Quote from: JayJuanGee on December 31, 2022, 08:50:38 PM

Quote from: MarjorieZimmermanGinger on December 31, 2022, 08:14:50 AM

Quote from: JayJuanGee on December 26, 2022, 09:32:17 PM

Quote from: MarjorieZimmermanGinger on December 27, 2022, 05:38:19 AM

Quote from: JayJuanGee on December 26, 2022, 09:32:17 PM

I think that the area in which OP went wrong was that it appears that he was calculating that the BTC price will go up during the next two years, and he seems to calculate that into his plan as if it were guaranteed, and even if the odds might be greater than 50% that the BTC price will go up in the next two years, that seems to be allowing for too many loose ends in regards to how to play a 8% to 10% per year interest rate that guarantees a certain level that he has to cover in the loan just to pay the servicing of it and how much the loan is costing him.

Predictions like this are normal things to happen in my opinion, because the OP could have tried to calculate bitcoin's journey when it reached the previous ATH, so that in the next two years bitcoin can provide a large return on the investment it makes.

Yes. I said that it was a problem for OP to be expecting 2x to 5x returns in 2 years even though other people make the same mistake. And, yes it might happen, but it is a problem to assign too high of a probability to such expectations, as OP seemed to have had been doing. Just because a lot of people do it does not mean that there should not be some kind of an attempt to clarify the matter, which was what I was doing.

If the investment he made goes according to the target set, it will look good and will provide a solution to the loan he is doing, then what if bitcoin in the next two years is still in its current state. Let's say this is the worst assumption that we are trying to predict, even though the next two years may not be the case. I mean there are preventive actions that can be taken, if at any time the target set does not go according to the expected scenario.

I am not sure if I understand or even agree with what you are proposing in respect to "preventative measures" since it is quite true that at the time that any of us goes into a loan, we should be able to create our plans in accordance with all of the information that we know at the time of entering into the loan.

There are quite a few things that are in our control, including what kinds of assets and cashflow that we already have and our abilities to consider the possible ups and downs of our own other assets and cashflow.

We also know the exact terms of the loan what is the percentage that is paid in interest/fees, what is the period of payment and the payment amounts.

As far as the BTC price, there seem to be ONLY three possibilities, which is that the BTC price goes UP, DOWN or sideways. We should be able to plan for those three possibilities, and sure we might have some changes in the other factors that we had considered to have had been fixed, but our plan for the period of the loan should not really be changing very much, so in that sense, there should not be any "preventative measures" that need to be taken, unless there was already a plan to employ such "preventative measures" if certain circumstances pass.

Everyone does not have to understand and agree with some of the assumptions that people want to convey, but the fact is that borrowing money at a bank is an outdated method and there are no greater benefits. If after borrowing you cannot calculate the principal amount of the loan, the monthly fee and the overall impact of the loan.

There is a side of complexity that is understood by many people in the money lending system at the bank, can this case be said to be true?
I mean the bank system applies several principles after providing loans to customers, starting from the sanctions and risks that must be accepted when the agreement has been implemented. This principle includes several risks that will occur, if the customer cannot pay off the monthly fee, the bank will take certain actions.

Three possible journeys of bitcoin, up, down and sideways.

Down: OP invested quite rightly by taking the price method when entering the market, I think this point is quite right.

Up: OP can wait for the bitcoin recovery process going forward, so that the investment made actually reaches the target he expects.

Sideways : I don't really understand the meaning of sideways, but I'm trying to assume that sideways is a condition where bitcoin is in the stage of a severe correction as it is today. This is where the OP went wrong in combining investments with loans in the bank, so the target set for two years is the portion of gambling he's trying to put as an investment, plus no reserve funds to max out for monthly contributions.

And in the end the OP has to be really good at conditioning time, so that the investment journey that starts with borrowing money from the bank doesn't damage his investment pattern, because the use of the money he earns in bitcoin is the right step. If the future period he has capital reserves to cover the bank's monthly fees. Because what I know, investing in bitcoin is a step to maintain the value of the currency and is the best asset in the long term.

Quote from: JayJuanGee on December 26, 2022, 09:32:17 PM

Quote from: MarjorieZimmermanGinger on December 31, 2022, 08:14:50 AM

Quote from: JayJuanGee on December 26, 2022, 09:32:17 PM

Quote from: MarjorieZimmermanGinger on December 27, 2022, 05:38:19 AM

Quote from: JayJuanGee on December 26, 2022, 09:32:17 PM

He also seems to NOT have other funding sources, such as a cashflow and/or other monies to assure that he does not have to sell his bitcoin..

The biggest problem arose here, there was no other source of reserve funds as he started to run out of money to cover the bank's monthly fees, so when faced with difficult conditions he would decide to sell bitcoins. Thus the investment he made did not get any profit and you could say he failed miserably in implementing this investment pattern.

Well, OP seems to be gambling that he is not going to lose. Yeah, so far his the BTC price seems to be going the wrong way, but it is still possible that he could end up profiting from the loan if the BTC price goes up in such a way that covers both his principle and the fees that he is supposed to pay.

This is an important point from the discussion that has been going on, gambling is the same as investment even though the pattern of work is different, because gambling is also part of prediction and investment is not much different from that pattern. If gambling expects a win, then investment expects a profit.

I would frame the differences between gambling and investment differently than you.

From my point of view, some folks seem to convolute their definitions of gambling and/or investing in such a way that it becomes difficult to understand how they are differentiating the concepts, so in that sense sometimes it can be difficult to figure out what they mean when the are describing how gambling and investing differ from one another.

So in some sense it could reasonably be argued that gambling and investing are on a kind of spectrum in which if we go far on one end of the spectrum we are in the territory of gambling and if we go in the other direction then we are in the territory of investing, but there are some shared traits in the middle in which the definition could go either way.

So, for me, investing tends to involve having a longer timeline and also tends to involve the engaging in behaviors in which the amount of guessing is reduced. So for example, if I say that I am going to invest $10 per week in bitcoin no matter what for the next 5 years - which is $2,600 ($10 * 52 weeks * 5 years), then I would call that investing rather than gambling, even though at this time, I do not know how much the price of bitcoin is going to be in 5 years (and/or what other places I might have held/invested that value and whether I might have received a better return by investing that value somewhere else), but I am trying to lessen the number of guesses that I am making. That would be following a kind of dollar cost averaging approach. DCA.

Now, if I take some variation of the same facts, and I tell myself that I have a $2,600 budget, and for the next 5 years I am going to buy bitcoin when it is low (or any other asset that is trade-able with relatively low fees) and to sell bitcoin when it is high in order to attempt to increase my $2,600 in a way that is better than the DCA approach over that same period of time, I might consider those practices to lean more towards a kind of gambling. It is not a very good example, but my point is the more variables that are left to chance including trying to predict the ups and downs of price, then the more I would consider the practices to fall into a gambling camp rather than into an investing camp.

Another possibility would be that if I were not to have an ability to provide myself with a front-loaded $2,600 budget, so in this scenario, I can only add $10 per week to my "investing budget" over the next 5 years, so each week I add an additional $10 to my "investing budget," and I try to identify assets that are low in price and to sell them when they are higher in price within a reasonable period of time, and I would like to both have more than $2,600 at the end of 5 years of "investing" in this kind of a way (whether held in BTC or in other assets but I am frequently trying to time the market in order to increase the amount of money in my investment portfolio, but I would also like to beat the $10 per week DCA approach and to have had accumulated more BTC at the end of the 5 year period than I would have accumulated if I had merely engaged into a DCA practice.

My point is that the more variables that I do not know and the more times that I am taking chances on unknown variables, then the more that the practice is likely to be classified by me as gambling rather than investing.

In the difference in time it may be true that investing is more likely to take a long time, whereas gambling does not take the whole journey. In terms of this definition, there is indeed a difference between gambling and investment methods, but I mean that the closeness of the two is almost the same in the practice of speculation.

I have no skill in math, I mean when people try to narrate investing is very close to gambling only in certain areas. Investment allocates funds to get certain assets that are trying to buy like our discussion concerns bitcoin, while gambling risks assets and depends entirely on uncertain possibilities, in this area it is certain that investment and gambling have different sides.

Within this scope I can understand and definitely agree that gambling is different from investment, and in the end it is we who can clarify the direction of investment or get closer to gambling, in accordance with the understanding and function that we already know.