Surely, there are some folks who may well get themselves into an emergency situation, and then maybe they end up selling some portion of their BTC, and they might end up shaving off several years of their BTC accumulation progress. Sometimes they might have some lucky events that end up saving them from suffering as extreme of damage, but sometimes they might never be able to completely recover from the damage that they had caused to their own situation due to their poor cashflow management practices.. and surely it can be difficult to avoid such mistakes, even we know that poor people can frequently be tempted to tap into their bitcoin in order to be able to consume, and sometimes there can be value in terms of paying oneself, even when recognizing that there are likely going to be large costs for the choice to pay oneself early.
It can indeed pretty tough to manage one’s cash flow, and people can sometimes be also forced into making tough decisions whenever an actual emergency occurs. And inasmuch as selling off part of one’s Bitcoin assets to cover certain expenses may actually cause a temporary relief, it also have the potential to disrupt and impact one’s long term financial health and goals.
It’s important to know how to strike a balance between meeting certain needs that are actually immediate needs and also preserving long term investment.
If there’s not a solid plan, there’ll always be a need to tap into their BTC, but when people develop a strong cash flow management as well as a solid emergency/backup funds, that need to always tap into their Bitcoin would be greatly mitigated.
We can sell sometimes to meet up with emergencies and later regret selling because we also missed out at the cause of doing that, same way it may applies on us, that after we sell, we realized that we just safe off the opportunity of losing in two direction as the market plummets and we were also able to meet up our emergency needs.
I do say it and make it obvious that we should be careful on when we make investment, the time to sell them and also the basis for doing that, if possible we should always speculate well on the market before selling, we may not be able to avoid making mistakes completely, but there's a way we can be more proficient in what we do and minimize the risk for making loss.
A new bitcoin investor should have in his mind to build up his emergency funds, the moment he has started his bitcoin investment because that's a backup funds to his investment if not he wouldn't be successful in his bitcoin accumulation journey. You are only to invest with your discretionary income by sharing it into two parts. Use one part to invest in bitcoin regularly weekly and use the second part to be building his emergency funds until it gets to three months of your monthly income.
After that you can channel the money that you are using to build your emergency funds into building your reserve funds. When you have built your backup funds, you can use the money to invest aggressively into building your bitcoin portfolio overtime. You need to be prepared for unforeseen circumstances that will occur in future as a long-term bitcoin investor. However, your emergency funds should be used for a real emergency and when used should be refilled.
If you don't have an emergency funds and you are investing into bitcoin, you are only gambling and not investing