I think we’re over exaggerating and over emphasizing on this Scenario, it’s just as simple of knowing when to stop if we’re choosing to be aggressive and knowing when to be aggressive financially, I think there is nothing absolutely wrong if we want to be aggressive and there are times we can be aggressive and there are also times we might not be aggressive, it depends on when we have more discretionary income to be more aggressive, because there is no way we can be aggressive when we don’t have a discretionary income, and we should be also smart and intelligent enough to know when is the right time to be aggressive and when it’s not the right time to be aggressive.
The truth is that buying Bitcoin aggressively is not a bad idea if you are doing it from your discretionary income, it is very good, especially if you are still far away in your accumulation journey, where the problem usually lies is doing it outside your discretionary income, because by doing that it smells troubles in your ability to hold for a very long time.
Another thing is over doing it without sorting out your basic needs first.
To buy aggressively, we have to depend on our financial situation. If we buy without depending on our financial situation, then we may put our holdings in danger later. For example, if we invest with our emergency money, then if we need that amount of money, then we may have to sell our holdings. So it is better to be aggressive depending on our financial situation.
Let me tell you in a little simpler language. As you said, invest aggressively with discretionary income. If you invest with the entire amount of your discretionary income, then you will not be able to create an emergency fund. If your emergency fund is already created, then if you invest with your entire amount of discretionary income and then you have any kind of financial crisis, then you will have to take money from your emergency fund. But it is never right to take money from your emergency fund for these small financial crises. So
it is always better to invest 5 to 25% of your discretionary incomeIf a person is investing into bitcoin, they can invest up to 100% of their discretionary income, but if they make a mistake then they are being too aggressive. Therefore it is good to hold back.
If a person decides to invest somewhere between 5% and 25% of their income into bitcoin, then they still cannot go over 100% of their discretionary income, so presumptively anyone investing 5% to 25% of his income into bitcoin is working within his discretionary income.
It seems pretty whimpy to only invests 5% to 25% of your discretionary income. .but guys can do what they like, even whimpy things.
Many folks struggle to be able to save/invest 10% of their income. so presumptively they are saving/investing from their discretionary income, and someone who saves/invests 10% of his income might be saving/investing 60% to 80% of his discretionary income... perhaps.
Sometimes we might need to talk about an example. Maybe a guy makes $2,000 a month, and he has around $1,000 a month in basic expenses, and then he might have another $300 a month in discretionary expenses, so then he might have $700 a month that is left, and he might put half of that into his bitcoin investment around $350 and the other half of $350 into his back up funds. In that case he is investing only 17.5% of his income into bitcoin, but he is investing 35% of his discretionary income, and perhaps once his emergency funds are up to a high enough amount, then he might invest $700 per month into bitcoin, which is 70% of his discretionary income, but only 35% of his regular income (which might be a real hard goal to reach since many folks struggle to invest/save 10% of their income).
Liked how you broke this whole thing down with the numbers and examples, because a lot of people just say invest in Bitcoin without really understanding the context of the whole money division and where the money is supposed to come from. At the end of the day, it is that leftover cash after bills and survival that really matters. Like you said If someone is earning $2k and has about $700 left, the way he spreads that $700 tells a lot about his priorities. Some might say throwing 70% of your leftover cash into Bitcoin is kind of too much, but for me putting just 5 to 10% looks too safe… Personally, to be honest, I do feel okay with 40-60% then sometimes maybe 70%, I will dare not put above 80% or 100% of my discretionary income, reason because I feel more secure having left over cash at hand just because of minor unexpected expenses and responsibilities that I know will always come around.. But the truth is both sides can win depending on how consistent and disciplined they are. I do not even think it is fair to look down on the smaller investors, because honestly, even putting 5-10% every month over years adds up big time with Bitcoin. For me, the real thing is not trying to compete with who goes all in, but making sure I am consistent and not breaking myself in the process.
And the truth is, situations differ. A young single guy for instant can afford to be more aggressive than someone with kids or a family counting on him. Because this is not some one size fits all plan. The goal for me is not to panicked and sell off, which will basically kills the whole point of holding, so I’m trying to be careful and a bit still aggressive with what I put in Bitcoin..