Quote from: bangjoe on May 12, 2023, 04:52:27 PM

Quote from: JayJuanGee on May 12, 2023, 02:59:02 AM

.....but you might have other months in which you might have either great cash surpluses or great shortages of cash for a variety of reasons that might have to do with irregular expenses or maybe even some "surprise" expenses... when you have surprise expenses within a particular month, for example, you might be faced with some dilemmas regarding whether you should still invest into bitcoin during that month or to cut back with your bitcoin investment or to completely withhold your investment into bitcoin until you are able to get your cashflow/expenses ratio back in order and perhaps aiming to replenish your cash reserves prior to resuming investing into bitcoin, too.

Unexpected expenditure or surprise is indeed very disturbing in the process of implementing the discipline of financial flow, which makes financial principles unstable, because usually emergency expenditure or surprise expenditure must be made priority, we must immediately complete it first. Emergency funds prepared must be sufficient in handling this but sometimes indeed beyond predictions, funds 30% of our salaries collected within a few months, with a surprise expenditure we need funds even more than what we have collected, in that position Indeed, temporarily making the decision to pause/reduce investment in Bitcoin is the right decision and we can continue the DCA back after everything is normal.
Maybe in the stage of refilling the emergency fund, after being drained more due to surprise spending, I think it depends on how the calculation takes into account the condition of his situation, whether he needs to recharge or continue as usual by saving 30% of his total income, and I think there's nothing wrong with that too Replenish your emergency fund before continuing with your investment.

I doubt there is exactly any kind of a strict formula (like 30% for example... because if you are going to support yourself for 6 months on your emergency fund, then you likely would need more than 30%.. even though maybe you could calculate that you might be able to survive on 30% of your actual income if you were put into an emergency situation that involved losing your cashflow for 6 months.. or various kinds of scenarios that can be contemplated an are somewhat individualistic in the ways that the probabiliites of the emergencies and how they might happen might play out).

Many of us likely can get some kind of a framework in regards to how consistent is our cashflow (and how much of a cushion that we might have / or not), and how complicated our expenses are (if they are consistent, or if there are a bunch of built-in "unknowns," for example).

For example, if we are a single guy with a steady job and we are living on 50% of our salary (and we have 50% that can be spent however we like), then it would likely be way more straight-forward for a guy in that kind of a situation as compared to someone who might engage in work that has very inconsistent cashflows that might even be partly dependent on the efforts of others (such as running and/or owning a business), and also if a person has a family that s/he supports with his/her income, then there could be some inconsistencies regarding those expenses, depending on if some or all of the other members are contributing to the family finances or if they might be causing some unexpected increases in expenses.

More complicated situations likely justify retaining a higher amount of liquid value in reserves. By the way, liquid means that you are able to spend it or get access to it right away without any obstacles.. something like cash is very liquid, and residential property is not very liquid, stocks might have some liquidity, but might take several days or even weeks to liquidate.. Of course, bitcoin is pretty damned liquid, but if you are investing in bitcoin, you would not necessarily want bitcoin to count as part of your "emergency" funds until your holdings are in sufficient profits, and maybe you don't even want to be forced to sell it while you consider yourself to be in early BTC accumulation stages..

Like I said having some variation of 6 months cash reserves can be really great and empowering for any investor to achieve and to thereby allow a lot of investing freedom when the cashflow and the reserves are sufficiently/adequately in place to provide for that kind of flexibility, and how those reserves are held can vary too.. so they might need to have some amount of liquidity in terms of being able to be drawn from over 6 months, so they might not need to be 100% liquid upon demand in order to be able to be drawn from over a period of 6 months if such an emergency situation were to end up playing out that drug out for 6 months or maybe longer, but at the same time, if there is 6 months of reserves, and the reserves start to be depleted, many folks are not going to just sit back and let the reserves deplete because the situation would start to become even more and more stressful in the event that the reserves continue to be depleted and they get down to some kind of level of exhaustion or near exhaustion.