Properly distributing discretionary income and maintaining a balanced investment

[Loyang]

There are many people among us who think that if the price of Bitcoin ever decreases, all their money and all their dreams will be lost. Especially a new person thinks so. For this reason, many people do not agree to invest or never invest.

Keeping some money for the future or leaving some assets for their son or daughter.

There are many people who are very worried about whether to invest the entire amount of their discretionary income in Bitcoin or what % to invest. A person needs to keep 40% or 60% of his discretionary income in low-risk places. Because Bitcoin is very volatile, it is not possible to say when what will happen in the Bitcoin market. So if a person keeps 40% to 60% of his discretionary income in low-risk places, then even if the price of Bitcoin decreases a lot, he will not face a very big loss. He can leave some money or property for his son or daughter.

Investing in Bitcoin

A person should invest 20% to 30% of his discretionary income in Bitcoin. Because the Bitcoin market is very volatile, it is impossible to say what will happen to the price of Bitcoin in the future. If a person invests 20% to 30% of his discretionary income in Bitcoin and if he continues to buy and his portfolio is able to reach its target level, then if the price of Bitcoin increases a lot, then he can profit a lot of money from Bitcoin. If a person invests the entire amount of his discretionary income and if the price of Bitcoin decreases, then he can face a large loss, so a person would be better off doing so.

[AuchanX]

The current mindset of people is somewhat like this, many people do not invest because of the fear that once the price of Bitcoin falls significantly, everything will be over. In some cases, it also happens that they pour all their income together and then face big losses. Both can make a person depressed. In my opinion, the most important thing in investing is risk management and mental preparation. Bitcoin is undoubtedly a strong asset at present, but it is very volatile. Many times in history, Bitcoin has fallen down to 60%-70%. Again, it has created new ATH from there. Only those who accept this reality and invest can survive in the long term.

As you mentioned, the idea of ​​investing 20%-30% in Bitcoin is not bad. But I would like to add another thing here, DCA... If you do not pour a huge amount of money, but continue to buy slowly, the market timing pressure is greatly reduced and thus the long-term attitude remains intact.

[Jegileman]

Every investment is risky, you as an investor is the one that will then now evaluate how to actually make decisive decisions about which investment to go into and to what percentage of your discretionary income will you put into it.

Leaving assets for your children is a very good one by any parent but if the assets you’re leaving behind won’t appreciate in future to come, then it is as good as worthless because by the time your children grows up to reap the fruits of your labour, inflation would have affected everything and they’ll probably not worth anything worthwhile anymore.

Bitcoin still stands a good edge against many assets you’ll want to leave behind for your children, just make sure whatever you do with those discretionary income, they’re worth something to rely on by your kids in the future.

[Progress101]

This may be a very realistic way to actually look at Bitcoin, especially for people who are very new. A lot of the fear come from thinking that once the price drops, everything is over, and that can be really intimidating especially if oyu dont understand how it works. I can get keeping part of your money in safer places gives you breathing room and peace of mind, especially if you are thinking about your family or the future. Bitcoin doesn’t have to be your everything, it can just be part of the plan, especially if you haven't found your conviction yet.

[DiMarxist]

Trying to know which amount that, should be put into Bitcoin investment  should be an individual issue because before thinking about investing in Bitcoin which has to do your discretionary funds. One must clearly put into account his or her needs that, because discussionary funds are money that is set aside for the purpose of solving unforseen situations which may arise. So I will recommend that puting in 15% to 20% of your discretionary funds for the purpose of investing in Bitcoin should be done because putting all your discretionary funds into Bitcoin is not something that should be advised as other needs will arise .

[Creeper0]

When the price of Bitcoin goes up or down, only your portfolio increases and decreases. You are not forced to sell at that time. If you do not sell your investment, then what is the relationship between profit and loss and price volatility? This is just panicking yourself due to lack of knowledge and imagining yourself as a profitable or a losing investor, nothing more.

Suppose, you have started your investment journey with a 4-year target and are sticking to that target. Then the profit and loss should be calculated after 4 years, because you will sell at that time. Why should you confuse yourself with market volatility before that? If you do not sell, then there is no profit or loss from your investment. It is foolish to make yourself unstable along with market volatility. However, I agree with you that you should not use all your prudent money in investing. It should be done in an amount that you can afford to lose.