Investing a decent amount is also another way to say invest with an amount you can afford to lose. Even if one is responsible or irresponsible, he/she should know that it's very important to invest with an amount that they can always afford to risk. Everyone has an amount that they can afford to lose, but most people don't know.
I don't know if I'm getting you right but why do i feel that your perception on Bitcoin investment is for trading because when you advised him to use the only money he can afford to lose, perhaps indirectly you are saying that there is a higher chance for him to lose his money Bitcoin or in other words referring to gambling investment, however in as much as nothing is guaranteed when it comes to investment but with Bitcoin success is certain if you are ready to hold, so actually the risk you are talking about should be actually dependent on the kind of investment you are talking about because if your pattern is for a long term holding I wouldn't use the word risk because it seems that you don't really understand or know the potential of Bitcoin you are investing on.
Any money you invest into bitcoin should come from disposable income.. so by definition it is extra money and/or money that you can afford to lose.
Your bitcoin investment could go to zero, so any money you invest could be lost 100%, and you should be prepared for that possibility with any money you invest into bitcoin.
Of course, every investor should make a decision to invest in Bitcoin based on holistic considerations. Overall consideration here is the possibility of high profit or investment loss. Consideration of disposable income as capital and the expectation of potential profit associated with it certainly helps to consolidate the consistency of each buying. Future determination of hard-earned income and the decision to hoard Bitcoin is definitely going to be positive as the system has often cheated one following the historical footsteps of the local currency investment journey.
An investment decision with potential returns like Bitcoin and its past price history is certainly a beacon of hope for small investors like us. Although you always say it can be high and it can also go to zero. Your whereabouts must be reasonable because none of us are sure where its value will go. But I think behind the negative attitude we must keep the positive influence which can encourage us to accumulate more Bitcoins. Long-term trends in holding and holding during bullish and overbought each dips.
Your whole post is a bit weird and unclear laijsica, yet it may be worth clarifying that one of the reasons that any of us might consider the possibility that bitcoin could go to zero or to have some kind of a negative rather than a positive performance outcome is so that we temper our investment amount in order to account for those kinds of considerations.
Sure the most aggressive of bitcoin investors might shoot to come closed to investing 100% of their disposable income into bitcoin, and surely there is value in being aggressive, yet at the same time, if they are investing close to 100% of their disposable income into bitcoin for long periods of time, they are likely going to be putting unnecessary and undue stress upon their finances and their psychology, especially since bitcoin is an asymmetric bet to the upside in which investors can lose up to 100% of what they put in, but there are also various great upside scenarios, so even relatively whimpy investors might well end up finding themselves to have had profited quite fantastically from their having had decided to p;ut some level of their disposable income into bitcoin (even if it was a relatively whimpy amount in the 1% to 5% territories.
None of us can decide the balance level for the investment levels of anyone else, so there can be ways to take a reasonably balanced or a somewhat aggressively leaning investment approach to bitcoin, and still maintaining a fair amount of balance and/or enjoyment in life because there is some value to spending some money while you are young rather than completely deferring gratification and neglecting your own psychological and/or social well-being that might sometimes be better off by spending some money while you live rather than completely deferring gratification based on choosing to invest on the high side of aggressiveness into bitcoin.
which may later negatively affect the investment for the duration of that emergency. I think I got the gist of what you said. If 10% or 20% of disposable income can be considered for investment, then the rest of the Floating Cash can be reserved for emergency needs and the amount of float should be such that the daily needs of the family can be met for 6 months or more. This arrangement is definitely going to be positive for long-term investment in the future as the amount of cash depends on increasing your Bitcoin stash and holding it for a long time.
There is nothing wrong or risky for an investor investing 100% of his disposable or investing aggressively in to his Bitcoin investment, the idea of investing your disposable income has to do with a presumption that you have taken care of what you might have consider to be a basic needs with a provisional emergency funds inclusive which is very paramount towards your investment. However, before an investor must have been investing any where close to 100% of his disposable he must have been cutting down expenses such as not riding an extensive car, or not living in a more luxurious house, going on vacations so on and so forth for the purpose of increasing his disposable income as well as his reserved and float to enable him become aggressive in his accumulation without over doing it such that it will not affects his living expenses negatively.
Accumulating bitcoin in an aggressive way will determine on the size of your emergency funds. If the size of your emergency funds is up to 6 months size, you can buy bitcoin aggressively than someone whose emergency funds is 3 months. Reserve funds can be used to buy a new car or car repairs and vacations, so that your emergency funds will not be touched and floats can be used for going out to dinner or eat in a good restaurant.
The probem here isn't that gold or silver isnt a good asset and if its about track record gold has been a very good option for a very long time even longer than bitcoin, but where you are getting it wrong is thinking of diversifying, the question you should ask yourself is can I afford to build a good stash in both asset, then if not you should focus one building up your stash in bitcoin and when it's has gotten to at least a year of your living expense then you can consider diversification.
The problem with early diversification is that you would end up having little of so many asset neglecting the law of concentration which means you gain wealth from building one asset and maintain it from diversifying, so diversification is not a good option for someone trying to build wealth.
It's true, building wealth won't come quickly, it takes time and a process to get there. I think whatever type we will invest. However, when something easier and quicker comes along, I think why should I use another option. Yes, BTC really provides an opportunity to go there as an investment tool, whether you want to invest at the same time or use the DCA purchase method as many people are currently implementing.
The easiest opportunity to invest is investing in DCA method, if you invest in DCA method you will be successful very quickly. Because the DCA method controls the average price of buying bitcoins, due to which each person can accumulate this investment for a long time and it is present to give the most benefits. The DCA method is a great plan to build a mountain of wealth with little by little. As the saying goes (a small grain of sand is a water drop, a continent rises from the bottom of the ocean) because if you keep accumulating small amounts of money, you can eventually build a mountain of great wealth.
That is why DCA method is currently the best method among all investors.In as much as the dca strategy has numerous benefits there is no reason one should or trying make any form of comparison with other strategy as per which is the best method among all investor, every investor will only make that informed decisions of choice of strategy or strategies to be used in his accumulation process to suits him in terms of his, financial situation, risk tolerance level, investment goals and objectives, which all is aimed at maximizing every opportunities in the market to have a sizeable worth of Bitcoin.
I believe DCA is the best method so far when it comes to building your bitcoin portfolio from the scratch as a new bitcoin investor, because you will be consistent in accumulating bitcoin every week or monthly without skipping any of the wee. Before you know it in four years time, your portfolio will have increased to an amount that you would have not being able to have to buy bitcoin once. DCA method is also flexible and stress free because you buy bitcoin with your discretionary income which you don't feel it as anything being deducted from your monthly income, and you can also buy bitcoin at various prices at the dip and at the bull giving your the opportunity to calculate your 200WMA.
Lump sum will not give you the size of portfolio that someone that used DCA to buy will give to you in they hodli for the same number of years. This is because lump suming is a fixed price purchase, and buying at the dip is something a beginner don't even need because it is the worst strategy for them, it is hard to know when the price will dip and they will keep waiting and end up waiting wretched till old age because bitcoin price increases overtime.