Many people say “hold Bitcoin long term”, but forget about emergency funds

[mirakal]

The idea of investing in bitcoin and holding it for long term is a valuable financial venture that could pave way for a good retirement plan.

However, before risking our funds into it, there are three pillars that we need to establish first, emergency funds, debt pay-off particularly those with high interest, and securing health and life insurance so that whatever the outcome of bitcoin investment is, or any investment you will make, it will not leave enormous consequences to our life.

We may not able to provide them all, but even just securing emergency funds first, it could certainly create a higher positive outcome of whatever investment we chose to take risk.

[Russlenat]

Frankly speaking, you won't be able to hold bitcoin for long term successfully if you neglect the idea of having emergency funds first. Emergencies do come most often than seeing profitability with bitcoin, so if you don't have back-up funds to cater to those unforeseen incidents and you have nowhere to ask for loans, then the last resort is to sell your coins regardless of the current price.

This is actually happening to a lot of investors. Bitcoin holding isn't really hard, its the attitude and choice preferences of the investor that makes it too hard to succeed.

[freedomgo]

If we can't hold bitcoin for long term, then we can always choose to invest on it for short term, thus expecting lesser profits compared to those who can actually perform long term investment with bitcoin.

But in reality, regardless if you invest for long term or short term, as long as you are risking your personal money on something that have no guaranteed returns yet, then one should provide sufficient amount of emergency funds first  because that will serve as your personal back up whatever circumstances that will arrive while you are still in the process of long term investment.

Emergency funds will always feel us secured and calm, despite how unpredictable the crypto market is.

[Vaculin]

You don’t need anyone to tell you about emergency funds it comes naturally regardless of if you like it or not because if you don’t have emergency funds you will be done for during any emergency.
For me you don’t need anyone to tell you about your basic needs and that’s where emergency funds falls in.

For any responsible investor, it comes naturally for them without being told. Bitcoin investment, no matter how profitable it seems right now, still the future has not yet revealed itself. So having said that, the best precaution that we can do is to prepare emergency funds first and foremost, and to never stop working on a job that will guarantee a sustainable source of income.

If your investment fails, at least your finances will never be compromised. It's better to think this way that the money you have invested is already part of your expenses so you won't be expecting much of its future returns.

[Iranus]

Invest in yourself first, invest in your emergency funds, before you start thinking of investing into bitcoin, or any valuable and profitable investment in the market. This should be the mindset of any investor. However, people want instant money and take shortcuts, so they jump into bitcoin investment without securing their personal budget or their emergency funds first, and when emergencies hit them, they end up with panic selling and lose from their investment.

Hold bitcoin for long term, but before that, secure your emergency funds first to avoid panic selling and lost your capital.

Financial management always follow the principle of safety first, growth later. That means, living expenses -> emergency fund -> saving -> and finally, investment. We should only invest when our financial situation is relatively stable.

But in reality, not many people apply this basic principle because most people only want to get rich quickly. Most people do the opposite. They use money that cannot be lost and even pour all their money into Bitcoin

That's why not many people feel happy or even scared when bitcoin drop below $60k. If they truly followed proper financial management principles, they would have viewed this price drop in a different way.

[X-ray]

Frankly speaking, you won't be able to hold bitcoin for long term successfully if you neglect the idea of having emergency funds first. Emergencies do come most often than seeing profitability with bitcoin, so if you don't have back-up funds to cater to those unforeseen incidents and you have nowhere to ask for loans, then the last resort is to sell your coins regardless of the current price.

This is actually happening to a lot of investors. Bitcoin holding isn't really hard, its the attitude and choice preferences of the investor that makes it too hard to succeed.

A lot of them neglect the idea of having emergency funds because insufficient knowledge about investing.

Emergency fund comes first because investing requires you to endure floating loss, without emergency fund  these floating loss will become a real loss unnecessarily.

The order is always basic needs first, emergency fund, and then cold money that you don't really need right now or anytime soon to invest to bitcoin for a projected length of 2-3 years.

By then, you can relax even when market turns bad.

[mumang siat]

 OP must identify the meaning of the phrase "just keep Bitcoin for the long term." In this case, investors who have been involved in Bitcoin for a long time know what they should do. As new investors, we must examine it in as much detail as possible. The investment referred to here is one where we place assets for the long term. This requires effective fund management. Long-term investments are important, and emergency funds are also crucial. Wise investors balance both aspects.

 In this case, it's not the Bitcoin investment that's inappropriate, but the way we manage/manage each individual that determines the success of proper fund management. What we must examine is how to manage funds/assets properly and wisely. Investment is very useful, and emergency funds are also important. Investment can be done using DCA by not investing all of your funds, keep an emergency fund.

[maydna]

Most people don't think about allocating money for emergency fund and they sell their Bitcoin investment to covers emergency needs. That is not wrong because they have their plan but if they can allocating money for many things including Bitcoin investment and emergency fund, they will not sell their Bitcoin investment instead using emergency fund.

They should split their income to many parts, daily needs, emergency fund, Bitcoin investment, and other parts in your life. If you face something that needs fund, you will know what allocation you should use and leave other allocation like that and it is about money management that helps you to manage the money.

[Hewlet]

This is actually happening to a lot of investors. Bitcoin holding isn't really hard, its the attitude and choice preferences of the investor that makes it too hard to succeed.

If you have a stream of income that keeps you afloat throughout your investment period and also have a special allocation that goes into your emergency funds, it becomes really easy to stay through the times of DIP and even use those period as an avenue to stack more chunk of bitcoin to the ones you have already accumulated. emergency fund is as important as your invested fund because with it you are sure that your asset is protected from uncertainty.

[Tythox.com]

Frankly speaking, you won't be able to hold bitcoin for long term successfully if you neglect the idea of having emergency funds first. Emergencies do come most often than seeing profitability with bitcoin, so if you don't have back-up funds to cater to those unforeseen incidents and you have nowhere to ask for loans, then the last resort is to sell your coins regardless of the current price.

This is actually happening to a lot of investors. Bitcoin holding isn't really hard, its the attitude and choice preferences of the investor that makes it too hard to succeed.

A lot of them neglect the idea of having emergency funds because insufficient knowledge about investing.

Emergency fund comes first because investing requires you to endure floating loss, without emergency fund  these floating loss will become a real loss unnecessarily.

The order is always basic needs first, emergency fund, and then cold money that you don't really need right now or anytime soon to invest to bitcoin for a projected length of 2-3 years.

By then, you can relax even when market turns bad.

I agree with this order: basic needs first, emergency fund, then cold money for Bitcoin.

This is probably the part many beginners dont calculate very well. They only think about how much Bitcoin they can buy today, but they dont think about how long that money can really stay untouched. If the money is needed again after few weeks or few months, then it was not really investment money from the beginning.

For me, emergency fund is not only about having money for bad situations. It also protects the Bitcoin position. If someone has backup cash, he can watch a dip with more calm mind. Without backup, the same dip can become fear because he knows he may need to sell.

I also think the amount of emergency fund cannot be same for everybody. Someone with stable job and low expenses may need less backup, while someone with family, debt, health issue or unstable income may need more. So it is not only about “3 months” or “6 months”, but about personal situation.

The main lesson is simple imo: if you want to hold Bitcoin for years, first arrange your life so you are not forced to sell it in weeks.

[DrBeer]

Many people say “just hold Bitcoin for long term”, but I think one thing is often ignored: emergency money.

Holding Bitcoin sounds easy when everything is fine. But when real life problems come, like rent, medical bills, family issue, job loss or urgent expenses, many people are forced to sell even if they never planned to sell. In that case the problem is not Bitcoin, but bad planning before buying.

For me, long term holding should not only mean “I believe in Bitcoin”. It should also mean “I can leave this money untouched for long time”. If someone invest all his spare money without keeping any backup, then even a small emergency can destroy his plan and make him panic sell at bad time.

This is why I think emergency fund and discretionary income are very connected. Before DCA or lump sum, people should first know what money is really free. Not money for food, rent, debt, family needs or short term bills.

So maybe the best Bitcoin strategy for normal people is not only buy and hold, but:

1. cover basic needs
2. keep some emergency backup if possible
3. use only real discretionary money for Bitcoin
4. hold without emotional pressure

Bitcoin rewards patience, but patience becomes very hard when you invested money that you may need next month.

And always remember, patience with a proper analysis usually pays off in the end.

Volatility is the key reason why major cryptocurrencies are best suited for medium- to long-term accumulation and generating income. In the short term, they are NOT SUITABLE for the average person. A drop in the value of these assets would severely erode the value of ordinary citizens’ savings, and they would most likely not want to sit back and watch this happen, given that the majority of the population cannot accumulate significant amounts of money, including for unexpected expenses.
Conclusion: diversify your savings. This includes fiat currency ("take it and use it"), cryptocurrencies ("they sit there and increase in value, but in the long term"), gold, and other highly liquid assets that protect value against inflation.

[Oasisman]

Who forgets emergency funds and thought about putting their money in a very volatile asset first?
I guess it's safe to say, everyone here knows an investment cannot be an emergency funds at the same time. If you can't afford to have both, then you're not ready to invest.
I'd like to add something important about those 4 "must-haves" before investing. You should not only have emergency back up funds (fiat), but you should at least have all sort of necessary insurances. That way, you are 99% certain your Bitcoin holdings will remain untouchable long term.

[BALIK]

Who forgets emergency funds and thought about putting their money in a very volatile asset first?
I guess it's safe to say, everyone here knows an investment cannot be an emergency funds at the same time. If you can't afford to have both, then you're not ready to invest.

People do not forget, but some people become careless. Some have never faced an emergency situation before, and that leads them to believe that it will never happen to them.

So they invested their entire emergency fund in bitcoin, hoping that bitcoin would increase in value before something bad happened to them.

I'd like to add something important about those 4 "must-haves" before investing. You should not only have emergency back up funds (fiat), but you should at least have all sort of necessary insurances. That way, you are 99% certain your Bitcoin holdings will remain untouchable long term.

Do you mean health insurance, life insurance, accident insurance...? Yes, that is a good idea, but I think it depend on each person's financial situation. It should not be something mandatory like an emergency fund.

[Cointxz]

Who forgets emergency funds and thought about putting their money in a very volatile asset first?
I guess it's safe to say, everyone here knows an investment cannot be an emergency funds at the same time. If you can't afford to have both, then you're not ready to invest.
I'd like to add something important about those 4 "must-haves" before investing. You should not only have emergency back up funds (fiat), but you should at least have all sort of necessary insurances. That way, you are 99% certain your Bitcoin holdings will remain untouchable long term.

You’re right about this but there some people can easily swayed of hype to commit a move like this. Some even gamble everything when they are influenced already by their desires of gaining profit.

It’s a common knowledge to invest only what you can afford to lose yet there’s always someone ignoring and choose to still risk because they are hoping that they will get profit just in time before they will use the fund.

That’s the time when an investment on Bitcoin always gone wrong.

[tabas]

The main lesson is simple imo: if you want to hold Bitcoin for years, first arrange your life so you are not forced to sell it in weeks.

A lesson that many still don't learn. They think that upon investing in bitcoin, it should be fine that they're in it but the other aspects of their lives aren't right. This is a good advise that upon investing to bitcoin, everyone has to make sure that they won't just dump it when they're in need of money. You don't invest in a very short period because you'd see the importance of long term and how you understand investing. Don't sell your bitcoin when you're in need due to your negligence from having an emergency funds and with your losses in your other investments.

[tottong]

For me, long term holding should not only mean “I believe in Bitcoin”. It should also mean “I can leave this money untouched for long time”. If someone invest all his spare money without keeping any backup, then even a small emergency can destroy his plan and make him panic sell at bad time.

This is why I think emergency fund and discretionary income are very connected. Before DCA or lump sum, people should first know what money is really free. Not money for food, rent, debt, family needs or short term bills.

Good financial management will lead someone to achieve their desired goals, and when it comes to investing in life, there are many issues to consider because life isn't just about investing.
It's important to have an investment plan, but it's also crucial to make adjustments to your emergency fund because we can't predict what will happen in the future.
People who succeed in life have a plan and prepare thoroughly so that when something happens, they don't have to struggle. That's the essence of successful financial management, because almost everyone needs money in their life journey.

If you don't have any and it's an emergency, what you're worried about is that when something happens, you have to sell the bitcoins you own, and the biggest problem arises here because it could be that the price of bitcoin is experiencing a sharp decline like the current situation and without emergency funds that can be used, you definitely have to make the decision to sell bitcoins so that the investment you are making will actually experience a decline instead of growth.

[Swordsoffreedom]

Frankly speaking, you won't be able to hold bitcoin for long term successfully if you neglect the idea of having emergency funds first. Emergencies do come most often than seeing profitability with bitcoin, so if you don't have back-up funds to cater to those unforeseen incidents and you have nowhere to ask for loans, then the last resort is to sell your coins regardless of the current price.

This is actually happening to a lot of investors. Bitcoin holding isn't really hard, its the attitude and choice preferences of the investor that makes it too hard to succeed.

A lot of them neglect the idea of having emergency funds because insufficient knowledge about investing.

Emergency fund comes first because investing requires you to endure floating loss, without emergency fund  these floating loss will become a real loss unnecessarily.

The order is always basic needs first, emergency fund, and then cold money that you don't really need right now or anytime soon to invest to bitcoin for a projected length of 2-3 years.

By then, you can relax even when market turns bad.

No offense intended. But I also think that those who ignore an emergency fund or basic needs and prioritize investing are lacking financial knowledge. They are essentially gambling with their own lives.

Emergency funds should be given higher priority than any other funds. This is not optional, it is a requirement. Because without it, any financial plan or idea can fall apart the moment something unexpected happen

Without an emergency fund, even the best investment strategy becomes fragile and vulnerable.

[Fiatless]

A lesson that many still don't learn. They think that upon investing in bitcoin, it should be fine that they're in it but the other aspects of their lives aren't right. This is a good advise that upon investing to bitcoin, everyone has to make sure that they won't just dump it when they're in need of money. You don't invest in a very short period because you'd see the importance of long term and how you understand investing. Don't sell your bitcoin when you're in need due to your negligence from having an emergency funds and with your losses in your other investments.

Some people are so zealous about investing in Bitcoin that they fail to plan for uncertainties. Others just assume that they would not have any future emergencies, so they don't prepare for them. Those who are also ignorant assume that Bitcoin is a short-term investment, hence they don't have the need to set aside emergency funds. Without emergency funds, no investment is safe, no matter how lucrative it might be.

[Oshio-man]

To hold bitcoin is very easy, if truly you settle down to learn to acquire the knowledge that is making investors and holders to know when to sell to be profitable and when not to sell than to hold to escape loss, if you want to hold bitcoin to be successful in future, make sure you have other business that is bringing you income, that is what will give you the boldness not to sell your bitcoin in short period of time than to hold for long term before you can visit the market to know what to do , either to sell to earn huge income because every holders target is to make huge income from the market.

[CageMabok]

OP must identify the meaning of the phrase "just keep Bitcoin for the long term." In this case, investors who have been involved in Bitcoin for a long time know what they should do. As new investors, we must examine it in as much detail as possible. The investment referred to here is one where we place assets for the long term. This requires effective fund management. Long-term investments are important, and emergency funds are also crucial. Wise investors balance both aspects.

New investors will usually learn more from experienced investors or investors who have already had success along a particular path. Therefore, new investors who want to become investors must not only be meticulous in saving important things, but also be meticulous in utilizing their time so that they can be truly disciplined in all other important matters. And from some of the advice you provided, I believe it is also very important for new investors and should not be overlooked.

In this case, it's not the Bitcoin investment that's inappropriate, but the way we manage/manage each individual that determines the success of proper fund management. What we must examine is how to manage funds/assets properly and wisely. Investment is very useful, and emergency funds are also important. Investment can be done using DCA by not investing all of your funds, keep an emergency fund.

Investing varies from person to person. It's not recommended to invest all your capital in a single asset, as this can create difficulties when you need money for other things in life. That's why most people recommend investing only as much as you can afford, and this can be done repeatedly using the DCA method or other methods that are convenient.