Quote from: Falconer on Today at 05:40:34 PM

Quote from: JayJuanGee on Today at 05:10:53 PM

Quote from: Falconer on May 14, 2023, 03:01:00 PM

So far I haven't been very strict about setting aside an emergency fund and I can tell you it's pretty flexible from one month to another. I mean, the amount can vary as the needs that I have to fulfill each month increase or not. But of course I wish I could put it aside every month as long as I have my salary paid out at the beginning of the month even if it's only a few percent of the amount I've managed to save. Part of it I think is good for investment, and part of it as an emergency fund.

You do not need to be adding to your "cash reserves" or your "emergency fund" every month once you get to a kind of sustainable level. I recall at one point in my life when I was single (no business and no family) that I had a monthly cashflow cushion of $500 (which just meant that the lowest point that the checking account balance projection would ever get would be $500)... but that did not account for other places in which I might have to draw if my income dried up or my expenses increased. When I added a business then I had to increase that $500 amount to $1,500 and there were times that I went up higher and down lower, and sometimes when I would lower it too much then I would see that I was getting into "pickles" too frequently, so I would raise it order to lessen my chances of getting into "pickles.".. so cash cushion is one thing and then how much in reserves is another thing - and if you are having to dip into your reserves frequently, and if you are always (or frequently) into the practice of engaging in replenishing it, then it may well be a sign that it is NOT high enough.. or something is wrong with your balancing of factors, your life style or maybe just the various ways of your income are really inconsistent or your expenses are "all over the place.".. it might also be a sign that you are overly investing into BTC (or whatever other investments that you might have) .

I would imagine that it would be preferable to get to a position in which you are not bouncing around a lot (sure some bouncing is probably not a bad sign in terms of needing to be somewhat aggressive and not overly whimpy in terms of how much you are investing into risky assets - such as bitcoin), and so it is not necessarily easy to strike something close to a balance - and the ultimate goal would be that you are choosing how much to invest into bitcoin based on "extra" cashflow that comes from income and/or fewer expenses, rather than every month struggling to replenish your emergency funds that are already overly depleted... and of course, those are judgement calls in which you have to figure out your own proper, appropriate and comfortable balancing.

I understand that I may mess up this plan in the future when one or two cash flows from multiple sources suddenly dry up. However, I have learned many things from the experiences of the people around me, including maybe some of your experiences in managing finances. This management sometimes won't go according to what we plan, but trying to avoid mistakes in the sense of managing it properly must be attempted.

There is always going to be some risk in any kind of strategy that is attempting to make some progress and to attempt to be somewhat assertive about it (versus some kinds of strategy that might either barely keep up with inflation or that might actually lose value in the future because they fail/refuse to sufficiently attempt to account for inflation).

So, yes.. I would not consider the likelihood that some mistakes are going to be made along the way to be deal-breakers because hopefully, you can just deal with the mistake or the ramifications of the mistake(s) once it (they) happen, yet there still is quite a bit of value in terms of trying to figure out how likely are certain mistakes to happen, and then how big would be the ramifications for each of the mistakes, because there could be ways to at least mitigate how likely it would be that the mistakes would happen and to even make it pretty unlikely that the mistakes would completely destroy you or even that that maybe you might have some mistakes that you would consider to be severe.. but they would ONLY end up dipping into your principle by 10% or 20% rather than some mistakes could end up having something like 70% to 90% dipping into your principle, so even though you may be willing to suffer some unlikely damages, it would be prudent and practical to be able to attempt to recognize the difference in the magnitude and likelihood because sometimes people engage in behavior that has decent chances of producing a 70% to 90% reckening and maybe they are calculating it as if it were only less than a 10% reckening if it were to happen... - including that frequently there are periods in the building of investments and/or principle that can take years and years and years to establish, so if you reck yourself by 70% to 90%, it's not like you can just bounce back in a period of time that is significantly shorter than how long it took you the first time, and in some cases, it is almost impossible to build the same principle at later dates because the costs have changed....

For example in bitcoin, there may have been some abilities in around 2015 to build a 40-50 bitcoin stash for $10k-$15k.... and so if you had built up 40-50 bitcoin, and then you had spent 10-20 of them, and you are feeling pretty good because you still have a pretty solid 20-30 bitcoins that are mostly in some form of cold storage, then if you end up losing 70-90% of them because you fuck around too much and take too many risks, then you end up with around 5 BTC, even though you still have some bitcoin, you are hardly ever going to be able to make it back to having 40-50 bitcoin, and you may well even be damned lucky (meaning that it is quite unrealistic) that you would be able to get back to some kind of a solid status of having 20-30 bitcoins in the next 5-10 years, if ever.

Sure, everyone needs to weigh their own circumstances, but there can be real costs to losing principle, depending on the kind of principle (and the kind of asset) that you might have worked hard to acquire and/or attain (or you might have had luck involved in your acquisition and retention of such asset, too).

Quote from: Falconer on Today at 05:40:34 PM

Children need a lot of things and expenses will increase along they grow up. Just a few days ago my emergency fund had to be reduced due to a need that I can say is urgent, but I have to be grateful it doesn't exceed 10% of the total cash I have as an emergency fund. As I said before, I'm pretty flexible about this plan, and probably won't always oblige myself to consistency on the plan.

There are surely needs to attempt to tailor to yourself and to your own various variables, and none of are necessarily going to completely know how you might engage in some of your calculations or how you might value one asset over another asset (or even valuing time, energy, health and relations). So in that regard, if you dedicate some value to some kinds of things that others would not do, or you end up taking risks that others might not take, there could be some difficult to calculate components and even you might have some difficulties putting exact values (beyond ballpark assessments) regarding why you might be making your allocations in the ways that you are doing...or maybe even there might be some periods where you are making changes 4-5 times in 2 months, and other people are thinking "what the fuck are you doing?" and you are having some troubles figuring out your own calculations, and there might be people who don't change very much in a year and may or may not even look (analyze) what they are doing on even a quarterly basis.

Some strategies (maybe even more aggressive ones) likely need more interaction, and sometimes there could be better results by not trying to be so aggressive and calculating, but sometimes we might not even know aspects of ourselves that might be causing us to engage in various kinds of work that is NOT really productive use of our time.. but we might not ever realize that or ONLY come to realize the matter at a much later date.