Does the DCA strategy inspire newbies to invest?

[Dxdiax26]

Emergency funds are not the same with reserve funds, but they are both back up funds. Our discretionary income is used to buy Bitcoin while we use our emergency funds to ward off unexpected financial demands that may tempt us to tamper with our investments.

If we misunderstand, we will always fail in doing it, meaning that if the difference between emergency funds and reserve funds makes many people no longer able to make purchases because they keep thinking about how to do it without thinking about the needs and in the end, these people will experience confusion in investing in Bitcoin because the way to differentiate it makes it difficult for them to buy to invest in Bitcoin, which in general, investment results become our future assets in accumulating the amount and value.

[Son Of Blockchain (SOB)]

Emergency funds are not the same with reserve funds, but they are both back up funds. Our discretionary income is used to buy Bitcoin while we use our emergency funds to ward off unexpected financial demands that may tempt us to tamper with our investments.

If we misunderstand, we will always fail in doing it, meaning that if the difference between emergency funds and reserve funds makes many people no longer able to make purchases because they keep thinking about how to do it without thinking about the needs and in the end, these people will experience confusion in investing in Bitcoin because the way to differentiate it makes it difficult for them to buy to invest in Bitcoin, which in general, investment results become our future assets in accumulating the amount and value.

Misunderstanding can cause lots of mistakes that why it's good for people to know what they're doing, anyways mistakes are made for people to learn from it and apply caution next time, so i believe that someone who made the mistake of using the emergency funds for investment would learn with time why it's not advisable.
 Although the reserve fund can as well serve for investment purpose but not constantly like the discretionary funds but in situations like a job loss or so and that's why it's good to set it aside so it would serve it's purpose when necessary.

[JayJuanGee]

With this fund, I believe we don't need to worry about solving problems, as we have an emergency fund or reserve fund set aside before starting Bitcoin investment.

Actually, we don't necessarily need emergency fund and reserve funds set aside before starting our Bitcoin journey, if we've backup funds already before we got into Bitcoin, then it might do us some good to deploy some of it to lump sum or front laod our investment instead of Idly piling up cash.

You sound lost, @Sticky Bomb.  Emergency funds and reserve funds are part of back up funds, so they are the same thing, except that emergency funds and reserve funds are more specified as to what they are and back up funds is a generic description that captures both.

Back up funds should not necessarily be used to buy bitcoin, unless you have enough back up funds that you are not putting yourself at risk in terms of overly spending from your back up funds and then not having enough income to cover all of your expenses.. which then means you may well end up overly depleting your back up funds and/or having to tap into your bitcoin at a time that was not of your own choosing.

There is nothing wrong with considering ways to invest into bitcoin faster, aggressively or to front load your investment into bitcoin so that you can accumulate bitcoin at a faster rate than you would have had otherwise accumulated - so long as you do not end up going from aggressive accumulation and then falling into overly aggressive accumulation.

Investors who don't have backup funds can start right away and build them alongside buying and holding Bitcoin. There's no need to keep waiting while you have discretionary income, such delays are unnecessary. Again it doesn't make sense building emergency fund when you don't have Bitcoin, that's misappropriation of priorities. The first priority is to check if you've discretionary income, of you do, then you're ready for your first purchase, you can now keep buying consistently and building backup funds alongside your consistent buys.

These are all good points in your last paragraph, even though you may need to think more clearly about the different ways that back up funds are built up, held and managed.  In the end, you may be correct about everything that you are saying, even though your first paragraph was confusing and likely misleading in the way that you were using terms and even seeming to believe that back up funds are different from emergency funds and reserve funds.  

Think about it.  Emergency funds are a kind of back up funds that you  may well not want your back up funds to go to such low level and to dip into them since they are the last line of defense before tapping into your bitcoin... Generally, guys think about building up emergency funds first and even getting emergency funds up to a certain high level before having other funds (ie reserve funds) that have more flexibility, which would include the ability to buy bitcoin on the dip with those funds.

Sure, the fact of the matter is most likely that when guys are in the early stages of building up their back up funds, they have some funds categorized as emergency funds and other funds categorized as reserve funds, which means that the reserve funds have flexibility and the emergency funds do not, yet if they are early in their building up of their back up funds, they likely should not have a lot of flexibility since they should have a priority of both building up their back up funds and building up their bitcoin, so then when you are proclaiming some kind of a practice that suggest that back up funds are not important (yeah you used the terms emergency funds and reserve funds), you seem to be glossing over the whole complementary need to maintain back up funds and bitcoin building and for me it seems problematic to be glossing over the value of those back up funds by suggesting that there might be some value to be using them to buy bitcoin during dips... which largely seems to me that you are acting as if buying the dip is smarter than ongoing, persistent, consistent, and regular bitcoin investing.

[Edited Out]

I understand Sir Jay's point of view about poor people figuring out how to increase their income, some people are just so unfortunate and always get hit hard by life to the point that it affects them from progressing even when they're putting much effort too, if i were superstitious i would've said it's a generational curse like some superstitious do think about such people, well their case is understandable.
 However there are those who have opportunities to change their situations but are too lazy to put in effort or sacrifice their time and effort to make sure their situation changes. Everyone can never have equal opportunities but some people misuse their chances of changing their situations, sometimes it might not even be lack of effort but have to patience in allowing their efforts produce live changing opportunities.

I doubt that we can generalize why many poor people end up failing, since there are going to be various levels of effort and there are going to be various pieces of luck that might take place along the way, and surely, if a guys is ongoingly putting forth effort, then perhaps those kinds of guys are going to be in a better position to take advantage of good luck when it such good luck ends up presenting itself.

I would think that almost no matter what, a certain amount of hard work is needed from poor people in order to get ahead of their poor status, and the level of work, effort and organizing that poor people do is likely not going to completely explain outcomes.

On an individual level, we might not really enjoy the amount of work that we have to do, and we also might consider that it is unfair that some of us are having to work way harder than some of those who we perceive as our peers, and yeah, if we are able to keep up our morale and our energy, and maybe even we have to keep up our health by making sure that we eat well, get enough sleep and enough exercise, then perhaps we are improving our chances for success, even though success is not guaranteed even if we do everything correct.

With this fund, I believe we don't need to worry about solving problems, as we have an emergency fund or reserve fund set aside before starting Bitcoin investment.

Waiting to start investing, to build an emergency fund is not the right decision at all. You can build an investment and an emergency fund in a balanced way at the same time. If you divide your discretionary income into three categories: emergency fund, investments and extra expenses. If you divide your discretionary income in this way, you can easily build an emergency fund and investments and extra weekly or monthly expenses at the same time, all in a balanced way.

If you wait to start investing until you have built your emergency fund, you will definitely miss out on buying opportunities, you may not be willing to invest due to the fear of seeing the market fall, and you will fall far behind the goal of building a portfolio. So if you build your investment and emergency fund at the same time, you will definitely protect yourself from such risks and setbacks.

I will suggest that you are correct in everything that you are saying, except that you seem to be presuming that everything is easy, which I doubt to really be the case for a lot of people.  In order to both invest in bitcoin and also to strengthen cashflow management practices (that also includes building up back up funds), there are likely a lot of people who have to make quite a few changes in their already existing practices.  Accordingly, there can be a lot more comfort and east to transition into some kind of a maintenance status after the back up funds had already been built up, as compared with the struggles (and even sacrifices) that frequently will end up existing for guys who are both in their early stages of building their bitcoin/cashflows and they are getting used to adapting to some of the trade offs that may well exist when they are making changes to how they are spending, saving and investing their discretionary funds on a weekly-ish basis.

[Charcol]

Emergency funds are not the same with reserve funds, but they are both back up funds. Our discretionary income is used to buy Bitcoin while we use our emergency funds to ward off unexpected financial demands that may tempt us to tamper with our investments.

If we misunderstand, we will always fail in doing it, meaning that if the difference between emergency funds and reserve funds makes many people no longer able to make purchases because they keep thinking about how to do it without thinking about the needs and in the end, these people will experience confusion in investing in Bitcoin because the way to differentiate it makes it difficult for them to buy to invest in Bitcoin, which in general, investment results become our future assets in accumulating the amount and value.

I think that when new investors are told the names of so many types of funds, the matter may seem complicated to them at first. However, while removing the complexity of the names, it is not right to exclude the difference in the functions of the funds. Because if the difference is clear, the decision to buy can be easier.

Someone has some money, but if he does not know which part of it will be needed for sudden medical treatment or income interruption and which part is really extra, he may buy more Bitcoin just because he has more money. Later, perhaps, if there is an emergency expense, he may be forced to sell at a time when he did not want to sell. I think if the purpose of the money is decided in advance, the pressure of this decision is reduced.

[sotelorene]

It is best to be a low coiner rather than having no bitcoin. The idea is just to start small even without an emergency funds and it is possible to set up an emergency funds while still ongoing with bitcoin accumulation using a percentage of our discretionary income for doing this. However, most people won't want to start small because they fail to appreciate the importance of starting small. Starting small and being consistent with bitcoin accumulation can really pay up in the long run. I believe there are people that started without already having an emergency funds but today they have a good bitcoin holdings with an emergency funds .

Starting small or not is not among the criteria in Bitcoin investment because everyone has different source of income which means some folks has a huge source of income while some doesn't and again having huge source of income doesn't mean your discretionary will be very huge no, but rather the size of one's discretionary income depends on the needs to be taken care of. So anyone who has a huge discretionary income can start big likewise small so it doesn't matter, the most important is how regular someone will be in their accumulation.

[Sammysmart001]

I think that when new investors are told the names of so many types of funds, the matter may seem complicated to them at first. However, while removing the complexity of the names, it is not right to exclude the difference in the functions of the funds. Because if the difference is clear, the decision to buy can be easier.

Someone has some money, but if he does not know which part of it will be needed for sudden medical treatment or income interruption and which part is really extra, he may buy more Bitcoin just because he has more money. Later, perhaps, if there is an emergency expense, he may be forced to sell at a time when he did not want to sell. I think if the purpose of the money is decided in advance, the pressure of this decision is reduced.

Before deciding on how much of Bitcoin one can buy, what is most important is to understanding what each portion of funds is meant for. And will also make DCA easier to be able to maintain. If you can differentiate your money and know that this for emergency and another for investment you see that you don’t need to reconsider your purchase with Bitcoin every time any unexpected bill appears. The very goal it to avoid investing in the money that has another important purpose not just to avoid investing still everything is perfect.

[Grease5000]

DCA is a good strategy but it is good when the price of bitcoin is low already. Example is when bitcoin fall below $16000 in 2022 that El Salvador was buying one bitcoin daily. If you want the strategy to be good for you, you can just wait until the price fall during bear market and start DCA.

I don't think waiting for a bear market is really DCA because that is more like trying to time the market and hoping you can identify or predict  perfect time when bitcoin dip.

The problem is that nobody knows when bitcoin price  will drop. DCA is meant to spread purchases over time, so  it gives investors the opportunity tokeep accumulating regardless of short term price movements. And El Salvador buying 1 BTC daily when Bitcoin was around $16,000 is an example of buying during a downturn, but the important part of DCA is the consistency, not waiting for a particular price.

Personally, I would rather have a fixed accumulation plan and continue buying through different market conditions than wait for  price to dip before buying that may not arrive when I expect.

[_act_]

I don't think waiting for a bear market is really DCA because that is more like trying to time the market and hoping you can identify or predict  perfect time when bitcoin dip.

You are getting it wrong. You can begin to DCA at anytime time. If you wait for the time bitcoin price has fallen and you begin to buy bitcoin like weekly or monthly (but I recommend weekly), that is what DCA is. Even if it is during bull run, as long as you are buying the coin at a specific time like weekly, it is called DCA.

[Nuel0717]

I don't think waiting for a bear market is really DCA because that is more like trying to time the market and hoping you can identify or predict  perfect time when bitcoin dip.

You are getting it wrong. You can begin to DCA at anytime time. If you wait for the time bitcoin price has fallen and you begin to buy bitcoin like weekly or monthly (but I recommend weekly), that is what DCA is. Even if it is during bull run, as long as you are buying the coin at a specific time like weekly, it is called DCA.

I'm finding it tough to understand what you mean, you talked about waiting for when Bitcoin price falls, then said you prefer buying weekly and termed it DCA, it’s confusing even though I'm trying to connect some dots so I'll get a clear understanding of what you mean
 
I don't know if it's a typo error from your ends but if what you meant is tbat people need to wait for the price to fall before DCAing then you're wrong cause the DCA doesn't require waiting for Bitcoin to fall before buying but buying consistently.

Well the interval at which people buy differs, while some can comfortably buy at weekly bases while some monthly and there are times when some can buy daily cause they have the capacity to but buying daily is not common with everyone the most common are weekly and monthly buying.

[Emjay24]

I don't think waiting for a bear market is really DCA because that is more like trying to time the market and hoping you can identify or predict  perfect time when bitcoin dip.

You are getting it wrong. You can begin to DCA at anytime time. If you wait for the time bitcoin price has fallen and you begin to buy bitcoin like weekly or monthly (but I recommend weekly), that is what DCA is. Even if it is during bull run, as long as you are buying the coin at a specific time like weekly, it is called DCA.

I agree that DCA can be started anytime, but when an investor waits for the price to crash before buying, then they are buying the dip instead. Why the wait when the investor can jump in and start buying right away as long as they've discretionary income available.

I don't recommend waiting strategy for no coiners and low coiners, the reason DCA is recommended is to help investors buy consistently over a longer period of time, buying both lows and highs to arrive at a good average buy price and a descent stash for themselves. So the wait is unnecessary, there is no need to keep delaying buying and holding. Investors should rather be inclined to take action immediately they can relate with having discretionary income and knows how to buy. Good thing DCA can also be practiced with little amounts, even if the investor has as low as $10, he can get started.

[Dxdiax26]

...

If we misunderstand, we will always fail in doing it, meaning that if the difference between emergency funds and reserve funds makes many people no longer able to make purchases because they keep thinking about how to do it without thinking about the needs and in the end, these people will experience confusion in investing in Bitcoin because the way to differentiate it makes it difficult for them to buy to invest in Bitcoin, which in general, investment results become our future assets in accumulating the amount and value.

Misunderstanding can cause lots of mistakes that why it's good for people to know what they're doing, anyways mistakes are made for people to learn from it and apply caution next time, so i believe that someone who made the mistake of using the emergency funds for investment would learn with time why it's not advisable.
 Although the reserve fund can as well serve for investment purpose but not constantly like the discretionary funds but in situations like a job loss or so and that's why it's good to set it aside so it would serve it's purpose when necessary.

More precisely, when someone has made a mistake, they should reflect on themselves and avoid repeating it in the future.

When investing in Bitcoin, selfishness shouldn't be a priority. This is something everyone must address. Many mistakes are made in the initial stages. Therefore, when enlightenment comes from those who may not be as experienced in making mistakes, consider it a lesson to be more careful in how we use it. Whether it's an emergency fund or a reserve fund, these two are closely related, with the only difference being how we use it.

[Son Of Blockchain (SOB)]

Edited..

Edited...

More precisely, when someone has made a mistake, they should reflect on themselves and avoid repeating it in the future.

When investing in Bitcoin, selfishness shouldn't be a priority. This is something everyone must address. Many mistakes are made in the initial stages. Therefore, when enlightenment comes from those who may not be as experienced in making mistakes, consider it a lesson to be more careful in how we use it. Whether it's an emergency fund or a reserve fund, these two are closely related, with the only difference being how we use it.

We can't be too perfect but we can try to attain perfection, what I'm trying to say is that mistakes in an investment is inevitable and when it occurs, reflecting on it like you said and trying to avoid a repeated situation in the future is very important, failure to do that means that the person is comfortable with failing repeatedly.
 An investor should aim for success in the future, although there would be challenges along the line which are those mistakes they make knowingly or out of ignorance, however someone who wants to be successful in an investment would always reflect on his or her wrong doings and work on them. It includes figuring out the right funds to use for different situations.

[JoyceBTC]

It is best to be a low coiner rather than having no bitcoin. The idea is just to start small even without an emergency funds and it is possible to set up an emergency funds while still ongoing with bitcoin accumulation using a percentage of our discretionary income for doing this. However, most people won't want to start small because they fail to appreciate the importance of starting small. Starting small and being consistent with bitcoin accumulation can really pay up in the long run. I believe there are people that started without already having an emergency funds but today they have a good bitcoin holdings with an emergency funds .

Yes intending investors can decide to start small with no emergency funds and build up an emergency funds later while still investing, which is actually not bad but mind you this doesn’t work for everyone. If it’s hard for someone to setup an emergency funds now, how sure are you they will be able to set that up later, more especially low income earners that might actually want to still keep up with the same amount they’ve already started investing with and continuously not having extra funds left for emergency, since they feel there might not be any emergency coming up soon.

As an investor it is important to note that nobody should feel too relaxed of not having an emergency soon, because the need might arise at any time, it is better when you decide to start investing, stick to an amount that will be very convenient for you while still having extra funds with you for emergencies or future needs, that wouldn’t  cause you tampering with your investments. You must not start big, what is most important is using a flexible amount that you can be consistent with in order to be able to accumulate a good amount of bitcoin.

[Abbatty]

It is best to be a low coiner rather than having no bitcoin. The idea is just to start small even without an emergency funds and it is possible to set up an emergency funds while still ongoing with bitcoin accumulation using a percentage of our discretionary income for doing this. However, most people won't want to start small because they fail to appreciate the importance of starting small. Starting small and being consistent with bitcoin accumulation can really pay up in the long run. I believe there are people that started without already having an emergency funds but today they have a good bitcoin holdings with an emergency funds .

Yes intending investors can decide to start small with no emergency funds and build up an emergency funds later while still investing, which is actually not bad but mind you this doesn’t work for everyone. If it’s hard for someone to setup an emergency funds now, how sure are you they will be able to set that up later, more especially low income earners that might actually want to still keep up with the same amount they’ve already started investing with and continuously not having extra funds left for emergency, since they feel there might not be any emergency coming up soon.

As an investor it is important to note that nobody should feel too relaxed of not having an emergency soon, because the need might arise at any time, it is better when you decide to start investing, stick to an amount that will be very convenient for you while still having extra funds with you for emergencies or future needs, that wouldn’t  cause you tampering with your investments. You must not start big, what is most important is using a flexible amount that you can be consistent with in order to be able to accumulate a good amount of bitcoin.

Yes, you are right. We shouldn’t let not having an emergency funds delay our bitcoin investment, but as soon as you begin investing, you need to start looking for more discretionary income so you can start saving up for emergency funds. Life scenario is unforeseen and an emergency case can come up at any time, so to avoid being in a position to be forced to sell our holdings, we should make provisions to protect our Bitcoin by getting emergency funds, but don’t let it delay your investment.

[GIF-JOBS]

Yes, you are right. We shouldn’t let not having an emergency funds delay our bitcoin investment, but as soon as you begin investing, you need to start looking for more discretionary income so you can start saving up for emergency funds. Life scenario is unforeseen and an emergency case can come up at any time, so to avoid being in a position to be forced to sell our holdings, we should make provisions to protect our Bitcoin by getting emergency funds, but don’t let it delay your investment.

There is no need for an emergency fund before investing, many people postpone investing to create an emergency fund before investing, which is definitely wrong. Rather, we can invest and create an emergency fund together without stopping anything. We can be careful on both sides, just as an emergency fund is needed, it is also not reasonable to delay starting investing, and therefore, in the first instance, we can invest and create a fund by dividing the discretionary income in half. If we can be a little careful, then we can manage everything very well. Equal caution should be given on all sides, an emergency fund will give you the greatest support in future unexpected situations and will keep your investment safe, and therefore there is no chance of ignoring it in any way.

[Rockson1]

Before deciding on how much of Bitcoin one can buy, what is most important is to understanding what each portion of funds is meant for. And will also make DCA easier to be able to maintain. If you can differentiate your money and know that this for emergency and another for investment you see that you don’t need to reconsider your purchase with Bitcoin every time any unexpected bill appears. The very goal it to avoid investing in the money that has another important purpose not just to avoid investing still everything is perfect.

Discreationary fund is what we need, the each fund you mean is your discreationary fund and discretionary if I'm right, if that's it, what if you don't have emergency funds yet, what will do, since your discreationary income is ready, for me, I think as long as ones discretionary income is available, we can start our investment, when we create our emergency funds along the line, of course we will know what it stands for, since the name tells more about it, the importance of emergency funds can not be ruled out in protecting our portfolio from tampering been tempered due to unexpected financial problems, the necessity of discretionary income should not be ignored.

[Rabata]

Discretionary consumption is not important to "maintain" your bitcoin investment. It is important for your own comfort and recreational purposes, but when it comes to maintaining your bitcoin portfolio, your discretionary income and backup funds are the priority, and in backup funds, your emergency fund is the most important which serves as a last option not to tap into your holdings in the case of emergencies or financial difficulties.

With this fund, I believe we don't need to worry about solving problems, as we have an emergency fund or reserve fund set aside before starting Bitcoin investment.
This is an advantage for us in investing, as we don't need to use our existing assets, and they will always be a solid asset for our future, accumulating each time we make a purchase.

Our goal in having an emergency fund or reserve fund is to prioritize it only in situations that sometimes require us to use existing assets, but having this fund makes us feel more comfortable in resolving any problems that arise with our investments.

Setting aside money for an emergency fund can make it easier to stay invested. However, just because you have that money doesn't guarantee that you won't have to worry about future financial problems. If you have a major illness, a long-term loss of income, or multiple expenses at the same time, the amount of money you set aside may not be enough.

Again, the function of an emergency fund and money set aside for other purposes is not always the same. The first, i.e., an emergency fund, can be useful when you are forced to sell Bitcoin in an emergency. You can change the use of the second according to the situation. If you decide how much to invest in Bitcoin based on the two, it may seem like your actual security is higher. But it may be logical to consider your income, expenses, and family responsibilities and use a portion of your discretionary income to determine how much money to invest.

[Sammysmart001]

Before deciding on how much of Bitcoin one can buy, what is most important is to understanding what each portion of funds is meant for. And will also make DCA easier to be able to maintain. If you can differentiate your money and know that this for emergency and another for investment you see that you don’t need to reconsider your purchase with Bitcoin every time any unexpected bill appears. The very goal it to avoid investing in the money that has another important purpose not just to avoid investing still everything is perfect.

Discreationary fund is what we need, the each fund you mean is your discreationary fund and discretionary if I'm right, if that's it, what if you don't have emergency funds yet, what will do, since your discreationary income is ready, for me, I think as long as ones discretionary income is available, we can start our investment, when we create our emergency funds along the line, of course we will know what it stands for, since the name tells more about it, the importance of emergency funds can not be ruled out in protecting our portfolio from tampering been tempered due to unexpected financial problems, the necessity of discretionary income should not be ignored.

I do understand your point that someone don’t really have to wait until their emergency funds is being fully buit up before starting to invest. Habit of DCA can be buit eveb if the amount is small, staring with a portion of discretionary income can be of help to keep up with DCA.
But also what i see that is important is that discretionary income should be divided based on priorities. Because putting all amount into Bitcoin without having any available amount at all, could become a big problem if an unexpected expense should come up. This moments are we’re most people are focused to sell out their coin at the bad time that they didn’t want to. So I would say that you can be investing and at the same time be building up your emergency funds …….. safety net should be built gradually.

[Brizi5000]

I don't think waiting for a bear market is really DCA because that is more like trying to time the market and hoping you can identify or predict  perfect time when bitcoin dip.

You are getting it wrong. You can begin to DCA at anytime time. If you wait for the time bitcoin price has fallen and you begin to buy bitcoin like weekly or monthly (but I recommend weekly), that is what DCA is. Even if it is during bull run, as long as you are buying the coin at a specific time like weekly, it is called DCA.

I'm finding it tough to understand what you mean, you talked about waiting for when Bitcoin price falls, then said you prefer buying weekly and termed it DCA, it’s confusing even though I'm trying to connect some dots so I'll get a clear understanding of what you mean
 
I don't know if it's a typo error from your ends but if what you meant is tbat people need to wait for the price to fall before DCAing then you're wrong cause the DCA doesn't require waiting for Bitcoin to fall before buying but buying consistently.

Well the interval at which people buy differs, while some can comfortably buy at weekly bases while some monthly and there are times when some can buy daily cause they have the capacity to but buying daily is not common with everyone the most common are weekly and monthly buying.

I agree with you, the DCA does not support market timing especially when it involves waiting for a price drop before buying bitcoin. If that happens then it automatically means buying the dip strategy. The core purpose of the DCA will be defeated if investors apply market timing and waiting for a lower price before buying so for an effective DCA strategy what matters most is to continue buying no matter the price whenever the discretionary income is available.