DCA stands for dollar-cost averaging, a fancy term often used to describe the process of making regular purchases of an asset over a set period of time.
By making smaller, consistent savings, you can easily accumulate without worrying about market conditions and other things that often scare speculative investors.
We often refer to this process as ‘auto-buying‘ or ‘auto-saving’ because it’s easier to understand for newcomers and a global audience. This method has been especially effective for accumulating Bitcoin savings over time.
Why most people fail to build new habits
Did you know that more people would rather plan to workout 5 days per week and not go at all than plan for 1 day per week and actually turn up?
It’s either Monday to Friday or nothing at all. No one wants to start by doing 30 mins on a Tuesday for one month straight before adding more volume. It’s too unsexy, and you won’t receive any social clout.
The same can be said for fresh investors entering a new market.
Being consistent and turning up is very boring.
It’s much more exciting to imagine going all in and making a great return.
Most people learn all the investing tricks or take all the supplements, but then they rarely follow through in a meaningful way.
A regular DCA plan works because you’re turning up at the same time, even when you don’t want to (the price isn’t always where you want it to be), and taking action.
You’re building a tolerance of the market, getting into a routine, learning more about what you’re investing time and money in, building conviction… this has a compounding effect over time.
So, how can we apply this ‘DCA’ principle to the rest of our life?
Don’t start with the ideal.
We always dream of the end result and how fast we might be able to reach that point; this often leads to unrealistic expectations. NOTHING is easy. Regardless of the task, hobby or goal, accept that it’s probably going to be slower than you think.
When you first start a Bitcoin savings plan you might buy a small amount once per month, then weekly, then daily… it’s a process.
For most goals, 30 minutes per week is reasonable to work in.
Yup, it seems pretty pitiful compared to our lofty goals, but it’s better than doing a 2-week stint and then revisiting it later in life, full of regret.
Just think of all the skills you could have acquired by now with 30 minutes per week over years… seriously. #HideThePain
You might want to add more volume in 30 days or so, but this should be your base to start with. Build consistency. Get the reward of becoming better at whatever it is and go from there… DCA your way to a better life.
If you want to apply this process to saving Bitcoin, we can help at FastBitcoins.com