If you pour all your money into investing and are afraid of the ups and downs of Bitcoin, you will be in trouble.
Investing into Bitcoin with funds that are meant for your expenses or other necessities is a bad investment practice. It can further be described as being over aggressive in your investment and it can prove unsustainable for long, also it can lure the investor to tampering with his portfolio when the actual needs arise and sell at a time he didn't choose.
Bitcoin is best approached with discretionary income, in accurate cashflow management practice, you must first remove funds that are meant for your expenses before identifying that you've discretionary income and further splitting your discretionary income into funds for Bitcoin buying and others for building of backup funds.
This is very important for an investors for especially the newbies because I have seen some beggars rushing to buy Bitcoin when the price has drop now, which will make some people buy with daily expenses funds, Before investing in bitcoin, make sure you don’t too over aggressive in your investment that will affect your bitcoin journey, it is not advisable to use the funds that are meant for your expenses to invest in Bitcoin because in the process it will affect your investment by selling without not thinking about the price because you need the funds, investing in Bitcoin need a proper plan that will make you to buy your Bitcoin without not using your funds meant for daily expenses and hold your assets for a long time.
Those who rush to buy Bitcoin when the price drops are not buying it for the long term. They are not investors, they are traders, they are gamblers. Similarly, those who invest with the money they need for daily expenses are also basically using Bitcoin as a gambling . It is very important to have a proper plan to invest in Bitcoin. Let's say a person earns $2000 per month. From that, his basic expenses such as house rent, food, child and one and a half education, transportation and all related expenses total $1200. He will have the remaining $800 as discretionary income. From there, he can invest $400 in Bitcoin every month if he wants, deposit the remaining $200 to form an emergency fund and spend the remaining $200 as he wants. He can also spend the remaining $200 on entertainment, social service or improving his quality of life. If you continue to invest in this way, after your emergency fund reaches a minimum of $3600 for 3 months, you can use the extra $200 left to invest more aggressively or create a reserve fund. If someone invests in this way, they will be able to invest for a long time. And if anyone continue to invest in Bitcoin for a minimum of 4 to 10 years or more, then the possibility of getting several times more profit here than investing in any other sector in the future is much higher.
The way you broke it down with discretionary income, emergency funds, and daily expenses really makes sense. If someone follows a steady plan like that over time, even with small amounts, it can really add up because of how time and compounding work. It’s a simple, practical approach that makes Bitcoin investing a long term habit instead of a gamble, and it lets you benefit from its potential without putting your financial stability at risk.