Balancing Financial security and Bitcoin Accumulation

[Futurexxx]

Let's not deceive ourselves here because we all know that bitcoin is a long-term investment, and for us to comfortably invest in bitcoin and hold our bitcoin investment for 4-10 years, we will need a steady income that guarantees us discretionary income, but if our steady income doesn't guarantee discretionary income, we have to work on our source of income to get a better one that guarantees discretionary income. We don't need to be in a hurry or force ourselves to invest in Bitcoin when we have a steady income that doesn't guarantee discretionary income because if we do that, we might use the money meant for our expenses to invest in Bitcoin, and we will fail in our Bitcoin investment because when the time to solve our expenses comes, we will have no choice than to depend on our Bitcoin investment to solve it. If a contractor who is not certain when to get the next contract in a year after completing 2-3 contracts starts to invest in Bitcoin, the contractor might end up selling his Bitcoin along his accumulation process because he will save up money he will use in the future to solve his expenses in case he doesn't get any other contract, and when he notices he's not consistent in accumulating Bitcoin, he might get upset and sell his Bitcoin out of anger. We surely need a steady income and discretionary income to get it right with Bitcoin investment.

You made a point there. But then again, as a person who want wants a good life, you’re ought to have a steady source of income, and to be an average person in the society, you need to have a multiple sources of income in order to keep up. Just as you gave an example of a contractor, knowing too well that contracts doesn’t come often should make other plans in getting other sources of income. By so doing, can use a discretionary income in buying bitcoin, using DCA methods. For me, once you’re working and earning, you can invest in bitcoin, no matter how little which also works along with determination and discipline

It's only lack of proper money management that will make a contractor sell off his Bitcoin holdings just for survival, do not forget that Bitcoin investment is for everyone, and as a contractor you can invest in Bitcoin once your discretionary income is available through the contract you got. You must not invest weekly or monthly, but you can invest anytime your won a contract, from the discretionary income that came out from it, and if your money management skills is good you will be successful in it because as we all know, contractors earns a lot, they can fend for themselves with a single contract for a year, on that note, if he knows how to manage his money very well, he will definitely have a huge emergency and reserve funds in place that can salvage the days that he will be out of work for an extended period of time, so a contractor can invest in Bitcoin and be successful if he knows how to manage his finance proper, and if he can add another source of income, it would even be more in a safer side financially than someone that is just relying on a sincere income.

[Nightwatchmare]

Bitcoin is a savings that is kept for the future. If a person creates Bitcoin as an emergency fund, then he is making a big mistake. Because investments are made for a long term period such as 5 to 10 years. And we create an emergency fund to protect our portfolio. But there are some people who use Bitcoin as an emergency fund. If you are a person who does this, then he can find himself in many bad situations. For example

*If the price of Bitcoin decreases and then that person needs money, then he will have to sell it at a loss

*If he sells at a loss, then he will be behind in terms of money and then that person will have to take a loan.

*He will break down mentally a lot.

*He may blame Bitcoin, such as Bitcoin is fake etc.

Bitcoin is very risky, but not for everyone. Because I think Bitcoin is very low risk for people who can have proper knowledge about Bitcoin and hold their holdings for the long term. Bitcoin is very risky for people who invest in the short term or use Bitcoin as an emergency fund.

You did the right thing to guide newbies on how they should go about their bitcoin investment without getting burnt, but you don't use the right words to guide them to invest in bitcoin without getting burnt because newbies can still provide their backup funds and still end up selling their bitcoin at a loss when they need money to solve their expenses. But if newbies stick to only investing in bitcoin with their discretionary income and they also provide their backup funds, there's no way they will sell their bitcoin out of fear even though the price of bitcoin decreases because they use their discretionary income to invest in bitcoin, and they can use their discretionary income the way it pleases them. Bitcoin is for everyone, but you can't force someone to use Bitcoin or invest in Bitcoin.

[JayJuanGee]

Poor people might have ONLY a very narrow path of opportunities to get out of poverty, and if they spend several years building up something like a bitcoin portfolio, and then they end up screwing up their investment because of their own slopiness they might not be able to recover again... so there could be some poor persons who had spent one or two cycles building up his bitcoin holdings and he does not have much if any of an emergency fund, but then an emergency comes and his whole bitcoin is wiped out because his bitcoin was serving as his emergency fund. .and maybe if the BTC price is down at the same time as the emergency, he might never be able to recover from what he ended up losing.  Sometimes also just a bit of cash can get someone over the rough periods and to prevent a bad situation from becoming even worse because the onhand cash was able to cover the expenses until the person got back on course and started earning an income and/or maybe resolved some expenses.

Bitcoin is a savings that is kept for the future. If a person creates Bitcoin as an emergency fund, then he is making a big mistake. Because investments are made for a long term period such as 5 to 10 years. And we create an emergency fund to protect our portfolio. But there are some people who use Bitcoin as an emergency fund. If you are a person who does this, then he can find himself in many bad situations. For example

*If the price of Bitcoin decreases and then that person needs money, then he will have to sell it at a loss
*If he sells at a loss, then he will be behind in terms of money and then that person will have to take a loan.

*He will break down mentally a lot.
*He may blame Bitcoin, such as Bitcoin is fake etc.

Bitcoin is very risky, but not for everyone. Because I think Bitcoin is very low risk for people who can have proper knowledge about Bitcoin and hold their holdings for the long term. Bitcoin is very risky for people who invest in the short term or use Bitcoin as an emergency fund.

Before anything else, let’s clear this up… your savings, emergency funds, and Bitcoin investment are three completely different things. They are not the same and should not be treated like they are…

Your desire to claim that savings is different from emergency funds is a bit strange.  Of course there is an investment category, yet the investment category can also be like a savings that is expected to grown over longer periods of time.

It is probably better to consider savings within categories of money that we already discuss, which it seems that savings is a form of back up funds. .and there are three forms of back up funds that can all overlap in some kinds of ways.  Emergency funds, reserves and float.

Savings likely fit within either emergency funds or reserves.  Emergency funds are the last line of defense that a person has before having to tap into his bitcoin, so if he has spent all his other funds, and he is tapping into his emergency funds, he is in a position that is not good, especially if the emergency funds are depleting and the next thing would be tapping into his bitcoin once the emergency funds are depleted.  I personally think that a person who is in bitcoin accumulation stage would likely have to stop accumulating bitcoin once he gets down to the point of only having emergency funds, yet at the same time, guys can figure out how they treat these different categories and we could be having a semantics debate that only is arguing about the meaning of the words rather than the practical application in terms of how a guy is going to be using these various kinds of funds.

If you tell me that your savings is serving some kind of a purpose, then what is that purpose? so then it might tell us what category of back up funds it fits into.

If your savings is earning yield and you are holding it for the long term, then it might be considered as a form of investment rather than as a form of back up funds. 

From my own perspective float is not something that we necessarily save up over time, yet each month if we are accounting for our expenses from our income, so that after we account for all of our expenses, then whatever amount is left over would be discretionary income; however, if we are unclear about how much our expenses are going to be, then we might hold some extra funds in float until we determine how much the expenses are going to be.  Once the expenses accounting is figured out, then whatever extra amount that we had been holding in float would end up becoming discretionary income.

Bitcoin is not your emergency fund.

If you have no back up funds, then it seems that bitcoin would end up becoming your emergency fund, since it would be the next thing to tap into.  Of course, the best way to hold emergency funds is cash, but if you don't have any cash left (because you depleted all of it), then the next thing would be to tap into your investments, and if the only thing you have is bitcoin then bitcoin is next.  If you have other investments, then sure maybe you could choose to tap into the other investments first, yet there could be questions in regards to which one to tap into based on how liquid it is (how easy and quick it is to convert it into cash). If something is more or less equally liquid, like it might take a day or two to convert into cash, then we also might look at how volatile it is, or if one is up or down in price at the time that we need to choose which one to cash out of... So when running out of money, there would be a combination of liquidity and price that might influence our choice of which one to go to first.

I understand that you are making a recommendation that bitcoin not serve as the emergency funds, which of course, is not a controversial assertion.

Bitcoin is not your traditional savings either. Put in mind It is an investment asset where you build and grow long term, using strategies like DCA over years, not weeks or months. If you’re trying to save money you might need soon, or for safety, go put it in a bank or somewhere stable. Bitcoin is not the place for that.

Fair enough regarding bitcoin.  Yet you still seem to be talking about savings as if it were backup funds of one sort or another .. either reserves or emergency funds.  By the way, reserves are very similar to emergency funds, but they just have more options on how they might be used. which seems to be what you are suggesting savings to be since you had been saying that savings is different from emergency funds.

Now, using Bitcoin as emergency backup? That is just not smart. Emergencies don’t wait for price rebounds. Haha… BTC can take time to move, convert to cash, and sometimes the fees or even the network can delay you… What if the price crashes when you urgently need money? You will then be forced to sell at a loss. Which will now lead to you panicking, probably regretting everything, and maybe even blaming Bitcoin when the truth is, it was just poor planning.

Fair enough.  yes.. we need to have some back up funds so we don't end up tapping into our bitcoin at a time that is not completely of our own choosing, and if we got into bitcoin and we had told ourselves that we were planning to invest into bitcoin for 4-10 years or longer, then in order to attempt to honor our own desired preferences, then we have to have back up fund systems in place to make sure that we do not break our own intentions.

now if we have not figured out our own timeline in regards to investing into bitcoin, then we might be merely trying to figure out if bitcoin is in profits or not so that we might sell some of it to satisfy our needs and/or our wants, so yeah, we have to figure out if we are striving to have an actual investment into bitcoin rather than a trade, then if we are investing, our timeline would need to be 4-10 years or longer, otherwise we are trading, and if our investment timeline is 4-10 years or longer, then we likely have to make sure that our back up funds are sufficient to cover the variation in our income and/or our expenses, and the more variability that we expect, then the more likely we have to hold larger amounts of back up funds to cover  such variability.

Now if we have back up funds that we consider to have higher priority than bitcoin, such as maintaining our savings, then those are choices that we make if we already consider that there are some categories of funds, such as savings and/or other investments that have higher priority over bitcoin.  We should try to know our priorities in advance, but sometimes if we are put into a position of having to sell one thing or another, we might find that we have to either reconsider our priorities or even to consider a matter that we had not previously considered... which would be another justification to make sure that we have sufficient back up funds so we do not necessarily have to figure out what would be the next thing to sell when we run out of things to sell to cover our expenses.

[DubemIfedigbo001]

setting up systems that help you to not get overly emotional about BTC price moves in one direction or another, even though we likely cannot completely take emotion out o f the equation, there are still ways to lessen the likelihood of high emotional levels.

I think from my experience that it is easier to take hold of your emotions when you still have good funds for yourself after taking care of your bitcoin investment and building your backup funds for the said period. When you must have created the kind of balance in your cashflow that you don't get strangled or disadvantaged by what is actually remaining for yourself, you can have the courage to look away from your holdings and manage your emotions well bearing in mind that there is no need tampering with your portfolio or getting troubled with the market dynamics as long as you have enough to keep you filled up presently and some good savings(not emergency funds) in case your cash at hand gets exhausted. Having a good financial backup increases the courage and confidence to act rightly.

[Loyang]

You made a point there. But then again, as a person who want wants a good life, you’re ought to have a steady source of income, and to be an average person in the society, you need to have a multiple sources of income in order to keep up. Just as you gave an example of a contractor, knowing too well that contracts doesn’t come often should make other plans in getting other sources of income. By so doing, can use a discretionary income in buying bitcoin, using DCA methods. For me, once you’re working and earning, you can invest in bitcoin, no matter how little which also works along with determination and discipline

To be a common man, you do not need multiple sources of income. Because if you do good deeds and earn money in an honest way, you can also become a common man in the society.

If a person cannot manage his family properly with his stable income and at the end of the month or at the end of the week the financial condition becomes very bad and that person wants to invest if he cannot invest for money. Then that person can arrange another job if he wants. But he has to take care of his own physical condition. Because if he is not physically healthy, he is working extra to invest, then it will not be good for him. So first take care of whether you are healthy or not, then think about investing or think about the society. Because if you get sick while working extra, then after a while you may not be able to work anymore.

[Silikiem]

without money, there is no way that you can invest in bitcoin, so the best thing is for anyone to have a job so that when you start from there, because there is no other means that will be accepted when you have a means of earning,  but when you don't have a means they how do you even invest so one of the best things to start with is for you to get a job then you will notice that that way you will be able to use the dca method easily because without funds there i no way you can do the dca.

And it depends on the kind of income you are getting, because when you are investing good money same way you will get good return so the money that is going in to buy matters a lot. After all, when you don't invest well then the returns will be small when you are not finacially stable then it will be better to figue things out before investing.

To invest, a person can invest by doing any work, whether it is daily wage, job or business.To invest, it is necessary to have a source of discretionary income. If your source of discretionary income is from a job or working as a daily wage, then you can still invest if you want. If you are working and if you cannot get the meaning of discretionary income from it, then you may not be able to maintain the continuity of your investment. Therefore, you need to have the importance of proper financial management.

Bitcoin is very risky, there is no guarantee that you will be profitable if you invest. However, the possibility of profit is much higher in the case of long-term investment. Therefore, we can never say that we will be profitable if we invest.

you are actually every correct, Without that, it’s nearly impossible to commit consistently especially with strategies like DCA dollar cost  averaging low,  some many  people want to rush into crypto without first securing their financial base. Getting a job or stable source of income is the first real step. Once that’s in place, then you can think long-term, invest wisely, and actually see meaningful returns. smart money starts with smart planning.

You don't need a stable source of income before you can invest into bitcoin all you need is your discretionary income. There are some people who have stable source of income but at the end of the month and taking care of their basic needs and monthly expenses, they are left with nothing. Such people cannot invest in bitcoin.

A contractor that gets paid twice or more in a year can invest in bitcoin after he gets paid with his discretionary income. The contractor after taking out his monthly expenses and basic needs for a given period of time and he has left over. He can use that leftover to invest in bitcoin whichever way he wants. A gambler can hit the jackpot and use his win to invest into bitcoin. Proper plan and cash inflow management is what matters.

Let's not deceive ourselves here because we all know that bitcoin is a long-term investment, and for us to comfortably invest in bitcoin and hold our bitcoin investment for 4-10 years, we will need a steady income that guarantees us discretionary income, but if our steady income doesn't guarantee discretionary income, we have to work on our source of income to get a better one that guarantees discretionary income. We don't need to be in a hurry or force ourselves to invest in Bitcoin when we have a steady income that doesn't guarantee discretionary income because if we do that, we might use the money meant for our expenses to invest in Bitcoin, and we will fail in our Bitcoin investment because when the time to solve our expenses comes, we will have no choice than to depend on our Bitcoin investment to solve it. If a contractor who is not certain when to get the next contract in a year after completing 2-3 contracts starts to invest in Bitcoin, the contractor might end up selling his Bitcoin along his accumulation process because he will save up money he will use in the future to solve his expenses in case he doesn't get any other contract, and when he notices he's not consistent in accumulating Bitcoin, he might get upset and sell his Bitcoin out of anger. We surely need a steady income and discretionary income to get it right with Bitcoin investment.

Fair enough, but the point is that you don’t need a steady source of income to be able to invest in bitcoin, all you need is just a discretionary income to invest with. Bitcoin investment is a long term investment and for an investor whose initial strategy is focused on the long term goal of accumulating and hold, surely there will come some weeks or months when you might not be able to figure out a discretionary income to accumulate with, and If you’re unable to figure out your discretionary income yet to be able to invest with for the week, or month or sustain your seemingly ongoing investment, you mustn’t get yourself worked up about that, and that also shouldn’t push you to sell part or all of your assets just so you can be Able to get money out of it to sort out your needs because it’s an area where your emergency funds comes to play. If your discretionary income isn’t available yet to invest with, all you need do is to wait until you’re able to figure out your discretionary income again so you can continue your accumulation. It doesn’t matter how long it takes you to build up your profile and meet your investment goal, it’s a long term goal and at such patience is key. In as much as you are accumulating and not selling for quick gains or panicking to sell whenever you notice a little downturn in the market, rest assured that with time, discipline and patience you’ll gradually grow your portfolio and meet your accumulation target. And come to think of it, what will make an investor who is a steady income earner not to be able to figure out a discretionary income if not for a poor financial management skills or the person is an unserious investor . That’s why it’s equally important for an investor to have the right financial management skill to be able to manage his finances and know exactly where and how his finances are being spent on.

[Derekfunds]

Bitcoin is a savings that is kept for the future. If a person creates Bitcoin as an emergency fund, then he is making a big mistake. Because investments are made for a long term period such as 5 to 10 years. And we create an emergency fund to protect our portfolio. But there are some people who use Bitcoin as an emergency fund. If you are a person who does this, then he can find himself in many bad situations. For example

*If the price of Bitcoin decreases and then that person needs money, then he will have to sell it at a loss

*If he sells at a loss, then he will be behind in terms of money and then that person will have to take a loan.

*He will break down mentally a lot.

*He may blame Bitcoin, such as Bitcoin is fake etc.

Bitcoin is very risky, but not for everyone. Because I think Bitcoin is very low risk for people who can have proper knowledge about Bitcoin and hold their holdings for the long term. Bitcoin is very risky for people who invest in the short term or use Bitcoin as an emergency fund.

The main reason not to keep Bitcoin in an emergency fund is to make it easier to use emergency funds in an emergency. Bitcoin is never a suitable currency for use in an emergency. Because it takes some time for Bitcoin to be converted into fiat, which can cause delays in using it in an emergency. Even price volatility tends to have a negative impact here. So, in order not to delay solving the problem in an emergency and not to face losses, it is absolutely foolish to keep Bitcoin in that emergency fund.

So you should create an emergency fund in such a way that you can use the emergency fund very easily and quickly. Always choose fiat money for the emergency fund and definitely keep it in real currency. Keeping the emergency fund in a bank or online money is also not advisable or the right step. Keep the emergency fund in a place where you can use it at your fingertips and from there you do not have to count the losses.

I don't think there is actually a perfect place to keep emergency funds, you said keeping emergency funds in bank is not advisable then are you saying it is advisable to keep it in our room? What if robbers came to our house? Won't they steal the money? I'm not against any of these though but anyone an investor find convenient then is good because different people stays different environment, it is possible that someone can stay in an environment that security is very tight and in this kind of environment you won't be afraid of keeping money in your room.  Remember our emergency funds ought to be protected as much as we protect our investment because it is the pillar that holds our investment.

[Padi24]

Bitcoin is a savings that is kept for the future. If a person creates Bitcoin as an emergency fund, then he is making a big mistake. Because investments are made for a long term period such as 5 to 10 years. And we create an emergency fund to protect our portfolio. But there are some people who use Bitcoin as an emergency fund. If you are a person who does this, then he can find himself in many bad situations. For example

*If the price of Bitcoin decreases and then that person needs money, then he will have to sell it at a loss

*If he sells at a loss, then he will be behind in terms of money and then that person will have to take a loan.

*He will break down mentally a lot.

*He may blame Bitcoin, such as Bitcoin is fake etc.

Bitcoin is very risky, but not for everyone. Because I think Bitcoin is very low risk for people who can have proper knowledge about Bitcoin and hold their holdings for the long term. Bitcoin is very risky for people who invest in the short term or use Bitcoin as an emergency fund.

The main reason not to keep Bitcoin in an emergency fund is to make it easier to use emergency funds in an emergency. Bitcoin is never a suitable currency for use in an emergency. Because it takes some time for Bitcoin to be converted into fiat, which can cause delays in using it in an emergency. Even price volatility tends to have a negative impact here. So, in order not to delay solving the problem in an emergency and not to face losses, it is absolutely foolish to keep Bitcoin in that emergency fund.

So you should create an emergency fund in such a way that you can use the emergency fund very easily and quickly. Always choose fiat money for the emergency fund and definitely keep it in real currency. Keeping the emergency fund in a bank or online money is also not advisable or the right step. Keep the emergency fund in a place where you can use it at your fingertips and from there you do not have to count the losses.

I don't think there is actually a perfect place to keep emergency funds, you said keeping emergency funds in bank is not advisable then are you saying it is advisable to keep it in our room? What if robbers came to our house? Won't they steal the money? I'm not against any of these though but anyone an investor find convenient then is good because different people stays different environment, it is possible that someone can stay in an environment that security is very tight and in this kind of environment you won't be afraid of keeping money in your room.  Remember our emergency funds ought to be protected as much as we protect our investment because it is the pillar that holds our investment.

In my opinion emergency fund need to be kept in a place where we can have free access to it whenever there is emergency need, the same thing applicable to back up funds this two funds need to be kept in a separate wallet, you can choose either to hold it in fiat currency or to hold or save it in bitcoin, but I think it will be more better if we create a different bitcoin wallet for this funds since the both funds is for security purpose. and yeah, saving it in bitcoin seems like a good plan because this way you won't be afraid of anything since you're the only one that have full control over it, rather than saving it in the Bank or your home where you can't get peace of mind.

[kanftka]

Poor people might have ONLY a very narrow path of opportunities to get out of poverty, and if they spend several years building up something like a bitcoin portfolio, and then they end up screwing up their investment because of their own slopiness they might not be able to recover again... so there could be some poor persons who had spent one or two cycles building up his bitcoin holdings and he does not have much if any of an emergency fund, but then an emergency comes and his whole bitcoin is wiped out because his bitcoin was serving as his emergency fund. .and maybe if the BTC price is down at the same time as the emergency, he might never be able to recover from what he ended up losing.  Sometimes also just a bit of cash can get someone over the rough periods and to prevent a bad situation from becoming even worse because the onhand cash was able to cover the expenses until the person got back on course and started earning an income and/or maybe resolved some expenses.

Bitcoin is a savings that is kept for the future. If a person creates Bitcoin as an emergency fund, then he is making a big mistake. Because investments are made for a long term period such as 5 to 10 years. And we create an emergency fund to protect our portfolio. But there are some people who use Bitcoin as an emergency fund. If you are a person who does this, then he can find himself in many bad situations. For example

*If the price of Bitcoin decreases and then that person needs money, then he will have to sell it at a loss
*If he sells at a loss, then he will be behind in terms of money and then that person will have to take a loan.

*He will break down mentally a lot.
*He may blame Bitcoin, such as Bitcoin is fake etc.

Bitcoin is very risky, but not for everyone. Because I think Bitcoin is very low risk for people who can have proper knowledge about Bitcoin and hold their holdings for the long term. Bitcoin is very risky for people who invest in the short term or use Bitcoin as an emergency fund.

Before anything else, let’s clear this up… your savings, emergency funds, and Bitcoin investment are three completely different things. They are not the same and should not be treated like they are…

Your desire to claim that savings is different from emergency funds is a bit strange.  Of course there is an investment category, yet the investment category can also be like a savings that is expected to grown over longer periods of time.

It is probably better to consider savings within categories of money that we already discuss, which it seems that savings is a form of back up funds. .and there are three forms of back up funds that can all overlap in some kinds of ways.  Emergency funds, reserves and float.

Savings likely fit within either emergency funds or reserves.  Emergency funds are the last line of defense that a person has before having to tap into his bitcoin, so if he has spent all his other funds, and he is tapping into his emergency funds, he is in a position that is not good, especially if the emergency funds are depleting and the next thing would be tapping into his bitcoin once the emergency funds are depleted.  I personally think that a person who is in bitcoin accumulation stage would likely have to stop accumulating bitcoin once he gets down to the point of only having emergency funds, yet at the same time, guys can figure out how they treat these different categories and we could be having a semantics debate that only is arguing about the meaning of the words rather than the practical application in terms of how a guy is going to be using these various kinds of funds.

If you tell me that your savings is serving some kind of a purpose, then what is that purpose? so then it might tell us what category of back up funds it fits into.

If your savings is earning yield and you are holding it for the long term, then it might be considered as a form of investment rather than as a form of back up funds. 

From my own perspective float is not something that we necessarily save up over time, yet each month if we are accounting for our expenses from our income, so that after we account for all of our expenses, then whatever amount is left over would be discretionary income; however, if we are unclear about how much our expenses are going to be, then we might hold some extra funds in float until we determine how much the expenses are going to be.  Once the expenses accounting is figured out, then whatever extra amount that we had been holding in float would end up becoming discretionary income.

Yeah I get your point JayJuanGee, and I agree we might just be talking about how we are each choosing to describe things. . But the angle I was coming from when I said savings should be separated from emergency funds is based more on the purpose and intention behind them.

You mentioned emergency funds, reserves, and float, and I think that is a solid one. But in my view, savings as I was referring to it is not just a backup or reserve, it is more like a targeted preparation for specific thing or goals outside of Bitcoin..  For example, someone might be saving to scale their business, buy a piece of property, or even make a major life move. That money has a clear intention behind it, and it is usually not money you want to dip into just because something unexpected happens. That is what the emergency fund is there for.

Maybe some folks here already have a strong financial structure or consistent income that allows them to invest freely and not worry too much about these breakdowns. But for others still trying to establish themselves or build towards stability, I think it is important to treat these intentionally. Like, someone can be DCAing into Bitcoin, have an emergency fund, and still be setting aside savings specifically for launching a business or going back to school or something else important. I think separating them mentally helps a person stay organized and avoid being forced to make poor decisions under pressure.

So yeah, I am not saying savings can not overlap with reserves or investment depending on how they are used, but I still think there is value in viewing them differently from emergency funds, especially when they’re tied to a clearly defined goal or timeframe.

Hope this makes better sense…

[JayJuanGee]

[edited out]

Yeah I get your point JayJuanGee, and I agree we might just be talking about how we are each choosing to describe things. . But the angle I was coming from when I said savings should be separated from emergency funds is based more on the purpose and intention behind them.

You mentioned emergency funds, reserves, and float, and I think that is a solid one. But in my view, savings as I was referring to it is not just a backup or reserve, it is more like a targeted preparation for specific thing or goals outside of Bitcoin.. 

You are describing your view of what savings is as the same as reserves, or at least one of the possible functions of reserves. Reserves can be used as emergency funds or they can be used for any consumption good or for a future investment or even to have available to buy the dip.  You can hold them how you like and change their purpose.

Emergency funds, on the other hand, are the last resource before running out of funds and the only thing after running out of Emergency funds is to tap into your bitcoin.  Sure emergency funds can be used for anything too, yet it seems to me that if someone is down to ONLY having emergency funds, he should start to realize that he is getting into a pretty vulnerable place in which his bitcoin could end up getting tapped into.

For example, someone might be saving to scale their business, buy a piece of property, or even make a major life move. That money has a clear intention behind it, and it is usually not money you want to dip into just because something unexpected happens. That is what the emergency fund is there for.

Fair enough..  there could be times in which you might choose to tap into your emergency funds because you have funds that are being saved for a specific purpose that might even have a deadline or something that will get you into a worse situation if you don't use the saved funds for their designated purpose at or around the designated time.  There surely are going to be cases in which we might move our priorities around, and surely there are some folks who don't even need emergency funds because they know that mommy or daddy will bail them out. .so mommy/daddy is their emergency funds... yet the mere fact that they have an alternative source of emergency funds does not get them out of the situation or even the fact that they might purposefully choose to hold less amounts of cash or emergency funds because they know that they have a resource serving as their emergency funds.. could even be their boss or their best friend or their uncle Marvin.

Maybe some folks here already have a strong financial structure or consistent income that allows them to invest freely and not worry too much about these breakdowns.

These breakdowns are way more important when we are living them and/or practicing them. There are some guys who contribute to some of these threads who seem to be talking in theory and not actually practicing what they are writing about.  So surely when guys have experiences, they can really start to engage with the theories and even tweak their practices from time to time based on their discussions in threads like this one.  Another thing they can use some of the categories differently, but then maybe they come to realize that what they had been doing does not really fit within the category that they thought that it did.

Some times we might put our system in practice, and then we might realize that every month or maybe every couple of months, we are getting stressed out because some portion of our reserve funds is falling down to below $1k, and we had noticed that as long as it stays above $1,500, we don't really feel stress, but if it starts to go below $1,500 we get a bit nervous, but if it goes below $1k then we start to get really nervous. .. so then after we experience this for several months in a row, we decide that we are going to have to up our numbers by somewhere between $300 and $500 in order to start to feel more comfortable.  At first we decide to put it at $300 more for the next month or two and then if that resolves the issue, then we can leave it at that position for the future, but if we are still feeling more stress than we want to feel, then we are already prepared to increase it by $200 more to put it at $500 more from the original amount.  So in some sense, we have a combination of finances and emotions that are helping us to figure out our comfort level and balance.

But for others still trying to establish themselves or build towards stability, I think it is important to treat these intentionally. Like, someone can be DCAing into Bitcoin, have an emergency fund, and still be setting aside savings specifically for launching a business or going back to school or something else important. I think separating them mentally helps a person stay organized and avoid being forced to make poor decisions under pressure.

I think that you are correct in terms of describing the situation like that, and if a person has a goal to build his emergency funds up to 3 months, he might also have side projects that are going on that he needs to fund, like you said.  It might not matter so much what we call these various funds, yet he might also end up getting himself into trouble if after a year or more of buying bitcoin, he has build his bitcoin investment up to 3-4 months of his expenses, and his emergency fund is still only 1 month, but he has various savings that he ends up spending for their designated purposes, so then that savings cannot serve as an emergency fund either.. Let's face it if push comes to shove, and you spend all of your emergency funds, then your savings might be the ONLY thing that is left and stopping you from spending your bitcoin, so it is up to you to figure out your priorities and to decide are you spending your bitcoin or are you spending from the savings that was meant to buy the birthday bicycle gift for your daughter.  you have to figure it out, and part of the problem or dilemma you got yourself into is to run out of funds in the other categories. You can decide which ever way that you like, yet part of the reason that we discuss some of these matters is so that guys can hopefully figure out ways to better establish systems and practices to help themselves and to lessen the chances that they are going to put themselves in a dilemma that they would not want to be in.. yet when they get to that spot, they are the ONLY one who can decide from which funds are they going to spend first.. .

So yeah, I am not saying savings can not overlap with reserves or investment depending on how they are used, but I still think there is value in viewing them differently from emergency funds, especially when they’re tied to a clearly defined goal or timeframe.

Hope this makes better sense…

What you are saying makes more sense, and none of those ideas are strange, even though surely there could be some situations in which you might have some specific item that you are saving for and you will end up getting that item rather than maintaining your emergency funds and sometimes even part of your bitcoin might end up coming into jeopardy... yet in the end, each of us still has to figure out how much various back up funds we have on hand and what purposes and priorities they might have, and surely if we do not have enough and nothing is left, then we may well end up spending some or all of our bitcoin at a time that is not completely of our own choosing, which was supposed to be what we were trying to avoid by making sure that we have enough back up funds in their various categories to cover our various current needs and to prepare for various changes that might unexpectedly come to our income and/or our expenses..   

[Pi-network314159]

Bitcoin is a savings that is kept for the future. If a person creates Bitcoin as an emergency fund, then he is making a big mistake. Because investments are made for a long term period such as 5 to 10 years. And we create an emergency fund to protect our portfolio. But there are some people who use Bitcoin as an emergency fund. If you are a person who does this, then he can find himself in many bad situations.

It is totally wrong to sell Bitcoin to settle emergency issues. It is often difficult to find guys in such situations except they invest aggressively without investing with what they can afford to lose. Or they don't divide their income according to it orderly manner, making provision of emergency fund, reserved and more. In a situation where a person focus on Bitcoin investment and family expenses, without taking other backup fund necessary, it will definitely be impossible to have a good cash flow managemet, and this is the reasion guys sell Bitcoin for emergency situation. Or they don't make enough provision of emergency fund and the lack of doing that will result to fucking up thereby leading to selling Bitcoin. I will advice people to avoid such situations.

*If he sells at a loss, then he will be behind in terms of money and then that person will have to take a loan.

Taking loan to buy Bitcoin after selling it will even worsen the case. Except the person in question has learnt a good cash flow managemet, no matter the loan taken to buy Bitcoin, it may still result to selling it again and again. So learning a good management should be more important to such person than taken loan.

*He may blame Bitcoin, such as Bitcoin is fake etc.

Of course it's only an ignorant fool in this century will think so.

[icebar]

Bitcoin is a savings that is kept for the future. If a person creates Bitcoin as an emergency fund, then he is making a big mistake. Because investments are made for a long term period such as 5 to 10 years. And we create an emergency fund to protect our portfolio. But there are some people who use Bitcoin as an emergency fund. If you are a person who does this, then he can find himself in many bad situations.

It is totally wrong to sell Bitcoin to settle emergency issues. It is often difficult to find guys in such situations except they invest aggressively without investing with what they can afford to lose. Or they don't divide their income according to it orderly manner, making provision of emergency fund, reserved and more. In a situation where a person focus on Bitcoin investment and family expenses, without taking other backup fund necessary, it will definitely be impossible to have a good cash flow managemet, and this is the reasion guys sell Bitcoin for emergency situation. Or they don't make enough provision of emergency fund and the lack of doing that will result to fucking up thereby leading to selling Bitcoin. I will advice people to avoid such situations.

Generally, people invest long term to secure their future. But if that money is used to run their family or for their own needs, then the plan made for the asset is completely in vain. There are some investors who invest in Bitcoin but do not have any plan to run their own family or manage an emergency fund. In their case, it is seen that even if they plan to invest in Bitcoin for a long time, it is not sustainable. They have to depend on that investment to meet any expenses of themselves or their family. That is why after investing in Bitcoin, an investor needs to form an emergency fund to last for a few months along with the investment so that his investment is not hindered in any way. If an investor sets aside a few months' worth of emergency funds and then makes aggressive investments with their discretionary income, that is definitely a good investment.

[Cipherpz]

If the investment has to be broken down to meet daily expenses or family needs, then that investment fails. Then it acts as a temporary savings — which is more risky. Emergency fund is really very important for every individual or organization. It is a financial asset that helps the investment survive. When an unexpected expense comes to us, if there is no emergency fund, people are forced to sell their investments. Unfortunately, almost all such sales are at a low price — which is destructive for long-term plans. We should create an emergency fund equal to at least 3 to 6 months of expenses. Investment is successful only when it is well-organized and planned.

Then enter into investment in Bitcoin or any other asset with the remaining money. Which has proven to be a real value and fruitful strategy in the long term in the case of Bitcoin.

Bitcoin investment is not only a matter of courage, but also a matter of discipline, planning, patience and financial responsibility.

[Tungbulu]

But for others still trying to establish themselves or build towards stability, I think it is important to treat these intentionally. Like, someone can be DCAing into Bitcoin, have an emergency fund, and still be setting aside savings specifically for launching a business or going back to school or something else important. I think separating them mentally helps a person stay organized and avoid being forced to make poor decisions under pressure.

I think that you are correct in terms of describing the situation like that, and if a person has a goal to build his emergency funds up to 3 months, he might also have side projects that are going on that he needs to fund, like you said.  It might not matter so much what we call these various funds, yet he might also end up getting himself into trouble if after a year or more of buying bitcoin, he has build his bitcoin investment up to 3-4 months of his expenses, and his emergency fund is still only 1 month, but he has various savings that he ends up spending for their designated purposes, so then that savings cannot serve as an emergency fund either.. Let's face it if push comes to shove, and you spend all of your emergency funds, then your savings might be the ONLY thing that is left and stopping you from spending your bitcoin, so it is up to you to figure out your priorities and to decide are you spending your bitcoin or are you spending from the savings that was meant to buy the birthday bicycle gift for your daughter.  you have to figure it out, and part of the problem or dilemma you got yourself into is to run out of funds in the other categories. You can decide which ever way that you like, yet part of the reason that we discuss some of these matters is so that guys can hopefully figure out ways to better establish systems and practices to help themselves and to lessen the chances that they are going to put themselves in a dilemma that they would not want to be in.. yet when they get to that spot, they are the ONLY one who can decide from which funds are they going to spend first.. .

You make a great point, a lot of investors feel it's just about labelling funds, forgetting that it's also more about prioritizing and managing them effectively. If a guy is able to build up quite a sizable portfolio but hasn't funded their emergency fund adequately, they might definitely find themselves in a very touch spot whenever an actual emergency arises. Having a completely separate savings for specific purposes like a birthday gift can potentially complicate things further if those funds can not be easily repurposed for emergencies.

When something comes up, like an emergency or just something that requires financial attention, it's completely left for the individual in question to decide which fund he'll tap in first to attend to that issue. And this decision depends on the individual's priorities and unique circumstances. It's really crucial to have the discussions around these matters because it really helps folks to think through and examine their financial strategies in order to help them establish better systems that potentially minimizes the risks landing themselves into a complicated and difficult situation.
Another important thing that is worth considering is the fact that having a clear hierarchy of funds can really help. For example, avoid using the emergency fund on things that are not actually emergencies and also trying as much as possible to preserve other savings or backup funds for their actual and intended purposes. It's also very crucial for every investor to regularly review, evaluate and make necessary adjustments to their financial plans in order to make sure that their plans aligns perfectly well with changing needs and priorities.

[JayJuanGee]

[edited out

It's also very crucial for every investor to regularly review, evaluate and make necessary adjustments to their financial plans in order to make sure that their plans aligns perfectly well with changing needs and priorities.

I agree with everything that you said Tungbulu, yet I get a bit worried about ideas that any of us might be aiming for perfection in either our bitcoin investing practices or our cashflow management system and practices.

There are always going to be some amount of flexibility and also some amount of personal tailoring that might not always be easy to decide about options that might be available or dilemmas that might present themselves from time to time.

We likely can try to get our bitcoin investment going directionally in a good place, and we are trying to figure out how much to invest into bitcoin and how much to keep in our back up funds and whether we should buy every week even when our cashflows might be irregular, and even when the BTC price is changing a lot we might wonder if we might want to try to time our weekly buys or if we might just buy on a certain day of the week no matter what. These are not easy decisions, since sometimes we might have a bit of an inclination in one direction or another, but then other times we have difficulties figuring out how to move forward, and we may well not want to get preoccupied about being perfect but just having some measured, meaningful and ongoing actions that allow us to stack bitcoin persistently, consistently ongoingly and perhaps even aggressively, every week... and to keep doing it for likely a whole cycle or more, unless we might be able to front load our investment, but we may well be stacking pretty aggressively for a couple of cycles before we might start to let off and change or bitcoin accumulation style.

[PremiumcryptoHub]

If the investment has to be broken down to meet daily expenses or family needs, then that investment fails. Then it acts as a temporary savings — which is more risky. Emergency fund is really very important for every individual or organization. It is a financial asset that helps the investment survive. When an unexpected expense comes to us, if there is no emergency fund, people are forced to sell their investments. Unfortunately, almost all such sales are at a low price — which is destructive for long-term plans. We should create an emergency fund equal to at least 3 to 6 months of expenses. Investment is successful only when it is well-organized and planned.

If you have to break up investments to meet daily expenses or family needs, that is completely wrong. There are many who struggle to meet their family's expenses while investing, I would like to tell them to protect their family first and then save for the future by accumulating what you are investing. Even then, it is an example of a very good person to monitor whether they have implemented a proper plan for managing their financial flow and emergency fund before investing, Savings even need to be automated so that manually saving our money doesn't become a nuisance. Bitcoin investment may not be a game because we need to master all the ways to increase it gradually after starting it and at the same time maintain the specificity of the investment.

[Derekfunds]

If the investment has to be broken down to meet daily expenses or family needs, then that investment fails. Then it acts as a temporary savings — which is more risky. Emergency fund is really very important for every individual or organization. It is a financial asset that helps the investment survive. When an unexpected expense comes to us, if there is no emergency fund, people are forced to sell their investments. Unfortunately, almost all such sales are at a low price — which is destructive for long-term plans. We should create an emergency fund equal to at least 3 to 6 months of expenses. Investment is successful only when it is well-organized and planned.

If you have to break up investments to meet daily expenses or family needs, that is completely wrong. There are many who struggle to meet their family's expenses while investing, I would like to tell them to protect their family first and then save for the future by accumulating what you are investing. Even then, it is an example of a very good person to monitor whether they have implemented a proper plan for managing their financial flow and emergency fund before investing, Savings even need to be automated so that manually saving our money doesn't become a nuisance. Bitcoin investment may not be a game because we need to master all the ways to increase it gradually after starting it and at the same time maintain the specificity of the investment.

I totally agree with you, some people has forgotten what to prioritize first because some of them want to compete with someone that is already doing well and taking care of there family and other needs. Family and needs can not be compared with investment no matter anything, but it make more sense investing and taking care of family and needs but I disagree on this part you said one have to master all the ways of Bitcoin investment to increase gradually. One doesn't have to master all the ways of Bitcoin investment before they can increase, you just need the basic knowledge and then use it properly.

[Tungbulu]

[edited out

✂️✂️✂️✂️

I agree with everything that you said Tungbulu, yet I get a bit worried about ideas that any of us might be aiming for perfection in either our bitcoin investing practices or our cashflow management system and practices.

There are always going to be some amount of flexibility and also some amount of personal tailoring that might not always be easy to decide about options that might be available or dilemmas that might present themselves from time to time.

We likely can try to get our bitcoin investment going directionally in a good place, and we are trying to figure out how much to invest into bitcoin and how much to keep in our back up funds and whether we should buy every week even when our cashflows might be irregular, and even when the BTC price is changing a lot we might wonder if we might want to try to time our weekly buys or if we might just buy on a certain day of the week no matter what. These are not easy decisions, since sometimes we might have a bit of an inclination in one direction or another, but then other times we have difficulties figuring out how to move forward, and we may well not want to get preoccupied about being perfect but just having some measured, meaningful and ongoing actions that allow us to stack bitcoin persistently, consistently ongoingly and perhaps even aggressively, every week... and to keep doing it for likely a whole cycle or more, unless we might be able to front load our investment, but we may well be stacking pretty aggressively for a couple of cycles before we might start to let off and change or bitcoin accumulation style.

Yeah, it can indeed be very overwhelming for folks to aim for perfection in both their Bitcoin accumulation process and their cashflow management practices, plus it might not always be realistic, and I'm not suggesting that they need to target perfection, whenever I say "suits/aligns perfectly well with their..." I am simply suggesting that every individual should choose a plan that aligns with their unique situation and their approach should be unique rather than attempting to copy that of others.
There's always need for folks to be flexible and for personalisation, and also very okay to adapt to changing circumstances. Rather than attempting to be perfect in one's approach, it'll be progressive and beneficial to get directionally right and also maintain a consistent approach in their well tailored approach.

I admire how you considered it to be having "measured, meaningful and ongoing actions" that helps folks attain a persistent Bitcoin accumulation. That's in fact a very unique and effective way to approach it, especially when folks have to deal with a market as volatile as the Bitcoin market and also an irregular cashflow. It's always about finding a balance or a rhythm that aligns with your unique financial situation and actually works for you and then sticking by it, and it doesn't have to be perfect. The best part of it is that, even if you think it's not good enough, as long as it works for you, you'll always have the chance to tailor it more as you proceed and make it as effective as you want it to be through acquired experience and confidence.

Front loading investments might not really be feasible for everybody, but what could be seen as a more solid and viable option is aggressively stacking up some sats over a couple of cycles. Investors' goals and financial situations can evolve with the passage of time and it's only natural for investors to also be flexible with their approach, being able to regularly evaluate and adjust their approach overtime  whenever they notice a change in their goals and financial situations. Folks should try as much as possible to keep moving forward and making visible progress, rather than allowing themselves to be bogged down in trying to optimize every single details and steps.

[yixichloro2xx]

[edited out

✂️✂️✂️✂️

I agree with everything that you said Tungbulu, yet I get a bit worried about ideas that any of us might be aiming for perfection in either our bitcoin investing practices or our cashflow management system and practices.

There are always going to be some amount of flexibility and also some amount of personal tailoring that might not always be easy to decide about options that might be available or dilemmas that might present themselves from time to time.

We likely can try to get our bitcoin investment going directionally in a good place, and we are trying to figure out how much to invest into bitcoin and how much to keep in our back up funds and whether we should buy every week even when our cashflows might be irregular, and even when the BTC price is changing a lot we might wonder if we might want to try to time our weekly buys or if we might just buy on a certain day of the week no matter what. These are not easy decisions, since sometimes we might have a bit of an inclination in one direction or another, but then other times we have difficulties figuring out how to move forward, and we may well not want to get preoccupied about being perfect but just having some measured, meaningful and ongoing actions that allow us to stack bitcoin persistently, consistently ongoingly and perhaps even aggressively, every week... and to keep doing it for likely a whole cycle or more, unless we might be able to front load our investment, but we may well be stacking pretty aggressively for a couple of cycles before we might start to let off and change or bitcoin accumulation style.

Yeah, it can indeed be very overwhelming for folks to aim for perfection in both their Bitcoin accumulation process and their cashflow management practices, plus it might not always be realistic, and I'm not suggesting that they need to target perfection, whenever I say "suits/aligns perfectly well with their..." I am simply suggesting that every individual should choose a plan that aligns with their unique situation and their approach should be unique rather than attempting to copy that of others.
There's always need for folks to be flexible and for personalisation, and also very okay to adapt to changing circumstances. Rather than attempting to be perfect in one's approach, it'll be progressive and beneficial to get directionally right and also maintain a consistent approach in their well tailored approach.

I admire how you considered it to be having "measured, meaningful and ongoing actions" that helps folks attain a persistent Bitcoin accumulation. That's in fact a very unique and effective way to approach it, especially when folks have to deal with a market as volatile as the Bitcoin market and also an irregular cashflow. It's always about finding a balance or a rhythm that aligns with your unique financial situation and actually works for you and then sticking by it, and it doesn't have to be perfect. The best part of it is that, even if you think it's not good enough, as long as it works for you, you'll always have the chance to tailor it more as you proceed and make it as effective as you want it to be through acquired experience and confidence.

Front loading investments might not really be feasible for everybody, but what could be seen as a more solid and viable option is aggressively stacking up some sats over a couple of cycles. Investors' goals and financial situations can evolve with the passage of time and it's only natural for investors to also be flexible with their approach, being able to regularly evaluate and adjust their approach overtime  whenever they notice a change in their goals and financial situations. Folks should try as much as possible to keep moving forward and making visible progress, rather than allowing themselves to be bogged down in trying to optimize every single details and steps.

That was an excellent and thoughtful follow up. You did well to clarify that when you mention things aligning perfectly,  it is  not about seeking some rigid or idealized standard, but rather about choosing strategies that fit each individuals  personal context and goals, which is the heart of sustainable financial planning. I think that clarification is important, especially because too often people feel pressured to mimic the most popular approach, forgetting that what works for one person may not be suitable for another.

You also made a strong point by highlighting that progress doesn’t require perfection. In fact, it is  usually the willingness to adapt, review, and move forward, despite not having a flawless plan that ultimately brings results. Your emphasis on personalization, flexibility, and consistency over perfection really mirrors the long term mindset required for successful Bitcoin accumulation. It is  far more valuable to build a system that’s resilient and tailored than to chase some mythical  optimal strategy.

And you’re right about front loading which it’s often praised, but realistically, not everyone has the means to do so. For many, the strength lies in consistent effort over time, which is just as valid if not more so when paired with patience and strong conviction. Many people forget that steady progress often beats perfect execution. What truly counts is showing up, sticking to your plan, and making smart changes when needed. Over time, this mindset not only builds confidence but also sets a strong foundation for lasting success, regardless of how or where you begin.

[Gost ms]

If the investment has to be broken down to meet daily expenses or family needs, then that investment fails. Then it acts as a temporary savings — which is more risky. Emergency fund is really very important for every individual or organization. It is a financial asset that helps the investment survive. When an unexpected expense comes to us, if there is no emergency fund, people are forced to sell their investments. Unfortunately, almost all such sales are at a low price — which is destructive for long-term plans. We should create an emergency fund equal to at least 3 to 6 months of expenses. Investment is successful only when it is well-organized and planned.

If you have to break up investments to meet daily expenses or family needs, that is completely wrong. There are many who struggle to meet their family's expenses while investing, I would like to tell them to protect their family first and then save for the future by accumulating what you are investing. Even then, it is an example of a very good person to monitor whether they have implemented a proper plan for managing their financial flow and emergency fund before investing, Savings even need to be automated so that manually saving our money doesn't become a nuisance. Bitcoin investment may not be a game because we need to master all the ways to increase it gradually after starting it and at the same time maintain the specificity of the investment.

I totally agree with you, some people has forgotten what to prioritize first because some of them want to compete with someone that is already doing well and taking care of there family and other needs. Family and needs can not be compared with investment no matter anything, but it make more sense investing and taking care of family and needs but I disagree on this part you said one have to master all the ways of Bitcoin investment to increase gradually. One doesn't have to master all the ways of Bitcoin investment before they can increase, you just need the basic knowledge and then use it properly.

Along with investment, a person should have proper financial management. There are many investors who cannot continue investing due to financial crisis after a few days of starting the investment. Having proper financial management is very important to keep all these aspects in order.

An investor needs to reduce all the extra expenses. Because if you can reduce these extra expenses, then you will have that amount of money and if you want, you can invest with that amount of money. While investing, it is never right to compare with anyone, always focus on what you have and continue investing with the amount of money you can invest. If your friend invests more money than you, if you see your friend and invest more money, it will never be the right decision. You should invest depending on your financial situation.