Well the possibility to get the building of the fast fund and accumulate Bitcoin is the same way for you to have source income and stay patient to pay. Something I like to get is the best way to avoid using the emergency money to buy Bitcoin in the work market dip. People who are willingly tempted to do that main purpose to emergency money is to complete the process expenses up the investment for increased.
The purpose of an emergency fund is to solve a problem in an emergency without having to withdraw your Bitcoin holdings. That emergency could be when you are unemployed or need money for a medical condition, and you may not be able to earn money at that time. If you have an emergency fund that is enough to cover your family's daily needs for 6 months in an emergency, but you may not need that much money. In such a situation keep an emergency fund available for 3 months and use the remaining funds to buy Bitcoin aggressively in the bearish period.
You may not always need an emergency fund, but you should always be prepared. I am not advocating buying Bitcoin with an emergency fund but as I have already said, if you have an excess amount, you should ensure that you use that fund properly.
You seem to be mixing up having emergency funds with having excess cash.
If a person reviews their finances and decide that 3 months worth of emergency funds is gonna be enough for their situation, then anything above that isn’t really part of their emergency funds anymore. It is just extra cash that they can choose to use in investing.
You are correct BluebloodCXVI. There are instances in which guys might be using the term emergency funds to refer to their reserve funds or their back up cash - and so we know that with reserve funds there are more flexibilities in regards to how to use them.
Another thing is that if a person is in their earliest stages of building up their back up funds, they may well be keeping some flexibility in regards to how much of their back up funds they consider to be emergency funds (funds that they cannot touch absent an absolute emergency) versus reserve funds (funds that have some level of self-determined flexibility in how they can be used).
We could imagine all kinds of variation in the ways that back up funds are built up, and even purposeful or unintentional taping into them during periods that they are still small and being built. .and maybe some of the bitcoin newbies are fairly new to investing and also fairly new to building up their cashflow management practices, so they might even get nervous (or begin to have false senses of being rich) merely based on their having had saved up 2 weeks of their expenses, when they had not previously been in the practice of saving up any money or building any cashflow cushion within the ways that they were managing their monthly income and/or expenses.
So there can be some learning curve and even getting used to how disciplined a person has to be when they are building wealth and so that they are not unable to resist their abilities to spend money merely because they have access to it.
But if they have 6 months worth of emergency funds and they now choose to reduce it to 3 months worth simply because bitcoin is bearish, then that’s a different case. It means that they are basically assuming that 3 months worth of emergency funds will be enough for them but the reality is that they can’t really know that for sure because a person could be out of work longer than expected, face multiple emergencies at the same time, or deal with medical issues that may last much longer than they planned for.
None of us can exactly know the level of back up funds that we need to have on hand for various kinds of cashflow scenarios that could come up in the future and the extent to which some of the possible scenarios are knowable or not, yet many times, guys will try to put reasonable levels of back up funds into place without going too far overboard in one direction or another, even based on their history of income/expenses and perhaps how long and how good they have been in managing their income/expenses.
Surely the longer and stronger the track record, and even the more that a person might have had built various kinds of wealth, whether bitcoin and/or back up funds and even alternative investments, there could be greater levels of confidence in regards to finances that might be available in cases that the income might go down and/or the expenses might go up.
The whole point of having emergency funds is to be prepared for the unknown. Not only will it help a person to cover unexpected expenses but it will also help in preventing them from selling their bitcoin prematurely. So once a person starts to dip their hands into their emergency funds just because the market presented a good buying opportunity, then it stops serving the purpose for which it was created for.
Sure. There are levels of unknown, yet at the same time, we are largely talking about back up funds, cashflow management in the context of also building a bitcoin stack size... so we surely cannot proclaim that everything is unknown, since we likely end up spending years building up our bitcoin and our cashflow management systems, so we likely would become more and more confident about our various cash cushions with the passage of time, as long as we do not end up having to spend a lot of time dipping into them based on earlier shortage of income and/or increases in our expenses.
Certainly there will always be another chance for a person to choose to accumulate bitcoin but they definitely don’t get to be able to choose when an emergency will pop up that is why it is better to always keep emergency funds intact and only invest with money that is truly surplus to their needs.
For sure, everyone is taking chances, and whether we call the amounts emergency funds, or reserves or back up funds, those funds will only protect up to the level of cashflow shortage that they have been built up to protect, which truly is another reason why there are a lot of benefits to be able to make it through several years (and perhaps even several cycles) of building up these various back up systems, and surely many of us likely realize that if we have some kind of a very large emergency situation, then after we deplete all of our various cash reserves and even perhaps liquidate some of our assets, then we might ONLY have our bitcoin remaining to serve as the remainder of our emergency funds, and of course, if we had enough time to both built up our bitcoin holdings and even if we might have had the fortune of our bitcoin appreciating in value, then there may well be a lot of benefits in having had built up our bitcoin funds, and those guys who had been able to build up their bitcoin holdings to be several years of their expenses and/or even perhaps having had gotten that through bitcoin price appreciation, there can also be advantages in that, even though perhaps our emergency situation might end up causing us to deplete large amounts (and perhaps even all) of our bitcoin holdings.
