Discretionary Income vs Emergency Funds: Why It Matters for Bitcoin Investing

[Jaksonhard]

I still disagree, people who can control their finances, do not need emergency fund as extra buffer zone. If you know what you are doing, then you should be able to save what you do not need. "Emergency" is just not calculating it very well. I believe we do not need another fund, just put it on bitcoin and if you ever need it then if it's under, then it should be in USDT, if it's over then you are profiting.

There is no need for it, so a good investor won't make a loss and you wouldn't need anything else. I understand people may not agree with me, I have seen them not agree with me, and it has been pages, but I just do not see the benefit of it. The only claim so far has been "what if something unexpected happens", well that is what investment is for.

Are you married and have children, and are you the breadwinner of the family who needs to take care of your parents or siblings?

I'm guessing you live alone and have nothing to worry about, or you still get financial support from your parents. Because I believe that any adult who has a family and children, even has to take care of old parents. They will always have a financial plan and an emergency fund will always be their top priority, not investing or trading. Because they know that the world is tough and bad things can happen at any time, and having an emergency fund is important. Only people who are single and have never experienced those challenges think that an emergency fund is unnecessary.

The need for emergency fund can be for any level of people, married or unmarried. If I tell you my reality, I am still single and still fighting with poverty. I have to balance my income and expenses with my older parents and other family members. In the meantime, I am deposit Bitcoin but I know that at any time my older parents may get sick and they may need urgent medical treatment. I am doing my family responsibilities properly and depositing Bitcoin through discretionary fund.  Although I am in the initial stage investing Bitcoin, I am continuing Bitcoin by keeping a backup fund. This backup fund is for my parents emergency medical treatment and also regularly Bitcoin accumulation

You should be very careful in taking care of your family responsibility and also managing your bitcoin investment because an emergency funds is not to accumulate bitcoin but to be a backup funds to your bitcoin investment so that, you don't sell your bitcoin investment before time when you are face with real life emergency.

Your discretionary income should be used for your regular weekly/monthly DCA accumulation. This is the reason why you must build up your emergency funds of at least three months of your monthly and stop. So that, you can channel that money into building your reserve funds and when that's set up, you are free to start investing into bitcoin with a large portion of your discretionary income.

You are right, it is not an emergency fund to deposit Bitcoin, he needs to create an emergency fund to meet his family needs and his own expenses, where he can deposit money using the DCA method. Because when he invests in Bitcoin, if at that time he has an illness or needs emergency money, he should not want to sell his Bitcoin investment and he can use the money from his emergency fund. Like a person uses a life jacket to float on water, which acts as a support to save him from drowning.

[I_Anime]

Both are very vital when comes to bitcoin investment (discretionary income and emergency funds ) . You need discretionary income to keep buying , because is like a left over which means that is money they you can put into anything (like your savings or investments) .

While emergency funds, certain amounts of money set aside to play the role of taken care of emergency expenses.  And some time , some expenses come without any warning . So emergency funds always there to take care of such expenses.

[Grace333]

Both are very vital when comes to bitcoin investment (discretionary income and emergency funds ) . You need discretionary income to keep buying , because is like a left over which means that is money they you can put into anything (like your savings or investments) .

While emergency funds, certain amounts of money set aside to play the role of taken care of emergency expenses.  And some time , some expenses come without any warning . So emergency funds always there to take care of such expenses.

Yeah you’re right, both are really important because if you do not have an emergency fund, life will eventually corner you into selling your Bitcoin at a bad time. People throw everything into BTC, then when an unexpected expense comes up, they panic sell and end up regretting it later. Having that backup cash on the side just makes the whole journey less stressful.

And with discretionary income, that is honestly what keeps your buying consistent without messing with your daily needs. Since it is extra money, you do not feel the pressure when the market dips, you just keep stacking little by little. One takes care of the present, the other builds the future, that balance is what makes the whole plan work.

[laspol65]

I would really love to hear what y’ll think about this, do you separate your funds like this? Have you ever made the mistake of using your emergency savings to invest in Bitcoin? Let us learn from each other. Drop your thoughts.

To sustain a Bitcoin investment, you definitely need both discretionary income and emergency funds. Because you are not following the Bitcoin investment DCA method for a short period of time, it is a long-term package that will protect your Bitcoin investment so that you do not face danger for a long time.
In daily life, dangers are surrounding people, so the emergency fund will guard your investment every moment. Because the more your income increases, the more Bitcoin you can collect according to the DCA method.

[Ricardo11]

I would really love to hear what y’ll think about this, do you separate your funds like this? Have you ever made the mistake of using your emergency savings to invest in Bitcoin? Let us learn from each other. Drop your thoughts.

To sustain a Bitcoin investment, you definitely need both discretionary income and emergency funds. Because you are not following the Bitcoin investment DCA method for a short period of time, it is a long-term package that will protect your Bitcoin investment so that you do not face danger for a long time.
In daily life, dangers are surrounding people, so the emergency fund will guard your investment every moment. Because the more your income increases, the more Bitcoin you can collect according to the DCA method.

These are important things, if you want to sustain an investment for the long term, it is essential to have all the necessary funds, as well as all kinds of preparations. There is no way to say when unexpected situations will occur in your life, but unexpected situations will definitely come. So, if you have an emergency fund at such a time, it is possible to keep the original investment intact in any unexpected situation. Because at that time you will not have to face a situation like selling your investment. So it is very effective that if you have both discretionary income and emergency funds ready, it is possible to keep the investment consistent and sustain it safely for the long term.

[Grace333]

I would really love to hear what y’ll think about this, do you separate your funds like this? Have you ever made the mistake of using your emergency savings to invest in Bitcoin? Let us learn from each other. Drop your thoughts.

To sustain a Bitcoin investment, you definitely need both discretionary income and emergency funds. Because you are not following the Bitcoin investment DCA method for a short period of time, it is a long-term package that will protect your Bitcoin investment so that you do not face danger for a long time.
In daily life, dangers are surrounding people, so the emergency fund will guard your investment every moment. Because the more your income increases, the more Bitcoin you can collect according to the DCA method.

The truth is, nobody can really hold Bitcoin long term if they do not have their basics covered.. If you don’t have free cash to invest and some emergency savings on the side, life will always find a way to push you into selling your Bitcoin too early. That is why people who plan properly last longer in the game, they are not pressured to touch their BTC when small problems come up.

DCA only works well when you are not investing with shaky hands. If you know your rent, bills, and daily needs are sorted, then every bit of Bitcoin you buy becomes untouchable, and you can let it sit there for years. That is where the real magic happens.. As your income grows, you can increase your contributions and build a stronger position without feeling stressed. It is just about patience, planning, and protecting your future bag….

[cxtreenal]

I would really love to hear what y’ll think about this, do you separate your funds like this? Have you ever made the mistake of using your emergency savings to invest in Bitcoin? Let us learn from each other. Drop your thoughts.

To sustain a Bitcoin investment, you definitely need both discretionary income and emergency funds. Because you are not following the Bitcoin investment DCA method for a short period of time, it is a long-term package that will protect your Bitcoin investment so that you do not face danger for a long time.
In daily life, dangers are surrounding people, so the emergency fund will guard your investment every moment. Because the more your income increases, the more Bitcoin you can collect according to the DCA method.

I agree with the two recommendations you made for long term Bitcoin investment sustainability. Another thing I would like to add is that when you implement your own strategy for long term management it will be consistent with your daily life and expenses how you organize your investments and grow your Bitcoin holdings. In the long term effort you will encounter many problems and sometimes you may get upset and feel pressured to withdraw your valuable holdings. What should be the amount of emergency fund, how many months it is safe for you and your investments, your income and discretionary funds these are important things to decide for yourself.

In some instance and depending on the financial solvency and less solvency of the investors there is an opinion in favor of keeping three months or six months or even one year in an emergency fund but it is advisable to be against holding excess amounts of fiat currency such as three months or an additional three months.

[justdimin]

I agree with the two recommendations you made for long term Bitcoin investment sustainability. Another thing I would like to add is that when you implement your own strategy for long term management it will be consistent with your daily life and expenses how you organize your investments and grow your Bitcoin holdings. In the long term effort you will encounter many problems and sometimes you may get upset and feel pressured to withdraw your valuable holdings. What should be the amount of emergency fund, how many months it is safe for you and your investments, your income and discretionary funds these are important things to decide for yourself.

That is true, keeping your own strategy is more important than all of this. Most of the time people say have 6 months of salary in your bank account for emergency and that should be enough. I mean unless something HUGE Happens, then 6 month salary should be enough. In this case, that means, you should just save 10% to 25% of your salary, for a short period of time.

So, let's assume that you make 1000 dollars, that means 6000 dollars is enough to save, so if you keep lets say 150 dollars a month to save, then in 40 months you have enough. Now, that may "sound" a lot, but humans live around 70+ years, not all of us of course, but that is the average age, and giving up just 4 years of that, in return of having decades easier, I would say it's a good idea. After you reach that? You put all your savings into investment. That is the suggestion at least.

[JayJuanGee]

I agree with the two recommendations you made for long term Bitcoin investment sustainability. Another thing I would like to add is that when you implement your own strategy for long term management it will be consistent with your daily life and expenses how you organize your investments and grow your Bitcoin holdings. In the long term effort you will encounter many problems and sometimes you may get upset and feel pressured to withdraw your valuable holdings. What should be the amount of emergency fund, how many months it is safe for you and your investments, your income and discretionary funds these are important things to decide for yourself.

That is true, keeping your own strategy is more important than all of this. Most of the time people say have 6 months of salary in your bank account for emergency and that should be enough. I mean unless something HUGE Happens, then 6 month salary should be enough. In this case, that means, you should just save 10% to 25% of your salary, for a short period of time.

So, let's assume that you make 1000 dollars, that means 6000 dollars is enough to save, so if you keep lets say 150 dollars a month to save, then in 40 months you have enough. Now, that may "sound" a lot, but humans live around 70+ years, not all of us of course, but that is the average age, and giving up just 4 years of that, in return of having decades easier, I would say it's a good idea. After you reach that? You put all your savings into investment. That is the suggestion at least.

Each of us should attempt to use our discretion regarding what minimally to have and perhaps a range of what we might keep for back up funds.

I tend to suggest 3-6 months with 3 months being the emergency fund, which means that he second 3 months is somewhat optional depending on your circumstances.  I also suggest it to be 3 months of expenses rather 3 months of income. 

Of course, many folks might already be in the habit of keeping some back up funds that might be 2-6 weeks of their expenses, so when they come to bitcoin, it tends to be important to work on building a higher amount based on a higher importance not to tap into bitcoin at a time that is not of your own choosing.. so there is an extra effort to create a greater gap so that you don't have to tap into your bitcoin... another thing is that guys likely should be trying to get started investing into bitcoin as soon as possible and to start to build their bitcoin investment, so they can measure how much back up funds they have and perhaps make their initial investments into bitcoin at a similar rate as they are growing their back up funds, and this can be a bit of risky period since the back up funds will likely not even add up to 3 months of expenses in the earliest stages of building up the bitcoin investment.

If a guy has a lot of expenses like a business or a family or some other complications of irregular income, then he is likely going to need to have more back up funds as compared with someone who has fewer expenses and fewer complications in his income and/or expenses.

Many regular folks have difficulties saving/investing even 10% of their salary, and so we can imagine that 10% is only going to allow the putting away of 1 year's salary after 10 years, and so if guys are able to save/invest at greater rates, such as 25%, then they are able to put 1 years salary away in merely 4 years.  So if a guy is starting from nothing or he does not have large amounts of discretionary income, then it is going to take longer to build his investment and his back up funds - including if he might end up tapping into his back up funds while he is building them up.. which sometimes end up happening when guys might be trying to take care of his expenses and trying to earn more money to increase his discretionary income, yet sometimes he might have shortages in income and increases in expenses.

[Proty]

I would really love to hear what y’ll think about this, do you separate your funds like this? Have you ever made the mistake of using your emergency savings to invest in Bitcoin? Let us learn from each other. Drop your thoughts.

To sustain a Bitcoin investment, you definitely need both discretionary income and emergency funds. Because you are not following the Bitcoin investment DCA method for a short period of time, it is a long-term package that will protect your Bitcoin investment so that you do not face danger for a long time.
In daily life, dangers are surrounding people, so the emergency fund will guard your investment every moment. Because the more your income increases, the more Bitcoin you can collect according to the DCA method.

The truth is, nobody can really hold Bitcoin long term if they do not have their basics covered.. If you don’t have free cash to invest and some emergency savings on the side, life will always find a way to push you into selling your Bitcoin too early. That is why people who plan properly last longer in the game, they are not pressured to touch their BTC when small problems come up.

DCA only works well when you are not investing with shaky hands. If you know your rent, bills, and daily needs are sorted, then every bit of Bitcoin you buy becomes untouchable, and you can let it sit there for years. That is where the real magic happens.. As your income grows, you can increase your contributions and build a stronger position without feeling stressed. It is just about patience, planning, and protecting your future bag….

Yes long term investment is only possible when an investor is investing using his or her discretionary income. Making use money that is meant for our expenses or money that we may be needing soon to invest in bitcoin with the plan of holding for a long term it won't really be possible since we will be left with no other options but to option for sale whenever the need for the money invested arise. So the best way is to invest from our discretionary income, this is the only way we can be able to hold for a longer term while dcaing without being pressured to temper with our bitcoin.

[Grace333]

I would really love to hear what y’ll think about this, do you separate your funds like this? Have you ever made the mistake of using your emergency savings to invest in Bitcoin? Let us learn from each other. Drop your thoughts.

To sustain a Bitcoin investment, you definitely need both discretionary income and emergency funds. Because you are not following the Bitcoin investment DCA method for a short period of time, it is a long-term package that will protect your Bitcoin investment so that you do not face danger for a long time.
In daily life, dangers are surrounding people, so the emergency fund will guard your investment every moment. Because the more your income increases, the more Bitcoin you can collect according to the DCA method.

The truth is, nobody can really hold Bitcoin long term if they do not have their basics covered.. If you don’t have free cash to invest and some emergency savings on the side, life will always find a way to push you into selling your Bitcoin too early. That is why people who plan properly last longer in the game, they are not pressured to touch their BTC when small problems come up.

DCA only works well when you are not investing with shaky hands. If you know your rent, bills, and daily needs are sorted, then every bit of Bitcoin you buy becomes untouchable, and you can let it sit there for years. That is where the real magic happens.. As your income grows, you can increase your contributions and build a stronger position without feeling stressed. It is just about patience, planning, and protecting your future bag….

Yes long term investment is only possible when an investor is investing using his or her discretionary income. Making use money that is meant for our expenses or money that we may be needing soon to invest in bitcoin with the plan of holding for a long term it won't really be possible since we will be left with no other options but to option for sale whenever the need for the money invested arise. So the best way is to invest from our discretionary income, this is the only way we can be able to hold for a longer term while dcaing without being pressured to temper with our bitcoin.

This one big mistake a lot of people make when they first come into Bitcoin. They get too excited and end up putting in money they actually need for bills, school fees, rent or just daily survival, and when life eventually hits, they have no choice but to sell off their Bitcoin way too early. That’s not really investing, that’s just stressing yourself and setting up for regret. Bitcoin is supposed to give you peace of mind long term, not put you under pressure short term.

That’s why I always say discretionary income is the real key to building a strong Bitcoin position. When you use money that you don’t urgently need, you give yourself the freedom to just sit back, DCA consistently and let time do the magic. No panic selling, no sleepless nights, just patience and conviction. At the end of the day, those who separate their living money from their investing money are the ones who last long enough to actually see the full reward Bitcoin brings.

[Wakate]

Both are very vital when comes to bitcoin investment (discretionary income and emergency funds ) . You need discretionary income to keep buying , because is like a left over which means that is money they you can put into anything (like your savings or investments) .

While emergency funds, certain amounts of money set aside to play the role of taken care of emergency expenses.  And some time , some expenses come without any warning . So emergency funds always there to take care of such expenses.

Absolutely correct and I hope many investors would understand this and stop investing all they have on Bitcoin without left over that can be used to take care of emergency bills that might come unexpectedly. Being a crypto investor is not all about buying and holding Bitcoin for as long as possible but making sure that their are funds ability Incase we find ourselves in circumstances that needed fund to keep us safe and out of reproach that could make us a laughing stock.

[Rockson1]

Absolutely correct and I hope many investors would understand this and stop investing all they have on Bitcoin without left over that can be used to take care of emergency bills that might come unexpectedly. Being a crypto investor is not all about buying and holding Bitcoin for as long as possible but making sure that their are funds ability Incase we find ourselves in circumstances that needed fund to keep us safe and out of reproach that could make us a laughing stock.

There is what we call discretionary income, as an investor you should figure this out of your income, there is also emergency funds which I believe that all investors understands that emergency funds are primarily funds set aside to tackle emergency which are unexpected occurrence why you are going about your investment, this emergency funds should be on its separate place and as investor don't ever think if making use of this for investment purpose because this fund is what will help you not to rely on your investment for solving emergency needs.
This is the reason why every investor should make sure the weigh their income, share it evenly in different parts, the investment should be on it own and that should be when you might have making provisions for everything, they emergency funds well kept then you can invest with the remaining funds which is now the discretionary income, this discretionary might be huge amount because it depends on the investor's income daily, weekly monthly.

[Mahanton]

Absolutely correct and I hope many investors would understand this and stop investing all they have on Bitcoin without left over that can be used to take care of emergency bills that might come unexpectedly. Being a crypto investor is not all about buying and holding Bitcoin for as long as possible but making sure that their are funds ability Incase we find ourselves in circumstances that needed fund to keep us safe and out of reproach that could make us a laughing stock.

There is what we call discretionary income, as an investor you should figure this out of your income, there is also emergency funds which I believe that all investors understands that emergency funds are primarily funds set aside to tackle emergency which are unexpected occurrence why you are going about your investment, this emergency funds should be on its separate place and as investor don't ever think if making use of this for investment purpose because this fund is what will help you not to rely on your investment for solving emergency needs.
This is the reason why every investor should make sure the weigh their income, share it evenly in different parts, the investment should be on it own and that should be when you might have making provisions for everything, they emergency funds well kept then you can invest with the remaining funds which is now the discretionary income, this discretionary might be huge amount because it depends on the investor's income daily, weekly monthly.

Separating emergency funds from investment money is one of the most important habits an investor can develop too many people dive into opportunities without first creating a cushion and when unexpected situations appear they are forced to pull money out of investments often at the worst possible moment an emergency fund provides stability and peace of mind it allows an investor to stay patient with the market even during periods of volatility. Discretionary income is where investment decisions should come from once basic needs are covered and an emergency fund is in place the remaining portion becomes available for building wealth using only discretionary funds keeps investments healthier because the money is not tied to day to day survival this creates freedom to hold long term positions without the stress of needing to liquidate quickly.

An emergency fund should sit completely separate from investment accounts not touched no matter how tempting it might feel during market opportunities its purpose is to protect against sudden medical bills job loss car repairs or other unexpected expenses the presence of this safety net prevents unnecessary financial pressure and helps maintain consistency with an investment strategy. Different people set aside different amounts some keep three months of expenses others prefer six months or more depending on responsibilities and lifestyle the larger the safety net the more confidence an investor will feel when committing discretionary income toward higher risk or long term ventures.

[Grace333]

Absolutely correct and I hope many investors would understand this and stop investing all they have on Bitcoin without left over that can be used to take care of emergency bills that might come unexpectedly. Being a crypto investor is not all about buying and holding Bitcoin for as long as possible but making sure that their are funds ability Incase we find ourselves in circumstances that needed fund to keep us safe and out of reproach that could make us a laughing stock.

There is what we call discretionary income, as an investor you should figure this out of your income, there is also emergency funds which I believe that all investors understands that emergency funds are primarily funds set aside to tackle emergency which are unexpected occurrence why you are going about your investment, this emergency funds should be on its separate place and as investor don't ever think if making use of this for investment purpose because this fund is what will help you not to rely on your investment for solving emergency needs.
This is the reason why every investor should make sure the weigh their income, share it evenly in different parts, the investment should be on it own and that should be when you might have making provisions for everything, they emergency funds well kept then you can invest with the remaining funds which is now the discretionary income, this discretionary might be huge amount because it depends on the investor's income daily, weekly monthly.

An emergency fund should sit completely separate from investment accounts not touched no matter how tempting it might feel during market opportunities its purpose is to protect against sudden medical bills job loss car repairs or other unexpected expenses the presence of this safety net prevents unnecessary financial pressure and helps maintain consistency with an investment strategy.

You’re right, emergency fund is not meant to be touched for any kind of investment opportunity, no matter how good it looks in the moment. The whole idea of that money is peace of mind, knowing that if something unexpected like health issues, loss of income, or even a sudden repair comes up, you have a cushion to fall back on. Without it, you are only setting yourself up for panic decisions that will affect your bigger plans.

I also feel like once you separate that emergency money from your investment mindset, you actually become a better and more consistent investor. There is no extra pressure to pull out funds when markets swing, and you can stay disciplined with your long term strategy…

[POPOLUV]

As the name implies discretionary income and emergency fund, has different purpose when it comes to Bitcoin investments, first the discretionary income is an income that is left with you after you have might finished paying of bills and it is still the discretionary income that can pave way for you to use to invest Bitcoin portfolio why emergency fund it is very important and necessary for every investor should be able to create out emergency fund during the process of accumulating your Bitcoin portfolio so that an investors can be able to tackle unforeseen circumstances.

[Tmoonz]

I would really love to hear what y’ll think about this, do you separate your funds like this? Have you ever made the mistake of using your emergency savings to invest in Bitcoin? Let us learn from each other. Drop your thoughts.

To sustain a Bitcoin investment, you definitely need both discretionary income and emergency funds. Because you are not following the Bitcoin investment DCA method for a short period of time, it is a long-term package that will protect your Bitcoin investment so that you do not face danger for a long time.
In daily life, dangers are surrounding people, so the emergency fund will guard your investment every moment. Because the more your income increases, the more Bitcoin you can collect according to the DCA method.

The truth is, nobody can really hold Bitcoin long term if they do not have their basics covered.. If you don’t have free cash to invest and some emergency savings on the side, life will always find a way to push you into selling your Bitcoin too early. That is why people who plan properly last longer in the game, they are not pressured to touch their BTC when small problems come up.

DCA only works well when you are not investing with shaky hands. If you know your rent, bills, and daily needs are sorted, then every bit of Bitcoin you buy becomes untouchable, and you can let it sit there for years. That is where the real magic happens.. As your income grows, you can increase your contributions and build a stronger position without feeling stressed. It is just about patience, planning, and protecting your future bag….

Yes long term investment is only possible when an investor is investing using his or her discretionary income. Making use money that is meant for our expenses or money that we may be needing soon to invest in bitcoin with the plan of holding for a long term it won't really be possible since we will be left with no other options but to option for sale whenever the need for the money invested arise. So the best way is to invest from our discretionary income, this is the only way we can be able to hold for a longer term while dcaing without being pressured to temper with our bitcoin.

In light of this it implies that no matter how small it can be provided that the intention is for long term plans it is important to be positive, consistence and with passage of time when put together will definitely make a reasonable amount, this is one thing most people forget by thinking that they must have a larger amount before they can start investment in Bitcoin, I alw found investing from discretionary income as a calculated risk since your basic needs has been taken care of before investing from the remaining money and without this it can be difficult to hold for long and that is where the treasure is.