Quote from: Proty on September 04, 2025, 09:02:23 PM

Quote from: Frankolala on September 04, 2025, 06:08:12 PM

Quote from: yixichloro2xx on September 04, 2025, 02:40:48 PM

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.

I disagree with you that emergency funds and reserve funds are the same. Emergency funds main purpose is to back up your bitcoin investment so that you don't sell prematurely when you're hit with unforeseen circumstances and should be used when there's a real life emergency. Whereas, reserve funds has more flexibility than emergency funds because you can use your reserve funds for several purposes like buying bitcoin at the dip and also you can start using your reserve funds when you are hit with real life emergency before going to use your emergency funds if your reserve funds cannot solve the problem completely.

They are all backup funds but does not mean that they are the same and should be kept together since they're not for the same purpose. Your emergency funds should be at least three months of your monthly expenses and it's always the bigger portion amongst your backup funds. Reserve funds will be of little size compared to your emergency funds.

A new investor does not need to have an emergency funds before he can start his bitcoin investment, provided his discretionary income is reasy, he can share it into two part and use one part to starr his weekly DCA purchase and tge other part to set up his emergency funds of at least three weeks of your monthly expenses. When that ha ac been achieved, he can channel that money that he was using for his emergency funds to build his reserve fund. After his reserve funds is set up, he can then invest aggressively with his discretionary income.

Emergency funds and reserves funds are two different things and they are use for entirely two different purposes. So I believe it will be misconception to view the two thing as the same thing. Emergency funds is not just for bitcoin investment so it will be wrong to make it look as if it is only when we are investing in bitcoin that we are supposed to have emergency funds. Even those that aren't buying bitcoin needs emergency incase of unforeseen contingency since no one can actually predict the future.

Yeah true, because emergency fund is something everybody needs, not just people who put money into bitcoin or any other investment. Life is full of surprises, sickness, accidents, sudden bills, job issues and when those things come, it is that emergency funds that saves you from panic or from selling off things at the wrong time. While Reserve fund, is more like a planned backup, money you intentionally keep aside to protect your bigger financial moves. They might sound similar but the use case is completely different, one is to rescue you instantly, the other is to support your long term structure.

That is why I also don’t agree when people mix the two together, because it can confuse beginners. Emergency funds are for survival and peace of mind, while reserve funds are more like insurance for your financial goals.. Emergency money is a must have, it is like a shield against the unknown. So yeah, you are right, linking it only to bitcoin alone does not give the full picture..