Post
Topic
Board Bitcoin Discussion
Re: Who says it's too late to buy Bitcoin?
by
Sim_card
on 15/03/2025, 15:28:19 UTC
quote author=Sim_card link=topic=5525373.msg65167926#msg65167926 date=1741971750]
Someone with low finance cannot Lump sum because he has to wait for a long time to gather up the funds before investing and that will be a terrible thing to do.

Anyone can use lump sum by supplementing it with his ongoing weekly DCA buying. Lump sum is not only for the rich because a poor investor can also lump sum. You must not use a very big amount to buy bitcoin once before you can lump sum. For example, if you are using $50 on your regular weekly DCA, if you have an extra cash from your place of work as a gift to motivate you or traveling allowance that is $200 or $300. Since it's the money that you didn't expect and no budget for it, you can use the $200 to buy bitcoin right away irrespective of the price of bitcoin at that moment. Lump sums are good because it increases your bitcoin stash faster.

Your example is a good one, even though I think that you should consider that whenever you get some surprise lump sum that is outside of your normal and regular DCA amount, that lump sum gives you options to 1) use some or all of it to buy right away, 2) defer some or all of it to DCA over a certain amount of time  (increase your DCA for the next 6 weeks, for example), and/or 3) to use some or all of it for buying on dips (sure the dips might not come, yet you could come up with a plan to buy 4 times with 25% of the money each time, every time that the BTC price drops 4%, so that would only cover you up to a 16% dip from the current price, and so sure you can experiment with such a buy on the dip deferal of part or all of the extra money).

My point is that the lump sum gives you options, and if you decide to use it all to buy right away, you may well consider that to be merely folding the amount into your DCA, and you are just buying with whatever extra discretionary income that comes in, and there is nothing wrong with that  approach, even though I would just criticize your framing of the matter by not mentioning that once you have categorized the extra money to be "for bitcoin buys," then you have three kinds of buy options that you can consider and you can decide whatever amount for each of the categories, including deciding to put zero into one or the other category, which your suggestion to buy right away with all of the lump sum amount seems to have had outright rejected the consideration of the other two categories, even though sure it may well be amongst the best of options to just use all of the extra amount to buy right away, but it surely is not the ONLY option to consider... and surely of course, any of us can choose whatever course of action based on where we are at in our bitcoin accumulation journey, including our consideration of where we are at in our 9 individual factors.
[/quote]
You are right, it's better not to lump sum all the money at once because sharing it into three parts for DCA, lump sum and buying at the dip will give more flexibility and benefits to the person. I used only lump sum as an example to let Agbamoni know that lump sum doesn't mean that is only for the rich. Both investors can lump sum, but the rich guy has more discretionary income to lump sum with a bigger amount than the poor man.

However, based on what you said is the best. For instance, If I have an extra cash of $500. It's better of for me to share into three and use $150 to lump sum right away, use $200 for DCA and spread it into several days with my initial ongoing DCA weekly order. I will use the last $150 for buying at the dip. Perhaps, I might still split it into four parts. $100 for lump sum, $100 for buying at the dip, $100 to add to my emergency funds  and $200 for DCA. All these should be done best by the investor based on how he wants it because he is in the best position to decide how he wanta to use the extra $500 that comes in without any plan to spend it on other things.