Quote from: Frankolala on Today at 06:08:12 PM

Quote from: yixichloro2xx on Today at 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.

An investor must have proper knowledge about emergency fund and reserve fund, must understand their differences, otherwise they can easily confuse them with each other, which can often lead to danger for them. We must know which fund is created for what purpose, and they must be used according to the purpose for which they were created.

Emergency fund and reserve fund are not the same thing, both act as backups but their purpose and use are completely different, the main purpose of emergency fund is to handle the sudden uncertain financial situations of life, so that at that time your Bitcoin holding is not damaged, that is, the main thing is that emergency fund is kept as a protective amulet to keep Bitcoin holding safe in the long term, no one can deny unexpected situations, because job loss, illness, family problems can happen very naturally in people's lives, and in such situations people will naturally face financial crisis, and that is why it is important to be prepared in case of emergency so that Bitcoin holding is not damaged at such a time.

On the other hand, the main purpose of the reserve fund is to use future good buying opportunities, that is, we know how volatile Bitcoin is, due to volatility, the price of Bitcoin can naturally go down for some time, in such a situation, using this opportunity, the reserve fund is prepared to accumulate more Bitcoin at a lower price. This is not a mandatory matter, but we know that the lower the price people can buy at the time of purchase, the greater the possibility of success, and therefore if someone wants to use the good opportunity to buy more at a lower price at the dumping moment, then a reserve fund must be prepared.

An investor must understand these clear differences, and they should know which is the most important between emergency funds and reserve funds, here emergency funds must be prepared compulsorily (As soon as possible after starting investing), because if the Bitcoin investment is to be held for the long term, its security must be ensured. On the other hand, the reserve is only prepared to buy additional Bitcoin during a Bitcoin DIP situation, which will not be a problem if you ignore it, you can just continue to buy Bitcoin continuously.

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