⭐ Merited by Ambatman (1)
Sure, it may well be preferable to error on the side of having more emergency fund rather than not enough, and surely folks who do not have an emergency fund are likely ending up using their bitcoin as their emergency fund, which protecting the bitcoin investment should be part of the rationale to build and to maintain the emergency fund in the first place.
And, like I have mentioned in other posts, it could well take a guy a 1-3 years or more to merely establish an emergency fund and a bitcoin invested amount in which each adds up to 3 months, especially if we may well consider that a guy who is investing 10% into bitcoin and/or his emergency fund, it would take 10 years at such rate to invest 1 year's worth of income whether that is into bitcoin or the emergency fund or a combination of both.
Frequently I have argued that an emergency fund does not need to be more than 3 months, since the funds in an emergency fund are more strictly held for emergencies, yet if some folks want to build back funds beyond an emergency fund and to have more flexibility with the back up funds, then they could do that, even though if emergencies were to come in terms of increased expenses and/or decreases in income, then the back up funds would likely be tapped into and exhausted prior to tapping into the emergency funds and the emergency funds would be tapped into and exhausted prior to touching the bitcoin. And, yeah, it could take some decent amount of practice to figure out reasonable balances in regards to how to build up and to maintain various kinds of back up funds.
Great, now we understand each other and are pretty much on the same side. And, like I have mentioned in other posts, it could well take a guy a 1-3 years or more to merely establish an emergency fund and a bitcoin invested amount in which each adds up to 3 months, especially if we may well consider that a guy who is investing 10% into bitcoin and/or his emergency fund, it would take 10 years at such rate to invest 1 year's worth of income whether that is into bitcoin or the emergency fund or a combination of both.
Frequently I have argued that an emergency fund does not need to be more than 3 months, since the funds in an emergency fund are more strictly held for emergencies, yet if some folks want to build back funds beyond an emergency fund and to have more flexibility with the back up funds, then they could do that, even though if emergencies were to come in terms of increased expenses and/or decreases in income, then the back up funds would likely be tapped into and exhausted prior to tapping into the emergency funds and the emergency funds would be tapped into and exhausted prior to touching the bitcoin. And, yeah, it could take some decent amount of practice to figure out reasonable balances in regards to how to build up and to maintain various kinds of back up funds.
I would like to say here that this also depends on your total capital and cash flows. There is nothing wrong with having an emergency fund in combination with a back fund. The general thing is that you can't possibly prepare for everything while being balanced with the rest of your finances, so it is not a problem that has an optimal solution. It is more of risk-balancing dance that is built on a good foundation of knowledge. I personally like having a one-off very large fund next to the emergency fund now that I can afford it. A 3 month emergency fund would not cover something like an extremely expensive surgery and it is not supposed to, don't get me wrong. Depending on where you live and what kind of insurance is available, you may not need this anyway. Further, one does need to be discouraged if their fund or current goals are small in this context. I actually liked my path towards building my funds, and you can gamify your journey. Each milestone was a very proud moment for me. $1000 fund complete? Rejoice and prepare for the next build.
Choosing our position size is helpful in managing risk, and also considering that we are investing no more than we can afford to lose, so we are already appreciating that we could lose our money when we invest it into bitcoin.
Hopefully we figure out an appropriate balance in order to not invest too whimpily into bitcoin, since the guy who invested the last 10 years at $100 per week ended up doing way better than the guy who only invested $10 per week. In fact the guy investing $100 per week, ended up with a bitcoin portfolio size that would have had been 10x larger than the guy investing $10 per week.
I guess in general I would say that you shouldn't bite more than your finances or your emotions can manage. Hopefully we figure out an appropriate balance in order to not invest too whimpily into bitcoin, since the guy who invested the last 10 years at $100 per week ended up doing way better than the guy who only invested $10 per week. In fact the guy investing $100 per week, ended up with a bitcoin portfolio size that would have had been 10x larger than the guy investing $10 per week.
I think emergency fund and back fund should be kept separately. If you keep them together then if you do not have proper financial management skills then you may confuse the two things. Emergency fund is money kept for personal or family needs and back fund is money kept for future in any personal or business sector. If you do not have proper financial management skills then you may spend all your money in emergency fund or back fund. So it is better to keep emergency fund and back fund separately.
There is nothing wrong with considering various backup funds in terms of liquidity.. meaning the ease upon which they could be accessed, since part of any emergency could have had resulted from changes in access to funds, such as a bank freezing or some kind of a rug pulling or hampering of access to various funds.
There is no rule that any back up funds have to be kept in one place, and as a reminder there are three categories of back up funds, which is: 1) emergency fund, 2) reserve funds and 3) float funds.
Float funds are largely just funds that have not yet been determined, since every month we might have money coming in and various expenses, yet if we might not be sure about how much is coming in or the exact expenses, then we might keep some float funds, that would end up converting into discretionary income if it ends up that there is more income than expenses.
Emergency funds are largely a kind of reserve fund, yet it should be the last that is spent prior to having to tap into our bitcoin (which we are trying to avert or avoid, if possible).
It makes most sense to keep some amount of emergency funds in physical cash in our local currency.. and maybe we can have some foreign currencies too, such as dollars since maybe even som local places might still accept dollars, and maybe we might consider that the dollar might hold its value better than our local currency, and sure we can have some money in banks and other forms, and the less confident that we are in our being able to access the funds, then the more we might need to diversify the locations in which we keep the money in differing accounts or whatever might help us to feel that we don't have all of our funds in one location, since part of an emergency might be with our third party custodian, and at the same time, we might not feel comfortable having 3 months or more of our expenses in cash in our house or even hidden in various places that might not necessarily be our personal residence, such as our office (business location) or maybe at a relatives place.
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Funds for family expenses should be given adequate priority even above your emergency fund and your investment fund because they are what help you remain invested for the long run.Of course, monthly expenses are the highest priority, yet sometimes there is discretion within the expenses, in which some of them are more urgent than others. Something like food, lodging and utilities may well rank as the highest priority, and even within those categories, there are levels of luxury and/or sometimes some of them can be deferred or even adjusted in terms of luxury versus normal versus cheap goods, so there can be judgement in terms of expenses that might change the level of discretionary income.
Many of us should already realize that various back up funds, including emergency funds have been build up from past discretionary income, so those back up funds are a form of discretionary income... The same is true for investments into bitcoin... and when we manage our historical build up of various kinds of funds and/or investment or we make choices regarding the extent to which to put more money into our backup funds or into our investments, that would be coming from our discretionary income and after our expenses.
So yeah, no one can really determine the extent of our priorities besides ourself, and part of the reason that some guys are aggressive or whimpy in their bitcoin investment has to do with their priorities, including their choices regarding how well they manage their cashflow and/or their discretionary income.. and surely there can be two guys who are similar in their income and base expense, yet they may manage their finances differently and result in differing ways that they allocate their discretionary income that relates to priorities... and so we might not even be able to blame anyone for their priority choices, even though 10 or more years down the road, it is quite likely that the financial and psychological status of individuals will likely differ based on various priority choices they made 10 years earlier and at various points along the way in their journey.
That's why we don't need to be afraid of the risk, even though it needs to be understood properly because when someone starts to be afraid of the investment risk,
If you're a kind of investor, who understands the requirements for managing risk, then you will understand that we can overcome this by ordinary holding, because the market will always be volatile and there you could find an entry and exit route to buy and sell at a profitable rate.But some don't understand that they can't be holding bitcoin and sell at anytime, there used to be a right positioning for selling at a profitable rate, we don't have to apply fear when we are into bitcoin investment, instead we should spend more of our time learning and speculating the market to achieve the best position needed.
Each of us should be setting systems in place so that we can handle the ups and the downs, and surely if we are in our earliest accumulation phases we would likely be served well if we are ongoingly buying during our first 4 years or more no matter the BTC price... and then maybe at some point after we have accumulated more bitcoin we might adjust our persistency in buying bitcoin, yet we still may well want to be prepared to hold and perhaps even to buy higher level dips if we have lessened our ongoing buying at any price... At the same time, I am not advocating that guys prematurely convert over to buying the dips rather then regular and ongoing buying, since many times guys might prematurely conclude that they have enough bitcoin and enough ability to presume that they will be able to buy dips rather than just ongoingly buying.
There is minimum or we can say zero risk involved if we talk about investing in Bitcoin. It's just an inner fear or trust issue which one has to overcome and start investing in Bitcoin, rest is a smooth journey. We have discussed and seen many cases of investing in Bitcoin for longer duration, as long as someone intent is to HODL Bitcoin for 5 or more years he is bound to get good return.
This is not true, and I disagree that this is what you should be telling people who invest in Bitcoin, especially those who are new to it or unfamiliar with it. You might entice them with the wrong information. We are all lovers of bitcoin and all investors of bitcoin, but that doesn't mean we should send the wrong message.If you said "minimum risk". I might agree, but "zero risk" is wrong.
There is a risk in bitcoin, you might not see it, but that doesn't mean it's not there. There are certain levels of cyber attacks that can affect bitcoin prices. The internet is crashing in certain parts of the world, or being attacked, which can affect bitcoin prices drastically. We can wake up any morning and hear devastating news that can send bitcoin from over $100k to less than $20k. I'm not saying it will happen, but there is always the possibility.
There is even the cyber-attack risk you incur. We've heard of people who got hacked and lost millions of dollars. All those are risks. The fact that it is be avoided doesn't mean it's not a risk.
I agree with your overall sentiment Alpha Marine since when we deal with bitcoin, we are likely engaging in various behaviors to mitigate the various kinds of known and unknown risks, and we cannot completely get rid of the risks, even though we take various measures to attempt to protect ourselves from various risks that are both executional risks that are within our control and/or risks that might be somewhat outside of our control (except for various ways that we might attempt to deal with, perhaps with position size and/or perhaps hedging).
Interesting take. Comparing Bitcoin with gold actually makes sense. Bitcoin’s limited supply, ease of transfer, and resistance to inflation really do give it an advantage, especially now that fiat money keeps losing value.
And yeah, Michael Saylor’s been ahead of the curve for a while. That Las Vegas Bitcoin Conference next week might just bring some major updates and give more push toward wider adoption.
Yes, comparing Bitcoin with gold will certainly be an interesting topic to discuss.And yeah, Michael Saylor’s been ahead of the curve for a while. That Las Vegas Bitcoin Conference next week might just bring some major updates and give more push toward wider adoption.
Nope. It is not that interesting to discuss, and it is not really even on-topic, even though guys get distracted by gold and they think that it is interesting since they don't really understand that bitcoin is around 1,000x or more better than gold, so we end up getting into discussions in which guys are considering bitcoin to be equal to gold or even gold to be superior, so then we might also argue in regards to what are evaluations are and/or how long it might take the market to work out the current prices (market cap comparisons) to bring more accurate valuations. .which frequently I suggest might well take 50-200 years to work, so in the short-term the market shows bitcoin at about 1/10th gold market cap.. so there is almost no way that bitcoin can go 1,000x or more of gold's market cap in a short period of time... so there is noise in the process of moving the market caps to where they are likely going to end up.
Because currently many people still rely on gold to protect their assets against inflation.
Historical practices (so network effects) of gold does have some advantages over bitcoin, yet that is ONLY one dynamic in terms of figuring out relative money-ness (or sound money-ness). There should be no doubt that bitcoin is better than gold in terms of: verifiability, transportability, scarcity, divisibility, costs of storage, transport, abilities to transact without third party, and other money factors.
so yeah, more and more folks are figuring out that bitcoin is a much better place to keep money, even though surely there are some folks who are already used to gold and they are scared of bitcoin, since they don't really know it and have difficulties figuring it out.. so they stick with the inferior asset class (gold) which is going to continue to have its lunch eaten by bitcoin in the coming 50-200 years, just like bitcoin has been eating its lunch in t
he past 13 years (I prefer to measure starting from 2012, even though bitcoin wins even more if we go back further in bitcoin's price history to compare bitcoin relative to other assets/currencies).
But the problem is that many people also do not see that currently there are assets that can protect our assets from inflation and not only protect our assets, but can also give us benefits and that asset is bitcoin. So by holding a Bitcoin conference, it will open the eyes of more people to see future assets in the present, namely bitcoin. It does not mean that gold is a bad investment asset.
Relative to bitcoin, yes, gold is a bad investment, so hopefully not too many people are so retarded as to keep more than 10% the size of their bitcoin holdings in that relic shiny rock.. (and maybe even 10% is quite a bit too high?) and keep their time, energies and value focused on bitcoin rather than getting distracted.
But when compared, I think bitcoin is much better in certain aspects. Like it's not too complicated to carry anywhere. As long as we have a wallet phrase where our bitcoin is stored, wherever we go, we can still access bitcoin. While gold, if we move house and our gold assets will be moved too, it will certainly be much more difficult, because gold has a physical form that requires extra security when carrying it. So that's why I personally think bitcoin is superior at this time.
At least you recognize bitcoin to be superior to gold... so hopefully you are careful in terms of your own investments (and not wasting your time, energies and money into gold rather than bitcoin)... .. including your making proclamations, based on your own seeming ignorance, that there is some kind of an interesting question regarding how gold compares to bitcoin when the comparison is likely way less interesting than you are making it out to be since, it is likely gong to continue to take a long time to sort our fair market prices, so maybe it is interesting (in some sense) that bitcoin is continuing to eat gold's lunch, and it is taking normies a long time to recognize/appreciate the opportunities to get into bitcoin, even though some normies are continuing to get distracted into the old shiny metal relic of a rock (aka gold) because they believe that gold is "interesting" when it is not really interesting relative to bitcoin and once we get some better ideas of what bitcoin is and what role is to currently playing in our world... so hopefully most of us are not distracted into gold and/or considering it to be interesting.
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and back fund is money kept for future in any personal or business sector.
while back up fund's is that spare money kept aside with the purpose of backing up your investment, like using it to invest aggressively during a dip or you can use it to for some other stuff that may have warrant you to dip into your emergency funds, but take note that your emergency funds is the last layer of protection of your Bitcoin investment, that's why it's very unwise to use it for anything else, except a real life emergency situation that threatens your bitcoin holdings. and back fund is money kept for future in any personal or business sector.
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I think that you are describing some aspects of these various back up funds incorrectly.
You are correct that emergency funds are the last to be spent prior to having to tap into bitcoin, so frequently guys will choose to have funds that are other than their emergency funds so that they might have some flexibility, so reserve funds will have flexibility in regards to what they can be used for, and reserve funds can also be used for emergencies so that you don't have to tap into your emergency funds.. and sure if the emergency is resolved, then there is no need to tap into emergency funds if reserve funds are used first.
I personally consider float funds to be funds that are not yet resolved in the middle of any month there might be uncertainties in regards to your income and/or your expenses, so you don't necessarily dare spend some of your money until you resolve your income/expenses, and so that extra money is float.. and it will likely either convert into money you need for expenses or if you do not end up needing it for expenses, then it will convert into discretionary income that you can use for whatever reason, consumption, investment or to put into your back up funds (emergency funds or reserve funds).