Should we do DCA strategy for emergency funds for many years?

[SatoPrincess]

It’s perfectly okay to sell your bitcoins when you reached your profit target. Don’t let the fanatics on the internet make you feel bad or less of a bitcoiner because you sold your coins. IMO I believe it’s safer to have a domiciliary account where you can save your money in usd.

[DiMarxist]

I don't think that it's actually wise for someone to save his emergency funds in Bitcoin. The essence of emergency funds is money that is kept aside solely for the purpose of unforseen circumstances that may arise and do doing a DCA with your emergency funds is not okay and is out of point by all standards.

We should try to keep things simple the idea of putting your emergency funds in doing a DCA sounds awful to me. Bitcoin is a volatile asset so just imagine that when there is a problem that need you to use your emergency funds, which you have put into Bitcoin and the price of Bitcoin is down it can affect you negatively.

We should always clearly define things as they are, as someone who has a monthly income program salary according. Set aside money that should be meant for your expenses for the month, then set aside money that you should use for the purpose of investing and emergency funds should be set out and kept aside in Fiat currency.

[Powerjumboo]

I know that as Bitcoin investors that DCA strategy is the most convenient because you simply buy from your discretionary funds whenever you get your income. It is also important to make provision for emergency funds from your discretionary funds because emergencies can happen unexpectedly.

My questions is whether it is important to DCA our emergency funds like our Bitcoin DCA accumulation for many years? If your answer is yes, should we stop if after some years we feel that we have backed up enough funds for emergencies? I know it's not recommendable to keep emergency funds in a volatile asset like Bitcoin but assuming you stopped making provisions for emergency funds should you keep a part of it in Bitcoin to hedge against inflation or leave everything in fiat as reserve funds, having mind that fiat deprecates over time?

We're hear to lean, what is your take?

We need an emergency fund on our way because we never know when danger will come and it is important to have some emergency funds for emergencies but the emergency fund can also be kept in Bitcoin although Bitcoin is a volatile asset then an emergency fund can still be kept in Bitcoin because above all the need if now I have a serious need and if I need money on top of my emergency fund then we must be ready to sell Bitcoin because as I said earlier above all the need for example if a family member needs any medical treatment and is in a serious condition then if the emergency fund runs out then he must sell Bitcoin for treatment. I have definitely kept some emergency funds for my needs which can meet the need and I don't have to keep a close eye on Bitcoin all the time.

[Rubuchi]

I don't think that it's actually wise for someone to save his emergency funds in Bitcoin. The essence of emergency funds is money that is kept aside solely for the purpose of unforseen circumstances that may arise and do doing a DCA with your emergency funds is not okay and is out of point by all standards.

We should try to keep things simple the idea of putting your emergency funds in doing a DCA sounds awful to me. Bitcoin is a volatile asset so just imagine that when there is a problem that need you to use your emergency funds, which you have put into Bitcoin and the price of Bitcoin is down it can affect you negatively.

i also saw this and was a bit in awe about investing or saving Emergency funds in my bitcoin wallet. What is then the reason why it is called emergency funds as a concept. The concept of emergency funds in bitcoin investments is unambiguous so we should not try to make ambiguous. Calling a fund with you an emergency fund does not just stop at the declaration only it also extends to in practice.

[Out of mind]

In my opinion, even if you continue to invest using DCA, it is very necessary to have an emergency fund. It is beneficial for every investor. When you continue to invest using DCA, later when the market situation worsens, if you do not have any emergency funds, you will not have any money for investment. That is why you should keep an emergency fund so that if you create a position in the market where you think it is very deep, you can buy with that saved money. Emergency fund is not an investment but rather a helping hand in investment, which is very important for every investor. If you keep your savings for investment in local currency, you will have to face losses due to inflation. That is why I think you can convert them to dollars if you want, it will be stable and there will be no possibility of inflation here. Along with DCA, emergency fund is very important for every investment, so every investor should manage this matter carefully.

[Gozie51]

We're hear to lean, what is your take?

I believe emergency fund is just as reserve money which means money kept for emergency purposes and for whether it is good to be used for bitcoin investment or not is relative. Left for me I would say it is not really bad. It is not bad in itself but the reason you may get advise against it is because bitcoin investment for profit is expected to stay for longer time before you call it off for bigger profit margin. So when you keep emergency funds in bitcoin, you may have need to withdraw it to serve the purpose of emergency and maybe get a lesser value when you are withdrawing because of drop through volatility. But have we also considered the other side of the coin? I mean you can also invest your emergency money in bitcoin then within the next couple of days after the invest, it increases more than 50%. This is the reason I said it may not be a bad idea. Therefore, it is relative whether you want to invest emergency money in bitcoin or not.

[Tongley]

I would never want or prefer to keep my emergency fund in Bitcoin. Because no one can say when an emergency will arise, rather it comes suddenly and no one can say the price of Bitcoin or when the Bitcoin market will go. So whenever your emergency arises, if the market falls, you will face a loss and will be forced to sell. So keeping your emergency fund in Bitcoin is never the right decision.

I like to divide my emergency fund into two layers. For example, one part is in dollars and the other is in fiat. Because the inflation rate is increasing day by day, keeping the emergency fund in fiat is a concern. I like to keep a small amount of fiat and the rest in dollars. Because whenever such an emergency arises, I can get some time to convert from dollars to NGN.

[ruykeri]

DCA refers to the regular purchase of Bitcoin. In the case of an emergency fund, you are not buying anything but saving some money from your discretionary income for future security. The reason for this is that if an emergency arises in the future, then the backup fund will solve it. There is no need to stop buying Bitcoin until the emergency fund is complete. After calculating the necessary expenses, some of the remaining discretionary income can be given to Bitcoin and some to the emergency or reserve fund at the same time. However, 50/50 or any other specific ratio cannot be fixed for everyone. It will be decided according to the personal financial situation. And there is no need to add money to the emergency backup year after year. The backup fund should be kept according to the amount of total expenses for 3 to 6 months according to the expenditure and income situation. If any part of the emergency fund is kept in Bitcoin, it will no longer be a real emergency fund. Since the price of Bitcoin is very volatile, when you need emergency money and at that time you need the entire backup fund, if some part is deposited in Bitcoin and if the price of Bitcoin is in a dip at that time, then you will suffer a loss even in your backup fund. Therefore, the backup fund should be kept in fiat currency or as savings which can be easily used for any emergency need.

[Akaenyi]

We're hear to lean, what is your take?

I believe emergency fund is just as reserve money which means money kept for emergency purposes and for whether it is good to be used for bitcoin investment or not is relative. Left for me I would say it is not really bad. It is not bad in itself but the reason you may get advise against it is because bitcoin investment for profit is expected to stay for longer time before you call it off for bigger profit margin. So when you keep emergency funds in bitcoin, you may have need to withdraw it to serve the purpose of emergency and maybe get a lesser value when you are withdrawing because of drop through volatility. But have we also considered the other side of the coin? I mean you can also invest your emergency money in bitcoin then within the next couple of days after the invest, it increases more than 50%. This is the reason I said it may not be a bad idea. Therefore, it is relative whether you want to invest emergency money in bitcoin or not.

I understand what you mean, the reason why somebody can put their emergency funds in a Bitcoin investment is for profit so that by the time emergency happens they might have made some profit on the capital but on the other hand they might be at a lose when they want to sell it. I don't think that we should use our emergency funds for any business, if we do we have missed the essence of reserving the funds as an 'emergency, which should be kept in a currency that we can access and spend without first going through a second or third party before we can get cash that is easily acceptable everywhere, remember that many people and businesses don't accept Bitcoin. Spending naira is faster and more convenient than Bitcoin, that is why I believe that it is not recommended to keep emergency funds in Bitcoin.

[JoyceBTC]

Saving your emergency into digital assets doesn't change anything, in fact it's more better to save your money be it emergency or discretionary income into Bitcoin, this would enable you save your money from inflation.
The reason why it's asked about not to save your money or discretionary income into Bitcoin is because when it happens you can easily convert and withdraw it to settle what you need it to , but if is stored on Bitcoin it could take you more longer time to have access to it.

I think you are getting it wrong here. We all know the DCA strategy is a strategy which will help us accumulate wealth gradually bit by bit and it is better off for long term. So imagine you are doing DCA for your emergency funds, which is helping you accumulate it, because you don’t have an emergency at hand and also because of the inflation, then an emergency arises along the line when the market is currently down, then you will be forced to sell at loss because the price of bitcoin currently might be lower than the purchase price. This is the reason why it is not advisable to DCA your emergency funds.

[Gozie51]

I understand what you mean

~snip~

It is not bad in itself but the reason you may get advise against it is because bitcoin investment for profit is expected to stay for longer time before you call it off for bigger profit margin. So when you keep emergency funds in bitcoin, you may have need to withdraw it to serve the purpose of emergency and maybe get a lesser value when you are withdrawing because of drop through volatility. But have we also considered the other side of the coin? I mean you can also invest your emergency money in bitcoin then within the next couple of days after the invest, it increases more than 50%. This is the reason I said it may not be a bad idea. Therefore, it is relative whether you want to invest emergency money in bitcoin or not

You finally aligned to the same view.

My brother I'm saying that emergency fund is what it is, used for emergency purposes and that it is not bad in itself if you invest it but the risk there is that when you want to use it, the value might decrease due to volatility especially in crypto. However, it is relative because you might also invest it and get profit from it too which is individual's decision.

We all know what emergency fund is (money kept aside for emergency purposes) but it depends on the prospect at hand and your capacity to fall back to sort yourself when emergency arise if you had used the initial reserved emergency money. Some people are risk takers too. If they see good profit margin, they can decide to risk investing it and not necessarily in bitcoin/ crypto or any other volatile business to be safe. For example, I have seen someone who loaned his 500k reserved emergency fund to someone to receive extra 100k on top in two weeks time. The deal was planned and executed, this bro took his 600k in the next two weeks. So that's emergency fund that was also reinvested. You must not keep emergency fund dormant in bank or your house if you see good prospect for business turn over. So there is no rule that says emergency fund can't be invested, it can be done wisely if you can. Life na risk too.

[Cossyblack]

I know that as Bitcoin investors that DCA strategy is the most convenient because you simply buy from your discretionary funds whenever you get your income. It is also important to make provision for emergency funds from your discretionary funds because emergencies can happen unexpectedly.

My questions is whether it is important to DCA our emergency funds like our Bitcoin DCA accumulation for many years? If your answer is yes, should we stop if after some years we feel that we have backed up enough funds for emergencies? I know it's not recommendable to keep emergency funds in a volatile asset like Bitcoin but assuming you stopped making provisions for emergency funds should you keep a part of it in Bitcoin to hedge against inflation or leave everything in fiat as reserve funds, having mind that fiat deprecates over time?

We're hear to lean, what is your take?

In my opinion your emergency fund shouldn't be invested in bitcoin, my reason for this is that bitcoin is violatile and you have no idea when an emergency will occur. This means if you invest your emergency fund in bitcoin and the value of bitcoin drop,the value of your emergency fund will also drop. And if an emergency situation occurs during this period that the price bitcoin is dropping you will have no option but to sell them at loss. When you do so, your emergency fund might no longer be sufficient enough to deal with the emergency situation. I think you should reconsider your decision because investing your emergency fund into bitcoin is really not a good idea instead leave it them in Fiat currency or you can convert them into a stable coin(USDTt), that way they will be protected from inflation.
 

[Chilwell]

I don't think that it's actually wise for someone to save his emergency funds in Bitcoin. The essence of emergency funds is money that is kept aside solely for the purpose of unforseen circumstances that may arise and do doing a DCA with your emergency funds is not okay and is out of point by all standards.

We should try to keep things simple the idea of putting your emergency funds in doing a DCA sounds awful to me. Bitcoin is a volatile asset so just imagine that when there is a problem that need you to use your emergency funds, which you have put into Bitcoin and the price of Bitcoin is down it can affect you negatively.

i also saw this and was a bit in awe about investing or saving Emergency funds in my bitcoin wallet. What is then the reason why it is called emergency funds as a concept. The concept of emergency funds in bitcoin investments is unambiguous so we should not try to make ambiguous. Calling a fund with you an emergency fund does not just stop at the declaration only it also extends to in practice.

If we are to use our emergency funds then what is the essence of building it with our investment at the beginning, no matter how many years we spend in holding Bitcoin, we should make sure that our emergency funds is kept aside because it protect our investment in case if there is any emergency issue. Emergency come naturally and I disagree for anyone to accumulate emergency funds for years, it is not possible because we are into one problem or the other that is why in emergency funds is very important when it comes to any investment.

The only thing I will assure you here is that if you think you have a huge amount for emergency funds, then the best thing I will advise is that you can reduce the amount that you are using in building your emergency and add it up to your investment, so that your bitcoin accumulation will increase faster.

[Sally9256]

I don't think that it's actually wise for someone to save his emergency funds in Bitcoin. The essence of emergency funds is money that is kept aside solely for the purpose of unforseen circumstances that may arise and do doing a DCA with your emergency funds is not okay and is out of point by all standards.

We should try to keep things simple the idea of putting your emergency funds in doing a DCA sounds awful to me. Bitcoin is a volatile asset so just imagine that when there is a problem that need you to use your emergency funds, which you have put into Bitcoin and the price of Bitcoin is down it can affect you negatively.

It's really wrong to keep your emergency funds in Bitcoin, it's just like having two separate Bitcoins so basically there is no back up funds. Back up funds are meant to be in fiat currency so that it can easily solve whatever problems you encounter and  that's why it's named Emergency fund. If in your mind saving your emergency fund is DCA to you then fine but it shouldn't be saved in Bitcoin and when emergency arrives it should be used to solve it. Also note that emergency funds shouldn't be kept for too long. After having enough emergency fund you can stop accumulating and push more money into buying Bitcoin instead.

Emergency fund must serve their purpose and whenever emergencies arise it should be available so you don't have to dip into your investment.

[AYOBA]

Just as the name implies emergency funds. I don’t encourage people to invest their emergency funds into bitcoin. It’s called emergency funds, and it’s suppose to be used to take care of any emergency that comes up. Just imagine you decide to use some portion of your emergency funds to invest in bitcoin, and after investing something comes up which you are suppose to take care of, and the money left won’t be enough, you won’t have choice than to sell the bitcoin which you bought, and we know how volatile bitcoin can be, the price might have dropped, and you won’t have choice than to sell at loss.

It’s not good ideal for someone to invest with their emergency funds as some people said profits is not guaranteed any anything can happen at any anytime, that’s why is better for anyone who has interest to invest should have another income apart from their emergency funds. Because using the emergency funds might be a big problem if it happen that the investment goes wrong, but that’s what most of the investors didn’t understand about.
 
We all know that the Bitcoin price is unpredictable the market fluctuates all the time, and when the price goes down and something emergency came up, they don’t don’t have choice than sell their assets where by they will sell it at big loss.

[Dreadboost]

It really a good question, because you are not just asking saving you are asking about opportunity cost Against safety.

So back to your question, should we DCA your emergency funds? I would say No, the reason is because we use DCA to stack up wealth, DCA works better in building wealth. The reason is you buy in Dip and hold for a long period of time but an emergency funds is just like an Insurance, and not an investment.

So let assume you DCA for emergency funds into bitcoin and during this period you are hit with a medical crisis when the is in a bear period, you will be forced to sell at a loss.

So I strongly suggest your emergency should be in liquid cash and stable, because at the end it job is certainty and not returns.

The answer remains NO!!

Emergency funds are not for everyday savings because it serves a different purpose. A particular percentage from the discretionary funds, which isn't meant for emergency funds, is used for DCA to gather enough Bitcoin. When the emergency accumulation is over, the percentage for emergency funds may or may not be used to add to more accumulation for Bitcoin. 

Know that it is a matter of choice. It is not compulsory to use emergency funds to invest in Bitcoin when the emergency fund accumulation target has been reached. The money can be used to diversify.

[Miles2006]

The discussion is complex meaning investors who save up emergency fund in bitcoin sometimes don’t get it right, emergency funds should be accessible at all times so if I may ask knowing fully well we can’t predict when we’re going to need the money, will the emergency fund be accessible when store in bitcoin definitely bitcoin price is never stable, I doubt if the money will be available when needed.
Inasmuch we use to store our wealth in bitcoin, it’s more preferable storing emergency fund in fiat for emergency purpose and in relate with bitcoin price although we can take a little of emergency fund and store in bitcoin but, there’s no problem as long as we can afford to replace the fund back. An investor might decide to stop saving up for emergency fund when they feel the fund is enough after some time they continue depending on our financial capacity and management plan.

[Abu-Naim]

My questions is whether it is important to DCA our emergency funds like our Bitcoin DCA accumulation for many years? If your answer is yes, should we stop if after some years we feel that we have backed up enough funds for emergencies? I know it's not recommendable to keep emergency funds in a volatile asset like Bitcoin but assuming you stopped making provisions for emergency funds should you keep a part of it in Bitcoin to hedge against inflation or leave everything in fiat as reserve funds, having mind that fiat deprecates over time?

Emergency funds are not calculated like other investment funds, it a money we kept aside for any emergency purposes that might arise when we probably have no alternative than to use the money to solve our problems because without this emergency money, you will have to use from your investment which is what most of us don’t want because you might not be on profit at that particular time, you have to sell at loss just to be safe.

I don’t think we need to DCA emergency money, we can keep the money almost anytime we use the funds for DCA, but at some point if we have enough money that will be enough to solve so many problems, we save them against any emergency, then wen increase our investment planning we now have more money to use in buying Bitcoin, and we reduce when our emergency money is finished.