Overall, I completely agree with your assumption, because having multiple sources of income will certainly ensure our Bitcoin investment remains untouched or unaffected. However, I believe that in addition to having multiple sources of income, we should also cut back on non-essential expenses. I believe this is also crucial. It's essentially the same if we have multiple sources of income but are wasteful with our lifestyle. Therefore, it's better to combine multiple sources of income with a simple lifestyle. And that way, I'm sure our Bitcoin investment will run more smoothly.
There is no doubt that a multiple source of income may really be of help in increasing our discretionary income however our expenses is what determine our discretionary income. If we can be able to cut down our expenses then our discretionary income will increase however if the reverse is the case then our discretionary income will reduce. So even if our cash flow increase as a result of multiple source of income without us reducing or cutting down on our expenses our discretionary income will not increase but rather there will be a great reduction. So working on our expenses and making such that we cut down on all unnecessary spending is really crucial in increasing our discretionary income.A good cash management and not just having a multiple source of income is what that is going to increase our discretionary income.
You’re absolutely right, having multiple streams of income would definitely help to have more available discretionary income, and working on our expenses would also really help increase our discretionary income, and having more cash flow available would also help our discretionary income grow more, sometimes we might want to reduce our weekly expenditure and monthly expenses depending on when we have our income available, I could use myself as a reference, when I started buying and accumulating bitcoin at a very low rate with a little discretionary income available I had to work on my cash flow and also trying to manage my expenses and trying to reduce some of my unnecessary expenses and also working on my mortgage because at that time I had some debt, so after clearing all that, I had to completely focus on increasing my discretionary income by stopping some unnecessary expenses and I must say that really helped me to increase my discretionary income and buy more bitcoin into my portfolio, I had to also increase my cash flow by generating more income which resulted to more discretionary income.
First of all, I will say that stable income is the basis of discretionary income. Stable income is a reliable and regular source of income. But if the income is unstable, then the income may be more in some months and less in others. That is, the income is irregular and unpredictable. In such a situation, if a person is struggling to generate his primary income, then there is no question of keeping or investing the remaining money. So I think stable income is the primary basis for building discretionary income. Finally, discretionary income is the money left over from our total income after meeting our necessary and essential needs. And we can spend that remaining money freely such as investment, savings, emergency funds, etc. Although discretionary income is completely at our discretion, when we use it for investment, it should be used responsibly. And its planned and conscious use plays an important role in investment. When we have extra money that can be used without the need for spending, we can effectively start building investment goals, future security, wealth growth and additional income sources in our lives.
The more discretionary income we have, the more investment capacity, risk capacity, and ability to grow wealth over time will be created. And if discretionary income is very limited or not at all, then it will be difficult to enter the investment. Discretionary income is not just the remaining part outside of expenses, it is the basis for building our financial future. Therefore, having discretionary income is important for a healthy and long-term investment plan. From discretionary income, we can regularly invest a certain amount of money in small amounts at a certain time in the DCA method. Someone can invest here even with $10. Discretionary income is not only for investment but also a means of creating savings and emergency funds. It is important to have savings and emergency funds as a tool not only for fulfilling future dreams from discretionary income, but also to maintain current financial security and investment discipline. If a person has discretionary income of $60 per month, then $30 can be invested, $15 in savings, and $15 in emergency funds (you can form the ratio according to individual needs). However, security should also be ensured along with investment.
Discretionary income creates the potential for a person's financial progress, but if it is not managed properly, negligence, disregard, and overconfidence often become the cause of financial risk. Many people invest the entire portion of their discretionary income without creating any emergency fund. In this case, when a sudden danger comes, they are forced to break the investment. Many people think of discretionary income as extra money and spend unnecessarily. Many others are complacent by keeping some money in emergency fund, but when the income suddenly stops, the excess spending and investment turn into losses. Such behaviors are examples of misuse of discretionary income. Therefore, proper prioritization and management of emergency fund, reserves funds, investments, and holdings are important so that there is no sudden income shortfall or unexpected expenses. Sudden temporary closure of a long-standing source of income, loss of a car or house, depletion of reserve fund due to the fall in the price of BTC - all of these can create a crisis in cash flow. Therefore, it is important to have a plan regarding the priority of discretionary expenses, emergency fund, and reserve fund. Although discretionary income is an opportunity, its unplanned and uncontrolled use causes harm. Therefore, to get the maximum benefit from it, I first need to have discipline, self-control and a specific plan in my planning. If I can calculate how much of my discretionary income I will invest, how much I will save and how much I will keep in emergency funds, and allocate it according to the plan, then I will be safe in all aspects and be mentally at peace.
The two aspects of increasing discretionary income are increasing income and reducing expenses. In this case, if we want, we can create additional sources of income, which will increase our income. Again, we can reduce unnecessary expenses. Whether the discretionary income is low or high, if we can plan and control it properly, it creates a strong financial foundation for our future.