The only way to protect your investment through Bitcoin is to be informed on how it works. It's because you're the one that's going to be trusted by yourself in handling it. There won't be a bank that will hold it for you unlike them that has portfolio manager for their stocks and other assets.
And that's why protecting as if it's only volatility that you should be worried about buying Bitcoin, no it's not the only thing there. It is part of investing even in other investments because that's how we make money from it.
So, starting from how to protect yourself from potential cons, hackers and scammers, a newbie really needs to invest their time in learning the basic concepts of it.
Topic: Growing both your Bitcoin and backup funds. - page 3. (Read 1023 times)
There is nothing new for me in this thread. For a long time I've been advocating about following some basic personal finance principles before you buy bitcoin and one of them is having a so-called emergency fund or backup fund as the OP says if you prefer. What I don't agree with is to grow it as well. Once you have your emergency fund fully funded you should stop adding to it. You don't need more, it's fiat and gets devalued, so you should only grow your investments.
I know you are not a financial expert, but some who earns like $1k monthly, how much do you think will be his emergency fund. I mean how much will it get to and he will stop and focus on investing according to you.I believe you always have to keep some backup funds for emergencies... In any case, I would still "save" in bitcoin, consider it like a savings account
Now if you have your emergency fund in bitcoin in the name of savings. What happens when you need it and it eventually the deepest time of bitcoin.? 
There is nothing new for me in this thread. For a long time I've been advocating about following some basic personal finance principles before you buy bitcoin and one of them is having a so-called emergency fund or backup fund as the OP says if you prefer. What I don't agree with is to grow it as well. Once you have your emergency fund fully funded you should stop adding to it. You don't need more, it's fiat and gets devalued, so you should only grow your investments.
Maybe some of what he wrote are still new to us but the the word that he highlight there which is called patience, is indeed very common and always been mentioned here across the forum. Another word that he highlight is backup funds, and this one is also new to me but IDK about you, though I'm sure that it was rarely being mentioned here.The only thing is that a lot of us are already doing it because it is also important. I think that the word back up, can mean two things, and that is it's okay if it is only less superior and the other would be is it must be equal to the other that we currently have, so that there will be less problems that we will experienced.
I believe you always have to keep some backup funds for emergencies... In any case, I would still "save" in bitcoin, consider it like a savings account
You can have your asset in bitcoin and still have your backup fund in this same bitcoin, the only difference from the two will now be on where you will hold them, you can make use of a cold storage for your bitcoin holdings for it to grow as an asset while the backup fund can be held on an exchange whereby you can easily exchange it for fiat when needed at any time, this one on the exchange will be as little as something you can afford to take risk on, since its not your major investment in bitcoin.
That is great strategy to have both long term investment in bitcoin and backup fund in same currency with the main difference being storage location. Using cold storage for your main asset investment allows it to grow in value over time while keeping smaller riskier amount on exchange for easy access to fiat when needed. This approach always allows us to manage risk and potential losses as exchange held funds are smaller portion of your overall investment. It is smart way to balance asset growth and liquidity.On the contrary, I don't consider this a great strategy. First, using bitcoin as an backup fund is a bad idea because when it comes to emergency funds, we need to keep its value stable and less volatile, not as volatile as bitcoin. A backup fund means we can use it immediately, at any time, and it has a stable value. The second thing is that leaving backup funds on exchanges is too risky because they can be frozen or lost at any time if the exchange crashes or goes bankrupt. Exchanges are not more safe and secure than banks, make no mistake about it even though they are both centralized institutions.
There is nothing new for me in this thread. For a long time I've been advocating about following some basic personal finance principles before you buy bitcoin and one of them is having a so-called emergency fund or backup fund as the OP says if you prefer. What I don't agree with is to grow it as well. Once you have your emergency fund fully funded you should stop adding to it. You don't need more, it's fiat and gets devalued, so you should only grow your investments.
You can have your asset in bitcoin and still have your backup fund in this same bitcoin, the only difference from the two will now be on where you will hold them, you can make use of a cold storage for your bitcoin holdings for it to grow as an asset while the backup fund can be held on an exchange whereby you can easily exchange it for fiat when needed at any time, this one on the exchange will be as little as something you can afford to take risk on, since its not your major investment in bitcoin.
That is great strategy to have both long term investment in bitcoin and backup fund in same currency with the main difference being storage location. Using cold storage for your main asset investment allows it to grow in value over time while keeping smaller riskier amount on exchange for easy access to fiat when needed. This approach always allows us to manage risk and potential losses as exchange held funds are smaller portion of your overall investment. It is smart way to balance asset growth and liquidity.
Your point are well utilized. However, one does not necessarily need to have only one back plan. You can have as many as possible so that when one fails, you pick up the other continue your race. Bitcoin is not a get rich quick something. It requires time so much patient just like you said.
Well said, OP. Emergency funds is crucial while investing in Bitcoin in other to be balanced and not sell off your Bitcoin when you're not suppose to, but I believe that even before you invest in Bitcoin this is a necessary financial knowledge one should have.
Investing in Bitcoin doesn't mean you gonna risk everything, or become very aggressive where you don't pay attention to other areas of your life and finances, Jobs.. we should all understand that investment is all about calculated risk, lets not allow our expectations consume us.
Have a plan and be disciplined as you invest and not being pathetic in the name of investment.
Investing in Bitcoin doesn't mean you gonna risk everything, or become very aggressive where you don't pay attention to other areas of your life and finances, Jobs.. we should all understand that investment is all about calculated risk, lets not allow our expectations consume us.
Have a plan and be disciplined as you invest and not being pathetic in the name of investment.
I myself do not agree that all the money we have is put into bitcoin investments, because for this type of investment there are strategies that can be done without having to invest all the money you have.
I didn't recommend go to fully with Bitcoin investment, use all money for investment in Bitcoin. I never said this!Investment is risky so is Bitcoin investment. You must reserve money for other things, not only spend all your money for investment. Emergency will need money and you must have it available to use. You can diversify your investment portfolio, but I don't advice to do it to altcoins that are weak, lack of solid idea and dedication of project, developer team, hence can die easily in bear market.
About altcoin deaths
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Apart from that, to make investments we have to pay attention to other things such as reserve funds, such as funds for emergencies which are not possible to handle emergencies, we have to sacrifice the investments made, especially if the results are not satisfactory enough or make a loss.
Things begin to be more complicated, that is not recommended too.But if you want to complicate the procedure, go ahead with some tools.
https://www.worldgovernmentbonds.com/
You can have your asset in bitcoin and still have your backup fund in this same bitcoin, the only difference from the two will now be on where you will hold them, you can make use of a cold storage for your bitcoin holdings for it to grow as an asset while the backup fund can be held on an exchange whereby you can easily exchange it for fiat when needed at any time, this one on the exchange will be as little as something you can afford to take risk on, since its not your major investment in bitcoin.
Patience is a lesson Bitcoin teaches very well to those willing to keep going. A bear market can last for 2-3 years, and things can keep getting worse until they finally start to get better. And sometimes when they get better in terms of the price, you get crazy transaction fees, which once again require you to be patient and wait.
As for backup funds, some should be in a relatively stable fiat like the USD, but I believe it's okay to use Bitcoin as backup funds and, as the op puts it, dip hands into BTC investment when there's an emergency.
As for backup funds, some should be in a relatively stable fiat like the USD, but I believe it's okay to use Bitcoin as backup funds and, as the op puts it, dip hands into BTC investment when there's an emergency.
We can actually say patience is one of the attributes of a true Bitcoin holder because if you are not patience especially when you have some funds saved up in Bitcoin then the final results to your savings would probably be a messy one and I relate this to what you just said about how long the bear market can actually stay and so having an emergency funds would go a long way too because it would save you the stress of tempting with your coins because believe it or not #bitcoin.is.here.to.stay.
A lot of people especially my follow newbies have already started there Bitcoin accumulation journey before having the idea of securing there Bitcoin investment by having a backup funds such as emergency, reserve and/or float funds and they are now confused on what to do and to be honest I was among this category of people, some people immediately they get this knowledge or idea they pause there Bitcoin accumulation and start building there back up funds also known as emergency, reserve and/or float funds and is okay, but one can still be building his Bitcoin investment and also his back up funds at same time, the only thing he needs to do is cut the percentage he was investing on his Bitcoin and then channel some to his back up funds.
This is what I have been doing ever since I got the idea and it has been working perfectly well for me and it those not affect me in anyway, it is very important to have a backup funds in other to secure your Bitcoin investment there are two things I believe one needs to succeed in Bitcoin investment which are.
1. Patience.
2. Backup funds.
Without having patience to hodl for a long term you won't make it that big and sometimes you will end up losing money but if you are patient enough to hodl for long term then you will definitely reap big.
And without a Backup funds you will easily be tempted to dip hands into your Bitcoin investment when ever you have emergency or problem and you are not with cash but when you have a backup funds it will help you in times of emergency or problem.
So it is very important to protect your investment, especially investments as volatile as Bitcoin, to avoid unnecessary losses. So it will be a very good move to build your backup funds, while contemporaneously building your Bitcoin, although it may slow down your accumulation speed and may take a bit longer to reach your financial goals, however it's all good as long as your backup funds are being built gradually and strong, because the backup funds are just as important as the investment itself. However, it's more preferable engaging in a slow but steady accumulation with a strong financial backup, than being aggressive with one's accumulation with no strong financial backup which will later lead to one's down fall.
It's easy to say that you should do one first before the other especially if you have the innate capacity of being able to do such. It's hard when you're put in a situation where you can only make a choice out of the two. For most people, especially those who are still new to the bitcoin industry and cryptocurrency world they are faced with such choices cause at the end of the day, they wanna claim a stake at having a millionaire-maker in their portfolio, but at the same time, it's not that bad to think that maybe someday bitcoin might flop and when that happens they wouldn't have such backups. This is what I have been doing ever since I got the idea and it has been working perfectly well for me and it those not affect me in anyway, it is very important to have a backup funds in other to secure your Bitcoin investment there are two things I believe one needs to succeed in Bitcoin investment which are.
1. Patience.
2. Backup funds.
Without having patience to hodl for a long term you won't make it that big and sometimes you will end up losing money but if you are patient enough to hodl for long term then you will definitely reap big.
And without a Backup funds you will easily be tempted to dip hands into your Bitcoin investment when ever you have emergency or problem and you are not with cash but when you have a backup funds it will help you in times of emergency or problem.
So it is very important to protect your investment, especially investments as volatile as Bitcoin, to avoid unnecessary losses. So it will be a very good move to build your backup funds, while contemporaneously building your Bitcoin, although it may slow down your accumulation speed and may take a bit longer to reach your financial goals, however it's all good as long as your backup funds are being built gradually and strong, because the backup funds are just as important as the investment itself. However, it's more preferable engaging in a slow but steady accumulation with a strong financial backup, than being aggressive with one's accumulation with no strong financial backup which will later lead to one's down fall.
I could still remember when I was first starting in the bitcoin industry. I didn't even have a financial plan or whatever. I took a major risk and figured that going for money makers at this early stage in my journey would work better than having to save money for when rainy days come. And while I ended up losing it all anyway a few years ago, I was able to earn it back thanks to the knowledge and the lessons I learned in the past. I'm telling this so you know that I had the privilege of still being able to commit mistakes and not lose it all. Some of us don't.
Do not persecute nor belittle people who chose bitcoin over having savings, or vice versa. To them that is the most sensible decision given their circumstances. Support them at the very least.
Investment should be done with money that is spare money and beyond that, an investor has other money reserves to use, for other things beyond investment such as for emergencies like you said.
Spending all money for investment is risky and it's no longer a story of afford to lose or not afford to lose, when it comes to emergency, you need to sell your bitcoin at any price, even -50 or lower than your accepted price. It's not a good choice if you think of other options like knocking doors of relatives, friends to borrow money for emergency.
Invest like this is not wisely in personal financial management and it's not recommended.
I myself do not agree that all the money we have is put into bitcoin investments, because for this type of investment there are strategies that can be done without having to invest all the money you have. Apart from that, to make investments we have to pay attention to other things such as reserve funds, such as funds for emergencies which are not possible to handle emergencies, we have to sacrifice the investments made, especially if the results are not satisfactory enough or make a loss.Spending all money for investment is risky and it's no longer a story of afford to lose or not afford to lose, when it comes to emergency, you need to sell your bitcoin at any price, even -50 or lower than your accepted price. It's not a good choice if you think of other options like knocking doors of relatives, friends to borrow money for emergency.
Invest like this is not wisely in personal financial management and it's not recommended.
Even borrowing money from friends will not guarantee success, we know that everyone is sensitive to money, let alone other people, even brothers and sisters, sometimes it is difficult to help each other when it comes to financial problems, so we ourselves have to do everything well, try not to involve other people in the process. us, even though there are definitely people involved, make sure that person helps us fully.
Patience in anything we do always gives a good result, in investing in Bitcoin, you don't need to rush,as a newbie you need to rush to buy your investment because you might become stocked since it is your first time,you need to study the process and have a fixed income that will keep you going ,a newbie does not understand that there need to be a backup and reserve funds if you want to successfully continue in the investment. Your backup/emergency funds help you to buy more when there is a dip in price or when you are stocked with financial challenges,so you can fall back to your emergency/ backup funds to accumulate your Bitcoin account for a long term so that it will not affect or have a break in hodlin .
Personally I have experience first hand how impatient can make you lose big time in this space. I had the opportunity to finally make it big but my lack of patience denied me the opportunity. The feeling sucks no doubt when you look back at what would have been.
Experience is the best teacher, this days, I tried to hodl certain projects I see potentials in them, dump the ones with no prospect and most of all I tried to build my portfolio with potential coins.
It is also important to have a backup funds for stormy market like what we are currently experiencing. Situations like this in most cases are blessing in disguise when the market fully recovered.
At this time the market is prone to volatility, in such a time it is better to do DCA or for those who do short-term trading it is the best opportunity to buy coins and sell back to get a good profit but the market is running fast and I don't think it is better to hold now because the market may fall further so it is better to either do DCA or short-term trading.Experience is the best teacher, this days, I tried to hodl certain projects I see potentials in them, dump the ones with no prospect and most of all I tried to build my portfolio with potential coins.
It is also important to have a backup funds for stormy market like what we are currently experiencing. Situations like this in most cases are blessing in disguise when the market fully recovered.
Building a portfolio with the best coins is a good strategy but for long-term trading or long-term holding, I trust BTC the most and I am not in favour of holding altcoins for a long time. Yes, because of the way the market is going right now if the market goes down, alternative coins will go down a lot.
So if you are buying alternative coins then my suggestion is to do DCA if you are holding, if you are doing short-term trading then this is a good opportunity for you to buy and sell when it goes up a little and secure some profits.
Personally I have experience first hand how impatient can make you lose big time in this space. I had the opportunity to finally make it big but my lack of patience denied me the opportunity. The feeling sucks no doubt when you look back at what would have been.
Experience is the best teacher, this days, I tried to hodl certain projects I see potentials in them, dump the ones with no prospect and most of all I tried to build my portfolio with potential coins.
It is also important to have a backup funds for stormy market like what we are currently experiencing. Situations like this in most cases are blessing in disguise when the market fully recovered.
Experience is the best teacher, this days, I tried to hodl certain projects I see potentials in them, dump the ones with no prospect and most of all I tried to build my portfolio with potential coins.
It is also important to have a backup funds for stormy market like what we are currently experiencing. Situations like this in most cases are blessing in disguise when the market fully recovered.
Smart move on keeping that backup fund. As you are aware, "don't put all your eggs in one basket." That's the name of the game here. This isn't about rapid riches. It's about keeping strong, clinging tightly, and surviving the storm. Like anything else, Bitcoin ups and downs. The real victors, though, are those who remain calm under trying circumstances. They stick to their strategy since they have one
That's how you should be using your backup money. You are providing yourself with a safety net so you may weather difficult times and emerge stronger on the other side. Though it will take a bit more time to see those large returns, trust me; it is well worth it. This concerns laying a strong basis and a safe future. And you win in this way as well
That's how you should be using your backup money. You are providing yourself with a safety net so you may weather difficult times and emerge stronger on the other side. Though it will take a bit more time to see those large returns, trust me; it is well worth it. This concerns laying a strong basis and a safe future. And you win in this way as well
Don't you think the problem is that you invested most of your money into a long term asset, if you do it this way, you'd frequently be forced to sell when you do not want to, that's why i have said in this thread already, that i recommend keeping part of your funds in liquid assets that you can easily convert to cash.
Take note as well that BTC isn't the only thing you can invest in for the long term, there are other assets you can diversify into. Finally, even if fiat is inflationary, you should also have some money in your bank account for quick spending.
Yes, of course, the problem is that I invested almost all of my money in long-term holding and did not leave some reserves, so I had to sell some of it to meet some necessary financial needs. I was hoping that it would reach the desired goal before I had to sell it, but unfortunately that is what happened.Take note as well that BTC isn't the only thing you can invest in for the long term, there are other assets you can diversify into. Finally, even if fiat is inflationary, you should also have some money in your bank account for quick spending.
I also agree with you that we should keep a cash or a bank account for quick spending. This is very necessary because we need to spend some money on monthly expenses.
The logic behind this is wrong, because nearly all of your money shouldn't be in BTC, for the rest of it to be called a 'backup' fund. There are other investments and assets you can purchase, gold, real estate, and many more you can find; your funds should be well diversified into different assets like these, alongside BTC. However, like you said, it is important to always have liquid asset, so you can live and solve necessary problems without liquidating your long term assets.
Very well said. Even if we always address Bitcoin as the highest ROI investment, still the fact remains that its future is left uncertain and unpredictable. Trusting all our funds into bitcoin will bring a lot of risks, thus losing everything if we end up our bitcoin investment unsuccessful. The only way we can grow our back up funds is to diversify our investments and not just focus on a single source of profits. That way, we won't face financial crisis in the future. Jump to: