Balancing Financial security and Bitcoin Accumulation

[I_Anime]

I don't want to invest more than 10%-15% of my total discretionary income in volatile assets like Bitcoin.

Your are in charge of your investment so you can invest as you please provided you are using your discretionary income. If what you can afford to invest is 5% of your discretionary income,it is still a good start as it will still go a long way as long as you're  investing consistently over the long term. You can invest with any amount regardless of size,so the 5% is not a bad start if you can keep the consistency going. I believe you haven't built a strong confidence in bitcoin yet that's was why you are skeptical about investing up to 15% of your discretionary income but it's fine as we were once skeptical about bitcoin before we finally trusted it. So I believe as time goes on, as you are practically investing, your trust in bitcoin will increase,it's a gradual process.

As you are investing make sure you are also learning , understanding what are investing in will help build your confidence more . The reason many are still having doubt about Bitcoin is because they don't understand the technology behind it, the purpose it was invented the first place .

No, I’m not saying you should go into some complex tech aspect of bitcoin before investing. You can start with just the basics, then with time you will advance as you accumulate. Doing so you will be able to build a better confidence in bitcoin and it will make embarking folks (those interested in bitcoin) easier too .

[Sunshine1525]

As you are investing make sure you are also learning , understanding what are investing in will help build your confidence more . The reason many are still having doubt about Bitcoin is because they don't understand the technology behind it, the purpose it was invented the first place .

No, I’m not saying you should go into some complex tech aspect of bitcoin before investing. You can start with just the basics, then with time you will advance as you accumulate. Doing so you will be able to build a better confidence in bitcoin and it will make embarking folks (those interested in bitcoin) easier too .

Investing is a process, so far someone is doing it the right way, the person would definitely learn new things on the long run, even if there's a mistake along the line you’ll learn from it an take correction. For instance those who stored their coins with coldcard would learn to store in a safer wallet by moving it to a wallet backed with passphrase.

What people need to start investing is discretionary funds, with common sense they can figured out other things and gain knowledge simultaneously while on the investment.

[samadam007]

As you are investing make sure you are also learning , understanding what are investing in will help build your confidence more . The reason many are still having doubt about Bitcoin is because they don't understand the technology behind it, the purpose it was invented the first place .

No, I’m not saying you should go into some complex tech aspect of bitcoin before investing. You can start with just the basics, then with time you will advance as you accumulate. Doing so you will be able to build a better confidence in bitcoin and it will make embarking folks (those interested in bitcoin) easier too .

You seem to be giving unnecessary requirement needed to build confidence to invest. Beginners don’t need all of that. The thought of how bitcoin skyrocketed in the past and how long term investors benefitted more is enough to build your confidence. Of course, past result does not guarantee future performance, but it can help beginners to understand why other people believe in its long term value. At the same time, folks should not only focus on Bitcoin potential and ignore the risks. Understanding it is volatile in nature will help you make good investment decisions.

While investing, if a person feels he needs to go deeper into bitcoin and understand the technical aspect too, then that is his choice. If he feels there’s no need for all that, and his interest is just regular buying and holding, then that is also fine too. Don’t make it sound like it is compulsory to learn the deeper part of bitcoin to be able to build confidence to accumulate long term.

[Futurexxx]

How much % you invest in Bitcoin is completely your personal decision. As you mentioned, you will not be willing to invest more than 10% to 15% in a volatile asset like Bitcoin. Every investment has risks, if you mean investing in gold, then I would say that Bitcoin has become a much better asset than gold at present. The future of Bitcoin seems to be bright because, every person now wants their financial security and financial freedom. For this financial security and financial freedom, Bitcoin is the most reliable and safe asset.

The main reason why Bitcoin is more of a better asset to invest in right now than gold is that it's still far away from it peak price, it's more like a 17 year old that still has a lot of life ahead of him, unlike gold that is closer to it peak price, and has been around since from the beginning of mankind. So it's because of that Bitcoin is more of a better asset to invest in than gold.

. I believe that when you are able to deal with the volatility of Bitcoin day by day and are able to build complete faith in Bitcoin, then you will decide to invest between 40% and 50% of your total wealth in Bitcoin.

This should never be taken as a financial advice because it's a bad advice. If you invest 40-50% of your total  wealth as you are proclaiming, you are actually going all in on your investment, or you are investing with what you cannot afford to lose, which will compel you to always be in a state of panic anytime their is a dip in the market, so this is a terrible idea bro.

[cxtreenal]

I don't want to invest more than 10%-15% of my total discretionary income in volatile assets like Bitcoin.

Your are in charge of your investment so you can invest as you please provided you are using your discretionary income. If what you can afford to invest is 5% of your discretionary income,it is still a good start as it will still go a long way as long as you're  investing consistently over the long term. You can invest with any amount regardless of size,so the 5% is not a bad start if you can keep the consistency going. I believe you haven't built a strong confidence in bitcoin yet that's was why you are skeptical about investing up to 15% of your discretionary income but it's fine as we were once skeptical about bitcoin before we finally trusted it. So I believe as time goes on, as you are practically investing, your trust in bitcoin will increase,it's a gradual process.

As you are investing make sure you are also learning , understanding what are investing in will help build your confidence more . The reason many are still having doubt about Bitcoin is because they don't understand the technology behind it, the purpose it was invented the first place .

No, I’m not saying you should go into some complex tech aspect of bitcoin before investing. You can start with just the basics, then with time you will advance as you accumulate. Doing so you will be able to build a better confidence in bitcoin and it will make embarking folks (those interested in bitcoin) easier too .

This is how long term investors in Bitcoin develop. I didn't know much about Bitcoin at the beginning, I had a source of knowledge, but it would take a lot of time to learn the technical aspects. I started DCA with basic knowledge about Bitcoin investment and I am still accumulating Bitcoin.

Accumulating Bitcoin and gaining knowledge along with it is a great learning experience and in this method, your knowledge base becomes stronger and it takes relatively less time to learn because you are implementing what you are learning. Just as there is a focus on learning, so is there on accumulating Bitcoin regularly. The summary of the DCA method is that you can accumulate Bitcoin through discretionary income and learn to be responsible for basic needs and keep a balance in money management.

[SmartCharpa]

[Edited out]

In most cases, we neglect our personal comfort or forget or don't want to accept that we need to spend money to make life beautiful and enjoyable beyond some basic needs. Most people want to prove that discretionary income is "just for investment" but I don't want to invest more than 10%-15% of my total discretionary income in volatile assets like Bitcoin. Because this expenditure should also be divided into separate sub-categories along with emergency funds, reserves and financial security. This doesn't change the basic principle of investment and can also make life enjoyable. We are dividing money into different categories but the main purpose of creating a budget is not just to increase investment but it should use the investment as people enjoy.

I know that everyone is entitled to do what ever they like, but don't you think that investing only 10-15 of your discretionary income to small? because I believe that after taking proper care of your basic needs, the discretionary income left wouldn't be that huge, so investing only 10-15 is good, but your accumulation will be very slow.

The best way I knew off, which sir jayjuangee has spoken of on several occasions here is by dividing your discretionary income into three equal part, one place for investing, one place to set up your back up funds and the final part for discretionary consumption, which you can use to enjoy life, if you are that type of person that loves going out, this way you can invest effectively and still live a normal life. Investing only 10-15 of your discretionary income only entails one thing, which is you intend making more reservations for enjoyment than doing the right thing, or am I getting it all wrong?
Correct me if am misunderstanding you here.

You are claiming that using 10 to 15% of your discretionary income to invest is too low. Do you know the amount the person earns per month? People can’t invest more than they can afford to lose.

Let assume that a guy earns around 200k a month, after taking care of their expenses, they have 70k left, investing 10k naira every month is not a bad idea, but they should also know that those who are using huge amounts to accumulate will have more holdings than those who buy with small amounts.

In any case, if you are guy who parties a lot, you need to reduce the way of lifestyle. We know that we only have one life to enjoy, but if we have what it takes, we can increase the amount we use to buy at the end of the month. It’s not as if we are saying anyone should compete with other people who are more financially stable, but for your own benefit, you should stop spending your money on unnecessary things.

[Rhow]

This should never be taken as a financial advice because it's a bad advice. If you invest 40-50% of your total  wealth as you are proclaiming, you are actually going all in on your investment, or you are investing with what you cannot afford to lose, which will compel you to always be in a state of panic anytime their is a dip in the market, so this is a terrible idea bro.

The recommendation to keep 40-50 percent of your total assets in Bitcoin may not be realistic for everyone. However, at the same time, it is not possible to say by looking at the percentage that someone is investing all of their assets or can withstand losses by keeping 40-50 percent. Because he may have sufficient usable cash in the remaining relationship, income may be stable, and there may be no major expenses in the near future. Again, your allocation to Bitcoin may be low, but the rest of your assets are tied up in land or something that cannot be easily used in an emergency. If you calculate that aspect, even if your Bitcoin is low, the pressure to sell may be high.

Again, the monthly purchase allocation and the current share of Bitcoin in total assets are also different. If you bought a small proportion earlier and the price of Bitcoin increases compared to other assets, it may become a large part of your total assets. Then the large percentage by itself does not prove that you actually bought with the money you need.

[JayJuanGee]

[Edited out]

As far as I remember, Sir JJG never suggests dividing discretionary income into three equal percentages, rather he does not make a ratio for everyone and asks to decide according to one's own ability. He says discretionary income can be divided into three, but it is not mandatory that it should be equal.

I think that I frequently suggest that dividing into 1/3 each is a good conceptual starting point to make sure to consider all three of the categories, yet in the end, each person has to figure out for himself whether to further adjust those proportions, and if so how much to adjust.

If someone has a small or non-existent emergency fund, then he may need to give more there to protect him. Again, someone who has sufficient cash security can allocate more in Bitcoin. This means that each person needs to make a responsible decision according to their own situation, not a fixed equal share.

Exactly, and don't forget the guy who might have to purposefully allocate money to attend a party to celebrate one of the birthdays of his family member or some other celebration occasion that is optional in the spending of the money, but he likely would rather makes sure to spend those discretionary funds on such party attendance (or gift or otherwise) rather than to contribute to problems in his relationships.

[Tonimez]

[Edited out]

You are claiming that using 10 to 15% of your discretionary income to invest is too low. Do you know the amount the person earns per month? People can’t invest more than they can afford to lose.

Let assume that a guy earns around 200k a month, after taking care of their expenses, they have 70k left, investing 10k naira every month is not a bad idea, but they should also know that those who are using huge amounts to accumulate will have more holdings than those who buy with small amounts.

In any case, if you are guy who parties a lot, you need to reduce the way of lifestyle. We know that we only have one life to enjoy, but if we have what it takes, we can increase the amount we use to buy at the end of the month. It’s not as if we are saying anyone should compete with other people who are more financially stable, but for your own benefit, you should stop spending your money on unnecessary things.

As a beginner who is still trying to understand what bitcoin is all about and also learn to trust the investment, it is not wrong to invest as low as 5-15% of his Discretionary income in bitcoin as he could be doing that with complete reluctance and believing he has lost his money already. However, as he continues in his investment process, he keeps learning about bitcoin and when he has gained more confidence, it will be wise for him to increase his investment amount because investing a very little percentage of your Discretionary income means exposing your money to extreme financial mismanagement if care is not taken.

You do not have to invest to please anyone as you also need to be conscious of not investing more than you can afford to loose but then, if such person has an investment goal, he will set the goal within a timeframe and that would also determine his aggression towards buying or his DCA allocation at everytime.

[Qhunman]

You seem to be giving unnecessary requirement needed to build confidence to invest. Beginners don’t need all of that. The thought of how bitcoin skyrocketed in the past and how long term investors benefitted more is enough to build your confidence.

The requirement he gave out was unnecessary as investors don't need all of that to build their confidence in bitcoin.  If you invest regularly, your confidence in bitcoin will grow stronger and the more you invest, the more you will be acquainted with bitcoin.  It has been said in this thread before that an investor doesn't really need basic knowledge before they can invest in bitcoin.  What is this Basic knowledge if I may ask?

Basic knowledge shouldn't be a mandatory requirement to invest in bitcoin instead what you need is just your discretionary income and a centralised exchange to begin investing in bitcoin.

[I_Anime]

You seem to be giving unnecessary requirement needed to build confidence to invest. Beginners don’t need all of that. The thought of how bitcoin skyrocketed in the past and how long term investors benefitted more is enough to build your confidence.

The requirement he gave out was unnecessary as investors don't need all of that to build their confidence in bitcoin.  If you invest regularly, your confidence in bitcoin will grow stronger and the more you invest, the more you will be acquainted with bitcoin.  It has been said in this thread before that an investor doesn't really need basic knowledge before they can invest in bitcoin.  What is this Basic knowledge if I may ask?

Basic knowledge shouldn't be a mandatory requirement to invest in bitcoin instead what you need is just your discretionary income and a centralised exchange to begin investing in bitcoin.

Good question what’s basic knowledge?
Knowing how to use the exchange to purchase is also part of basic knowledge. The only thing that’s not completely necessary when come to bitcoin investment is the technical aspect of bitcoin . You don’t need any technical knowledge in order to involve yourself with bitcoin investment.

But understanding how exchanges, wallets, security, and investment risks work is essential for making informed investment decisions. Which are also part of the basic knowledge, yes you have to understand how to secure your assets properly to avoid any loss . No matter how much Bitcoin you stash, one careless mistake can put your entire stash at risk.

Stop sounding like someone that’s investing in some kind of shitcoin . Yes, the wins of those that have been in Bitcoin for while can inspire one to start investing in Bitcoin. But one still have to understand what they are investing on to build their confidence and to prevent any form of week hands . And you can literally do that as you accumulate and invest in Bitcoin .

[Loyang]

Good question what’s basic knowledge?
Knowing how to use the exchange to purchase is also part of basic knowledge. The only thing that’s not completely necessary when come to bitcoin investment is the technical aspect of bitcoin . You don’t need any technical knowledge in order to involve yourself with bitcoin investment.

But understanding how exchanges, wallets, security, and investment risks work is essential for making informed investment decisions. Which are also part of the basic knowledge, yes you have to understand how to secure your assets properly to avoid any loss . No matter how much Bitcoin you stash, one careless mistake can put your entire stash at risk.

Stop sounding like someone that’s investing in some kind of shitcoin . Yes, the wins of those that have been in Bitcoin for while can inspire one to start investing in Bitcoin. But one still have to understand what they are investing on to build their confidence and to prevent any form of week hands . And you can literally do that as you accumulate and invest in Bitcoin .

Common sense does not say that a person needs to know anything special when starting Bitcoin investment, except to know whether they have discretionary funds or not and whether they have calculated them correctly. If a person is able to find discretionary income, then he can start investing. After starting investment, a person can gain knowledge about wallets and choose a wallet. Because many times it is seen that a person chooses a wallet in a hurry and chooses a centralized wallet which is not the right decision at all. For example, many people think that trust wallet is decentralized and thinking this, many people choose trust wallet. Trust wallet is not decentralized and it is not open source either. So start investing first and after starting investing, gradually gain wallet knowledge and choose the right wallet for you.

Small mistakes in the present can become big mistakes in the future and we can lose our holdings due to this mistake. So don't rush, start investing by finding discretionary income and after starting investing, slowly choose everything. This will be good for a new person.

[KawasakiNinja1_]

Investing is a process, so far someone is doing it the right way, the person would definitely learn new things on the long run, even if there's a mistake along the line you’ll learn from it an take correction. For instance those who stored their coins with coldcard would learn to store in a safer wallet by moving it to a wallet backed with passphrase.

What people need to start investing is discretionary funds, with common sense they can figured out other things and gain knowledge simultaneously while on the investment.

Exactly, You're right that people need discretionary income to start investing and a quick start-up process. There is no need to focus on the intricacies of Bitcoin investing early on because it is possible to invest with the basics while understanding other things and gaining knowledge at the same time. Getting started in the process of collecting bitcoins and gaining knowledge with it is a great learning experience as a novice investor is able to increase their knowledge base as they get the chance to apply what they learn and accumulate bitcoins accordingly.

So it is clear that every beginner investor can start Bitcoin investment with the basics and progress with time by saving Bitcoins and thus the confidence of these investors towards Bitcoin investment increases which makes them interested in Bitcoin investment with great dedication for long term i.e. several cycles.

[samadam007]

Good question what’s basic knowledge?
Knowing how to use the exchange to purchase is also part of basic knowledge. The only thing that’s not completely necessary when come to bitcoin investment is the technical aspect of bitcoin . You don’t need any technical knowledge in order to involve yourself with bitcoin investment.

But understanding how exchanges, wallets, security, and investment risks work is essential for making informed investment decisions. Which are also part of the basic knowledge, yes you have to understand how to secure your assets properly to avoid any loss . No matter how much Bitcoin you stash, one careless mistake can put your entire stash at risk.

Stop sounding like someone that’s investing in some kind of shitcoin . Yes, the wins of those that have been in Bitcoin for while can inspire one to start investing in Bitcoin. But one still have to understand what they are investing on to build their confidence and to prevent any form of week hands . And you can literally do that as you accumulate and invest in Bitcoin .

All these your basic knowledge requirement prior investing are still unnecessary and too broad for new folks to learn fast. Many beginners may find it difficult deciding the right type of wallet to use. So telling them to learn all this things would definitely be confusing because obviously they’re new to it. They may end up delaying their investment because they think they’re not ready yet.

I am not saying the list you mentioned are not important, but it shouldn’t be a delay not to start investing. As long as your discretionary income has been figured out. You can start buying and holding on same exchange while you broaden your knowledge about list of things you have in mind to learn.

[ZeroVinsonN]

All these your basic knowledge requirement prior investing are still unnecessary and too broad for new folks to learn fast. Many beginners may find it difficult deciding the right type of wallet to use. So telling them to learn all this things would definitely be confusing because obviously they’re new to it. They may end up delaying their investment because they think they’re not ready yet.

I am not saying the list you mentioned are not important, but it shouldn’t be a delay not to start investing. As long as your discretionary income has been figured out. You can start buying and holding on same exchange while you broaden your knowledge about list of things you have in mind to learn.

People just keep overcomplicating what basic knowledge means, as far as I'm concerned, all we need for being able to start investing in bitcoin is our discretionary income, once we've figured that out w can start buying bitcoin, this isn't to say that using a good wallet from the start is wrong but there is also nothing wrong with starting with an exchange first, after all that's where most buy their bitcoin from, a good wallet can come afterwards.

Say someone already knew about secured wallets long before they decided to start buying bitcoin, there is no reason for them not to start with it but this is because it was already common knowledge to them. Some people learn about self custody and open source because they started buying bitcoin which means they did not start with already securing their assets, they learned later on and are still HODLing till date.
We shouldn't discourage people from investing in bitcoin simply because they don't have access to the perfect wallet yet, after all, what better motivation is there to learn about how to secure your bitcoin than to already be HODLing bitcoin.

[Homemade-IQ]

I think that I frequently suggest that dividing into 1/3 each is a good conceptual starting point to make sure to consider all three of the categories, yet in the end, each person has to figure out for himself whether to further adjust those proportions, and if so how much to adjust.

What you said here is true, starting by dividing your discretionary income into three equal part sounds very good from the start, but it can be reduced to just two place in the future when you have secured a strong back up funds in place that can protect your investment from emergencies for a period of three months or more.

 In such a state where you have already secured your back up funds, it can be very flexible, and you can be aggressive towards your accumulation like 60% for investment, 30% for discretionary consumption and 10% to add it to your back up funds, since it's already strong, but if you are starting from scratch, then it's wise to divide it into three equal part, so that you can be efficient on all front.

[Hardyrobust]

All these your basic knowledge requirement prior investing are still unnecessary and too broad for new folks to learn fast. Many beginners may find it difficult deciding the right type of wallet to use. So telling them to learn all this things would definitely be confusing because obviously they’re new to it. They may end up delaying their investment because they think they’re not ready yet.

I am not saying the list you mentioned are not important, but it shouldn’t be a delay not to start investing. As long as your discretionary income has been figured out. You can start buying and holding on same exchange while you broaden your knowledge about list of things you have in mind to learn.

People just keep overcomplicating what basic knowledge means, as far as I'm concerned, all we need for being able to start investing in bitcoin is our discretionary income, once we've figured that out w can start buying bitcoin, this isn't to say that using a good wallet from the start is wrong but there is also nothing wrong with starting with an exchange first, after all that's where most buy their bitcoin from, a good wallet can come afterwards.

Say someone already knew about secured wallets long before they decided to start buying bitcoin, there is no reason for them not to start with it but this is because it was already common knowledge to them. Some people learn about self custody and open source because they started buying bitcoin which means they did not start with already securing their assets, they learned later on and are still HODLing till date.
We shouldn't discourage people from investing in bitcoin simply because they don't have access to the perfect wallet yet, after all, what better motivation is there to learn about how to secure your bitcoin than to already be HODLing bitcoin.

For a beginner the most important thing is to figure out if they have discretionary income to invest with before they can start. There are people that has already known about the wallet that is good for holding before they start investing in bitcoin, although this doesn't mean that a beginner must learn about wallet before starting. As long as they understand the need or reason why they are investing with discretionary income and focus on continuous accumulation of bitcoin, definitely there knowledge about bitcoin will increase in the long run.

[PhilosopherKing]

Bro, why do you think that someone is making wrong financial decisions only if their investment is low? Investment depends on the person's income and financial capacity. Not everyone's financial situation is the same, someone's income may be irregular, in that case someone's family responsibilities may be more or he may not have sufficient emergency funds. So investing 10–15% does not mean giving more importance to pleasure and enjoyment, but it is a decision according to my personal financial capacity. On the other hand, I did not just talk about enjoying life or happiness, but also about emergency funds, reserves and financial security.

Another thing is that if your financial capacity is good and the rest of the funds are separate, i.e. emergency funds, reserve funds, then you can increase your investment.There is no problem in this, but one thing to remember is that everyone should make a long-term investment plan by giving importance to their financial security and comfort of life so that they are not forced to sell Bitcoin at an untimely time.

Remember that, it is not right to increase the security risk of assets while increasing the speed of investment.

That can be balanced dear if the person divide their discretionary income, and use some to ongoingly invest and also use some for saving for emergency funds along the way.

Also know that increasing the amount of your investment do not mean that you are increasing the risk of selling your stash . What matter is where the money you are investing is coming from. If the investment money is from your discretionary income then am sure that you will have solved your necessary needs before setting aside the one that is remaining for bitcoin. So as long as you continue using your discretionary income to ongoingly invest and also building your emergency funds along the way then I don't think it will be risky investing big % of that your discretionary income.

[Barikui1]

That can be balanced dear if the person divide their discretionary income, and use some to ongoingly invest and also use some for saving for emergency funds along the way.

Also know that increasing the amount of your investment do not mean that you are increasing the risk of selling your stash . What matter is where the money you are investing is coming from. If the investment money is from your discretionary income then am sure that you will have solved your necessary needs before setting aside the one that is remaining for bitcoin. So as long as you continue using your discretionary income to ongoingly invest and also building your emergency funds along the way then I don't think it will be risky investing big % of that your discretionary income.

Talking about only the highlighted statement in your write up, investing a large percentage of your discretionary income in Bitcoin can be problematic to your investment if you have not already put down a reserve funds that can sustain you and your investment for a period of three months or more, because it's only proper that you invest only 33.3% of your discretionary income if you are just starting with no formal back up funds in place already, because by doing it that way, you can have rooms to make provisions for your back up funds and discretionary consumption.

It is only reasonable to invest a large portion of your discretionary income when you have already secured a sizeable backup funds that is strong enough to sustain you and your investment for months, not when you are just starting and is still trying to put down your back up funds in place.

[Cossyblack]

All these your basic knowledge requirement prior investing are still unnecessary and too broad for new folks to learn fast. Many beginners may find it difficult deciding the right type of wallet to use. So telling them to learn all this things would definitely be confusing because obviously they’re new to it. They may end up delaying their investment because they think they’re not ready yet.

I am not saying the list you mentioned are not important, but it shouldn’t be a delay not to start investing. As long as your discretionary income has been figured out. You can start buying and holding on same exchange while you broaden your knowledge about list of things you have in mind to learn.

Newbies don't need to know everything about bitcoin from the very begining because  they are new to it, so how do you expect them to know it all. Even a veteran investor after several years of investing in bitcoin hasn't been able to know it all yet we expect a newbie to know everything about bitcoin before investing which is not necessary.

Too much of everything is bad and bitcoin knowledge isn't an exception. I am not saying learning about bitcoin is bad but rather trying too hard to learn everything about it is what is bad and you may even end up not investing at all. What an investor actually needs to begin investing in bitcoin is his discretionary income and not some over loads of knowledge that will delay him from investing.

If he has figure out his discretionary income then he should invest and start holding bitcoin without further delay. What ever knowledge is chasing is secondary, the most important thing to figure out his discretionary income and invest consistently.