Balancing Financial security and Bitcoin Accumulation

[JayJuanGee]

[edited out]

You have given a good example, if a person could have been regular in accumulation Bitcoin from 2020, then his weeks would have counted 342 till today, the total capital of that investor would have been $34,200, surprisingly his first buying price was in January 2020 was about $7.2k. During this period, there have been many price drops and declines, which have resulted in a long term investor burning through high pressure and heat and finally turning it into pure gold, and currently the average purchase price of his portfolio stands at 37.5k.

Even if gold had some periods of outperforming bitcoin, I doubt that gold is a good place to put time, energy and/or value, even though if you cannot resist investing into such an inferior product, such as gold, then maybe you could at least limit your investment into that crap to less than 10% the size of your bitcoin holdings..

I share the same view as you in this matter. The fact that an asset may/can outperform the other within the short term doesn’t necessarily mean in anyway that that asset is superior to the other one in the long run. I will not deny the fact that gold has done incredibly well as a store of value over the centuries, but if you observe very well, you’ll notice that the growth potential of gold is actually very limited, compared to Bitcoin, and this is simply because it’s a mature asset with a much larger market cap.

While Bitcoin on the other hand, is literally still on its early stages of global adoption, and this alone gives Bitcoin way more room for appreciation the more adoption continues to expand.

That being said, whether or not one should consider diversification is 100% completely dependent on the individual’s choice, but what I always say is that, if an individual strongly trusts Bitcoin’s long term potential, then it’s only logical that bitcoin remains their core investment, even if they are eventually decide to consider gold, they should keep their exposure to gold relatively small, the 10% you suggested isn’t a bad figure.

I said less than 10%, and of course, in the end each one of us chooses, what we want to do, and surely there could be some guys who come to bitcoin and they already have been investing in gold for a long time, so they are going to have a bit of an attachment (and perhaps even local knowledge of gold) so surely with any investment (or allocation or choices of allocation) there can be some bias when guys come to bitcoin and they already have been investing in some other assets, so then the extent to which they might diversify out of those assets would be personal choices, and it might even take them some time to diversify out of other assets into bitcoin, even if they end up deciding to allocate some portion of their overall investment portfolio to bitcoin, whether that it 5-25% or some other allocation that they consider to be appropriate in accordance with their own already existing stake in those other assets and perhaps their potentially having some specialized knowledge in assets that they already own.

In the last section of my "Opening Post 3" of my investment ideas thread, I gave some ball-parked ideas to show how my allocation to bitcoin as compared with other assets in my total quasi-liquid investment portfolio had changed between late 2013 (when I first got into bitcoin) and mid-2022 (the date that I had made that section of that post). 

I think that one of the interesting things that I was trying to point out is that my allocation to bitcoin had largely come from the price appreciation of the portion of my bitcoin and even my attempt to claim that I probably ONLY put around 13.5% into bitcoin by the end 2015, even though the valuation of my bitcoin, as compared with other assets went way up due to bitcoin's appreciation rather than my putting more value into bitcoin.

My advise to investors is, to stick to wherever they believe and trust that value will created overtime and over the coming decades, rather than allowing themselves to be distracted by which asset performs better over a few months or even years and which one doesn’t, because this keeps you focused on the goal, regardless of whatever temporary or short term market conditions and positions.

It seems to be especially important for guys in their early stages of building their investment portfolio to stay focused on bitcoin and cash, and then once their bitcoin and cash are in strong positions, then they could possibly expand out to other investments.

For myself, when I came to bitcoin, I already had right around 20 years investing and building up my cash and/or investments, so that gave me more space to work with - and so sure there could be some guys who are coming to bitcoin with various other assets already in their holdings, and so then they have to figure out how to proceed forward, whether they merely start adding bitcoin to their holdings and/or whether they might reallocate out (or to change their position size) on some or all of their other already existing assets.

To me, it seems erroneous to diversify or to get distracted by diversification too early within the bitcoin investment journey since investing in bitcoin should involve both the stacking of bitcoin and also to the strengthening of cashflow management systems/practices to the extent that guys need to also strengthen their cashflow management systems/practices.

wait to earn extra money or create multiple sources of income.

It is not necessary that you must wait until you have a source of income to invest in bitcoin because I have seen investor who don't have a source of income that are still doing well in their bitcoin investment. As an investor having a source of income isn't mandatory as you can invest in bitcoin without having one. What's more important isn't having a source income but you having a discretionary income because even when you have a source income you  can't be able to invest if you can't figure out discretionary income from it.

Is true that you don’t necessarily need a source to invest in bitcoin . But still as an investor you should aim for more sources or a better sources to build your bitcoin investment over time , having sources will help in some many ways , though bitcoin investment is not a complex thing to do but still there are principles one should follow for the betterment of its investment. Because any slight mistake will definitely leave a mark in a long run ,  most time lead to one selling off too early , that’s why having more than one sources is golden it won’t By any chances lead you to fully rely on your investment in order to survive.

Your statement is quite strange @I_Anime, since it tends to take a hell of a long time before investors would be or should be thinking about relying upon their investment (or even part of their investment) to survive.

In other words, guys have to build up their bitcoin investment for years and years and years before it might get to such a level that they might rely on some of it or all of it in order to support their standard of living.

[Yablee0]

I fuck with idea of starting investing while still continuing to learn about bitcoin, it is definitely a sensible approach.

That's a very smart move to take as an enthusiast. Because trying to know everything before getting started can make you miss out a whole lot and also set you backwards in your investment journey since we can barely know all about Bitcoin investment in a short while.

My only advice is that, the amount you use to invest in bitcoin as a newbie should be a reflection of the level of understanding you have at that particular level you’re in with your investment.
And then as your investment and conviction continue to grow, you can then gradually increase your allocations.

I don't think that is the case. I'm not sure is necessary or compulsory that someone must invest small due to he's limited level of knowledge or whatever. The most important thing is once  you are able to figured out your discretionary funds from your earnings you are good to go, furthermore that alone can be enough at that very point maybe any other additional things can come up later in the investment journey. 

Don’t just go jumping in blindly simply because you happen to have some discretionary income available to you at the time.

Then if you are not investing in Bitcoin investment when you already have your discretionary funds on ground, then what will you be doing then? Please don't get newbies (new investor's) confused.

[Rockson1]

Don’t just go jumping in blindly simply because you happen to have some discretionary income available to you at the time.

Then if you are not investing in Bitcoin investment when you already have your discretionary funds on ground, then what will you be doing then? Please don't get newbies (new investor's) confused.

I think you need to ask him again, some people can be funny, there has never been a time that i heard that when you have your discreationary income, you should not invest and if one does not invest, maybe the person should learn more perhaps that is what he wants to say, it means the person will have to recreate Bitcoin again before he invest, some times when I come across this type of ideas from some folks it gets me pissed because it seem to me like a drama since this has been said and heard severally, every intending Bitcoin investor journey starts as soon as he has his discreationary income,  that is just the real thing.

[I_Anime]

Your statement is quite strange @I_Anime, since it tends to take a hell of a long time before investors would be or should be thinking about relying upon their investment (or even part of their investment) to survive.

In other words, guys have to build up their bitcoin investment for years and years and years before it might get to such a level that they might rely on some of it or all of it in order to support their standard of living.

It’s totally on me , what I actually meant was that one can start investing without a source , though it will be better to have a source regardless . So that they won’t find themselves in situations where they will have to start relying on their investment to survive , because such habit towards your investment will not only slow your investment down it can even mess it up .

Yeah there are level when one will start relying on their investment (which is usually after reaching their accumulation goal).  When they have gotten to the point of having enough bitcoin stash in their wallet which they have held for couple of years.

[samadam007]

It’s totally on me , what I actually meant was that one can start investing without a source , though it will be better to have a source regardless . So that they won’t find themselves in situations where they will have to start relying on their investment to survive , because such habit towards your investment will not only slow your investment down it can even mess it up .

Yeah there are level when one will start relying on their investment (which is usually after reaching their accumulation goal).  When they have gotten to the point of having enough bitcoin stash in their wallet which they have held for couple of years.

FYI, no one invests without a source of funds. It has to come from somewhere, even if it is a small amount from one’s salary, business profit, a gift or income

The issue is not even how many income a person has, or whether it’s regular or not. If they’re able to manage their finances well, follow a plan and invest using only with discretionary income, it will be easy to build good position over the years and reduce chances of being force to sell.

[I_Anime]

It’s totally on me , what I actually meant was that one can start investing without a source , though it will be better to have a source regardless . So that they won’t find themselves in situations where they will have to start relying on their investment to survive , because such habit towards your investment will not only slow your investment down it can even mess it up .

Yeah there are level when one will start relying on their investment (which is usually after reaching their accumulation goal).  When they have gotten to the point of having enough bitcoin stash in their wallet which they have held for couple of years.

FYI, no one invests without a source of funds. It has to come from somewhere, even if it is a small amount from one’s salary, business profit, a gift or income

The issue is not even how many income a person has, or whether it’s regular or not. If they’re able to manage their finances well, follow a plan and invest using only with discretionary income, it will be easy to build good position over the years and reduce chances of being force to sell.

At first what’s a source of income , this is Money you earn regularly or through work, business, investments, or other ongoing activities. this concept we are talking about a real source income , that generate money regularly . Sometimes gifts are not regular thing, is something you recieve occasionally so you won’t completely call that a source .

In a scenario where by a student who still live under his parents roof , endup being interested in bitcoin without having any source and fully depending on his parents . You won’t call that a source so that individual can choose to invest some of the money or allowance gotten from his parents into bitcoin , though you can’t compare such individual with someone with real solid sources that’s also investing in bitcoin .

[Umulala-alala]

It’s totally on me , what I actually meant was that one can start investing without a source , though it will be better to have a source regardless . So that they won’t find themselves in situations where they will have to start relying on their investment to survive , because such habit towards your investment will not only slow your investment down it can even mess it up .

Yeah there are level when one will start relying on their investment (which is usually after reaching their accumulation goal).  When they have gotten to the point of having enough bitcoin stash in their wallet which they have held for couple of years.

FYI, no one invests without a source of funds. It has to come from somewhere, even if it is a small amount from one’s salary, business profit, a gift or income

The issue is not even how many income a person has, or whether it’s regular or not. If they’re able to manage their finances well, follow a plan and invest using only with discretionary income, it will be easy to build good position over the years and reduce chances of being force to sell.

At first what’s a source of income , this is Money you earn regularly or through work, business, investments, or other ongoing activities. this concept we are talking about a real source income , that generate money regularly . Sometimes gifts are not regular thing, is something you recieve occasionally so you won’t completely call that a source .

In a scenario where by a student who still live under his parents roof , endup being interested in bitcoin without having any source and fully depending on his parents . You won’t call that a source so that individual can choose to invest some of the money or allowance gotten from his parents into bitcoin , though you can’t compare such individual with someone with real solid sources that’s also investing in bitcoin .

When you are struggling in buying bitcoin you will end up selling everything soon, to invest in bitcoin and stay consistent in the market you will need a good discretionary income and for you to have this discretionary income it will come through a source but still having a source of income doesn't guarantee you discretionary income because you may still have this source of income and it's not enough to even take care of your most need things, depending on your parents to live will difficult for you to start up a BTC investment.

[PhilosopherKing]

This is just why people should not do more than they can handle, if you are not generating enough discretionary income to buy $100 worth of bitcoin every week then buy at whatever level you can manage, you don't even have to buy every week if you can afford to do so, the point is about starting and making sure to be consistent in your accumulation, as long as the person is buying with their discretionary income when they can, with time their bitcoin holding will grow as well.

Having plenty amount of discretionary income should not even necessitate person to go all in with their discretionary income. There is a very big risk when person invest with all their discretionary income . Because apart fom. Investing, there are also other reason like why discretionary income is used when investing. When start your ongoing investment, person can use a start small in the way they are comfortable so that they can ongoingly invest, learn and also be consistent with it, without affecting the other part of the person life.

And along the way,.as person figure things out and grow up their understanding, they can then begin to increase their investments money up to a more higher amount .

[Yablee0]

to invest in bitcoin and stay consistent in the market you will need a good discretionary income and for you to have this discretionary income it will come through a source but still having a source of income doesn't guarantee you discretionary income because you may still have this source of income and it's not enough to even take care of your most need things, depending on your parents to live will difficult for you to start up a BTC investment.

I am still trying to understand what you meant by someone need a good discretionary funds or whatever, I'm not really getting you. However, what I will add is that the discretionary funds is the left over funds after all expenses is already been taken of and that is definitely what we are expected to proceed with our investment. it doesn't matter if it's good or not, what's important is once you able to figured it out from our earnings everything is cool.  Secondly, the other part of your write up that's bold. Probably i spent more than five minutes or more going through it yet I still can't comprehend what's the real message of that particular paragraph. Please don't see it too hard. But for safety sake, let's try and put more thoughts and concentration into our post especially now due to what is currently going on. Maybe I might be wrong but I just like pointing out things that isn't right when spotted to avoid further escalation.

[BluebloodCXVI]

Don’t just go jumping in blindly simply because you happen to have some discretionary income available to you at the time.

Then if you are not investing in Bitcoin investment when you already have your discretionary funds on ground, then what will you be doing then? Please don't get newbies (new investor's) confused.

I think you need to ask him again, some people can be funny, there has never been a time that i heard that when you have your discreationary income, you should not invest and if one does not invest, maybe the person should learn more perhaps that is what he wants to say, it means the person will have to recreate Bitcoin again before he invest, some times when I come across this type of ideas from some folks it gets me pissed because it seem to me like a drama since this has been said and heard severally, every intending Bitcoin investor journey starts as soon as he has his discreationary income,  that is just the real thing.

You @Rockson1 have clearly misunderstood my point in that post and maybe if you had cared to take your time and read the full post, you might have gotten a better grasp on the concept of the context i was trying to portray.
But you were so quick to jump on @Yablee0 bandwagon.

I never told anyone not to invest if they have discretionary income available to them; why would i say that ?
What i was basically saying was that as a newbie, having discretionary income available to you doesn’t mean you automatically start throwing it into investing in bitcoin without understanding what you’re doing.

Of course learning and investing can happen alongside each other, but still, the amount you choose to allocate into investing should match your current level of knowledge and conviction.

You don’t need to become Satoshi before you can start buying bitcoin, but you also shouldn’t just jump in blindly simply because you have spare cash.

You seem not to realize that it is not that easy for some people to reduce their expenses?

Some people are already living on a very tight budget and may not be able to cut out anything more from their budget.
In this kind of an instance, finding ways to try and earn more money is gonna have a more good impact on the investor than them trying to save a few extra dollars.

It is very true, this is  mostly for people who are living on low wages.  I have always been seeing people  advising low income earners on cutting their expenses in order to invest in bitcoin without even minding the minding the harsh economy they live in. A country that is bare surviving and Inflation is very high.

 Someone who earns average wage  in USA can still find possible ways to sort their expenses and have spare funds to invest in bitcoin. Reason is because they still receive some governmental aid or help. Unlike Nigerian whose average salary per month ($50-55) can't settle 50% of their expenses.

 Let's not even talk about a family man who earns that kind of low income, how will he sponsor his kids education, rents, food etc and he is still trying to save up to invest into bitcoin. Thats why many Nigerians owes alot of debt.  To me, it's impossible to have any spare cash left to invest if you are low income earner in Nigeria. I agree with you on finding extra source of income to generate more cash flow, because that is the only realistic way to invest.

That’s exactly what i’m talking about.
What’s gonna be there to cut down on when your budget is already running on fumes? You sure as hell can’t budget your way into money that is not even there to begin with.

At that point it’s just better to try and get an alternative source of income so you can earn more income.
If not, the only thing that might eventually be left for you to cut down on will be oxygen 😆

[ZeroVinsonN]

Don’t just go jumping in blindly simply because you happen to have some discretionary income available to you at the time.

Then if you are not investing in Bitcoin investment when you already have your discretionary funds on ground, then what will you be doing then? Please don't get newbies (new investor's) confused.

I think you need to ask him again, some people can be funny, there has never been a time that i heard that when you have your discreationary income, you should not invest and if one does not invest, maybe the person should learn more perhaps that is what he wants to say, it means the person will have to recreate Bitcoin again before he invest, some times when I come across this type of ideas from some folks it gets me pissed because it seem to me like a drama since this has been said and heard severally, every intending Bitcoin investor journey starts as soon as he has his discreationary income,  that is just the real thing.

It does make sense not to just jump in simply because you have the discretionary income as a newbie, even though it's out discretionary income a newbie needs to try to start out small, there is no need for them to rush in and start pouring all of their discretionary income into investing in bitcoin, even long term holder hardly go all in like that, that level of aggressiveness means that a newbie who doesn't already have their emergency fund in place won't be able to set it up, plus they are forfeiting all of their discretionary spendings if they use all of their discretionary income to buy bitcoin.
I will still push for the 3 way split, with one part of their discretionary income used to buy bitcoin, one part used to set up their emergency fund and the other part used for their discretionary spendings.