The amount of value that we put into bitcoin should be money that we are not going to need for 4-10 years or longer, and sure it is possible that we might need the money that we put into our back up funds at various periods of time, yet we should also be wanting to build an emergency fund that has a minimum of 43 months of our expenses and in which we would likely not be tapping into such emergency funds absent an actual emergency related to loss of income and/or increase in expenses that were beyond our expectations.
Did you mean 3 months of our expenses? I believe this is a typo. Maybe you'll want to correct it so it doesn't send the wrong message across.
Yep.. that was a typo.. I went back and fixed it. I had meant to say 3 months.
This is a good plan, the recent emergency I had was handled effortlessly by my emergency fund and funds I kept aside for refilling my gas cylinders when it's finished. I was glad I handled it effectively and didn't touch my portfolio. It was then that I had a deep appreciation of these teachings. The only responsibility on me now is to build back the funds I depleted.
Yep.. .sometimes people start to presume that everything is going to work out with their finances, and even poor people sometimes get desperate in terms of wanting to put whatever little money they have to work, and it tends to not be a good idea to stick ourselves in situations where we have hardly any cash or we have no cash because we were trying to make sure that all of our cash was working (invested into bitcoin), so then we might feel even worse, if the BTC price is dropping greatly, as it has been doing in the past 5 weeks or so, and then it tends to be a lot better to not ONLY have emergency funds, but also other back up funds, and then like you said if some kind of an event (extra expense or even a loss of our income) happens, then we feel so powerful that we were able to handle our emergency situation with the extra funds that we had available. So yeah maybe if we end up using our various back up funds, and then we dipped in our emergency fund, it could end up taking us several months to build our emergency funds and our back up funds back to their prior levels... ..so we will have judgement calls regarding how to allocate our building back of our emergency funds/back up funds and/or whether our situation has become so dire as to stop adding to our bitcoin investment during part of the period that we are rebuilding our emergency funds or perhaps reducing the amount of our weekly BTC buys while we are rebuilding our emergency funds/back up funds.
One best advantage of using DCA is that it helps many investors to buy Bitcoin at different price which could be at a discount price while others must have bought at a higher price, like those that will invest a lum sum at once once, they could buy at high price different from the investors that uses DCA to buy at different dip price. But, buying at lum sum is just based on the person's financial power and perhaps don't want to waste much time without buying, perhaps they have their reasons.
Yes, DCA is definitely a good method. In my opinion, DCA is the safest method. It is the only method that both beginners and experienced can use without hesitation. In this method, you can buy and deposit Bitcoin in all types of markets. You will not have to worry about losing your money. You will not have to worry about analyzing the market. You only have to think about one thing, which is to continue investing regularly. After starting investment, do not touch the invested money without reaching a specific goal. Decide on long-term investment.
But on the other hand, if you want to invest in any other method, then first you have to be much more experienced. You have to have a good knowledge about volatility.
You always have to think about how much you are losing, when will it give you a return.So I think it is better to keep yourself mentally healthy and continue investing safely in DCA instead of choosing other methods.
If you are a beginner investor into bitcoin, and you are in your first whole cycle of accumulating bitcoin, you likely need to give very little thought about whether the bitcoin investment is giving you good return, so largely you just keep buying at any price.
Of course if you are able to front load your investment and/or buy on dips, there is nothing wrong with supplementing your BTC accumulation with aspects of those techniques, yet at the same time, beginner investors are likely going to be much better off by mostly focusing on DCA, and the extent to which they might supplement DCA with other techniques is o.k. as long at they are able recognize and appreciate several of the trade offs that come with other techniques.