Some people can even invest 30% of their salary in bitcoin, 50% in their needs and bills for that month, and 20% in emergency funds, but that still depends on how much the person is earning.
I like these kinds of categories, yet there is still a difference in regards to how much to allocate towards something for each paycheck, but if the emergency fund is not being used, then it does not need to be allocated into, except if such emergency fund is getting rebuilt from having had been depleted... so when you are describing the 20% for emergency fund, you are likely just referring to something like an expectation that you might have about variance in your expenses versus your income..,. so there is difference between a variance in your income versus expenses and the replenishing of an emergency fund... even though there could be cases that might be drawn out for a decent amount of time that might amount to replenishment of a depleted emergency fund...and some members have already suggested that an emergency funds should not be touched at all, except for the purpose that they are proscribed. I am not 100% in agreement with that view, but I surely have a lot of sympathy for that kind of a conservative and self-imposed disciplined approach.
Yeah, you are right, Sir JayJuanGee. Although everyone has a different approach as to how they always like to make their allocations, which have been working for them the way they want, obviously, steadily allocating money to an emergency fund that has not yet been used would not add any profit to the money. The situation is just like keeping a lump sum of money in your safe, which is not invested anywhere and will therefore be affected by inflation.
I am of the opinion that the emergency fund should only be replenished when the initial allocation from the first paycheck has been fully utilized for the intended expenses.
Let's say, for example, that someone receives a paycheck on the first month and the person allots 20% of the salary into an emergency fund safe, and due to fewer expenses, or perhaps there were no arising expenses for that month, the emergency fund was not spent. Then there would be no need to still allocate more funds (20%) to the already existing emergency fund if the person received another pay check for the second month's salary.
If perhaps the person still has their first-month emergency fun allocation unspent, they can then allocate the 50% (20% + 30%) to their Bitcoin investment or another investment if they have any, because it will be profitless to always keep allocating more funds to emergency funds whereas they are not being spent and are not going to generate any profit.
I agree with what you said.
Do it in the way that is best comfortable for you, depending on how much you earn every week or month. Everybody's salary varies; some people can put more money into their bitcoin investment and only put less money into their emergency funds, and yet they will not be affected in any way; they will still have their needs contained until they receive their next salary and work out the new budget they also have for that month.
Some people can even invest 30% of their salary in bitcoin, 50% in their needs and bills for that month, and 20% in emergency funds, but that still depends on how much the person is earning.
Of course that is the most convenient way at the moment but in the future I will readjust how to distribute the budget more evenly and larger on bitcoin investment, as I said I want to increase the strong fund first so that it is safer and stronger for a few months the rest can focus on bitcoin defensively by increasing the DCA.
I believe many of them do that such as 30% bitcoin investment 10% emergency fund the rest of the needs to cover a month, for now it should be more adjusted again and strategize a good budget over the long term for bitcoin investment.
Well, the fact remains that everyone has their own way of doing things in order to avoid financial hardship. Your approach is not bad; when you have your expenses covered, you can always increase your Bitcoin investment allocation.