Just to semantically correct you.  There is a difference between buying lump sum and buying the dip.  Even if you are using a larger amount to buy the dip, you are still buying the dip. The mere fact that you buy a larger amount does not convert that kind of purchase into lump sum rather than buying the dip.

Lump sum refers to getting an extra amount of cash, and then deciding what to do with it.. which you have the three choices of how to divide an unexpected extra amount of cash which is 1) buy right away (which would be lump sum buying) 2) buy the dip (which would be a form of waiting) or 3) DCA (which is another form of structured waiting)... and of course, you don't have to employ all three and you can do them in part or ONLY choose to do one or two of them rather than all three.


Yep.. I understand that sometimes people will convolute the ideas of emergency fund and reserve fund, so then it can be a bit unclear about priorities or when or how to dip into the funds, so if your funds are in separate categories, then you would likely realize the priorities better and end up treating the different categories of funds differently, even though some various kinds of reserve funds might or might not have differing priorities, depending on your own priorities. 

A few days ago I posted some examples about how reserve funds might be put into different categories, and we might be able to see that some of those categories might be more important to us than other categories, yet all of those various kinds of reserve funds serve as a lesser priority than the emergency fund and would likely be used prior to getting to dipping into our emergency fund.. so as those various reserve funds might end up being used, we might well realize, way before needing to touch our emergency fund, that we are running out of reserve funds and we need to buckle down with our spending otherwise, we might have to dip into our emergency funds - and we don't want to every have to dip into our emergency funds absent an actual emergency that includes us already having had exhausted our various other reserve funds.


Sure, that is part of the reason that some of us talk about those kinds of cash management matters as being basic foundations for investing into something as volatile as bitcoin.  When an asset is volatile, cash management becomes more important, especially if you want to hold onto it and not end up losing money by holding it and not being prepared to hold it through potentially tough (and/or volatile) times.


Sure.  Many folks might try to take the easy road, and even presume that they know enough (including the basics), but sometimes we might not realize that we don't know as much as we need to know and that we might prevent a lot of problems by making sure that we learn the right things.. and sure, another thing might be that there can be difficulties finding the better information or sorting through good information and bad information or even being able to come to our own conclusions that are based on both experience and exposure to good information to sometimes put the information into practice too.. because sometimes we might know some things, but if we do not put what we know into practice, it might not make as much sense if it is just held in theoretical ways rather than putting it into practice.


Some of those folks want to use their bitcoin as their emergency fund, but then they might not realize that if they use their bitcoin as their emergency fund, then they might get caught having to dip into their bitcoin at a time (maybe sell some or maybe end up having to sell all of it) that is not convenient and/or might lead to losing a lot of money because they end up having to sell low rather than the opposite in which they should be buying low rather than selling low.


Surely, each person has to decide the level of risk that he is willing to take, and sure it could be the case that your friend ends up doing o.k., but surely, if he does not sufficiently protect himself, he might end up devolving into gambling rather than investing, and he might not even realize it - until some kind of a bad event takes place in which all of a sudden he might not have enough cash and he could have had easily prevented his bad situation by having better cashflow management... but yeah, every person has to figure out how to make those kinds of balances, including how much they are able to keep in their various backup funds without risking too much.  We likely realize that people who don't invest and who engage in fairly sloppy cashflow management may ONLY keep around 2-4 weeks worth of cash for any extra expenses that might come during the month, so there are many people who live on the edge like that, and sure some folks already have practices in which they keep more than 2-4 weeks worth of cash.  So it becomes more important to keep more back up funds when you have such a volatile asset such as bitcoin, and especially if you consider that your investment timeline is 4-10 years or longer.. so if you have a longer investment timeline, then you should want to make sure that you are not going to be tapping into that at any time that is other than your own choosing, which presumptively is 4-10 years or longer for any funds that you put into it, and some folks are considering timelines that might be 20-30 years or longer, especially young people. .and surely there could be some points in which even young people might have shorter timelines, including if they might be able to aggressively invest and reach some meaningful targets at times that end up being shorter than their initial longer timeline goals... so it seems better to plan longer timelines and to be more conservative, yet still being able to benefit if the investment (in this case bitcoin) goes better than expected and goals might be able to be reached faster than initially expected. .but in order to have those kinds of successes, it likely is better to have solid systems in place in which investing is taking place rather than gambling.


It could be the case that you are sorting through some of the terminology, and sometimes we might still be engaging in sound cashflow management practices, but just using different terms to describe what we are doing, and also sometimes we may or may not be keeping enough back up funds whether we call them emergency funds, reserve funds or float.. . and like you mentioned, there are ways that we can figure out what is our discretionary income, and we can make choices to hold back our discretionary income or even to increase our discretionary income by increasing our income or cutting our expenses, especially if we might have some various categories of goals that we would like to achieve, if we are saving up for some kind of a specific good or service that we want to purchase or if we might have some kind of an investment that we might want to make.. and surely even some investments (like a smartphone) might cost a lot and might depreciate in value, but some kinds of goods we might be able to use in order to increase our income or to cut our expenses, so sometimes even consumer good might serve some utility and even be considered a kind of worthy investment.

So yeah in regards to bitcoin, there can be some dilemmas that involve really being able to set aside the money that we are investing into bitcoin and expecting to not be able to use that money for many years - such as 4-10 years or longer and even having some understanding that it is possible that the bitcoin investment might not do well. .so we have to be prepared for a variety of scenarios and choosing our investment size so that we are still able to live our regular life while making reasonable and prudent choices about how much of our discretionary income to put into bitcoin within our own particular financial and psychological circumstances.