Post
Topic
Board Speculation
Re: Buy the DIP, and HODL!
by
red4slash
on 17/09/2023, 12:42:33 UTC
I like to think about the non-steady income in a couple of parts.

The first part is just figuring out what is your worst-case scenarios, what are your best case scenarios and what is your average... So then with that information you can try to project ahead, and most likely mostly using some combination of the worst-case scenarios and the average in order to figure out how much money you need to keep in your emergency fund in order to cover those situations in which the worst-case scenarios ended up playing out rather than the average case scenarios.

So, even though not necessarily likely worst-case scenarios could end up playing out for 6-12 months or more, and so the emergency cash fund should be able to cover the gap between what you need to live and what kind of income is coming in.  Hopefully, you are already spending (your monthly expenses) somewhere less than your average case scenario which should then cause for an ability to invest (or DCA) with part of the amount that you are living below your average case scenario. and sure if the worse case scenario persists for a long time, you may well end up needing to either reduce or eliminate your DCA purchases of bitcoin, but if you have planned in advance you should not necessarily need to stop your DCA, and for sure, you do not want to end up putting yourself in a position in which you end up having to sell any of your BTC during periods in which worse case scenarios are playing out.. which likely would mean that you had not sufficiently prepared in terms of your emergency fund and/or the ways that you had been choosing to live in order to make sure that you are generally living below the amount of your average case scenarios rather than spending more than that.
Thank you for adding further clarification to this; I consider this information very helpful and I know other people do too. A lot of people in this forum might actually fall into this category of unsteady cashflow and this information will be very helpful for those who will be able to digest and implement it.

From your explanation, it is obvious that a simple averaging of upper and lower limits might not be  as efficient as keeping in mind the worst-case situation. As student, it is easy getting $10 per week for low income country oike mine  but sometimes it gets as high as $50. For a student in this situation that want to start investing in Bitcoin, a DCA of $10 per week will be more feasible
In other words, we should not only have a strategy when our finances are stable to do this DCA, but we must also have a scenario when the worst situation comes to us. I am someone who believes that bad things can come at any time, and in this conversation we are focusing more on our financial situation.

Don't get too comfortable with the situation, because that's actually something that will make it harder for us in the future. For example, we are doing well right now, and we forget what the future will be like. Because no one knows what will happen one week, one month or one year ahead, so we must be able to prepare for it as well as possible.
And if we are in a situation like that, maybe we should reduce or even stop the DCA that we have been doing, I agree with that.