If someone has a sustainable source of income, they can always allocate some percent of their income into Bitcoin investments and also allocate some for emergency funds. That's the right way of investing in Bitcoin because if an individual doesn't have a sustainable source of income, he or she might not be able to hold their Bitcoin investment for a long time, but if you have a source of income, you can as well save some money even while investing in Bitcoin.
Some people who don't have an emergency fund can still get money from their other source of income without touching their Bitcoin investment. Unless it's a kid who is investing using the money he or she gets from parents or guidance, The kid might not spend their Bitcoin too because, any time they have any need, their parents can provide it for them.
Topic: Growing both your Bitcoin and backup funds. - page 4. (Read 1031 times)
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I have experience with this. I was following the DCA strategy for a few months and I accumulated a good amount, but in the end I was forced to sell a large portion of this amount due to some difficult financial circumstances. It is true that I made some profits in the sale, but I sold much less than my target.
Having an emergency fund is important for long-term holdlers because it helps to avoid selling your Bitcoin prematurely. But keeping Bitcoin is not a do-or-die affair. Some situations will force one to sell his coins because he really needs the money. I don't think there is a need to regret selling your coins because you need the funds to solve a pressing need. People were forced to sell because of health issues or loss of jobs. My mother will always that it is better to sell an asset to solve a problem than to borrow.
I agree with you that sound financial management requires a balance between investing and building emergency or backup funds. Investments like Bitcoin can be tempting to try for quick savings, but maintaining financial stability and security through backup funds is crucial. This approach may slow down savings, but it provides a safety net in times of emergency, ensures long-term success and protects against investment volatility. Patience and backup funds are key to a sustainable and safe investment strategy.
When people see the volatility of Bitcoin, they just assume that they can invest everything they own and get a quick return from investment. They become disappointed since the Bitcoin price is not predictable. Out of financial pressures they end up selling the coins at a loss. Having a long-term investment mentally is important in Bitcoin Investment.
I have experience with this. I was following the DCA strategy for a few months and I accumulated a good amount, but in the end I was forced to sell a large portion of this amount due to some difficult financial circumstances. It is true that I made some profits in the sale, but I sold much less than my target.
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.
With backup funds means like you should have a reserve in terms that you need to spend money for some unexpected happening. This is what mostly being called emergency funds. While the logic of what OP has said is true. I have seen people that I invest together at the same timeframe but then they're able to lose their grip through their holdings because they were in need of money and they have no other place to pull money but to sell their Bitcoin holdings even if they don't want to. So, with that, it's very important to have that emergency funds just in case that unforeseen financial challenge comes to you.
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.
I agree with you, you have a good point. In general, this is true. If you do not have spare funds, it is difficult for you to continue with the Bitcoin DCA strategy for a long time, because you will be forced to sell some Bitcoin in the event of any financial emergency.
I have experience with this. I was following the DCA strategy for a few months and I accumulated a good amount, but in the end I was forced to sell a large portion of this amount due to some difficult financial circumstances. It is true that I made some profits in the sale, but I sold much less than my target.
I have experience with this. I was following the DCA strategy for a few months and I accumulated a good amount, but in the end I was forced to sell a large portion of this amount due to some difficult financial circumstances. It is true that I made some profits in the sale, but I sold much less than my target.
Perhaps with our good income you can split out your investment percentage and you would still be very much okay.
Emergency funds is a very important thing that an investor should always ut in place because it's more like the ground to survive every situation, people who don't consider it always fall victim of bankruptcy.
if eventually one has put in some stash into bitcoin it's left for them to be patient with their investments especially in bitcoin because bitcoin is not a Ponzi scheme or get rich quick investment.
Other people are also able to do their Bitcoin investment as emergency funds, for example some people who bought some cheap Bitcoins before and if they will see it, they have profits already but instead, they keep holding it for some reason and some people like me, I already tried it too. I am able to sell some of my Bitcoins before for some emergency cases even I have separate emergency fund.Emergency funds is a very important thing that an investor should always ut in place because it's more like the ground to survive every situation, people who don't consider it always fall victim of bankruptcy.
if eventually one has put in some stash into bitcoin it's left for them to be patient with their investments especially in bitcoin because bitcoin is not a Ponzi scheme or get rich quick investment.
you might be favoured with the actions because you had no issues financially in that process or during those times but if there was an unforeseen circumstances that had took place while most of your assets where in BTC already you would have noticed more of the value of emergency funds before investments.
It's more like a backbone to your investment.
Now, if you invested in Bitcoin but when an emergency arises you need to convert it, that means you invested more than you can afford to lose. If you invested in Bitcoin and after a couple of years you need to liquidate it even with a loss, that also means you have invested more than you can afford to lose.
How much can you afford to lose? That amount which you can forget forever after you invested it.
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.How much can you afford to lose? That amount which you can forget forever after you invested it.
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.
That's correct, but the point is simple and has been repeated over and over again. Invest only what you can afford to lose.
Now, if you invested in Bitcoin but when an emergency arises you need to convert it, that means you invested more than you can afford to lose. If you invested in Bitcoin and after a couple of years you need to liquidate it even with a loss, that also means you have invested more than you can afford to lose.
How much can you afford to lose? That amount which you can forget forever after you invested it.
Now, if you invested in Bitcoin but when an emergency arises you need to convert it, that means you invested more than you can afford to lose. If you invested in Bitcoin and after a couple of years you need to liquidate it even with a loss, that also means you have invested more than you can afford to lose.
How much can you afford to lose? That amount which you can forget forever after you invested it.
Backup bitcoin is good idea. It help to future savings. So don't lose the bitcoin. If have bitcoin hold it long time . Bitcoin price is any time hit the price. It best investment and savings your Life time. Hold time hold the Bitcoin easy wasy got more profit.
When you have decided to invest in Bitcoin for your future, of course you will have a good understanding of the risks of investing and don't decide to invest without having any understanding of this, of course this will cause you to suffer losses on the investment you will carry out.If you choose to maintain it for a long period of time it will certainly be very good and when you have experienced the benefits of the investment you have made, of course you can enjoy some of the profits you have earned and if you choose to maintain it for a longer period of time of course This is not a problem, but you must still hold other funds to be able to meet the needs you need.
Backup bitcoin is good idea. It help to future savings. So don't lose the bitcoin. If have bitcoin hold it long time . Bitcoin price is any time hit the price. It best investment and savings your Life time. Hold time hold the Bitcoin easy wasy got more profit.
Well, having a backup is a good strategy when it comes to Bitcoin investment. you just didn't emphasize on it the way I had expect you to. You don't necessarily have to divide your Bitcoin investment to create your backup fund. What you should be dividing is your source of investments, like your salary or earnings. Then you continue investing using the dollar cost average (dca) method. Your back up fund is just like a spare money you are saving on a separate account, to cover up any emergency. This is separate from your expense funds that you use to cover up bills and maintenance. It's just only needed when there's an urgency for funds.
You have explained this well. I looked like the OP didn't get it well. And you have done justice to it with this sound explanation which I would have also written. I always think that DCA method is the most suitable method for people who are employees, rather than business owners. Because as an employee with a family and numerous bills more than your salary can cover, splitting your income and have a small fixed amount go to investing in bitcoin, while another goes to emergency/back up funds is simply the ideal thing to do. The others would go into the family upkeep and other things. While entrepreneurs and other big business owners or those whose income are massive can afford to invest lump amounts in bitcoin without bothering much about DCA or back up funds as their investments may be more diversified.
Your points are excellent. You have nicely discussed the importance of backup funds. Building a backup fund is a smart approach to investing in Bitcoin. I completely agree with the two important key points you mentioned are patience and backup funds. Patience is very important. Those who can be patient can do much better in the long run. If you have a backup fund then you don't need to sell your bitcoins in an emergency. You can meet your needs with your backup fund.
there are two things I believe one needs to succeed in Bitcoin investment which are.
1. Patience.
2. Backup funds.
To succeed, there are more conditions than these.1. Patience.
2. Backup funds.
A good strategy for your investment is start of everything. Strategy includes your capital management, for other things beyond investment and how much you allocate your capital for investment.
How you do purchase for your investment. I recommend you to apply Dollar Cost Averaging DCA strategy.
https://costavg.com/
Choose a good wallet to use: open source, non custodial.
Back up your wallet and let's see
How to back up a seed phrase.
Perhaps with our good income you can split out your investment percentage and you would still be very much okay.
Emergency funds is a very important thing that an investor should always ut in place because it's more like the ground to survive every situation, people who don't consider it always fall victim of bankruptcy.
if eventually one has put in some stash into bitcoin it's left for them to be patient with their investments especially in bitcoin because bitcoin is not a Ponzi scheme or get rich quick investment.
Other people are also able to do their Bitcoin investment as emergency funds, for example some people who bought some cheap Bitcoins before and if they will see it, they have profits already but instead, they keep holding it for some reason and some people like me, I already tried it too. I am able to sell some of my Bitcoins before for some emergency cases even I have separate emergency fund. Emergency funds is a very important thing that an investor should always ut in place because it's more like the ground to survive every situation, people who don't consider it always fall victim of bankruptcy.
if eventually one has put in some stash into bitcoin it's left for them to be patient with their investments especially in bitcoin because bitcoin is not a Ponzi scheme or get rich quick investment.
Perhaps with your good income you can split out your investment percentage and you would still be very much okay.
Emergency funds is a very important thing that an investor should always ut in place because it's more like the ground to survive every situation, people who don't consider it always fall victim of bankruptcy.
if eventually one has put in some stash into bitcoin it's left for them to be patient with their investments especially in bitcoin because bitcoin is not a Ponzi scheme or get rich quick investment.
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.
Yeah, I agree with this too, I don't think that it's really in our advantage to be putting all of our eggs in one basket, as much as I'd love to do it, I think that still having an access to your emergency fund without the worry that you might be getting it out at a loss is a big deal to me, I can't imagine myself selling all of my bitcoin for the sake of an emergency and that emergency matches to the time that the price of bitcoin is at a really low point in the market, better off to have a money stashed/invested in bitcoin and have some insurance rather than doing it the different way, probably also for the best too that you diversify your investments so you don't worry about money. 
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.
Our funds should not only be limited to bitcoin as there are other potential investments that could also bring potential profits and add more funds into our current emergency back up. Learn not to put all your funds into a single basket, that will only increase the chance of losing. Instead, grow your bitcoin as much as you also want to grow other sorts of investment, but leaving your back up funds untouchable unless if unforeseen events suddenly happen. 
Well, having a backup is a good strategy when it comes to Bitcoin investment. you just didn't emphasize on it the way I had expect you to. You don't necessarily have to divide your Bitcoin investment to create your backup fund. What you should be dividing is your source of investments, like your salary or earnings. Then you continue investing using the dollar cost average (dca) method. Your back up fund is just like a spare money you are saving on a separate account, to cover up any emergency. This is separate from your expense funds that you use to cover up bills and maintenance. It's just only needed when there's an urgency for funds.
And if I may add, if you have extra funds, better course thru your funds to other tangible assets such as real-estate, jewelry and precious metals. One should not only build his back-up funds in terms of fiat or other currencies, but much better if you will have other assets to fall back into.
Savings is also necessary aside from allocating your funds to other assets. It is always best to have some emergency funds if you badly need it. At least you won't be in a tight position with lenders if you happen to require some funds.
Well, having a backup is a good strategy when it comes to Bitcoin investment. you just didn't emphasize on it the way I had expect you to. You don't necessarily have to divide your Bitcoin investment to create your backup fund. What you should be dividing is your source of investments, like your salary or earnings. Then you continue investing using the dollar cost average (dca) method. Your back up fund is just like a spare money you are saving on a separate account, to cover up any emergency. This is separate from your expense funds that you use to cover up bills and maintenance. It's just only needed when there's an urgency for funds.
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