Post
Topic
Board Politics and society (Naija)
Merits 1 from 1 user
Re: Balancing Financial security and Bitcoin Accumulation
by
TokenTikas
on 04/09/2025, 17:36:34 UTC
⭐ Merited by JayJuanGee (1)
but I think the part that might confuse  people is how you separated emergency funds from reserved funds. In financial planning terms, they are usually considered the same thing  that is cash set aside for unexpected needs. If we start introducing another layer like reserved funds, it could give beginners the impression that they need to maintain multiple categories before they even think about Bitcoin, which might not be realistic for most people.

What actually matters is exactly what you pointed out, is that Bitcoin investment should come only from discretionary income, not money that is  supposed to keep you afloat during emergencies. The clearer we keep that line, the less chance that people will end up mismanaging their finances in the name of stacking sats.
Emergency funds and investment funds are created for completely different purposes so they should never be mixed together. Emergency funds are mainly kept to deal with sudden job loss, medical expenses, or any other unforeseen situation. Therefore it should always be kept in a place where it can be easily converted into cash and there is no risk of market fluctuations.

On the other hand, the money that should be used to invest in bitcoin should be the money that even if lost, your financial position will not be damaged, which is called excess or discretionary income. If someone invests in bitcoin with an emergency fund and the market falls, then it will be difficult to withdraw that money if necessary and will be in great financial danger. Therefore, it is necessary to keep a clear separation. The emergency fund will be in a safe and risk-free place, and bitcoin will be invested only with excess money. If you follow these boundaries, it will be possible to invest while maintaining financial security.