Topic: Growing both your Bitcoin and backup funds. - page 5. (Read 1023 times)

I don't really know, but I think I have been thinking out of the box for sometime now, about this supposed "backup funds" that most people make attributes to when it comes to Bitcoin investment. You might be wondering what it is. Let me give an illustration:

Assuming we are not into any form of investment like Bitcoin and others, we would still be living out normal lives right?, Which means the income we get are our major means of survival, and not our backup funds.

Then why do most people postulate the idea that when investing in Bitcoin, you have to sideline a backup fund which would aid your day-to-day living?. Please correct me if am wrong, but I think such idea is not convincing enough.

If we can consider our source of income as a major way of survival when we are not into any form of investment, then why can't we consider the money we've sidelined from our DCA funds as what we can survive with?, rather than identify it as a backup funds?.  For more simplicity, what I mean is that: assuming I received my monthly salary of $100, then I deduct my Bitcoin investment funds of $50, then it won't make any sense to consider the remaining $50 as a backup funds, since it's clearly what I need to survive for the full month. We can maybe use the word backup if the salary is been split into three places, maybe $50(Bitcoin investment), $40(main survival funds), and $10(backup funds). This is just my opinion.


Of course, you've identified a key point (Patience) necessary for investing in Bitcoin, but I think you didn't mentioned something, and that is: your level of accumulation.
The unit or amount of Bitcoin you accumulate also has a huge say on how well your long term hodling can profit you. You can't buy $500 worth of BTC for hodl, and hope to get better result compared to someone who bought $5000 worth of btc.
I believe there is power in long term hodling, and also there is power in good amount of accumulations.

It depends on everyone size of income that will determine if you can invest in other investments along side with your bitcoin investment. If the investor is earning little and not much, it is better that he focus more on accumulating bitcoin with his discretionary income to a level that he feels he has enough Bitcoin and wants to invest in a different line of assets. This is when he can diversify to other assets. Real estate is not an investment for the poor or average but for the rich which will make me diversify into real estate as my last investment.

In whatever kind of investment that we are into be it real estate, gold or bitcoin emergency funds is very important be will prevent one from selling part of his investment when it is not of his will. If you just invest all your money, there is high possibility that your investment will be sold when a real emergency hits you. This is why the rich survive more than the poor when investing because they have various means where they can seek funds from without touching from their investments that is growing.

You are right but someone using the DCA strategy still needs to have emergency, reserves and float funds also known as the Backup funds reasoning being that one can have an emergency or problem that will be more than your salary it is those backups funds that will help you not to dip hands into your Bitcoin investment.
I'm using the DCA strategy but I still have my backup funds and am also building it along side with my Bitcoin, yes the DCA strategy is very nice and it gives one freedom but you still need to have a backup funds to secure your investment because you never can tell what will happen, I had a story in this forum were a man using the DCA strategy had an emergency that made him dip hands into his Bitcoin investment because he did not have a backup funds. Now that Bitcoin is in dip any one using the DCA strategy with a strong reverse funds also known as backup funds can use it to accumulate enough Bitcoin.
So even if you are using the DCA strategy like I'm doing is still very necessary to build a strong backup funds if you don't want to be in a situation that will make you dip hands into your Bitcoin investment in future.

If you want to make an investment in bitcoin, there are things in which you need to consider first before anything, the kind of investment you're going into, its duration, the source of fund to use for the investment and so on, if you can't afford to use money from what you have earned or the fund that belongs to you, then you don't have to force yourself in making an investment, money for your daily expenses shouldn't be included as part of your investment.

It depends on the method of Bitcoin such investor adopts because not all method will require a momentary purse in the accumulation process. If it is the investor is using buying the dips and lump sum, then it will be possible to purse until their is enough liquidity within his system before he continue. But for someone using the DCA method, he would have already made his calculations base on his income to accommodate the Bitcoin collection while there is already reservation for the emergency funds. Holding the Bitcoin depend largely on if the concept pf emergency fund is in place and using the DCA method helps because it does not create any form of pressure on the investor. I strongly recommend the DCA method for new investors like you because it eliminate most of the problems you might face.

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.

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.