Topic: Buy the DIP, and HODL! - page 269. (Read 136429 times)

investing with anything that's related to a loaned money is directing inciting bad debt on yourself and money that's loaned in itself has a specific date you're supposed to pay it back which means that your investment timeframe is totally dependent on how long the owner of the money is willing to allow you access to it and that makes it a bad source of bitcoin investment option as it won't encourage you to HODL for the long term and if you're only able to buy your Bitcoin from loaned money, it directing means you will not be able to continue buying more Bitcoin and that you have a combination of so many issues you've got to fix ranging from payment of debt, sorting out emergency funds and even being able to take care of yourself while still accumilating your Bitcoin and these will all go put you in a tight corner where you might be forced to sell off your holding at a time that's far below your target.

As much as it's necessary to think about investing into Bitcoin, it's also necessary to know that the source of our investment should primarily come from us and not from a third party of any kind. Maybe some bunch of motivational speakers like Robert kiyosaki that are of the school of thought that you can always get yourself in debt just so you can invest into real estate or those kind of shit might have sent a wrong message to some folks to believing you can take up a loan to buy Bitcoin but that's just mere shit. The idea of using the DCA methord in stacking up Bitcoin has made it possible for even the low class to get some chunk of Bitcoin without necessary getting it through loan. It's even better to DCA with as low as $50 per week than buying $2k worth of Bitcoin with a loaned money you will be required to pay back in a small time frame of say six months or so.

Investing in bitcoin is not like a physical business, that you can take loan for in order to make profit after some years and pay back the loan. That cannot work on bitcoin investment because bitcoin is volatile, and the only way you can make profit in bitcoin with rest of mind and peace, is when you invest and hodli for a long time. Taking loan to invest in bitcoin is from fry pan to fire, because when your loan is due, you must pay up or else you will be arrested or given additional years, depending on you and the loan giver understanding and agreement, but you will also service the loan or the percentage will increase. If bitcoin is in the bear market or anytime bitcoin price dips, you might have high blood pressure, and your health will be at stake. In fact, so many disadvantages that I didn't even mentioned on taking loan to invest in bitcoin.

Bitcoin investment is done for the future, because that is when bitcoin will have shown itself to the whole world that she is King of wealth, and a lot of investors that bought earlier and now, that were able to build and grow their bitcoin stash without selling will benefit a lot. This is why if you don't have your discretionary income, there is no need to invest in bitcoin. This is because it is better that you use your own money that you have assigned to buy bitcoin weekly or monthly regularly using DCA strategy, so that you can start building up your bitcoin investment portfolio gradually nonstop for a long period of time. You will be investing with ease and without tension, as long as you have your emergency funds, reserve funds and floats to take care of whatever expenses. If you don't have money, you need to get something doing to give you income, and if your income is small that you do not have any discretionary income after taking care of important needs. You should find a second means of income, so that you can have a discretionary income to invest in bitcoin using DCA method which allows you to buy bitcoin at any price level. Regular buying is very important.

It's important to follow the rules, of course, but I think the most important thing is how well you can continue to invest the wealth you invest in the future. If you can regularly add money to invest your assets then you can continue the investment process as per the rules.
Of course, one should invest for future life. Start investing with courage, but don't show courage where you have to invest through a loan process. If you are a normal person then you cannot take big loan, even if you continue investment process with small loan money in long term investment process you will naturally face big loss. Of course we have to focus on additional income projects instead of focusing on loan projects, from where money can be earned and money can be invested. If you have a strong interest in investing then you must find new small income sources, small income projects will collectively grow into a big income source in the future. Investing can only proceed when the incoming sources work consistently.

Of course, it is very important to be able to consider various things before deciding to enter an investment and also to have good planning so that we can carry out investments that can provide benefits from the investments we make.

Indeed, there is nothing wrong with deciding to invest as much as possible in order to have a happy life in the future, but we also need to leave savings for the needs we need because we don't know for sure when we will have these needs so we don't have to take the funds we have. we invest for necessary needs.

In both cases there is risk level in mattering. And you are right that Mr A has more confidence about Bitcoin and he really believes in. So he is putting 25% of his income in Bitcoin. And I am sure if he believes in Bitcoin so definitely he will be in huge profit at certain point. Mr  B will also be in profit but due to low investment he can't get much like Mr A will get.

That is the game of mind. If your mind is saying you shouldn't invest much just because of loss fear so you can't invest much.
But if you believe on anything you don't listen mind you just invest in it and wait for the better time.

I think you need to follow some small rules for investing. If you rush to invest when you don't, you will face big losses. We need to know some good rules for investing and what are they.  Apply and invest.

We should invest only as much as we will not face any problem and after investing we can live happily and peacefully with our family. There are some people who think of investing with money loan. If they face loss after investing, then  I prepare to invest thoughtfully when I think about how they will repay the loan and how they will manage the family. If we want to do good all the time, we must have a good interest in investing.

I applaud you for playing around with various hypothetical persons and going back and forth to attempt to flesh out various considerations that might come into place depending on where a person is with his finances, yet within this one paragraph you seem to be mixing up ideas and framing them in confusing ways.  And, many times, guys are struggling to even consistently hold aside 10% of his income for investing, so it begins to be a bit unrealistic to be describing scenarios that guys have 50% or even 70% of their income available for investing, even though surely there are some people who are able to do that, but they tend to be exceptions rather than common kinds of scenarios... but it is possible, but not very realistic to be describing those kinds of outlier scenarios.. and maybe some of those were pushed more by @Moreno233 rather than by @teamsherry.

First, I would like to review that frequently a person can attempt to make a ballpark idea regarding how much of his income he is going to put into bitcoin, so maybe aiming for somewhere between 5% and 25% of his total income; however, he should not be able to come up with his exact target amount if he does not have some kind of an assessment of what his discretionary income is, so if his income and his expenses are almost the same, then he does not have any discretionary income, so he should not be investing into anything until he figures out how he can either increase his income and/or how to decrease his expenses so that he has a discretionary amount that he would be able to invest into bitcoin.

Of course, people with higher incomes have more abilities to actually make sure that they have some discretionary income, and sometimes folks with lower income have very few abilities to either increase their income or to cut their expenses because they are already living in such a way that they have little to no cushion... so those people cannot choose to invest into bitcoin or anything else until they figure out a way to increase or even create a situation in which they have discretionary income.

Second, I doubt that the concepts of whimpy versus aggressive have to do with how much you choose to invest, but instead they are choices about how much of your discretionary income that you invest.  So if you already figure out that on a monthly basis you have $2k coming in every month and you have $1,600 in expenses, so then you have figured out that you have $400 of discretionary income that you may well be able to invest into bitcoin, and so maybe the whimpy investor might invest $10 per week into bitcoin and the aggressive investor might invest $100 per week.. but of course, there are levels in between in terms of how much this person could choose to invest, and they might even choose to play it by ear, and some weeks they invest the least amount of $10 (by their own choice) and other weeks they choose to invest the maximum, but most of the weeks they choose to invest somewhere in the middle $50-$70, and so the higher that they are investing within their discretionary income, then the more aggressive that they are being, and if they have figured out all of their calculations correctly, then they would not be classified as overly aggressive, unless they were investing more than $100 per week and then putting themselves in a situation in which they are going above their discretionary income and therefore gambling and/or being reckless in terms of possibly putting themselves in a position that they might need some of the money that they had invested into bitcoin for their monthly expenses.


I mostly agree with this part.


I think that it can be helpful to attempt to describe concepts of whimpy versus aggressive, yet surely sometimes the context gets lost and for example, it might well make sense for some newbie investor into bitcoin to purposely start out whimpy in the way that he is investing into bitcoin, and only become more aggressive as he both gets used to investing into bitcoin and as he might be ensuring that he is maintaining a practice of building and keeping an emergency fund, a reserve and a float, and we likely realize that a person who has more cushion in his various forms of cash (whatever he calls them), he will have more abilities to be more aggressive because he is more informed about his situation, and yeah, the competition between kinds of investors and kinds of approaches may well more be suited to be a competition that a person has with himself rather than feeling any need to compete with anyone else, and maybe even if a guy might choose to compare various versions of himself, so he might be using terms such as whimpy versus aggressive in order to compare various versions of himself (or various approaches that he could choose to take) in terms of how much of his discretionary income that he might be using to invest into bitcoin or even other kinds of practices that he might choose in terms of when (and how much) within his own pay period to buy his BTC.

Your right about all that but I think you seem to mis understand the hypothetical, in this case it is not about needs or disposable income available it's more about two different investors with equal financial situation and equal discretion income and disposable income that choses to allocate different percentage and that is due to the risk or proximity of the investment not doing well.

Let me explain as I've understood.

MR A Understands the fact that bitcoin has a probability of not giving him any returns or going to zero and still choses to give 25% to bitcoin without putting himself on any pressure and is totally comfortable with it and it does not bother him, but MR B despite being in the same situation like Mr A doesn't go well with having too much in bitcoin and rather decides that it would be better to have only 10% in bitcoin and have the rest in cash.

You see they both have everything equal on both sides but they don't chose the same allocation to bitcoin because they don't both agree that it would be good to be aggressive in bitcoin based on the fact that it could also not give any returns and that should be seen as risk tolerance.

You know it's funny and pitiful at the same time how most people often underestimate the importance of building and maintaining an emergency fund, reserves and a float when it comes to Bitcoin  investment, because without these things, ones financial stability is nevee ensured, especially for individuals with limited financial resources.
Just as you pointed out, it'll be no different from using one's Bitcoin holdings as a form of trading or gambling because whenever an emergency arises, they'll always dip into their Holdings which will definitely lead to depletion of funds, rather than building it.

The availability of Emergency funds, reserves and float gives one a form or security whenever unexpected expenses, financial shock and emergencies surfaces. This approach makes sure that one's basic needs are met, thereby minimizing the possibilities of dipping into one's Investments.

Just as you pointed out, in order for one's Bitcoin investment to grow significantly, there's need for one to always have a very solid financial foundation because the absence of a solid foundation would definitely lead to depletion of investment and could often hinder the potential for long-term financial success.

It's also worth noting that having an emergency fund is just as essential as the investment itself because without it, there wouldn't be any investment to start with, because surely, emergencies will occur and you'll always sort them out.

However, I believe the reason why most people do not see the need for an emergency fund is because they live off the salaries they earn from their work places, and so believe that the wages are enough to cover for whatever expenses that may arise, which is in reality a flawed mentality because something could happen and thr income may cease, maybe salary payments being delayed or even job loss. Let's just assume it's a job loss and it takes a couple of months to get a new job, without an emergency fund, the only option would be to either acquire a loan or go to your investment for financial support and assistance.

Since you have mentioned about emergency funds, that is a major area where some new investors didn't understand when we say "invest what you can afford to lose". Some might think that they can handle the risk associated with bitcoin because they can afford to put a specific amount of money without worrying in the next 3-5 years because bitcoin's value is always appreciating so far as time passes by and during every after the bitcoin halving. What these people have failed to realized is that an unwanted withdrawal at some point might be inevitable during emergency arises and when it was demanding financial needs. It could get even worse if that emergency happens in the middle of the bear market. That scenario is just a waste of time and investment opportunity. Emergency funds serves two purposes, 1 is to have yourself a separate funds readily available anytime and 2 to protect your investments from an unwanted withdrawals, that if I didn't missed something.

As a bitcoin investor that you want to be ,you really need to take your investment strategy serious if you really want to grow and make it in life, giving an excuse in investing for long-term shows sign of unseriousness in your investment, an emergency fund is always needed in buying more and accumulating your bitcoin,and so you can't do without it . Setting aside of emergency fund is a major key to accumulate for over 10 years to 15 years or more if you want to go into long-term. Emergency fund is like your backup/back bone for smooth investment journey. If situation warrant you touching your emergency fund you should quickly replace it if you are sure of replacement,but if you are not sure it is better you use 1% of your emergency fund to solve your pressing need until when you will replace it so that it will not affect you.

The percentage of fund an individual can allocate to Bitcoin is really immaterial and if we want to work out a number for such, it will amount to a futile exercise. Individual responsibilities differs and there are no two person that have the same needs and the same responsibilities.

@JayJuanGee have helped a lot in explaining the important things to do as regard buying and holding Bitcoin. Such as using the DCA method while also making provisions for emergency funds. If we follow this process, every individual can easily work out what percentage of his funds to put into Bitcoin. How aggressive an investor should be depends on many other factors which I think should be topic for another day so we don't make it appear like competition.

But indeed such a thing is ultimately not worth saying as an investor if it is still using bitcoin or the portopolio that we have to be used as a trade because as you say it is gambling not as an investment so it is not worth someone like that to be said to be an investor because we must remember the initial benchmark that investors should take longer than that because there is at least a period of several years or maybe even decades (because there are still many people who are in bitcoin from the beginning of the creation of bitcoin until now which has been more than 1 decade) it can only be said to be an investor.

It is difficult to maintain and maximize emergency funds or reserve funds especially for those in the low economic class but in the end it also depends on readiness because there is no compulsion to be in bitcoin so that when they want to be in bitcoin then indirectly inevitably they must be prepared with risks including managing finances properly where they must be ready with reserve funds that can be needed at any time needed.

Another thing might be that Mr A and Mr B responsibilities are not the same, and Mr B have a high responsibility than Mr A which will make Mr B not to be able to invest 25% because that is more than his discretionary income. Another reason that is that Mr A might have a strong faith in bitcoin a d chose to buy aggressively using DCA method because he feels that this is the best opportunity for him to invest aggressively and increase his bitcoin faster. On the other hand Mr B might not have not have strong believe in bitcoin just like Mr A, and decided to invest only 10% of his income using DCA until he builds his believe and knowledge on bitcoin, he might decide to increase his amount.

Lastly, Mr B might feel reluctant that he does not need to invest much in bitcoin and invest in a wimpy way, when he can buy aggressively like Mr A, because he is rich and feels that he have enough fiat to save him in future from getting broke, which is under probability. This is why when you are investing using DCA method, the amount of money that we use should be based on our discretionary income, and also DCA aggressively when you are opportune to do so.

Yes every system has it ways of favouring people as long as the rules or guidelines is properly obed by the investor, for any one to strive well in the DCA strategy of holding BTC one should have at first seek knowledge of putting all this inconsideration mostly the area of emergency fund, there is nothing that is not achievable if planing is in place, the poor can still strive or survive with a good planning I see many who withdraw their fund it sell the BTC not just as a result of emergency but lack of planing and having short sight to what the Future hold while some may be as a result of FOMO and lacking required information.

Some time many don't do things base on knowledge they have gather from a right source but as a result of  what they hard and most time this could be unverifiable facts, what you have strong information leads to deep conviction, just in day of this MMM I hard a friend in school that sip garri while he hard over hundreds of thousands invested on it because he knows the income to the investment, there is no challenges that can leads him within the time frame to pull out any amount out there until the expected date base on the condition attached to it as well the benefits is to gain at the end also. conclusively you take more seriousness on what you have greater knowledge in value than what your knowledge is limited.

Those are mere hypothetical to explain the mental situation of two different persons with equal needs and every other necessities in place. Mr A feels comfortable and okay with an aggressive 25% allocation to bitcoin and that doesn't seem to bother him or give him a sence of over allocation to bitcoin whereas Mr B feels okay with his 10% whimpy investment despite knowing he could allocate more to bitcoin.

I made this hypothetical to picture that there is a risk or possibility that your investment in bitcoin might not do well or even go to zero and both persons knows and recognize this fact, this brings us to a point that everyone should invest money he won't miss cause its also possible for your investment not to do well, Mr B might before conscious of this and decides to have more cash than investing in bitcoin and Mr A choses otherwise.

You made a very good and interesting point but I want to point out one aspect of your statement that does not quite sit well with me. That is the aspect of using "risk tolerance" as a factor for investment. In the example you gave, it should not be ability to bear risk that should determine what percentage each of them will allocate to Bitcoin, rather it should be dependent on their individual needs. Using risk appetite as basis for determining the amount to allocate to Bitcoin might seem like Bitcoin is all about risk, a way of amplifying the risk of Bitcoin. So, needs is a better factor to consider and for this case, Mr A might have needs that requires up to 50% of his income while Mr B might have needs that requires just 30% of his income. Under these two scenarios, Mr B will have more leverage to allocate higher amount into Bitcoin than Mr A.

Meanwhile, when I said needs, I am referring to basic needs and any other thing of importance that cannot wait. These are the factors that can force an investor to sell his Bitcoin. Besides these needs, the other major consideration should be emergency funds which covers unforeseen circumstances.

Everyone needs to tailor his investment accordingly to his financial status and also the amount that would be comfort with, two persons might be earning equal amount and having equal financial stability but would be comfortable with different allocation, Mr A might be okay with an aggressive 25% weekly and Mr B might be okay with 10% weekly despite been at same level with Mr A and this might be due to each of them having different risk tolerance relating to investing in bitcoin or having all their value in only one asset.

I believe that when It comes to investing, been comfortable and having a balance matters more cause that is the only way you can ensure that you won't screw yourself up in trying to meet up or compete with others or end up in a state where you feel over allocated. Everyone has an obligation to figure out what is best for himself according to each of their cashflow and risk tolerance relating to bitcoin and how much they feel they can give out to accumulating bitcoin. And yeah someone who had a more whimpy investing might not be as rich as someone who was more aggressive when their investment matures, so it's left for everyone to find that balance been aggressive and comfortable and not being whimpy in your investment.

that's just the thing, bro. At the end of the day, you've got to do what works best for you depending on the peculiarity of your financial state and situation.

Once you try to go above your limit, you're indirectly shooting yourself on the foot because investing with an amount that's above your financial level will put you in a  position where your best bet is to take out some of your holding when your reserve funds isnt able to meet up your needs. I think we should appreciate the fact that the concept of buying with the use of the DCA methord and the idea of setting out a good emergency funds is not so you can just split your money into different places without really making use of it. It's basically strategies that will help you tailor down your investment plan in line with your current situation.

To be really practical, the amount Mr A will choose as his weekly DCA money isn't going to be same with what Mr B will decid to use. Depending on the individual financial levels, what you consider as your emergency funds could be the gross accumilation of another person at the end of the year and if you don't want to take notice of those kind of disparity, you wouldn't appreciate the amount you're DCAing with and as long as you try to do anything that puts you at a big discomfort, you're heading to a possible situation where tou might end up tampering with your holding due to your inability to tailoring your plan to your own self.

This discussion has been treated more than ones here, so I believe every investors or a beginner should be able to understand the concept that keeps their investment healthy and running however I believe this is one of the reasons why at @JayJuanGee introduce the method and the reason why an investor should have an emergency funds and also a reserve funds was actually because of a situation like this so that with a proper utilization of it an investors could hardly run into a problem no matter how it may be, however just like you said is not an investment wise to put in everything you have on investment because with the lack emergency funds or reserve funds their is a big chance of getting into trouble on the process.