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Quote from: yixichloro2xx on Today at 01:28:50 AM

Quote from: Odohu on August 10, 2025, 09:53:12 PM

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Quote from: Bluedrem on August 10, 2025, 06:42:37 PM

So even if a person cannot afford to invest, I think it is necessary to form an emergency fund even if his basic needs expenses are reduced to a minimum.

What is the need of having an emergency fund when you are not ready for Bitcoin investment? It will be better you use it as your discretionary income and start accumulating Bitcoin gradually with it, emergency fund can be provided later instead of having it and you are not accumulating Bitcoin due to lack of discretionary income it will be important you use it in the place of your discretionary and start accumulating Bitcoin regularly using the DCA strategy.

People seems to be complicating the concept of emergency funds, hence it is important to set the record straight before a potential will spend months building emergency funds before starting to invest in Bitcoin. I read in this thread where someone said that you have to build your emergency funds first before you buy your very first Bitcoin and I was like, what is the purpose of such emergency funds when there is no Bitcoin investment it is set up to protect. The moment an investor have discretionary income after settling basic needs, it is ok to buy Bitcoin first at those early stages even if the discretionary income is not big enough to set a sizeable portion aside as emergency fund. After purchasing the Bitcoin, he will then see the need to protect the Bitcoin from sudden sell off and that is where he will start working on the emergency funds. Like I said, this is in a situation whereby the discretionary income at the beginning is not big enough. The key thing is to buy Bitcoin first, then work towards the emergency funds as time progress... you might even be lucky that at those early stages you will not encounter any emergency that will make you sell your Bitcoin because you are highly motivated to own a Bitcoin portfolio. However, as soon as it is practically possible, an investor must set up emergency funds and also try to resist the urge of investing the emergency funds into Bitcoin so it can serve the purpose for which it was created.

I get the logic behind having an emergency fund before buying Bitcoin, but in reality, it is not always practical,especially for someone with a small or irregular discretionary income. Waiting months to build a fund before getting any exposure can mean missing out entirely if the price moves significantly in the meantime..........imagine someone has $100 left after covering basic needs each month. If they spend five months saving $500 for emergencies before buying any Bitcoin, they risk sitting on the sidelines while the price rises 30 to 40%. Instead, they could put $20 into Bitcoin right away and use the remaining $80 to start building their emergency fund, adjusting the balance as they go. This way, they are in the market early but still working toward financial security.

An emergency fund is still essential because it stops you from panic selling Bitcoin when life throws you an unexpected bill. But it doesn’t need to be fully built before your first satoshi. A balanced approach is buy small amounts of Bitcoin early, build the fund in parallel, and never dip into it for investments... that keeps you both protected and invested.

Your point is well articulated but there is a slight disagreement I will have in terms of percentage, if at every month you have $100 balance left after covering basic needs, you could decide to use 50% of it to invest and as well use 50% to keep as an emergency funds, and you could even do 70% of investment and 30% emergency as time goes on, the truth is that as individuals we all have different ways of viewing things and what best suits us, but for me I feel your investment should be on the higher side than your emergency funds, emergency funds should be a little bit lower than your investment, this is because profit comes in with investment and the higher the investment the higher your return on investment, but emergency funds is just there and it doesn't give you a return on investment, it is just there to create balance in case of unforeseen circumstances, so it shouldn't be more than investment in terms of percentage range.

I see where you are coming from, and your reasoning makes perfect sense. The ratio between investment and emergency funds really boils down to personal priorities and risk tolerance. While I agree that emergency funds don’t generate profit the way investments do, their value lies in protection and they keep you from having to touch your investments at the wrong time.

That said, your point about keeping investments on the higher side is valid, especially for those who want to accelerate growth. As long as you have already built a solid emergency cushion that can handle the kind of unexpected expenses you might realistically face, putting the rest into investments can indeed maximize returns over time. It is all about finding that balance where your future growth isn’t compromised, but your present security isn’t neglected either.

Quote from: Humblevirus on Today at 09:50:45 AM

Quote from: yixichloro2xx on Today at 01:28:50 AM

I get the logic behind having an emergency fund before buying Bitcoin, but in reality, it is not always practical,especially for someone with a small or irregular discretionary income. Waiting months to build a fund before getting any exposure can mean missing out entirely if the price moves significantly in the meantime..........imagine someone has $100 left after covering basic needs each month. If they spend five months saving $500 for emergencies before buying any Bitcoin, they risk sitting on the sidelines while the price rises 30 to 40%. Instead, they could put $20 into Bitcoin right away and use the remaining $80 to start building their emergency fund, adjusting the balance as they go. This way, they are in the market early but still working toward financial security.

An emergency fund is still essential because it stops you from panic selling Bitcoin when life throws you an unexpected bill. But it doesn’t need to be fully built before your first satoshi. A balanced approach is buy small amounts of Bitcoin early, build the fund in parallel, and never dip into it for investments... that keeps you both protected and invested.

I understand that emergency funds are very important in Bitcoin investment, but that should not shift our focus away from starting well with our Bitcoin investment. We should give our Bitcoin investment more power than our emergency funds. So, I don't think it's a good idea when we have $100 left over after our basic needs are solved, to just invest $20 and put the remaining $80 into emergency funds. I think we should first start our Bitcoin investment with $60 or $70 and put like $30 or $40 into emergency funds. For me, it makes more sense to focus on building our Bitcoin investment first, rather than focusing solely on building emergency funds. If someone can't invest more of their discretionary funds into Bitcoin, then they should split it 50% each for emergency funds and Bitcoin investment. But I am not in support of investing very little in Bitcoin and pushing more funds into emergency savings.

Your point is valid, maximizing Bitcoin allocation early can accelerate long term gains, but it is also a higher risk approach. The challenge is that without a decent emergency fund, unexpected expenses could force you to sell Bitcoin at an unfavourable price, effectively turning a temporary dip into a real loss. A more strategic path could be to grow both in parallel, even if Bitcoin gets a larger share, so you maintain exposure for compounding while still protecting yourself from having to liquidate at the wrong time. That way, you are not just betting on Bitcoin, you are also protecting your position in it.