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First of all thank you for calculating it in detail and yes it is true if we invest 15% it will take almost 7 years to reach our 1 salary per year in my opinion it does not matter how much money we invest the most important thing is we do not mind setting aside it every month or week because it is like our savings in the future. Let's say I earn (currently) $ 400 in a month and in a year I invest 15% of $ 4800 around $ 720. From a total of 7 years I managed to save $ 5040. After I saw the DCA calculator
the result like this Is my calculation correct?
Yep.. those numbers are all correct, and, so yeah, I think that 15% of your income is sufficiently aggressive for a lot of folks to be able to achieve, and surely there are some folks who are not able to be so aggressive in their bitcoin investment, yet if you are able to accomplish that level of aggressiveness while maintaining an emergency fund that is around three months of your income, then you will be in a pretty strong position to be able to handle your level of bitcoin investment aggressiveness.
In your hypothetical case, your emergency fund should be somewhere around $1,200, and surely you will be even stronger if you are able to keep some other kinds of backup and/or reserve funds too, so that you never have to tap into your emergency funds absent an actual emergency.. so frequently when any of us get to a state that we actually are having to touch our emergency funds, then we realize that we are getting down to our last of funds and we are not going to want to deplete our emergency funds.. .so we likely realize that matters are more urgent in terms of figuring out ways to increase our income or decrease our expenses..and hope that our emergency status does not last very long, since we have to replenish our emergency funds as soon as the emergency had passed.
It seems to me that any of us who have invested a year's of our income into our bitcoin investment should feel quite good about that, and surely we know that in the past 7 years or so, bitcoin has been performing quite well, so we would have some of our earlier investments into bitcoin having higher appreciation rates than our later investments, and surely we may well see a certain level of progress in having had been able to put a whole year's income into our bitcoin investment, and just like your linked chart shows, a guy who put $15 per week into bitcoin over 7 years starting from September 2016 would have had invested right around $5,500 into bitcoin and would have had accumulated right around 1.140705 BTC.
I personally think that such a guy would have already gotten himself into a position to be able to replace his income with his bitcoin and to be able to withdraw around $5k per year, if he is happy with that standard of living, since
his 1.140705 would currently have a 200-WMA value of $51,534 and a current spot price value of $99.2k. He has already largely 10x'd his yearly income, which I think with bitcoin is sufficient to enter into fuck you status, unless he wants to have a bit of a higher income (and/or cash cushion), then he could keep investing into bitcoin until it meets his threshold level that he considers to be enough.
The practical advice you’re giving is indeed very commendable. Investing around 15% of one’s income in Bitcoin can indeed be a very great way to build wealth overtime, and it’s also pretty important that you’re not also leaving out the importance of having an emergency fund in place.
I absolutely get and agree with what you’ve also said about having other backup funds in place too. Nothing guarantees more safety than having multiple safety nets available. That way, you’ll never get caught off guard if something unexpected suddenly comes up. And yeah, whenever you have to dip into your emergency funds, it serves as a great motivator to get one’s finances back on track.
I also think it’s pretty awesome when you try to think about just how far consistency can bring you when applied in your strategy. Just like you’ve said, when one manages to invest a year’s worth of income in Bitcoin, you’ll definitely have every reason to feel good about it when you see how that plays out. And sometimes you might want to wonder why people are so overly optimistic about Bitcoin and it’s potentials, but when you look at Bitcoin’s track record over the past 7 years, you’ll wonder no more.
The example you gave about the guy who invested $15 every week in Bitcoin for 7 years is indeed very fascinating and mind blowing. I mean, who would’ve believed in the possibility of turning $5,500 into over $99k, that’s just supercool. And like you said, that’s just around enough to make someone achieve a “fuck you” status, where you can now live off and do whatever you please with your Bitcoin wealth.
Another thing I love and highly commend is how you lay emphasis on the importance and essence of having a personal threshold for what should constitute having enough wealth, because like we already know, human wants are insatiable, the more we get, the more we desire and it becomes really easy to get caught up in the pursuit of more and more, even after having enough.