Most folks who are merely investing DCA from their income, they might ONLY be able to invest 10% or less of their income, so if a person invests 10% of his income, it would take around 10 years for him to have had put a whole year of his salary into bitcoin..
Indeed it would take over 10years and though 10% could mean a decent amount, especially when you have other investments in different fields you are taking up alongside Bitcoin investment.
However, there are always rooms to do more as, DCA doesn’t limit you to any specifics in amounts you can invest, it could be more or less, through regular or irregular periods but, you’ll just be sure to be investing when opportune.
An overwhelming majority of people do not consistently save and/or invest even 10% of their income, so it is a fairly BIG step forward to get people to invest/save 10% or more on consistent basis.
Of course, all of the 10% would be coming from discretionary funds, and so if a person expects to be able to save/invest more than 10% on a regular and ongoing basis then he needs higher levels of discretionary income to accomplish that, and I am not going to assume that normal people are ready, willing and able to do that, even though surely guys would get ahead sooner if they are able to invest more and are actually acting to carry out their investments on a regular and consistent basis.
Your assumption is likely correct that more people are likely able to save/invest more than they are doing, yet sometimes it might not make sense to save/invest in something like cash, so bitcoin gives options to be able to tailor amounts and there are other kinds of investments that are more difficult to get into, and many folks do not necessarily have retirement accounts through their work (that they can invest/save into), and saving into something like a house can really be burdensome just to be able to get to a point of being able to put down a deposit and other costs that are associated with closing and with maintaining the investment once in it.
There could be guys who might decide to save into bitcoin for 4-6 years before perhaps investing into something like a house, yet they might come to realize that they are better staying invested in bitcoin rather than diverting their bitcoin investment into property... surely there are guys who might have had accumulated 40 bitcoin prior to 2017 (maybe for less than $30k), and then they end up selling those 40 bitcoin to put a deposit down on a house (let's say that in mid 2017, they sold at $3k, so they got around $120k for those coins and they kept investing into their house through subsequent years), and maybe they purchase a house that is worth $400k in 2017 with house payments that are $2,500 per month with other costs of home ownership, so now they have hardly any bitcoin, and maybe their house is currently worth $1 million, but if they had kept their bitcoin and continued to invest $850 per month in bitcoin (maybe $200 per week?), then they would have invested $82k into bitcoin and got another 7 BTC, so then their total bitcoin could have had been right around 47 BTC, which is way better than having a $1 million house... and they could even by a $2 million house completely with less than half of their current BTC stash.. I am not against loans to buy houses, yet bitcoin performance has been way better than house performance... so even the guy currently might choose not to buy a $2 million house with his bitcoin but instead use some portion of his bitcoin and also get housing payments, if he still wants a house.
By the way, if a guy with 47 bitcoin wanted to be creative and wanted to spread out his selling of his bitcoin, a guy with
47 bitcoin could currently generate an annual income of right around $242k ($20.17k per month) with his 47 bitcoin in order to make housing payments if he choose to partially finance a current desire that he might have to buy a house that is worth $1 million or $2 million.
Maybe if he got a $2 million house, he could put a 20%-ish down payment of $400k.. (right around 3.42 BTC), and then his balance of 43.58 BTC would generate around $224k per year of income (or $18.67k per month), if he were to want to use his bitcoin to make payments in the event that he no longer were to have a regular job.. but yeah if he has dollars, he likely would prefer to spend the dollars first (before spending proceeds from his bitcoin).
Part of my point is that it would likely be better to build up the bitcoin stash first before getting overencumbered with real estate costs, and realizing that even though having value in real estate is better than having value in cash, it still likely continues to remain better to maintain most of the value in bitcoin, especially once a person has gotten to a decent bitcoin accumulation level where it starts to make sense to draw from his bitcoin, in some kind of a reasonable and sustainable way that prioritizes the bitcoin investment over other places to keep value..
Most folks who are merely investing DCA from their income, they might ONLY be able to invest 10% or less of their income, so if a person invests 10% of his income, it would take around 10 years for him to have had put a whole year of his salary into bitcoin.. and so frequently we have the investment being a product of both time and how much we put into it, so some guys get excited to cash out their profits, but if they have not put very much into bitcoin, then their profits would be less likely to be meaningful. We have all kinds of examples through bitcoin's history where guys had been cashing out way too many bitcoin too soon because they got interested in short term profits, but then they ended up selling way too many bitcoin too soon and ultimately were not really managing their bitcoin holdings in a way that would really bring meaning to their fnances and their overall net worth.
If a person's monthly income is $500, then 10% of it is $50. So 50×12=$600 in a year, then in 10 years, 600×10=$6000. And two or three bonuses a year can be added to the fifty percent. I said fifty percent because the remaining fifty percent will be needed for the family. Sometimes when the market goes down in a big way, it is better to keep some money to buy Bitcoin at that time.
You have to decide for yourself if you believe that it is helpful to hold back any money for buying dips, and yeah, with your example we have right around $6k invested into bitcoin over 10 years from the regular income, and if we might presume that the bonuses might be something like 1 month's pay on average, but the guy is ONLY going to invest half of the bonuses into bitcoin, then perhaps he would have an additional $500 per year to invest into bitcoin, which would be an additional $5k over 10 years, so if the guys finances stay in a similar status the guy ends up investing around $11k over 10 years.
The guy may well have circumstances in which he can increase his discretionary income by either earning more income or saving money along the way, so maybe even if the cost of living doubles in nominal terms over 10 years, maybe the guy is able to figure out ways to triple his income.. so his income increases are outpacing the increases in the cost of living.. which puts him into a reasonably decent place to anticipate ways that he can attempt to improve his circumstances, especially since he already has a place where he knows that he wants to put any extra generated value. I also personally like the idea of figuring out ways to invest into bitcoin on a weekly basis, yet of course, you have to figure out your cashflow systems and even to also make sure that you have back up funds in place for any mistakes that you might make in your various calculations of your various expenses that might come about from time to time.. and of course, back up funds also help to give some cushion for if your income goes down.
[edited out]
Well it is always a privilege to get started instead of waiting and wondering when it’s going to get the right time to buy and accumulate bitcoin, Which we can always start learning gradually along as we’re also building our Bitcoin portfolio, Their are guys who might want to be very aggressive when the opportunity for that comes as well, but trying to be aggressive and also having that intention to front load the Bitcoin, I think we can always be accumulating and front loading our Bitcoin with a very good and reasonable amount of discretionary amount to be able to keep up with our strategies in line, sometimes when we try to front loading our Bitcoin we might be wondering how consistent we can always be, that is why I just think that it’s quite reasonable to understand it’s just a matter of when we have that money and the opportunity presents itself, I think I would really love to stay focused and accumulating little by Little and staying active in accumulating with the goal of completing a full circle which most people aren’t able to complete it or making enough profit, some people it might probably take them two circle because of their level of accumulation and availability of discretionary amount to accumulate weekly or monthly, but it will be obvious that we might not even have enough profit in our bitcoin portfolio.
We could understand that investing in bitcoin wouldn’t be a guarantee for us, mostly importantly we can learn how to adjust our financial management, and learning how to be able to stay consistent in accumulating without having any problems in accumulating a good portion of Bitcoin to achieve our goals.
Of course, if you are able to be as aggressive as you are able to be, including front loading your investment into bitcoin as much as you can, you still might not be in a good position to slow down your bitcon accumulation after a whole cycle or maybe even after two cycles, yet surely you have to figure out ways to make balance with yourself so that you are also not becoming overly emotional about your bitcoin investment as well as other activities that you might have going on that might relate to your income, your family and/or your various expenses.
Frequently I consider front loading to be relevant when guys might either already have money when they come to bitcoin that they can divert into bitcoin and/or front loading might also apply towards situation in which a guy might get bonus pay from time to time. Another time that front-loading is relevant is in the context of using debt to fund your bitcoin, and usually with debt you would not want to use it unless the terms were decently good in terms of the fees, the interest rate and even the length of the loan. I would consider fees that are more than 6% annually to be too much, even though guys might tolerate higher rates. Also loan terms that are less than 4 years are problematic too, and surely I would expect the person is able to have other cash sources (besides the bitcoin) to pay for the loan over the duration of the loan.
If you are ultimately getting less than your whole year's income into bitcoin in 4 years, I find it very unlikely that you will be close to reaching over-accumulation status, and since investing is a product of both how much you put in and also how much time passes, I would expect that there might be a period of accumulation and then maybe a period of maintenance and then later comes your period of being able to sustainably withdraw.. so it is hard for me to imagine too many situations in which normal people of regular means would be getting to sustainable withdrawal status in less than two full cycles.
[edited out]
Since you said that you don't have the large discretionary income to front load your bitcoin investment, and want to buy little by little with your discretionary income. Don't you think that once circel is too short for a new investor to accumulate bitcoin and at the same time set up your emergency funds and reserve funds as someone who just started his bitcoin investment.
It's better that we don't use timeline as the main focus on our bitcoin accumulation journey because it will depreive us from accumulating as many bitcoin as possible overtime. Instead, you should have a bitcoin target which you will plan to accumulate so that you can focus on that quantity till you achieve it irrespective of the time duration that you will use to accumulate it. S that, you can know when you are entering an over accumulation phase.
Profits shouldn't be the main thinking when accumulating but reaching your bitcoin target should be your priority.
We cannot really know when we are going to reach our overaccumualtion status, especially if we are measuring in both bitcoin and dollars (fiat),so we likely will have some targets in regards to how much value we expect to put into bitcoin in the next year, next 3 years, next 5 years, next 8 years, next 12 years etc.
The further out we go, the harder it is to be very specific in regards to where we might want to go, so we can mostly just be general and perhaps have some ideas that we are touching on our short-term goals, so we likely can reassess from time to time if our long term goals still make sense or whether we might need to tweak them based on where we are at during various points along the way.
It's better that we don't use timeline as the main focus on our bitcoin accumulation journey because it will depreive us from accumulating as many bitcoin as possible overtime. Instead, you should have a bitcoin target which you will plan to accumulate so that you can focus on that quantity till you achieve it irrespective of the time duration that you will use to accumulate it. S that, you can know when you are entering an over accumulation phase.
Profits shouldn't be the main thinking when accumulating but reaching your bitcoin target should be your priority.
No, I think that it's more better to accumulate Bitcoin with a duration of time than setting a Bitcoin target, because if you set up a Bitcoin target, you are limiting yourself, you might stop accumulating if you get to that target very early, but if you set a duration of time like 10 years or more, you are definitely going to accumulate more Bitcoin as long as you are consistent in your Bitcoin accumulation journey, because I know that their are times you might even invest aggressively or sometime buy during a dip, so accumulating according to timeframe is the best way to accumulate a bigger stash of bitcoin than setting a target that can be easily achieved.
I am with you on this one, @Finebone.. The way I see it, Bitcoin is one of those things you just keep stacking for as long as you can, because the game is not really about hitting a final number or something and calling it a day…. Markets change, life changes, and honestly, what feels like enough today might not even scratch the surface years from now when the value shifts…
Sure some of our values might have shifted, yet even if our values did not shift, we might realize that we were wrong in our calculations regarding where we thought we would be as compared to where we are. We also might have learned things about how to calculate reaching some of our goals, and maybe some our goals were easy to achieve and other goals were more difficult to achieve, yet we keep plodding along.
in year one, we might have had outlined a base case scenario and then a better case scenario and a worse case scenario, yet we don't just suddenly get to year 12 and we are surprised. Instead we are able to measure and recalibrate at year 1, 3, 5, and various other points along the way... so maybe at some point in the beginning of our investment, we thought that we needed to reach 25 years of our expenses based on spot price valuations to be able to sustainably live off our bitcoin, yet we figured out some new ways of calculating that allowed us to consider the goal differently and in a more stable way and perhaps to be able to reach our goal with different ways of measuring based on the 200-WMA. We would adjust our goals to our new ways of calculating.
So I would say working with a set duration keeps you in the habit, and that habit is where the real thing happens.. You are not waiting for the perfect moment, you are just building, dip or pump, you keep adding.. And the funny thing is, when you are locked into a timeframe mindset, you usually end up with way more than you first imagined, without even stressing over whether you have hit your target yet…
In my opinion, it is better to have a long game running in the background than to accidentally talk yourself into slowing down just because you think you are done…
These are good points kanftka. We should have safety buffers in our goals, so ballparkedly we might be considering some of our various goals, yet when we get closer to achieving them, we are almost compelled to recalculate and to also build in a bit of a cushion since we are likely not going to want to believe that we reached a certain status, and then find out that we had overly estimated.
Sometimes we might also find ourselves erroring on the side of being overly scared, so for example, if we set ourself to have a goal of having an income of $80k per year, and right now we measure the quantity of BTC needed and
we see that right now 15.559 would be enough BTC so that we can start to withdraw at $80k per year, and we already know that we have already accumulated 22.39043 BTC, so we know that we already have enough and we have more than enough.. .Yet, we still might be scared to start withdrawing even though we have nearly 7 BTC more than we need to carry out our goal. These surely are matters that we need to resolve for ourselves in terms of how much of a cushion we feel that we need in order to feel comfortable getting started in our starting to live off of our BTC in a sustainable way.
Always security conscious of the investment, don't disclose your investment with people.
Well, on one side, it is good that we do not tell everyone what we have invested in bitcoins and crypto, but actually, it is the intention of telling others and how others interpret it.
There's more risk in exposing what we do and how we try to hold together with the strategy used, because some may take us by those information and target on us, another thing to also consider on this regard is the way we often see others post about what they don't have, while we think of their strategies being productive together with what they are holding, while on the real sense, they aren't investing on anything, some of us would have been more better than them, that is why it's more safe that we develop our personal business ethics and invest, hold and also keep mute about the capacity we have in bitcoin investment.
There are likely ways that we can talk about bitcoin with both strangers and with people we know without getting too much into our own specifics.
I will talk merchants who I know and also merchants when I am traveling about bitcoin, and many times if we are talking about bigger ticket items and we are negotiating about price, then we might talk about paying in cash versus paying in credit card and method of payment might also be a good time to mention bitcoin as a possible means of payment that is relatively fast and without a lot of fees, which can have some advantages on both ends.
Sometimes we will have to be careful if there are potentials that we are dealing with shady people or even if some normal people are talking about our bitcoin stash with shady people... We could end up in a problematic security situation, if some of our friends and relatives are gossipers, and they might not even have correct information, so they will assume, presume and perhaps even exaggerate regarding the quantity of bitcoin that might be available. So, sometimes it can be difficult to control the information once it is out there, even if one of our relatives might say something about what they believe is our bitcoin stash and then say that they were just joking, then sometimes we can remind them how it could be problematic for them to be telling others about what they believe my bitcoin stash to be. I have not found any great ways of stopping some of my relatives from talking and just seeming to make up numbers.
Most folks who are merely investing DCA from their income, they might ONLY be able to invest 10% or less of their income, so if a person invests 10% of his income, it would take around 10 years for him to have had put a whole year of his salary into bitcoin.. and so frequently we have the investment being a product of both time and how much we put into it, so some guys get excited to cash out their profits, but if they have not put very much into bitcoin, then their profits would be less likely to be meaningful. We have all kinds of examples through bitcoin's history where guys had been cashing out way too many bitcoin too soon because they got interested in short term profits, but then they ended up selling way too many bitcoin too soon and ultimately were not really managing their bitcoin holdings in a way that would really bring meaning to their fnances and their overall net worth.
Of course ,If you are only putting 10% or less of your income into Bitcoin, you have gotta accept that it is a slow game. It is like filling a jar with coins, at first it feels like nothing is happening, then one day you realize it is really actually getting pretty heavy. The problem is, a lot of people don’t wait for that heavy jar moment. They see a little green in their portfolio, get excited, and sell , then a few years later they are kicking themselves because those small gains could have been life changing if they just held on.
I still remember one guy on who told his sad or should i say unfortunate story on Reddit, who sold his whole stack for a used Honda Civic back in 2016. At the time, it felt like a smart move because he bought a new car, feeling good. Fast forward to today, and those same coins could have bought him a house… maybe two. That is the beauty of Bitcoin, u will need to have patience, look into the long term, because the short term wins can trick you into missing the big picture. If you want it to actually move the needle in your life, you have to give it time to do its thing.
Yep.. it is a slow process to accumulate bitcoin, and it is not good to interrupt the process.
Regarding the Honda Civic in 2016, we can do an approximate estimate that if the guy bought a medium priced Honda Civic in 2016, he may well might have ended up spending around $20k...
So bitcoin in 2016 ranged from $350 to $900. Let's say that he sold around $700... so then he needed to have right around 28.5 BTC in 2016 to generate $20k of cash.
Right now 28.5 BTC has a 200-WMA of $1.5 million and a spot price of $3.4 million. Surely right now, any of us could do quite a bit with 28.5 BTC, whether we started to generate income off of it or we cashed out chunks of it. The current sustainable income from 28.5 bitcoin would be $146k per year.
Generally lump sum cashing out for consumption (or even investing in something else that is usually going to be inferior) is not a good idea or a good way for a person to manage their BTC holdings.