy bitcoin and one of them is having a so-called emergency fund or backup fund as the OP says if you prefer. What I don't agree with is to grow it as well. Once you have your emergency fund fully funded you should stop adding to it. You don't need more, it's fiat and gets devalued, so you should only grow your investments.

I know you are not a financial expert, but some who earns like $1k monthly, how much do you think will be his emergency fund. I mean how much will it get to and he will stop and focus on investing according to you.

I believe you always have to keep some backup funds for emergencies... In any case, I would still "save" in bitcoin, consider it like a savings account

Now if you have your emergency fund in bitcoin in the name of savings. What happens when you need it and it eventually the deepest time of bitcoin.?

[boyptc]

The only way to protect your investment through Bitcoin is to be informed on how it works. It's because you're the one that's going to be trusted by yourself in handling it. There won't be a bank that will hold it for you unlike them that has portfolio manager for their stocks and other assets.

And that's why protecting as if it's only volatility that you should be worried about buying Bitcoin, no it's not the only thing there. It is part of investing even in other investments because that's how we make money from it.

So, starting from how to protect yourself from potential cons, hackers and scammers, a newbie really needs to invest their time in learning the basic concepts of it.

[EarnOnVictor]

Without having patience to hodl for a long term you won't make it that big and sometimes you will end up losing money but if you are patient enough to hodl for long term then you will definitely reap big.
And without a Backup funds you will easily be tempted to dip hands into your Bitcoin investment when ever you have emergency or problem and you are not with cash but when you have a backup funds it will help you in times of emergency or problem.

So it is very important to protect your investment, especially investments as volatile as Bitcoin, to avoid unnecessary losses. So it will be a very good move to build your backup funds, while contemporaneously building your Bitcoin, although it may slow down your accumulation speed and may take a bit longer to reach your financial goals, however it's all good as long as your backup funds are being built gradually and strong, because the backup funds are just as important as the investment itself. However, it's more preferable engaging in a slow but steady accumulation with a strong financial backup, than being aggressive with one's accumulation with no strong financial backup which will later lead to one's down fall.

You have a good point if I must say and I believe those who did not have plans in investment are the ones who are not patient. Also, the backup plans of a thing in commensurate with the amount invested sounds like a good plan, but don't you think that if you want to HODL, it might take many years? Can the person guarantee such backup funds to take care of his finances for that long? I doubt that. Otherwise, there will not be time for an investment at all to have had such a big money you narrated secured before being able to invest.

This is why I think you exaggerate this backup plan of a thing, a viable source of income is enough here. With that, you can meet your needs financially and even save more or invest more. Above all, my advice is that if you are investing, the money you invested should be treated as if you don't have it again, then carry on with your life as usual. If you didn't have that invested money, wouldn't you survive? That's the spirit! Nevertheless, having a few excesses that will take care of the immediate needs is still very important to avoid being stranded, but certainly can't be the kind of backup plan you explained.

[Smack That Ace]

I believe you always have to keep some backup funds for emergencies... In any case, I would still "save" in bitcoin, consider it like a savings account

Now if you have your emergency fund in bitcoin in the name of savings. What happens when you need it and it eventually the deepest time of bitcoin.?

Many people don't even differentiate between savings and investments, how can a highly volatile asset be used as savings? Just to take a simple example, those who bought bitcoin for $72k 2 months ago and now they need to use this savings. Would they be happy and satisfied with using that bitcoin when their savings lost 10% of their value and even 20% if they used it a few days ago? Bitcoin's volatility makes it suitable as an investment, it is not suitable for use as a savings, reserve, or safe haven asset.

[Adams0001]

I have experience with this. I was following the DCA strategy for a few months and I accumulated a good amount, but in the end I was forced to sell a large portion of this amount due to some difficult financial circumstances. It is true that I made some profits in the sale, but I sold much less than my target.

Don't you think the problem is that you invested most of your money into a long term asset, if you do it this way, you'd frequently be forced to sell when you do not want to, that's why i have said in this thread already, that i recommend keeping part of your funds in liquid assets that you can easily convert to cash.

Take note as well that BTC isn't the only thing you can invest in for the long term, there are other assets you can diversify into. Finally, even if fiat is inflationary, you should also have some money in your bank account for quick spending.

Exactly, you cannot invest all of your assets because he will undoubtedly effect you in an emergency, and you will undoubtedly sell your bitcoin since you will have no other option and your investment will no longer progress ahead. Many people prefer to invest in bitcoin for long-term profits and price increases. While there are other investments that can yield profits without investing in bitcoin, many prefer to invest in crypto due to its volatility. People who usually sell their bitcoin is because of an emergency, and they did not keep any money in their bank for spending. They all invested it, which is not advisable, which is why some are having difficulty. You should have enough money to spend without depleting your long-term investment.so that you can understand the value of your long-term asset

[Iranus]

~snip

That is great strategy to have both long term investment in bitcoin and backup fund in same currency with the main difference being storage location. Using cold storage for your main asset investment allows it to grow in value over time while keeping smaller riskier amount on exchange for easy access to fiat when needed. This approach always allows us to manage risk and potential losses as exchange held funds are smaller portion of your overall investment. It is smart way to balance asset growth and liquidity.

Have you ever thought about the scenario where the market suddenly falls into bear season? Bitcoin suffered a serious dump, losing more than 70% of its value like the 2022 bear season and your exchange accidentally went bankrupt as FTX did. What would you do if all your assets and savings were in bitcoin? Is that strategy still great?

Fiat has inflation, but in the short term it will not fluctuate and lose value like every time bitcoin corrects, so don't be too stubborn about the concept of inflation and ignore the importance of fiat in the short term. Always having savings in fiat currency will help you a lot in emergencies.

[SquirrelJulietGarden]

Have you ever thought about the scenario where the market suddenly falls into bear season? Bitcoin suffered a serious dump, losing more than 70% of its value like the 2022 bear season and your exchange accidentally went bankrupt as FTX did. What would you do if all your assets and savings were in bitcoin? Is that strategy still great?

The market can sudden have a push or a crash or less severe, a correction but the market trend does not sudden change. It takes time to change a trend from bearish to bullish and from bullish to bearish. Sometimes the market can have corrections like 20%, 30% in middle of a bull run but it won't break the market bullish trend.

Past vs. Present — Examining Bitcoin's History of Bull Market Corrections

Fiat has inflation, but in the short term it will not fluctuate and lose value like every time bitcoin corrects, so don't be too stubborn about the concept of inflation and ignore the importance of fiat in the short term. Always having savings in fiat currency will help you a lot in emergencies.

Fiat has inflation in many decades and this inflationary issue will continue to exist. Bitcoin is not here to fix it but it is here as a helpful investment choice for people who want to save their money in bitcoin, and see its value growth with time rather than save it in banks as savings and see money received as interests is smaller than purchasing power loss of fiat by inflation.

[legendbtc]

You can have your asset in bitcoin and still have your backup fund in this same bitcoin, the only difference from the two will now be on where you will hold them, you can make use of a cold storage for your bitcoin holdings for it to grow as an asset while the backup fund can be held on an exchange whereby you can easily exchange it for fiat when needed at any time, this one on the exchange will be as little as something you can afford to take risk on, since its not your major investment in bitcoin.

It can be said that the risks of investing in bitcoin have decreased significantly with the approval of the bitcoin ETF and its popularity but that does not mean it is completely risk-free. I think the advice to “only invest what you can lose” is still relevant when it comes to bitcoin or any highly volatile investment. So your long term investments, and savings are at risk since your assets are in bitcoin and I don't think even emergency savings in bitcoin is a wise idea. I find it even more risky when you leave your savings on centralized exchanges, don't forget the lesson of Mt.gox or FTX.

If you don't like fiat because of inflation then you can use another stable asset to save, gold can be an option because it is stable and highly liquid.

[lizarder]

Without having patience to hodl for a long term you won't make it that big and sometimes you will end up losing money but if you are patient enough to hodl for long term then you will definitely reap big.
And without a Backup funds you will easily be tempted to dip hands into your Bitcoin investment when ever you have emergency or problem and you are not with cash but when you have a backup funds it will help you in times of emergency or problem.

Investment must be adjusted to needs and we don't just think about investing in living in this world. Especially for beginners who may not have stable finances so they must have a strategy in running investments in bitcoin. The long term is indeed a good choice, but you have to think about the pattern of accumulation of purchases if you want to see assets increase. This is where the ability to adjust between meeting life's needs and buying is needed because if it is not adjusted, both will not work well

The risk of loss is caused by not having money to meet life's needs so trying to sell bitcoin when you need money. This pattern is wrong in running long-term investments because we should hold until bitcoin finds the ATH moment. Reserve funds are generally prepared to take accumulations in larger amounts rather than to meet needs when money is needed.

[Antotena]

If in the future I'm going to have more money in Bitcoin, I will make sure I have more money too outside Bitcoin because Bitcoin might be the easiest way of making money on the internet but outside there are other physical investments that you can make money from but they are capital required and that's why I said more money. This is the mistake some people do, they put all there egg in one basket and buy Bitcoin, it's not bad but learn to diversify at any given opportunity.

The worst of it is when some people use all their money to buy Bitcoin, they bought at the top and since they don't have back funds, they are force to sell at loss making them without any profits and still take loss. Assuming they have back up funds, they would have used the money to sort out any other problems they have and leave their investment on Bitcoin until it has given them a profit to sell.

[$weetne$$]

If you want to make an investment in bitcoin, there are things in which you need to consider first before anything, the kind of investment you're going into, its duration, the source of fund to use for the investment and so on, if you can't afford to use money from what you have earned or the fund that belongs to you, then you don't have to force yourself in making an investment, money for your daily expenses shouldn't be included as part of your investment.

If you are investing in Bitcoin you also have to plan to grow your backup funds because every other money that you have should be your backup funds that you use for other things. You should already have a source of income that should be the main source of your funding for your investment. When you invest in Bitcoin without considering if you can be capable of maintaining your standard of living without selling your Bitcoin, you are not going to be capable of holding for a very long time. Do not think that you have to put all your money into Bitcoin without thinking about other parts of your life. You can decide to get more jobs if you want to invest more money into Bitcoin or decide to learn how to trade very well then you can be trading to get money. With the addition of trading and your other sources of income, you should be capable to having enough money to use for anything that you need.

[Tmoonz]

The logic behind this is wrong, because nearly all of your money shouldn't be in BTC, for the rest of it to be called a 'backup' fund. There are other investments and assets you can purchase, gold, real estate, and many more you can find; your funds should be well diversified into different assets like these, alongside BTC. However, like you said, it is important to always have liquid asset, so you can live and solve necessary problems without liquidating your long term assets.

You are right at this, is more like having a different streams of income flow which has an enormous benefits generally let alone a hedge towards achieving your Bitcoin investment goal and objectives since your other living expenses can be comfortably taken care of without liquidating your long term asset in Bitcoin and similarly it will also be helpful in consistency of increasing your Bitcoin accumulation in order to have an overall good size of Bitcoin investment. At some point just as you have made it clearly priority should also be given to other asset class that are not Bitcoin related.

[harapan]

The logic behind this is wrong, because nearly all of your money shouldn't be in BTC, for the rest of it to be called a 'backup' fund. There are other investments and assets you can purchase, gold, real estate, and many more you can find; your funds should be well diversified into different assets like these, alongside BTC. However, like you said, it is important to always have liquid asset, so you can live and solve necessary problems without liquidating your long term assets.

It's just inaccurate to not consider these;some decisions like this have been made without proper considerations.
Some investments are risky but not having an investment is the greatest financial risk.You should be able to track your plans,diversify numerous,safe and relevant sources that'll generate and proffer positive results to the game.
Just In case something happens ahead and unknowingly,it'll fix you easily to calculate and position right