Quote from: Yucky on June 21, 2024, 04:49:47 PM

I have read a lot of threads where people talk about investing an amount of Bitcoin they can afford to lose and sometimes I feel it's either they know what they want to say but don't know how best to express it or they don't understand the difference between investing what you can afford and investing what you can afford to lose. Let's get the difference;

1. Investing what you can afford: this means that you're buying an amount of Bitcoin or any other asset of your choice that fits your level of wealth. It could be that if you're earning 200k for instance, the amount of Bitcoin you can afford to buy at every pay period could be 50k while the remaining 150k can serve your other needs. It's not as though you're throwing the 50k away but that you're setting 50k out such that if you continue doing that for months you should have an investment somewhere either in Bitcoin or another asset of your choice

2. Investing what you can afford to lose: this means that you're using your money to buy something that you can lose at any time. If that's the case, it means it will be unwise for someone who's earning 200k per month to keep investing 40k for multiple years.

A typical example of investing with what we can afford is;
1. Investing in Bitcoin
2. Investing into tangible assets like building
3. Investing into a business etc.

A typical example of investing with what we can afford to lose is;
1. Investing into altcoins, meme coins, etc
2. Funding our gambling account
3. Investing into a project we're unsure of.

The difference is clear, investing what you can afford is used when you are interested in building future wealth while investing what you can afford to lose applies to cases where you just want a short-term profit and it mostly happens when you're trying things out.

It doesn't matter how sure an investment is do not put in what you can't afford to lose even if life is all about taking risks you should make sure that your risks are well managed and calculated. If you want to invest in Bitcoin or alt coins it's not adviced to invest more than 40 percent of what you have, making just a single investment isn't a wise thing to do, it's better to spread those investment just incase one or two doesn't work out, do not put all your eggs in one basket so you won't get disappointed, this is a very common mistake a lot of people make