Quote from: Justbillywitt on April 26, 2024, 09:45:41 AM

Quote from: Rustam Meraj on April 26, 2024, 03:50:02 AM

Quote from: Troytech on April 26, 2024, 02:47:54 AM

Your right about all that but I think you seem to mis understand the hypothetical, in this case it is not about needs or disposable income available it's more about two different investors with equal financial situation and equal discretion income and disposable income that choses to allocate different percentage and that is due to the risk or proximity of the investment not doing well.

Let me explain as I've understood.

MR A Understands the fact that bitcoin has a probability of not giving him any returns or going to zero and still choses to give 25% to bitcoin without putting himself on any pressure and is totally comfortable with it and it does not bother him, but MR B despite being in the same situation like Mr A doesn't go well with having too much in bitcoin and rather decides that it would be better to have only 10% in bitcoin and have the rest in cash.

You see they both have everything equal on both sides but they don't chose the same allocation to bitcoin because they don't both agree that it would be good to be aggressive in bitcoin based on the fact that it could also not give any returns and that should be seen as risk tolerance.

In both cases there is risk level in mattering. And you are right that Mr A has more confidence about Bitcoin and he really believes in. So he is putting 25% of his income in Bitcoin. And I am sure if he believes in Bitcoin so definitely he will be in huge profit at certain point. Mr B will also be in profit but due to low investment he can't get much like Mr A will get.

That is the game of mind. If your mind is saying you shouldn't invest much just because of loss fear so you can't invest much.
But if you believe on anything you don't listen mind you just invest in it and wait for the better time.

We don't determine who believe more in bitcoin by the size of our investments, what really determine the size of our investment is our financial capacity. Two investors can have same trust and believe in bitcoin but one with more money will have a bigger portfolio because he financial capacity is more than the other one who has less portfolio, but that doesn't mean that the one with less portfolio in bitcoin doesn't believe in bitcoin. It's all about staying within your limit and not over doing yourself. You have to understand that at the end of the day it's about investing what you can be able to lose that will not affect your life negatively.

This is part of the reasons why some persons fail in life because they want to be in same measures with others without evaluating themselves if they can be able to endure what another person can endure. Investing in Bitcoin doesn't mean one needs to have huge amount before engaging oneself and it has been discussed severely that we should endeavour to invest what we can endure because unforeseen circumstances can happen and the reverse be the case so in such situations how can you be able to handle your emotions when you have sacrificed all your income in such an investment? that is why an alternative to your funds is necessary so that in a situation where things doesn't work the way you plan, the emergency funds can stand as a yardstick to make plan B and you continue with your investment journey because if you must grow in your investment, you must look for a way to continue and restrategize in a case where your initial plan failed.