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But at in a case where we feel we have too much of cash around in our emergency and reserves, would it be wise to put some into bitcoin when, let's say I'm having over a year of emergency funds and I feel I have too much of cash kept lieung around could I put at least 10% of that into bitcoin or keep or working for, like diversifying into some other asset ?
It seems that the more poor you are (and the fewer the investments that you have), the more important it is to both establish an emergency fund and also to maintain that emergency fund in cash rather than in any other assets.. especially the first at least 3 months of your living expenses. The thing with richer folks is that they may well have several options, and sure there are a certain amount of rich folks who are not very liquid (meaning that they are not keeping very much of their wealth in cash), but richer folks are still more likely to have options between which asset to sell, so in that regard, they can choose what they believe to be the asset that they value the least, but they also might get stuck with having to sell an asset that is the most liquid to deal with their emergency.. and so I am not going to presume that rich people don't end up fucking up BIG time, but they do tend to have more resources available, and so a person who is not as rich will tend to have to be way more careful not to end up either recking himself or overly ending up; having to dip into their investment because of their failures to properly have enough reserves, and a lot of poor people never end up making hardly any progress in their getting themselves out of holes because they either fail to keep enough emergency funds and reserves (because they are getting too greedy trying to make sure all their capital is "working," and another major kind of mistake that they make will be to either not let their winners ride or to be dipping into their investment way too soon and not letting their investments compound... and surely either of those kinds of BIG mistakes can be made better through better use of emergency funds, and also maintaining and managing reserves and cashfloats.
But I already mentioned the idea that the cash in your emergency fund.. perhaps up to 3 months expenses is likely going to suffer from not earning any interest or growing but instead ongoingly shrinking in value, which means that more and more funds will likely have to be added to the emergency funds and if you are lucky (and you don't have any emergency), then you may well end up ongoingly maintaining an emergency fund for 20-30 years or longer that continues to get larger and larger in terms of its nominal dollar value, but none of that money (up to around 3 months of your expenses) is earning any income nor interest, just continuing to debase in its value.. but it is a cost of staying safe and hoping that you actually never have to use it.. but it is also likely keeping your rich too. .because you would also never have to touch your BTC investment (or any of your other investments) at a time that is not completely of your own choosing.
Let's say that you spend 20 years investing into something like BTC at 15% per year, so after 6.67 years, you have invested a year's of your income, and so after 20 years you have invested around 3x of your yearly income, but at the same time you have continued to maintain at least 3 months of an emergency fund and sometimes you would have an extra 6-18 months of reserves and float, and so much of that cash was not really working through the last 20 years, but hopefully your bitcoin was working during that time and sufficiently made up for the fact that your various forms of cash were not working.. and you can do these kinds of calculations to figure out whether it was worth it to maintain these various systems including calculating if it would have had been better to use your BTC and/or your other investments as your emergency fund, which surely is a kind of sloppy behavior that we see people do and we see normies get reckt as fuck too and they end up having fun staying poor because they never get ahead and they are always gambling with their money.. so by the time they maybe could have had been to fuck you status, instead they are having to work until they die and they also might not even be able to increase their standard of living because they failed/refused to properly invest and/or to properly protect their investments.
Having cash around isn't such a bad idea as long as it would keep us rich and protect our bitcoin investment( this is due to the fact that our bitcoin portfolio would be doing well if we keep if for longer ),
Sometimes we might get too greedy because we want all of our money to be working, and in something like bitcoin, it may well not be really very necessary - even though of course, there are no guarantees - but the essence is to want to stay invested, and if you end up getting very great returns on your bitcoin, then it might not matter that you had 3 months to 9 months of your expenses continually available in cash and not working for you for 15-20 years or more.
There is something that is empowering about having the extra cash just being available, even though it is likely not only failing to earn interest but it is also likely half of its earlier value after 6-10 years.. and maybe also you are constantly having to add to your emergency fund because the first 5 years, you had kept $1k per month (so between $3k to $6k in your various emergency funds, reserves and float), but the next 5 years, you were no longer feeling comfortable with that amount, so you started to feel that you had to put $2k per month.. so $6k to $12k in the second 5 years.
we dont want a situation where by a health challenge uncalled for happens and the only option around is to sell off some of our asset, the thign about emergency is that we don't know when it would happen and we don't know how much expenses it would cost us to solve such a problem, so keeping huge amount of emergency funds or allowing your emergency funds to grow over time is not such a bad idea in general and it worth it even if we have to pay the price of knowing that we would be earning no interest from hoarding fait or keeping such huge cash around us.
You likely should feel reassured because maybe after 5-10 years investing, you end up getting up to 1-2 years of your income/expenses invested into bitcoin, and so maybe you would not feel as bad to be having all of that unworking capital just sitting around.
Another thing will be that if you try to be too whimpy on your emergency funds and reserves and you realize that the first 5 years, you always were able to get away with $3k to $6k in those funds.. .. .. but then if the reality of the matter, is that your expenses and various complications in your finances have gone up, and you would be more justified to double your emergency funds and reserves, yet you choose to keep them the same as they had been previously, then no one is going to feel sorry for you, if you end up getting recked because you were being too stingy with your emergency funds/reserves, and you would ONLY have yourself to blame for your own failure/refusal to sufficiently assess your circumstances while your circumstances are likely to be changing from time to time and in need of adjustments that account for such changed circumstances.
But at in a case where we feel we have too much of cash around in our emergency and reserves, would it be wise to put some into bitcoin when, let's say I'm having over a year of emergency funds and I feel I have too much of cash kept lieung around could I put at least 10% of that into bitcoin or keep or working for, like diversifying into some other asset ?
Even guys who have pretty straight forward cashflow and pretty straightforward expenses, they are still likely are going to have some variance in their cashflow and/or what their reserve levels might reach.. so for sure the emergency funds would likely be the least flexible in terms of your never wanting to use them yet they still might have to grow from time to time to account for what is at minimum of 3 months worth of expenses... and so there would likely be times in which you have a certain amount of emergency funds, a certain amount of reserves a certain amount of float, but also a certain amount that is just extra beyond those categories, so you will want to decide are you going to put that in to bitcoin or into something else... you have more options the more funds that you have, but of course, your own situation should be dictating to you where to put your funds.
Let's say that the guy has already been buying around 10% to 15% of his income in BTC for the past 5 years, and so he has invested close to 3/4 of year of his salary into bitcoin, but bitcoin has performed to such a level that it is about 1.5x his annual income, He has emergency funds that are about 3 months of his income and various classifications of reserves that are around 4-5 months of his income, so some of his reserves are already assigned for buying BTC on dips and other parts of his reserves is his entertainment fund and another part of his reserves is dedicated to his transportation costs and another part of his reserves have been to save up to buy his daughter a bicycle and another part of his reserves is saving up for a vacation, and another part of his reserves is to pay for the construction of a storage shed, and so if he has extra money coming in then he can figure out if he wants to buy BTC with it or maybe he thinks that he should use some of that extra money to invest into something else... My point is that the guy's circumstances and priorities should be helping to guide the extent to which his extra money goes into bitcoin or into something else, and if you notice, there can be certain parts of the guy's reserves that have higher priorities than others, and he sometimes, might have to dip from one portion of his reserves and to put it into something else, and he would spend from his reserves before he spent from his emergency fund, since no matter what he does not want his emergency fund to go any lower than 3 months (unless he really had an emergency and he had already spent from his reserves prior to dipping into his emergency fund).
No one is going to tell you if you have enough or too much, even though some practices might be more risky, and maybe you have a list of things that you want, but you only save up for them one item at a time, but you could still end up building up part of your reserves and then at some point redesigning it to something else, and maybe the part of your reserves that are dedicated towards buying BTC on dips have the highest priority, but if your wife does not get the vacation that you told her that you were going to pay for then, you might have to reconsider you priorities.
once you have 3 months of cash, you could potentially have some things that are cash equivalents that might take a month or two to cash in, but they hold their value. When you start to try to keep your emergency fund in too many other kinds of assets, then you surely run the risk of them all being volatile in the same direction, which is opposite of the dollar (or whatever fiat you use), of course, the richer you become, the less you have to worry about these matters because you likely have all kinds of various assets to draw from and you might not be as concerned if some of them are down or up when it comes time for you to use any of them, and you may also be so much in profits that any emergency might only be 1-2% of your total wealth, versus a more poor person who might get completely wiped out from any small emergency.. especially if he does not set asides funds and cushions to protect himself. .and it can take time to both build up those kinds of protection systems and also get into the practice of using them in such a way that you don't get your own false sense of security because you end up depleting them or using them and then when the real emergency comes, you are fucked because you did not maintain your emergency funds, your reserves and/or your cash float properly..
No one is going to hold your hand either, so if you fuck up, it is completely on you to figure out what kind of balances to make to make sure that you are investing aggressively enough while at the same time, making sure that you maintain sound financial practices in the direction of how you maintain your emergency fund, reserves and float.
When you put it this way, I think it would be better to just focus on bitcoin untill the rich effect starts to come in on your portfolio maybe when you have already invested up to four years of your income and a lot of combining effect has come in over the years then we can think of diversifying or having thoughts to put cash in other assets, yeah it would be a he'll of an experience if we encounter an emergency and we don't have any cash around, so it's left for everyone to figure out how much he feel its okay for him to have in his emergency funds( which should be at least 3months of expenses) and also when he feels he woudl be okay to start considering other asset, cause if anyone ends up fucking up he won't be expecting any pity from anyone and all the responsibility still falls on him for his mistake.
I think that the longer that anyone invests, the more and more comfort that he should have about having had built various systems to protect his investment, but surely one of the problems becomes that sometimes people will start to unnecessarily take extra risks with some of their investment and not protecting themselves as much as they should, and surely there can be points in which your holdings are more vulnerable than others, yet sometimes we cannot always know while we are in the middle of the process, and we can ONLY do as much as we are able to do, in terms of making our own best and solid practices to make sure that we are sufficiently protecting our portfolios and perhaps being aggressive without over doing it.. . and sometimes normies (normal people)_ do not always realize when they are either overdoing it or they are too far on the whimpy side or too far on the aggressive side...
.......it also has lesser to no gas fees attached to buying bitcoin off the exchange and this is good cause most beginners Don have huge capital and can be starting with as little as 10$, so imagine how discouraging it would be for them to be paying for gas everything they have to move their asset to their decentralized wallets, so yeah it's better they state with centralized exchange then when they have accumulated much bitcoin they can now move to a self custodian wallet to store their bitcoin.
Bitcoin does not have "gas fees"
That is a shitcoin way of describing matters.
If you are talking about bitcoin, then you might be referring to transaction fees or even exchange fees, perhaps?
