...
I agree that having safety net like reserve fund and steady income is important for investing in Bitcoin. But you can invest without them it brings much of stress and risk. As you said worrying about covering unexpected bills can force you to sell your Bitcoin at bad time which can cause you to lose money. Having strong financial base allows you to invest with confidence handle market ups and downs without panicking and stick to successful long term plan. Your advice is great it is important to build financial security first.
It's not enough to just invest in Bitcoin, but you have to effectively hold your investment for the long term, and it's important to take all the necessary measures for this.
You must create financial stability, you must continue to invest in Bitcoin consistently by keeping a stable source of income.
And later, you must have funds to sustain your investment for the long term, when you face an emergency or unexpected expense, you must have this preparation and mindset so that you can handle the situation without getting into any problems.
However, in preparing emergency funds, you do not need to prepare emergency funds before investing, because this may delay your investment, which is never the right thing to do.
Invest first, then ensure the long-term security of your investment by preparing funds as soon as possible, and keep the investment consistent, then it will give you a better chance of success.
I think it actually depends on individual case and risk level. Investing in Bitcoin with no reserve fund can easily get one into a panic situation when an emergency arises and only has no alternative but to sell off his Bitcoin at an inconvenient moment where most times it will be a loss. That is why in my case it makes more sense to create a certain financial cushion first, although it may be worthwhile to put off the beginning of investment somewhat. Having that safety net provides the benefits of holding in Bitcoin through volatility without fear in the long run. It is important to be consistent with buying but when your personal finances are not stable it is extremely difficult to be consistent. By developing a solid foundation, then you will be able to invest with confidence, as you are following your long term plan and not making any emotional decisions when the market moves. Ultimately there must be stability and consistency but I think that the stability must always come first in order to make the investment journey count.
If we have a long-term investment goal, we must create a solid foundation so that we do not have to withdraw from our investment in any unpleasant situation.
Suppose two new investors start their investment. One has started the investment with his proper financial plan and emergency fund And another invests a portion of his earned money but has no emergency savings or proper financial planning. Now if any unexpected event or personal emergency comes, but the first person can easily deal with the situation from his emergency fund and in this case, his investment will not be affected. But the other person who does not have an emergency fund will be forced to withdraw from his investment or he will have to take a loan to deal with his bad situation. Not just new investors, but every investor should have an emergency fund in place so that they don't have to break their investment to deal with unexpected expenses or situations. Therefore, having an emergency fund is very important for long-term planning and maintaining continuity.
This has been overly discussed here, you must not have your emergency funds ready before you start investing since it can be done simultaneously while accumulating Bitcoin, with the help of DCA strategy you can be buying Bitcoin at the same time building your emergency funds, the most important thing is to figure out your discretionary income with good funds allocation plans, we can't keep waiting to build an emergency funds first but it has to be considered alongside accumulating Bitcoin, emergency funds is important but it is not the first criteria before starting to buy Bitcoin, the first step is to have a discretionary income other things can be improving including building an emergency funds.
~snip
The Bitcoin market is always volatile and those who have managed to avoid this volatility for the long term have achieved success, and those who can maintain this continuity in the future can certainly achieve good success.
As an investor is it really possible to avoid volatility since we all know that volatility is an integral part of the bitcoin market? So I am wondering how can someone avoid volatility for the long term? What you said here is totally wrong in my perspective. Do I need remind you that volatility is the upward and downward movement of bitcoin price over time. So how do you avoid bitcoin price volatility when you have bitcoin in your portfolio and still be successful?
Note: I am just a newbie trying to learn new things every day.
Volatility is an integral part of the Bitcoin market. You asked a question, is it possible to avoid volatility? The answer is yes, it is possible. Consider that you have a discretionary income stream coming in every week and you want to accumulate Bitcoin from it. This is the only way to reduce your mental volatility. If I explain it to you a little more clearly maybe you will be able to understand it better. If you consistently accumulate Bitcoin in the DCA method it will not only grow your portfolio but also gain extensive experience in the market due to the long term nature of the market as the price of Bitcoin is volatile and you continue to hold Bitcoin without any stress. When you are continuing to create holding you will be able to create a investment defence wall regardless of market volatility and your financial strength will continue to grow over time.
Your explanation about the possibility of avoiding volatility is very vague