Bank and Emergency funds.

[dezoel]

I understand that needing money on an emergency isn't impossible, we all do, I am just denying that having cash aside, instead of bitcoin, is a better idea. Bitcoin may be down from what you bought at the same time, that is what I am against.

So for example, you were 10 when the first one happened, and 17 when the other one happened, correct? So assume someone adult, when you were 10, bought bitcoin after the crisis, and then all the way until you are 17, he held, that means, next crisis, he has more, because in 7 years, bitcoin always goes up, there is no year, where after 7 years, it didn't, it always does, sure month to month it could be down, or even year to year, but in 7 years, it won't, it will be up. So I believe, yes, emergency do happen, and I believe, yes , Bitcoin goes down, I just believe, those two at the same time, is rare. And worth the risk.

[Andrija Branislav]

I understand that needing money on an emergency isn't impossible, we all do, I am just denying that having cash aside, instead of bitcoin, is a better idea. Bitcoin may be down from what you bought at the same time, that is what I am against.

So for example, you were 10 when the first one happened, and 17 when the other one happened, correct? So assume someone adult, when you were 10, bought bitcoin after the crisis, and then all the way until you are 17, he held, that means, next crisis, he has more, because in 7 years, bitcoin always goes up, there is no year, where after 7 years, it didn't, it always does, sure month to month it could be down, or even year to year, but in 7 years, it won't, it will be up. So I believe, yes, emergency do happen, and I believe, yes , Bitcoin goes down, I just believe, those two at the same time, is rare. And worth the risk.

I understand now, sir. Be patient for 7 years and let BTC do its best for us, and the results will exceed our expectations. An important note, if I observe its direction, is not to interfere or tamper with it, even if you see the price increase and intend to sell at that time. Be patient and fertile, of course.

[ImGenius]

How much does bank charge compared to the risk of being hit by an emergency when you have nothing at hand and have to go source for means of borrowing?

We see that when someone does not have any assets or a permanent source of income, banks take more risk in lending. So they charge high interest rates, which can usually be up to 15%–25% per annum. Banks see this interest as a risk cover for them, because there is a risk of not being able to repay the loan.
In an emergency, banks do not lend for humanitarian reasons, but from a business perspective. Then, even if they give loans quickly, they add higher processing fees, service charges or late fees. Therefore, banks are more cautious and charge more for those who have a bad financial situation or a low credit score. In addition, loans can also be taken from alternative sources such as microcredit or NGOs, but the interest rates there are usually higher — up to about 30%.

So in my opinion, taking a loan when you have nothing at hand means an additional burden. Banks or other institutions charge higher interest rates according to the level of risk, so it is important to carefully consider your financial capacity and ability to repay before taking a loan.

[Swordsoffreedom]

I know, cryptocurrencies are volatile, and your money will either lose or gain value over time, but so are fiat currencies. You may not see your money losing value in numbers, but they are always losing purchasing power over time. $100 today won't have the same power after a couple of years, because of inflation and other economic problems within a country.

Yes, I agree with you.
They always shout that cryptocurrencies are extremely volatile and could lose value, but they remain silent about fiat currencies, which lose value daily.

There are many countries where their local currencies have lost incredible value (such as Venezuela and Zimbabwe), to the point where you need to carry a heavy bag full of cash to buy a bottle of Coke, for example. 

Those who live in Venezuela and Zimbabwe or countries with double digit inflation. Holding fiat is a disaster and much worse than crypto even in the short term because they are not volatile but lose value very quickly and have no chance of recovery. But not every country has insane inflation like these two, or their currencies are losing value as quickly as Venezuela and Zimbabwe.


All fiat currencies lose value every day due to inflation, increased supply, but I have never seen USD, CNY, EURO, JPY or my national currency lose more than 20-30% in a short period of time or lose more than 70% in just 1 year. But that happens quite often with cryptocurrencies.


Let's be realistic, no matter how fast fiat currency loses value, it is not as volatile and unstable as cryptocurrency. It is no coincidence that cryptocurrencies are called speculative, risky markets.

[pusaka]

I have my own strategy for this emergency fund, as we know that keeping it in fiat currency means its value will continue to be eroded by inflation. I apply this method: I always set aside a certain amount each month to save as an emergency fund. Then I calculate how much emergency funds I need to save in fiat currency. By saving every month, the amount continues to grow, and when it reaches a certain amount, I allocate it for investment, whether in crypto or gold.

For example, if $500 is the amount I need to save, and when it grows to $600, I will take $100 to allocate for investment.

[bhadz]

I do not recommend that someone who's got an emergency funds and has to look for a 90% less risky business. That's not the purpose why you're having an emergency funds. EFs should be stable, ready and untouched. That's because the purpose of it is to be used whenever something unexpected comes and not for any potential gains that you're wanting to have. I understand that instead of sitting it without anything in gain, you're going to look for it. But that's not it, you should allot a budget that's separate from it and then don't call it anymore an emergency fund.

[Iranus]

I have my own strategy for this emergency fund, as we know that keeping it in fiat currency means its value will continue to be eroded by inflation. I apply this method: I always set aside a certain amount each month to save as an emergency fund. Then I calculate how much emergency funds I need to save in fiat currency. By saving every month, the amount continues to grow, and when it reaches a certain amount, I allocate it for investment, whether in crypto or gold.

For example, if $500 is the amount I need to save, and when it grows to $600, I will take $100 to allocate for investment.

In fact, the emergency fund does not need to be replenished monthly, it can also be a fixed amount, an amount that you think can help you in an urgent situation. As a financial rule, it is recommended that an emergency fund be equivalent to 3-6 months of living expenses. Of course, this is just a general formula and each person can adjust it to suit their financial situation.

Even though you're always adding money, but you always maintain $500 in your emergency fund. I don't see how your strategy is any different than keeping a fixed amount in an emergency fund like many others are doing.

[Bluedrem]

I have my own strategy for this emergency fund, as we know that keeping it in fiat currency means its value will continue to be eroded by inflation. I apply this method: I always set aside a certain amount each month to save as an emergency fund. Then I calculate how much emergency funds I need to save in fiat currency. By saving every month, the amount continues to grow, and when it reaches a certain amount, I allocate it for investment, whether in crypto or gold.

For example, if $500 is the amount I need to save, and when it grows to $600, I will take $100 to allocate for investment.

Yes, you can. Depending on your circumstances and the purchasing power of your country, if you deposit enough money in your emergency fund, you can manage your life for three to five months with this fund during an emergency. Later, with the money allocated for your emergency fund each session, you can create another alternative fund that you will use for investments. Or, you can continue to buy Bitcoin in the DCA method along with saving money in the emergency fund. When your emergency fund is full, you can increase the allocation to DCA.

[Minor Miner]

Banks doesn't charge much even when we are not investing in Bitcoin emergency fund is important we can't predict what will happen next the interest you will pay when repaying back your loan will be much higher than the little charges bank is collecting from you, emergency fund protects your investment from not selling when you are not supposed to sell because when real emergency occur you won't think of selling your Bitcoin hodling to settle the emergency because you already have an emergency fund that will give a solution to the situation.

It's nice to see someone telling the truth, because bank fees are really small and insignificant. Unlike some people say and spread that bank fees are very high and even make us lose because of fees. I am really confused when they say that and wonder if they are intentionally distorting the truth and lying, or if they’re simply financially ignorant.

The core goal of an emergency fund is to protect us from unexpected financial shocks, keeping us from having to sell assets, go into debt, or disrupt our financial plans. Therefore, any idea of ​​using an emergency fund by investing in a business or a volatile asset like cryptocurrency is a bad idea, and it is no longer an emergency fund.

[Z_MBFM]

An emergency fund is like insurance; it's a price you pay to protect yourself from risk. You seem to think you've come up with a great idea, but you're not the first person to have a similar idea and get burned. For starters, you don't have to keep your emergency funds in the bank; you can keep them in cash.

Cash cannot be the solution of the government in an emergency. Because you cannot keep a lot of cash with you. I use credit cards for emergency needs and keep some cash with me. And there is the issue of insurance when we are in a serious situation like health insurance works when we are very sick physically then health insurance benefits us a lot.

Relying on a loan when times are tough is high risk because when the time comes, they may not give it to you or they may charge you high interest. I had an emergency fund that I didn't use for years until I had to use it.

While taking a loan in an emergency is sometimes a solution, sometimes it does more harm than good. When someone is financially weak, taking out a loan to do emergency work creates extra pressure for him, but if he does not have his own money, he will have no choice but to take a loan. What should he do then?

[ChocolateBitcoinK]

We create an emergency fund to get immediate cash in case of unexpected needs. So if someone is thinking of investing the money in the emergency fund, then first of all he should think whether he will be able to use his money immediately if an unexpected time comes. If not, then the main purpose of the emergency fund will be disrupted. Depositing the money in the emergency fund in the bank will ensure the safety of the money, but it is an unprofitable shelter. If someone wants to use the money in the emergency fund, in this case, it is better to keep some part safe instead of keeping it completely inactive so that the main purpose or immediate protection of the fund is always there.

[Pablo-wood]

We create an emergency fund to get immediate cash in case of unexpected needs. So if someone is thinking of investing the money in the emergency fund, then first of all he should think whether he will be able to use his money immediately if an unexpected time comes. If not, then the main purpose of the emergency fund will be disrupted. Depositing the money in the emergency fund in the bank will ensure the safety of the money, but it is an unprofitable shelter. If someone wants to use the money in the emergency fund, in this case, it is better to keep some part safe instead of keeping it completely inactive so that the main purpose or immediate protection of the fund is always there.

I share in your thoughts. Investing emergency funds might be risky except for scenarios where the fund has grown to a level where it can be splitted so some percentage can go into investment. Investing a small emergency fund is the highest risk anyone can do because as you highlighted the money might not be completely available when the need for it might arise.

[Fortify]

Because of what someone said in a thread concerning holding your emergency funds for long term without using it, that why not invest it on something that will bring profit for you in a short period, I commented on that post and it is very important I create a thread about it here because I feel it is something of importance to Bitcoin investors.
I have an emergency funds that has been on my account for some time now and I have not touched it and the bank is taking their changes from the emergency funds, I have already decided to start lending the emergency funds out and then when those that borrowed it are paying back they are paying with interest and in other to protect my money if I'm lending you the money you most drop a sellable property that is worth that money or even worth more of that money that I can sell and recover my money when the date of repayment expires.
Because keeping my emergency funds in a bank that will be deducting my money or in the name of bank charges is something that does not make sense to me.
Some people will ask what if an emergency happens immediately I borrow out my emergency funds how will I solve it, well I will simply borrow and solve it then when I get my money back I balance things up.

So if your emergency funds have been with you for a very long time and you don't even use them, look for a 90 percent less risk business that brings profit in a very short time and invest it there.
When you have an emergency and you have already used your emergency funds for your business you can simply borrow and since it is a business that profit you in a very short period you can balance up without it affecting you financially or your Bitcoin investment, remember I said look for 90 percent less risky business.
Think about this.

You have completely missed the point of the term emergency fund and seem confused on it's purpose. An emergency fund is meant to be accessible immediately, when you need it in an emergency, which is obviously not possible when you've lent it out to people. Most people will invest their emergency fund into a savings account that allows withdrawals, accepting that they will get a lower rate of return on this chunk of cash, but have it available when they might need to call on it. If you think that lending is a low risk business then you are going to get burned very badly one of these days, as it is one of the highest risk businesses out there - the majority of people who need to borrow are generally bad with money but will spend yours with glee.

[HONDACD125]

We create an emergency fund to get immediate cash in case of unexpected needs. So if someone is thinking of investing the money in the emergency fund, then first of all he should think whether he will be able to use his money immediately if an unexpected time comes. If not, then the main purpose of the emergency fund will be disrupted. Depositing the money in the emergency fund in the bank will ensure the safety of the money, but it is an unprofitable shelter. If someone wants to use the money in the emergency fund, in this case, it is better to keep some part safe instead of keeping it completely inactive so that the main purpose or immediate protection of the fund is always there.

Obviously, those who invest everything they have saved so far as an emergency fund are not thinking it through, and it's not only about investing in cryptocurrencies that will not allow you to immediately withdraw the funds so that you can use it, even if the money is invested in something else, there might be some reason that wouldn't allow you to immediately liquidate your investment and have liquid cash that you can use for the emergency. That's why it's important for one to at least have some cash at all times that they can use in an emergency.

If it's not in cash, make sure that it's in a currency or an asset that is easily liquidable, and there are no chances of you not being able to liquidate the assets in a case of emergency. If you have gold, and the markets are closed for a week for some reason, because such things are possible, and you won't be able to sell them immediately. In such a case, you won't have money immediately to handle the situation, and that's not a good thing.

[batang_bitcoin]

I share in your thoughts. Investing emergency funds might be risky except for scenarios where the fund has grown to a level where it can be splitted so some percentage can go into investment. Investing a small emergency fund is the highest risk anyone can do because as you highlighted the money might not be completely available when the need for it might arise.

I think that it's fine to invest a part of emergency fund. Don't invest it all but leave an amount that's good for being used when emergency has come. We want to see that our money are being utilized and spent for the greater good. Because it's hard to earn it and we need to be wise on how we should grow it while preparing for some unexpected event. OPs suggestion isn't bad and he's wanting people to invest in the low risk investments and of course, they're also low profits that can make at least some gains from it.

[Hypnosis00]

You may look your idea as easy as it is, but in real life, things won't be that easy dude. Yes, there is high returns having a lending business but the risk to lose is always there, because its 100% proven that not all your borrowers can certainly return the cash in time, or some may suddenly lost their job and that's uncontrollable so they will have no resources anymore to pay you back on their loan.

If I were you, invest some of your emergency funds in bitcoin and the rest of it, keep them in cash. At least with bitcoin, you know you won't lose if you never sell at a loss, and since you want to avoid the bank, keep it in cash then.

[Jatiluhung]

Because of what someone said in a thread concerning holding your emergency funds for long term without using it, that why not invest it on something that will bring profit for you in a short period, I commented on that post and it is very important I create a thread about it here because I feel it is something of importance to Bitcoin investors.
I have an emergency funds that has been on my account for some time now and I have not touched it and the bank is taking their changes from the emergency funds, I have already decided to start lending the emergency funds out and then when those that borrowed it are paying back they are paying with interest and in other to protect my money if I'm lending you the money you most drop a sellable property that is worth that money or even worth more of that money that I can sell and recover my money when the date of repayment expires.
Because keeping my emergency funds in a bank that will be deducting my money or in the name of bank charges is something that does not make sense to me.
Some people will ask what if an emergency happens immediately I borrow out my emergency funds how will I solve it, well I will simply borrow and solve it then when I get my money back I balance things up.

So if your emergency funds have been with you for a very long time and you don't even use them, look for a 90 percent less risk business that brings profit in a very short time and invest it there.
When you have an emergency and you have already used your emergency funds for your business you can simply borrow and since it is a business that profit you in a very short period you can balance up without it affecting you financially or your Bitcoin investment, remember I said look for 90 percent less risky business.
Think about this.

Emergency funds are saved so they can be used quickly in an emergency. In my opinion, emergency funds should still be in cash or something that's easy to use without requiring time to withdraw. I think we should determine the amount of our emergency fund from the start. So we can try to increase its value, or perhaps keep it the same. If we have other funds, put them into investments, or if it's not enough for investment, save them in a bank. Personally, I prefer to keep my emergency funds in two forms: one in my safe, which I try to use in fiat currency or paper money, and the other in my digital wallet, which I can easily access anywhere using Qris or instant payment methods if needed quickly.

Trying to get a loan in a hurry? It makes sense, but sometimes it's difficult.

[CryptopreneurBrainboss]

For example, if $500 is the amount I need to save, and when it grows to $600, I will take $100 to allocate for investment.

Nice strategy but not s easy as it sounds for everybody to adopt because some people don't even have enough to use for their daily needs that they'll have leftover for investing. Banks are known for giving loans to people that don't need it. They'll not give you that have no hope for money, loans but they'll give a business man that needs the loan to build up another structure because the banks are only interested in making profits and nothing else matters. Emergence funds aren't available from banks for the common man and that just goes to show how nonchalant the Banks has turned into.

[SATWAT]

Emergency funds are saved so they can be used quickly in an emergency. In my opinion, emergency funds should still be in cash or something that's easy to use without requiring time to withdraw. I think we should determine the amount of our emergency fund from the start. So we can try to increase its value, or perhaps keep it the same. If we have other funds, put them into investments, or if it's not enough for investment, save them in a bank. Personally, I prefer to keep my emergency funds in two forms: one in my safe, which I try to use in fiat currency or paper money, and the other in my digital wallet, which I can easily access anywhere using Qris or instant payment methods if needed quickly.

Trying to get a loan in a hurry? It makes sense, but sometimes it's difficult.

Emergency can happen to anyone at any time even someone is capable of having things to manage with this my own or with other sources because many are not able to do anything for this due to high inflation and instability but still it's always needed to be had in cash at your own place.
Usually peoples give different views about this because they are able to manage things as they are talking which is not possible for others in many regions having savings or emergency funds in banks flexible, but it's not works for many because their situation is not like those are talking.
I always want to have my funds in cash because I am able to manage this without having anything for long term Bitcoin is much better and strong but always in emergency having own best and secure strategy works.

[Yamifoud]

Emergency funds are for emergency occurrence, regardless if you save it in banks or in your own wallet. But if you are being threaten by the activities of the bank that's why you use it to be a capital of your business, I see there's something wrong with it. Save for your business or investments, do not compromise your emergency funds. That's mostly the reason why people suffer from financial crisis in the long run.