Quote from: adultcrypto on August 20, 2024, 11:59:16 PM

Quote from: Winterfrost on August 20, 2024, 07:04:30 PM

Quote from: Justbillywitt on August 20, 2024, 04:59:35 PM

Newbie or no newbie, it is not advisable to invest all your money in bitcoin. No matter how much you think is in your emergency funds account. It is advisable to always keep your sources of income open even though you have kept emergency funds aside. Because you don't know the kind of emergencies that might come up tomorrow. It could be an emergency that will consume all your emergency funds at once. So at that time you have invested all your money in bitcoin and the emergency funds you have kept cannot solve the problem, at that point what will you do? You will definitely go to your investment. But if you had kept your source of income flowing, you won't be in that situation.

If you invest all your money in bitcoin to only depend on your emergency funds, equally mean that you have a short term hold mentality. Because you are just waiting for a slight upward trend to sell off.

Emergency funds is crucial for a well sustained investment be it short or long term. No matter how short it may look like in between those space the investor can be faced with extreme life expenses that requires immediate attention and emergency funds should be rightly available to solve such problems, mostly at the early stages of accumulating Bitcoin. One other thing to clear off is that our emergency funds is separate from money kept aside to carry out living expenditures, so it is not right to invest all we have into Bitcoin all for the sake of getting out of it a bigger profits.

Experience is applied during the process of accumulating, it cannot be reversed when already put into action by investing more than should have, getting out of it with the only option is to sell too soon which is not recommended, so to avoid this from happening, investors are advised to invest more deligently according to availability of funds.

Short term investment is just like trading and that does not require much of emergency funds because if you understand what emergency fund is, you will know it is best suitable for long term investment because it serve as a protection of the investment itself because that is what the investor resort to when there is issues that need urgent attention which was not accounted for or expected to happen. If someone buy bitcoin and hoping to sell when price rises a little and he see reasonable profits, I do not see the need to keep emergency funds. Therefore, emergency fund is indeed crusial to sustain the investment but it is mainly for long term investment.

That is confusing to suggest that an emergency fund is only used for long term investors, especially since emergency fund can be useful for a lot of people and especially people locking up their funds for certain amounts of time and in certain kinds of ways.

Sure, I don't want to promote trading in this thread, yet there can be circumstances in which traders lock up decent amounts of capital in a trade and just in their trading accounts, and so their intention would be that the trading account money is not going to be available until some kind of anticipated scenarios plays out so that they can close their trades.. and so they should have back up and emergency funds that are separate from the funds in their trading accounts, so in that regard, if the price moves against them after they entered some trades they might be locked in various assets and short of cash, and even if they have cash in their trading account, that cash is already allocated to potential trades, so they are not supposed to be dipping in that for non-trade reasons. Of course, they might not have strict rules and they might be sloppy, but if they are trying to be ready for anything, they have to try to set their accounts up in ways that allow them to be ready for anything within their baliwick.

And surely an emergency or some short-fall in their various expenses should not be enough of a reason to close any of their trades or to dip into their trading account, but if they have an emergency and they have no other funds available, they might have to dip into their trading account funds and to take money from trades that they would rather not close, so there is potential that they would be closing trades that would be at some time that is not completely of their own choosing merely because they did not have an emergency fund and an emergency ended up happening... They might also end up dipping into cash that is in their trading account that is supposed to be separate from their expenses and any other fluctuations in their cashflow that should be covered by their float and or their reserve funds.

Traders will frequently treat their whole trading account as a kind of investment (since it is a kind of working capital) so they will keep it separate from their other living expense funds, so traders (especially the responsible ones) also need an emergency fund, various back up funds, reserves and float, in similar kinds of ways as long term bitcoin investors should be doing..but yeah, of course, we are not talking about traders in this thread.. even though having solid and strong cash flow management can help a lot of people in regards to a lot of financial surprises that might come up in their financial life.. and perhaps the maintenance of strong cashflow management also contributes to fewer situations rising to the level of becoming an emergency.