Basic knowledge is likely just having common sense, which means that there is an ability to learn and perhaps a desire to build an investment in bitcoin (since we are in an investing topic) rather than gambling or losing money. In other words, there are no real basic knowledge that is required beyond common sense, and surely if we also know that there is a need to invest from discretionary funds, if a newbie is having trouble figuring out if they have discretionary funds, then they may well need to spend some time learning math and/or figuring out their budget before they start investing into bitcoin.
I agree with what you said, frst and foremost is to get started,the more they're buying bitcoin, they more they understand bitcoin.They do not need complete knowledge in bitcoin before they can understand the process of buy bitcoin. With common sense and discretionary income, a newbie should be able to buy bitcoin. However it is
important to have a steady stream of discreationary income that they can rely on to buy bitcoin consistently and grow bitcoin investments over the next two bitcoin cycles
Sure. A steady income is preferred, but a steady income is not necessary to get started or even to continue to invest whenever discretionary funds are sufficiently available.
I am still suggesting to build your back up funds from whereever you are at and not creating an extra expectation that you should have more back up funds than you have, so you figure out how much you are going to put into bitcoin and how much you are going to put into back up funds at the same time, and build from where you are at... There is not an extra priority given to back up funds, even though guys still have to figure out their own comfort level in terms of how much to put into each... So a guy starting out with absolutely no back up funds will be in a more delicate situation as compared with a guy who might already have two weeks of his expenses in some kind of a reasonable back up fund... The guy with two weeks of expenses already saved up might not have to dedicate 50/50 to bitcoin and to back up funds, and maybe he decides to put 80% of his then existing discretionary funds (presumptively from his income) into bitcoin and 20% into back up funds.
Sir, I have already created a backup fund. I can keep less in the backup fund than in the investment and I have allocated more money for the investment. Because the backup fund is for expenses and the investment is for the purpose of profit. Just as the budget for the investment needs to be made in advance, it is also necessary to determine in advance how much to deposit in the backup fund. As you said, 80% investment 20% backup fund. I like the idea and it seems very reasonable.
Sure there can be people who come to bitcoin who already have a practice of keeping a certain amount of extra cash for any extra expenses that might come up between their pay periods.. .. yet at the same time, with bitcoin, there may well be need to build up the back up funds greater than they had been previously in order to protect oneself from being tempted to tap into the bitcoin holdings at a time that is not completely of one's own choosing, since especially if you are thinking about investment rather than trading, then you may well develop an investment timeline that is 4-10 years or longer, and I personally consider timelines of less than 4 years to be trading.. and from my point of view, even having investment timelines of less than 10 years may well be considered trading, unless you might have some age or health consideration that might not allow you to plan for more than 10 years into the future.
Generally, I consider building up bitcoin and back up funds at a similar pace to be a good default approach, until maybe the back up funds and the amount put into bitcoin equal right around 3 months of the expenses, then after that the bitcoin could be grown faster.. but yeah, guys can do what they like in terms of figuring out how much back up funds they think they need in order to not be tapping into their bitcoin investment too soon.
When I mentioned 80/20, I was talking about holding back no more than 20% for potentially buying dips, even though I tend to think that ongoing DCA is better, but there may be some guys who want to hold back for buying dips that may or may not end up happening.
Another problem with holding back for the dip, is that it can potentially put guys into a waiting mindset rather than an ongoing acting mindset so it might not be a good idea for guys in their first cycle (4-ish years) of building up their bitcoin holdings.
Let's start with your basic needs, and if you are calculating that correctly, then you have $200 remaining for your monthly discretionary funds. One of the reasons I suggest that you might not be calculating them correctly is that there is a difference between needs and wants, so you may well be including discretionary consumption into your "basic needs." That is for you to figure out, and part of the reason that I suggest that guys divide their discretionary funds into three categories is so that they account for their discretionary consumption, which nearly everyone should have, unless they happen to be a hermit and/or living the life of a hermit.. which most normal people do not want to live the life of a hermit, and we should not have to live the life of a hermit in order to invest into bitcoin.
In other words, you are using only two of the categories, $100 for investing and $100 for savings (back up funds). Savings/back up funds is the same thing, even though you might label them as having different priorities, so some guys might have emergency funds that they cannot touch absent some kind of an emergency, and they might have reserve funds that have more flexibility in terms of how you might use them.. but they are all forms of back up funds, and it is up to you what level of priority you give to them and how much you might want to or be able to stop yourself from tapping into them as you are building them up, presumptively.
If you have $100 per month into each category (investing/saving) then you could divide that into weekly if you want which would be about $23 weekly (since on average each month has 4.33 weeks).
Of course, you can start with certain amounts that you had figured out to be $200 per month and then see how it goes from how you divide it and how it might be building up with time, yet from your description, you may well need to better sort out your expenses (which you described as $400 per month) to determine which ones of those expenses are actually basic and which ones are discretionary (which ones are your needs, versus your wants).
Practice will help you, especially if you can continue to both take action and to keep track and to make adjustments to make it more comfortable for you... and of course, investing into bitcoin takes money away from your consumption, yet if you keep track you might consider it to be a good way of using your money.. and of course, you have to ultimately be comfortable with how much you are stacking away each week or whatever period you end up buying bitcoin with your funds.
I understand the matter more clearly. Now it seems to me that it is necessary to deposit in the optional fund as well. You have given many beautiful suggestions and talked about weekly investments. I will try to reduce my basic expenses, I will deposit $20 in the optional fund. However, I think it would be better to add something more to the investment fund and invest weekly. And the amount of investment in Bitcoin can be increased a little. I have thought a lot about one thing and have seen that the price of Bitcoin creates new ATH in every cycle and increases much more than the previous ATH. The price of Bitcoin is now 66k or 67k thousand. The highest ATH of the last cycle was 126k. If Bitcoin creates the highest ATH in the next cycle, then it will be almost double the current price, so I hope that our profit will be at least double.
You sound like a trader rather than an investor, and surely if you can figure out some ways to build up your bitcoin holdings, it seems a bit pathetic to be fucking around with 2x, 5x or even 10x profits if you are gong to be selling bitcoin and getting into dollars rather than making sure that you buiild up enough holdings so that you don't have to panick about trying to trade, but instead holding onto bitcoin for life... but yeah, in the end you can do what you like.
Think about guys who started investing $50 per week into bitcoin 10 years ago, then maybe over the past 10-ish years, they might have had invested around $27k and accumulated close to 7.7 BTC, so then perhaps they might be starting to get close to a point in which they might be able to quit their job and to live off of their bitcoin...
It seems that bitcoin is amongst the best, if not the best, place a guy can put value and that value building could end up getting screwed up for guys who ended up selling too much bitcoin too soon.. but sure, guys can do what they like and continue to make the same mistakes that guys had done historically... stopping their ongoing accumulation and selling too much bitcoin too soon.
I agree with you to say that guys can still start their bitcoin investment with zero back up funds rather they should not wait for a long time before building their back up funds, I started my bitcoin investment with zero back up funds and that is because my discretionary income was low so it won't be enough for me to build my back up funds and that of my bitcoin investment so I decided to focus on building my portfolio then after a short time I started building my back up funds, but there's nothing good as having a backup funds before getting started because for the fact that I started with zero back up funds doesn't mean other people can try it and it works because no one can predict when emergency will happen.
You cannot start with zero back up funds - since otherwise if you make a mistake that involves a basic and necessary expense needing to be paid prior to your next check coming in, then if having no money until your next paycheck you have to tap into your bitcoin . Maybe you should give an example of what you mean.. because you have to have enough to pay for your expenses otherwise you have to tap into your bitcoin?
I know you're a bit skeptical when I Said that I started my bitcoin investment with zero back up funds, and yeah starting our Bitcoin investment with zero back up funds can be very risky especially those with bigger responsibility like family. But in my own case I don't have a lot of expenses to take care of, and as a matter of fact I'm still single so there are some certain expenses that might seems irrelevant for the main time so then I will just decide to skip them so to enable me have enough discretionary income after taking care of the major expenses. There's one thing I forgot to add in my previous comment, and the things is that I don't go all-in I do reserve some portion of my discretionary income just should Incase... Since my payment will be coming next weekend, then I believe the little leftover I have will serve until my next pay day.
It works until it doesn't work... and yeah, it is up to you regarding how much back up funds you need to keep and how much you need to continue to build such back up funds. As long as you don't end up completely wrecking yourself, then maybe it is o.k, yet sometimes when we are in the process of ongoingly managing our income and expenses, we may find that there are times that we need to have access to cash, and we don't want to sell our bitcoin... and we will learn that having more cash cushion will end up creating way less stress for ourselves.
This is very wrong, who told you that you need to save plenty of money before you can start using DCA strategy. With the DCA strategy you don't need to have or save plenty of money before you start using the DCA strategy.
I was also surprised like you when I saw the first line of his post because the idea of saving a large amount of money before maintaining DCA sounds unrealistic to me. One of the best ways to invest is by maintaining DCA and there is no real need to focus on building big savings before starting it. The bitcoin you are investing through DCA can already be seen as a form of saving on its own.
I know of an Investor who Invest with the DCA method but doesn't have a steady cash flow so after exhausting the Money he has in his discretionary funds then he paused his Investment, he's currently looking for a way to build his discretionary funds again to continue his bitcoin investment, then I realized how important it's to have a steady cash flow while accumulating bitcoin because it makes the accumulation process to go smoothly.
You don't need steady cashflow before starting. All you need are discretionary funds.
Sure, if you have steady cashflow that is probably better to have than not have, but it is not necessary to have steady cashflow before getting started investing in bitcoin.
This is very wrong, who told you that you need to save plenty of money before you can start using DCA strategy. With the DCA strategy you don't need to have or save plenty of money before you start using the DCA strategy.
I was also surprised like you when I saw the first line of his post because the idea of saving a large amount of money before maintaining DCA sounds unrealistic to me. One of the best ways to invest is by maintaining DCA and there is no real need to focus on building big savings before starting it. The bitcoin you are investing through DCA can already be seen as a form of saving on its own.
It is not compulsory like he said it. But I don't think it is entirely impossible or unrealistic and I will give an example to it. If I have a bulk money I made maybe due to the dividends of a good investment I made over the couple of years ago and for one reason or the other I felt like reinvesting it to my portfolio, I wouldnt say I will still go ahead with the DCA approach. I would rather just make my investment in lumps then if I wish, I can then subsequently continue to reinvest using the DCA approach.
Now, this brings me to this question, I have been trying to ask this question. If I'm investing in DCA or Lumpsum into my portfolio, does it mean I have no option or room to be taking some percentages made from my proceeds during the course of investment?From your description, you seem to be trading and not investing.
I don't recommend trading bitcoin, and also this thread is not about trading.. it is about investing.
It is not compulsory like he said it. But I don't think it is entirely impossible or unrealistic and I will give an example to it. If I have a bulk money I made maybe due to the dividends of a good investment I made over the couple of years ago and for one reason or the other I felt like reinvesting it to my portfolio, I wouldnt say I will still go ahead with the DCA approach. I would rather just make my investment in lumps then if I wish, I can then subsequently continue to reinvest using the DCA approach.
Now, this brings me to this question, I have been trying to ask this question. If I'm investing in DCA or Lumpsum into my portfolio, does it mean I have no option or room to be taking some percentages made from my proceeds during the course of investment?
Being a long-term investor does not mean you are forbidden from taking profits when the coast is clear, long term Investment strategy is not a one-size-fits-all scheme so I believe it depends on an individuals goals, risk tolerance, and level of discipline.A pure HODL strategy which means never selling is valid no doubt, but looking at it from another realistic angle, hybrid strategy which means holding for long-term while still taking partial profits is also valid, you cant control what people do with their investments and
taking profits occasionally when the need arises does not automatically make someone a trader, the only time you can call someone a trader is when they are consistently focused on short-term market movements rather than occasional, strategic profit-taking. So If an investor Keeps a long-term core position ,takes only a small percentage as profit, follows a clear plan and doesnt operate with emotions, then they can still be referred to as investors ,they only decided to apply a hybrid approach to it which I dont believe is a crime.
Taking profits does make a person a trader, and we are not talking about trading in this thread.
Also it seems that you don't understand the difference between trading and investing.
