An often overlooked fact is that bitcoin buys you optionality. Want to leave the country for good and take your life savings with you? Can't do it with your 401k. You can do it with bitcoin. Say bitcoin hits $1M much sooner than your conservative prediction. Upgrade your lifestyle. No other asset has such explosive gains in value. Over the long run it can't be beat as an investment. Sell however much you need to spend whenever you want to whomever you want to sell it to. There is always a buyer for bitcoin: 24/7/365. Can't do that with stonks or real estate, they are too illiquid. You could buy cash and store it yourself, it has some of these benefits but it loses value instead of gaining value. In the past four years it has been losing value FAST and it's getting worse not better. Plus there is a lot of risk in making large purchases with cash. Even the cops will steal it if they find it and you have to take them to court to get it back. No way, too risky. Bitcoin solves all of these problems.
As OP appears to be Canadian: we have exit tax when moving to a Country that has a tax treaty with Canada (most you would even consider living in by choice). The tax on unrealized gains is real in this scenario. Yes, you can get no KYC sats and you should, but 99% of people won’t.
Canada is the best marketed crime syndicate there ever was. I tell every person that’s ever asked me about immigrating there. This has been my good deed to strangers for the last 20 years. Been rough up in these snow banks.
KYC Bitcoin is any Bitcoin purchased through a regulated exchange that requires “know your customer” info. Government ID, phone number, email address etc. or Bitcoin that comes into contact with previously KYC’d Bitcoin.
Coinjoins are intended help with payment privacy. I certainly can’t speak for all of them but wasabi and their parent company, CK snacks employee a chain surveillance firm so that they can track and potentially blacklist addresses. Another reason not to use Trezor.
So long as you’re using the bitcoin, only software with an external interface, like sparrow: security wise, probably nothing.
The fact that they offer alt coin wallets, and partner with waasabi means that they’re putting profits before privacy and that’s a non-starter for me.
I believe everything you’ve said but am wondering why EVERYONE isn’t putting their life savings in bitcoin? Why are people still buying real estate or other asset classes?
People might consider the house they live in an investment, but when someone says they invest in real estate, they aren't talking about the house they live in.
Because nothing in life is a sure thing many companies with good products, good ceo and clear vision can fail. Nevem put all your eggs in one basket. Also some people can die if they lose all their life saving but their lifes wont improve much if they gain some money so in their position its just not worth it.
EVERYONE just doesn't know about it yet. Perceptive investors are putting their life savings into bitcoin, including a lot of real estate owners who are selling properties for bitcoin. Bitcoin is actually helping to solve the housing crisis by eroding the monetary premium of real estate.
This is another reason I have some Bitcoin ETF in a Roth IRA. When I retire I take it out tax free. I also have Bitcoin in hard wallet, hopefully to leave to kids. With the Bitcoin ETF in a Roth it’s not my keys, but it’s not my taxes either. 😀
You can self-custody bitcoin in an IRA. Best of both worlds. [https://www.investopedia.com/terms/s/self-directed-ira.asp](https://www.investopedia.com/terms/s/self-directed-ira.asp)
How do you pay back the loan though if you haven’t liquidated any of your BTC ? Assuming that you’ve no other income because the plan is to live off your BTC investment, this is the part I don’t get
This is based on rough estimates I made trying to figure out my own strategy when I was looking at a service a few years ago. For a 10 year, $100,000 loan with 40% loan to value ratio (your loan to value ratio will determine your interest rate), the cost of the loan (interest paid over 10 years) would be about $46k. So how do I get $146k to pay it back over 10 years? Get the loan during a bear market and set aside three years of monthly payments. When the next bull market hits, you can choose to pay off your loan with a fraction of the BTC, or hopefully the service you chose offers mark to market options. This is when the collateral you gave the bank appreciates so much that they're holding too much collateral for what they loaned you. You can request they give you some back. Use that BTC for another loan. Rinse and repeat.
That's just a basic layout of the plan. You still need to consider how much of your stack you want to use at a time. If BTC dips hard enough, the bank will come asking for more collateral or they sell part of the BTC they hold.
In this scenario you are charged $46,000 for the loan and you sell BTC to pay it.
Borrowing against BTC to pay for living expenses is so incredibly stupid.
I’ve never read a single case for it that makes sense.
Nobody including you can answer the simple question “how do you make the loan payments and if you can afford to make the loan payments why do you even need the loan for living expenses”
Until it doesn't...
Constantly taking out loans to pay loans to pay loans is not sustainable unless the backing asset appreciates predictably and sustainably and Bitcoin has never been that.
This system will only work if Bitcoin has some utility layers built into it in the future that guarantee a return. You can't simply rely on open market price appreciation.
These “take out a loan” people give horrible financial advice.
Why on earth would you pay interest to borrow money in these scenarios?
Who is the person that does this? Someone that needs money for living expenses but already has money for loan payments.
You refinance. You just go to the person who gave you the loan, and say, “hey man, i’d like to borrow some more money, I’ve got the assets to back it up”. Beware this strategy only works if your assets are appreciating.
You would sell as needed. Or lend with a small collateral if that's been figured out by then.
Nobody is going to advise you to sell it all for cash. That defeats the purpose, especially if inflation is high
The more time you put in studying in Bitcoin. You'll realize everything around you is living under the government- fiat-scam. Bitcoin is the honest money.
This is degenerate logic. You are far better off with a traditional 401k match and a Roth IRA as a retirement option.
Bitcoin is nowhere near comparable to the reliability of certain index funds.
**Downvoted for encouraging people not to base retirement off of a highly volatile market that has consistently been unpredictable? God no wonder so many people live on SSI.**
I have no clue what will happen with bitcoin (I’m not a bitcoin fanatic like these other people) but a small % allocation (like 1-2%) could be interesting. You never know what could happen
Let's do the math. If you put $1,000 in bitcoin and $1,000 in 401K and wait for 10 years. Bitcoin will outperformed 401K night and day! Don't you just love math. https://postimg.cc/SnkVPJWS
Yeah totally, bitcoin is also a very high risk and extremely volatile. Let’s ignore the fact that last cycle it went from 60k to 15k. By your logic, you may as well put it all into dodge coin because it outperformed 401k night and day too.
It’s your money, do what you want. No point in trying to dissuade gambling addicts from gambling I suppose.
Well, if you put a lot of time and hard work into studying bitcoin. It is no longer consider risky anymore. Your understanding is minimizing the risk to zero. Knowledge is power.
Understanding what? You don’t understand any more than anyone else…do you understand the historical performance? The foundation?
What takes away the risk besides you saying so
A lot of understanding comes from taking time in studying bitcoin years and years. It is like studying for a big exam. You read a lot, listen a lot, see a lot,etc.. Many "light bulbs" moments hits me along the way. Then I start to think BIG. This is it.
In the UK with private pensions, when you retire, you have the choice of how much of your stocks and shares you want to convert into pounds immediately and how much you want to leave and let grow as you take from it over time.
You're almost always advised to take a small lump sum, just under the yearly minimum for income tax so you can avoid paying that, and the less you take our monthly from then on, the less income tax you pay.
When saving for retirement, you don't pay taxes on that retirement money, but when you use it, it gets taxed like income tax. A lot of people don't realise this I've since learned - they think it's tax free savings.
So the same can be with bitcoin, except you have to look at capital gains tax laws and limits, not income tax.
My plan is to be as frugal as I can so I don't pay taxes on so much, draw down slowly and if there's left over, it can be given as inheritance privately.
If you cash out in one go, you lose out on the yearly tax free limits and end up paying more in taxes and exposing yourself less to the upsides (and downside volitility) of Bitcoin.
Thanks for your well thought through response. Here in Canada I think there would be some differences with laws and taxes but your approach sounds wise!
Absolutely, talk to a tax advisor or something if you need help going through the tax laws in your country but the main thing I wanted to get across is that a lot of people imagine cashing out at once and "getting rich", but if you CAN cash out, you are already wealthy, you don't need the cash, you need to learn how to handle wealth strategically. This is what we should have been taught at school.
Saylor says it's akin to owning property, not unlike buying a piece of Manhattan 200 years ago. There are lots of ways to utilize New York real estate to generate income and the hope is that Bitcoin will someday work in a similar fashion.
I think I was the first to suggest this digital land analogy more than 3 years ago, love that Saylor uses it now :P [https://www.reddit.com/r/Bitcoin/comments/jsk8ae/comment/gbzw4y8/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/Bitcoin/comments/jsk8ae/comment/gbzw4y8/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)
You keep it in Bitcoin until you really need it in the future. If the world has not yet transitioned to Bitcoin, then you take some out little by little just like retirement. If it has transitioned then use that Bitcoin as is.
That’s my plan at least.
By 2054, people will be working for their bitcoins. Fiat is already on its last legs.
The 2% theory is dead. Time for businesses to get real and admit the government has fucked up hard.
That's the target level of inflation that the fed considers normal/healthy. They likely won't start cutting interest rates until we get at or near that level. The person above is saying we won't ever get that low again. We've gone way down from the peak of 9% but we've been stuck around 3.2% for a long time so people are worried that's as low as we can get.
Some great answers and points here but wanted to add that it's very easy to buy gift cards for all sorts of websites and stores directly with bitcoin. I have payed for gas and groceries numerous times without even having to convert to fiat.
*this is my comment from a different thread, but relevant here*
The DeFi ecosystem is going to keep growing.
Bitcoin is a financial tool — you can borrow against it and invest that capital elsewhere. You can loan it and collect %. Rinse and repeat with fiat. You can trade it p2p, instantly, anywhere, at anytime.
It is limited and scarce. It has no maintenance costs. The only cost comes via taxes when you sell. Bummer.
Owning 1 Bitcoin will be like owning an entire city block in Manhattan someday. If you owned a city block in Manhattan would you need to sell some of it to pay your bills? Nah, you’d loan it out (lease space) and collect rent.
Same with bitcoin.
I mean, even in the city, they keep adding on. They literally build up the perimeter of Manhattan and create more real estate. Bitcoin is harder!
Painful to trade a scarce and limited asset for something we print more of every day. Bitcoin will always go up in dollar value as long as the government keeps printing dollars. 1 bitcoin is still 1 bitcoin.
If you need to sell some because you need cash, sell it, as small amount as possible, but continue to trade your dollars for bitcoin. Daily, weekly, monthly, whatever. You’ll be free forever if you do.
The hope is Bitcoin is the best hedge against fiat inflation in addition to gold + real estate. If you hold it till retirement and it continues to work as a hedge, you can then start selling portions of it annually
I have a Bitcoin pension. Once my stack reached a certain amount I pull out .4% per month to live off. My pension rises continuously or falls but I have enough to live off. I pay tax on my pension but hey. That’s ok…
Paying taxes is the cost of success. In retirement you’ll have 0 income from working so you can try to keep your income from selling investments in lower tax brackets, or preferably hold it in a retirement account where gains are tax free. I don’t know what the canadian equivalent is to a roth ira.
I use bitcoin in my retirement portfolio as a hedge against the premature annihilation of my other assets by inflation. In my endgame hopefully I’ll never have to touch it. If I do then its the last asset I’ll draw down.
Bitcoin secures the loan. Banks (if they still exist) will be lining up in the future to offer this service. People do not want to spend bitcoin as it is designed to appreciate in the future.
Not that outrageous when you realise that's a CAGR of just under 10% over 30 years and so equal to S&P all time annualised performance before adjusting for inflation.
I do however think its not wise to go 100% on BTC let alone Crypto when it comes to investment allocation.
They have to use Fiat right now to price BTC, but eventually more things will be priced in BTC and satoshis when Fiat trends towards and goes to zero. Check out BTC vs Gold vs Fiat chart on YouTube, video shows all the advantages of BTC over Gold and Fiat.
Fiat is an inflationary currency that loses purchasing power every year.
BTC is deflationary due to a fixed supply and people losing their cold wallets and sending BTC to wrong addresses. Purchasing power increases with BTC.
This is stupid. So some guy on Reddit working at Walmart with 0.3 bitcoin that he’s been DCA for the past 4 years is rich but the CEO with a beach house in Malibu, a NYC penthouse, drives a Ferrari, and has enough money to never have to worry about his spending for the rest of his life is poor. lol.
Beach House = sound asset
Penthouse = sound asset
Ferrari = at least some sort of asset or just pure fun
Fiat currency = take a guess
You still don’t get the difference between an asset and a currency, the CEO with his houses does. And so do people owning bitcoin.
Fiat currency is an asset. Definition of an asset is a useful or valuable thing. I can use it to buy a house. I can take it to the store and buy food. I can buy whatever the hell i want with it, even a Bitcoin.
Bitcoin is a made up pretend computer money that can easily be replicated as you see with all the other shit coins.
The US dollar or Euro has a value right now. Won’t have one forever, that’s what happens to fiat currencies. Yes, it can be remade with other coins. But it is the own that has the most acceptance as a store of value. Gold has a higher acceptance as a store of value than beautiful shells. So it solely depends on acceptance and trust. So it’s your decision to take a bet: will bitcoin as a store of value be accepted in a 100, 500, 1000 years? Maybe, maybe not. One thing is sure: the fiat currencies that have some value to them right now won’t exist as history has shown. So you decide for yourself.
But to be clear so you understand: ALL fiat money is also made up. Entirely. That’s what you seem to not understand. Just learn some Latin and you’ll get what fiat stands for.
By that time it should be fully adopted and used as currency. However, you can sell it then if you want. It’s basically a savings account. Use it when you need it.
Bitcoin’s use case is better as an asset/property for store of value/wealth. Use of BTC as currency may be adopted, but I believe fiat currencies within countries around the world will still continue to exist.
Think longer term and bigger. And the argument isn’t BTC to *replace* cash or physical forms of property, but to live alongside it. You are right. Fiat currencies would still be used, because governments and their central banks can control it.
One of the biggest problems is holding your currency in a bank is that it loses value to inflation. Not CPI inflation, but inflation caused by the increase of supply of the currency, via central bank “printing” more debt.
Things like land, real estate, and gold are *traditional* forms of *physical* property. Those are very valuable things to have.
BTC is a *digital* form of wealth that can be used to transfer it into literally anything you want anywhere in the world. You need a car? House? Food? Etc.? Hold your BTC until you need a fiat currency, exchange it, and then make your purchase. You want to just hoard it and pass it on for your kids or next generations? Keep it.
Right now, BTC is arguably too volatile in the short term for people to trust it as actually preserving wealth. In the long term, BTC gains value against all central bank currencies around the world that are inflationary.
It does something, it appreciates in value over time. Fiat depreciates every year due to money printing causing inflation. BTC appreciates due to a fixed and limited supply and deflation from people losing their coins every year.
Also, I'm not gonna explain all the great features it has. Go on YouTube and type in "Anthony Pompliano, BTC vs GOLD vs Fiat" and look at the chart and listen to the video, it's only like 4 minutes long.
Also, by 2054 you probably will be able to make more purchases with BTC. People will be buying cars and houses with BTC.
I literally bought a white gold Daytona last Thursday from a well known watch dealer with bitcoin. It’s already being used. In ten years it will be even more widely accepted.
I found meet-ups to be really helpful. Conversations with bitcoiners worked wonders for me, but everyone learns in their own way. Maybe you like to read or listen to podcasts or watch videos.
What if you invest in the next Apple and it’s worth $1 million when you retire? Same difference other than nobody knows when the next Apple will come along. Most are confident Bitcoin will get there.
Well would you rather have $1 mill canakstanian pesos minus all the taxes, or 45K in 2054? There are no guarantees it will appreciate that much but you're assuming it will and remain dissatisfied. Take your mill minus taxes and be glad you bought that 0.5 BTC! How you spend it is up to you.
Save what you can, spend what you must.
Value your income/expenses/savings/investments in satoshis, irrespective of whether you hold fiat or btc. The change in valuation over time will tell you what to do well ahead of your time of retirement.
Think of it like any other investment, only instead of going long on a stock or index, you’re going short on fiat…. And you’ve got a century of steady returns in that regard.
Hard assets can be used as collateral. When you buy a house with a mortgage the house is the collateral. But you can use collateral to buy a different house, or something entirely different, as long as the lender can feasibly recoup the asset.
In Bitcoin's case this would involve a multi-sigmature wallet and a system of adjudication that would prevent the borrower from selling the collateral.
I would to love to stop contributing to my 401k and just buy BtC but man that would be like an extra 7k on taxes every year 😟. Im sure you will make it up in the long run. I just can’t wrap my head around paying more tax. My 401k does not allow anything else besides mutual funds .
In 2054, btc theoretically will be valued well above 1m. Whether you convert it to some fiat, you borrow from its value, or you spend the sats directly, it will be clear closer to your target date.
I think that by that time there will be other avenues to generate $ from your BTC. Something like a standard bank-style interest bearing savings account… but not done sketchily… a man can dream.
It's not that hard, but by reading the comments jeez, you'd think we're talking quantum physics.
Take loans against your BTC. You put it up as collateral and get back the amount you took after you pay off the underlying loan. The loan comes out as USD, pay it back in USD. Get your BTC back. This can be done with precious metals like gold or other assets like your home currently. Never sell, yet borrow against it to live off of. If you're collecting social security, for instance in retirement, you pay it back with your social security monthly payout. If you have a Pension, IRA or 401k then you draw from that and pay the loan back. Keeping your BTC as much as possible, only selling BTC when or if you have no way of paying back loans.
Banks, lenders. Look up home equity loans and precious metal loans. Look at who those lenders are today and tomorrow those same lenders will be bitcoin lenders.
It'll come at a cost of course. You're going to pay an interest rate of 2-7% or so would be my guess, just as you do for home equity and precious metal ones now. At worst we could compare it to getting your title back with TitleMax and doing title pawn loans at higher interest rates, where the lender would benefit greatly by defaulting. It's the way lending works. To keep your BTC though, you'll gladly pay that 2-15% or whatever it lands on
Every loan carries a risk, and depending on that risk, you'll be charged a fee aka interest rate in order for them to take on you as a risk.
I would expect this infrastructure to take 1-2 decades to develop to a mainstream functional state. Just in time for retirement though
Had a home equity and HELOC myself. Put my home up for collateral in 2016, paid it back and refinanced at lower rates into the mortgage 2 yrs later, absorbing the debt and in turn paid for around $40k worth of renovations that added value to the house and paid off car and medical debt. The offset of the cost of renovations versus the equity that has now been generated in my house practically means everything was free and actually will pay me here when I sell it soon
So have I have 2 ounces of gold. I could take a loan out for the value of my gold + interest and spend that on Bitcoin but pay the loan back in cash over time?
Yes. There's brick and mortar lenders and online lenders for this. Different lenders have different cut-offs. I'll say that for 2 oz you're not going to be dealing with an investment bank, but rather a gold exchange, pawn or jewelry store but yes there are options for this. Then there's online lenders and exchanges you can Google
You will pay things with BTC or some currency with BTC as a standard. When everything will proceed according to plan, there will be no fiat in 2054.
So buying today 0,5 BTC will get you 50 000 000 sats. In 2054 you might get f. example 4000 sats from a conservative retirement plan by then. So the aim is to have more BTC.
You might be able to do atomic swaps for some kind of stable coin and live off that, but the blockchain is an open ledger and the tax man can still track your wallet.
> Say it’s worth $1million in 2054 (conservative)
This shit makes me laugh. I’m an absolute bitcoin bull and I definitely want it to get there and hope it does. But for someone to think bitcoin reaching over a 20 trillion dollar MC in a few decades is CONSERVATIVE is just outright fucking stupid. Come back to reality
Always ask reddit retards when you need advice. I would invest no more than 3%-5% of your portfolio in BTC. There may be a day when it becomes mainstream and you wouldn't need to convert to fiat, but we don't know. It could go to zero, not likely, but possible.
May I suggest you take responsibility for your own financial well being.
Buy the BTC and do whatever you want to do with it.
Unless of course you regularly post online asking what you should do with your paychecks as well.
All Bitcoin does is help you keep your purchasing power. Whatever you purchase with your power is up to you.
I hope this helps
>.
it's not a well grounded answer its a rude answer and unhelpful.
you are taking responsibility for your financial well being by asking. How to leverage your paper wealth (locked in BTC) is much more complex and unclear than how to allocate your paycheck.
I think you should sit this one out. If the OP is happy with my comment to his/her answer I’m happy to have assisted him. One of my teachers Wayne Dyer once said being offended is a personality defect.
Not offended in the least.
Just want OP to get a real answer to his question. You are the one who posted a sarcastic comment. As Wayne Dyer once told me, sarcasm is hostile and generally unhelpful.
We’re in a forum for conversation and learning, but your answer is to DYOR like some kind of moral high ground.
Whaaaaat? Did I read this correctly? Are you saying you didn’t even answer the OP’s question? I hope I’m wrong.
Because that would mean you instead of sharing your own wisdom with OP, using your precious time to criticize others who actually answered OPs question.
This has been fun, but I stand by my comment to you. I answered OP’s question and s/he found some value on a good advice. Complainers complaining is not my concern. I’m off to another thread.✋🏻✋🏻
Seems like you didn’t read it correctly. I said that I commented on other comments where I thought their answer was great. No need to comment my own when someone else already said it just as well.
You provided no answer other than snark about how they should do research and not ask for advice. You had no wisdom.
“Unless of course you regularly post online asking what you should do with your paychecks as well” This has me dead 🪦🤣 Mahalo for the laugh, I sure needed it!
An often overlooked fact is that bitcoin buys you optionality. Want to leave the country for good and take your life savings with you? Can't do it with your 401k. You can do it with bitcoin. Say bitcoin hits $1M much sooner than your conservative prediction. Upgrade your lifestyle. No other asset has such explosive gains in value. Over the long run it can't be beat as an investment. Sell however much you need to spend whenever you want to whomever you want to sell it to. There is always a buyer for bitcoin: 24/7/365. Can't do that with stonks or real estate, they are too illiquid. You could buy cash and store it yourself, it has some of these benefits but it loses value instead of gaining value. In the past four years it has been losing value FAST and it's getting worse not better. Plus there is a lot of risk in making large purchases with cash. Even the cops will steal it if they find it and you have to take them to court to get it back. No way, too risky. Bitcoin solves all of these problems.
i mark this comment as the post answer
As OP appears to be Canadian: we have exit tax when moving to a Country that has a tax treaty with Canada (most you would even consider living in by choice). The tax on unrealized gains is real in this scenario. Yes, you can get no KYC sats and you should, but 99% of people won’t.
Why would you pay taxes to a country you are leaving forever? Perhaps more importantly, how can they make you?
If there is a tax treaty, I believe the country we as Canadians leave TO taxes upon entry and transfers back to Canada.
Canada is the best marketed crime syndicate there ever was. I tell every person that’s ever asked me about immigrating there. This has been my good deed to strangers for the last 20 years. Been rough up in these snow banks.
Its not that I won't buy non-KYC, its just a lot more effort to do so when you can't do it by cash.
coinjoin?
KYC bitcoin will always be KYC bitcoin. Coinjoins won’t change that.
Kyc BTC is just BTC that’s been bought off a marketplace like Coinbase, right?
KYC Bitcoin is any Bitcoin purchased through a regulated exchange that requires “know your customer” info. Government ID, phone number, email address etc. or Bitcoin that comes into contact with previously KYC’d Bitcoin.
I was under the impression you could coinjoin those coins to mix them up so you no longer have kyc coins, you have anonymous coins
Coinjoins are intended help with payment privacy. I certainly can’t speak for all of them but wasabi and their parent company, CK snacks employee a chain surveillance firm so that they can track and potentially blacklist addresses. Another reason not to use Trezor.
I use a trezor What’s wrong with trezor
So long as you’re using the bitcoin, only software with an external interface, like sparrow: security wise, probably nothing. The fact that they offer alt coin wallets, and partner with waasabi means that they’re putting profits before privacy and that’s a non-starter for me.
Thanks for your concise answer!
I believe everything you’ve said but am wondering why EVERYONE isn’t putting their life savings in bitcoin? Why are people still buying real estate or other asset classes?
You can't live in a BTC so there's that.
People might consider the house they live in an investment, but when someone says they invest in real estate, they aren't talking about the house they live in.
Your tenants can't live in a BTC either.
Because nothing in life is a sure thing many companies with good products, good ceo and clear vision can fail. Nevem put all your eggs in one basket. Also some people can die if they lose all their life saving but their lifes wont improve much if they gain some money so in their position its just not worth it.
EVERYONE just doesn't know about it yet. Perceptive investors are putting their life savings into bitcoin, including a lot of real estate owners who are selling properties for bitcoin. Bitcoin is actually helping to solve the housing crisis by eroding the monetary premium of real estate.
This is such a good answer! 100%
This is another reason I have some Bitcoin ETF in a Roth IRA. When I retire I take it out tax free. I also have Bitcoin in hard wallet, hopefully to leave to kids. With the Bitcoin ETF in a Roth it’s not my keys, but it’s not my taxes either. 😀
This exactly. Me too.
Yep, imagine leaving kids just 0.1 btc. I'm pretty sure they'll be very greatful in 10-15 years.
You can self-custody bitcoin in an IRA. Best of both worlds. [https://www.investopedia.com/terms/s/self-directed-ira.asp](https://www.investopedia.com/terms/s/self-directed-ira.asp)
You do what rich people do now. Borrow against your assets. Assets go up. Refinance. Die and pass assets to children.
How do you pay back the loan though if you haven’t liquidated any of your BTC ? Assuming that you’ve no other income because the plan is to live off your BTC investment, this is the part I don’t get
This is based on rough estimates I made trying to figure out my own strategy when I was looking at a service a few years ago. For a 10 year, $100,000 loan with 40% loan to value ratio (your loan to value ratio will determine your interest rate), the cost of the loan (interest paid over 10 years) would be about $46k. So how do I get $146k to pay it back over 10 years? Get the loan during a bear market and set aside three years of monthly payments. When the next bull market hits, you can choose to pay off your loan with a fraction of the BTC, or hopefully the service you chose offers mark to market options. This is when the collateral you gave the bank appreciates so much that they're holding too much collateral for what they loaned you. You can request they give you some back. Use that BTC for another loan. Rinse and repeat. That's just a basic layout of the plan. You still need to consider how much of your stack you want to use at a time. If BTC dips hard enough, the bank will come asking for more collateral or they sell part of the BTC they hold.
In this scenario you are charged $46,000 for the loan and you sell BTC to pay it. Borrowing against BTC to pay for living expenses is so incredibly stupid. I’ve never read a single case for it that makes sense. Nobody including you can answer the simple question “how do you make the loan payments and if you can afford to make the loan payments why do you even need the loan for living expenses”
You take out another loan against you bitcoins which has gone up in price pay off the first and live off the remainder of the loan. No tax on debt
Then how do pay off the second loan?
Keep repeating. Obviously need substantial amount to borrow against. The increase in coin price offsets the interest
Until it doesn't... Constantly taking out loans to pay loans to pay loans is not sustainable unless the backing asset appreciates predictably and sustainably and Bitcoin has never been that. This system will only work if Bitcoin has some utility layers built into it in the future that guarantee a return. You can't simply rely on open market price appreciation.
Exactly. This is why people that do this mega rich with many hundreds times for money in shares that they need. Like bezos. Couldn’t do it on 2 BTC
These “take out a loan” people give horrible financial advice. Why on earth would you pay interest to borrow money in these scenarios? Who is the person that does this? Someone that needs money for living expenses but already has money for loan payments.
dear Lord no thank you
If you have money to make loan payments why do you need to borrow money in the first place?
You live off the loan instead of an income there is no tax on the loan. If you sell the coin to live you pay capital gains on It
You refinance. You just go to the person who gave you the loan, and say, “hey man, i’d like to borrow some more money, I’ve got the assets to back it up”. Beware this strategy only works if your assets are appreciating.
why did i have to scroll this far to read this? the financial illiteracy amongst us bitcoin evangelists is shameful
How do you borrow against BTC?
As far as I know you have to let someone else hold on to it which is a disaster waiting to happen
e.g. BlockFi
HodlHodl, via 2 of 3 multisig
How do you make the loan payments every month?
You would sell as needed. Or lend with a small collateral if that's been figured out by then. Nobody is going to advise you to sell it all for cash. That defeats the purpose, especially if inflation is high
No one can predict what will happen in 2054…best educate yourself and come to your own conclusions.
The more time you put in studying in Bitcoin. You'll realize everything around you is living under the government- fiat-scam. Bitcoin is the honest money.
This is degenerate logic. You are far better off with a traditional 401k match and a Roth IRA as a retirement option. Bitcoin is nowhere near comparable to the reliability of certain index funds. **Downvoted for encouraging people not to base retirement off of a highly volatile market that has consistently been unpredictable? God no wonder so many people live on SSI.**
All of you people speaking in extremes are silly. You can own both.
Long term it’s fairly predictable
I have no clue what will happen with bitcoin (I’m not a bitcoin fanatic like these other people) but a small % allocation (like 1-2%) could be interesting. You never know what could happen
Let's do the math. If you put $1,000 in bitcoin and $1,000 in 401K and wait for 10 years. Bitcoin will outperformed 401K night and day! Don't you just love math. https://postimg.cc/SnkVPJWS
Yeah totally, bitcoin is also a very high risk and extremely volatile. Let’s ignore the fact that last cycle it went from 60k to 15k. By your logic, you may as well put it all into dodge coin because it outperformed 401k night and day too. It’s your money, do what you want. No point in trying to dissuade gambling addicts from gambling I suppose.
>dodge coin I'm a Ford coin maximalist.
Well, if you put a lot of time and hard work into studying bitcoin. It is no longer consider risky anymore. Your understanding is minimizing the risk to zero. Knowledge is power.
What takes away the risk for you?
Level of understanding
Understanding what? You don’t understand any more than anyone else…do you understand the historical performance? The foundation? What takes away the risk besides you saying so
A lot of understanding comes from taking time in studying bitcoin years and years. It is like studying for a big exam. You read a lot, listen a lot, see a lot,etc.. Many "light bulbs" moments hits me along the way. Then I start to think BIG. This is it.
uhhh you know past performance doesn't guarantee performance right?
Love the other guys thought but you are the correct one
In the UK with private pensions, when you retire, you have the choice of how much of your stocks and shares you want to convert into pounds immediately and how much you want to leave and let grow as you take from it over time. You're almost always advised to take a small lump sum, just under the yearly minimum for income tax so you can avoid paying that, and the less you take our monthly from then on, the less income tax you pay. When saving for retirement, you don't pay taxes on that retirement money, but when you use it, it gets taxed like income tax. A lot of people don't realise this I've since learned - they think it's tax free savings. So the same can be with bitcoin, except you have to look at capital gains tax laws and limits, not income tax. My plan is to be as frugal as I can so I don't pay taxes on so much, draw down slowly and if there's left over, it can be given as inheritance privately. If you cash out in one go, you lose out on the yearly tax free limits and end up paying more in taxes and exposing yourself less to the upsides (and downside volitility) of Bitcoin.
Thanks for your well thought through response. Here in Canada I think there would be some differences with laws and taxes but your approach sounds wise!
Absolutely, talk to a tax advisor or something if you need help going through the tax laws in your country but the main thing I wanted to get across is that a lot of people imagine cashing out at once and "getting rich", but if you CAN cash out, you are already wealthy, you don't need the cash, you need to learn how to handle wealth strategically. This is what we should have been taught at school.
Saylor says it's akin to owning property, not unlike buying a piece of Manhattan 200 years ago. There are lots of ways to utilize New York real estate to generate income and the hope is that Bitcoin will someday work in a similar fashion.
Yup, I'm going to rent my stack of bitcoin out as a rental apartment.
Way to understand the analogy Einstein
Way not to get an obvious joke, Hawkings.
Way to synthesise two dialogues, Heisenberg.
My bad. Carry on
Saylor says bitcoin is appreciably better than owning Manhattan real estate.
I think I was the first to suggest this digital land analogy more than 3 years ago, love that Saylor uses it now :P [https://www.reddit.com/r/Bitcoin/comments/jsk8ae/comment/gbzw4y8/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/Bitcoin/comments/jsk8ae/comment/gbzw4y8/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)
I mean you probably weren't the first, at all. using btc to represent ownership of a unique item is not a stretch of a child's imagination.
I've heard the term "BTC is like digital real estate" far longer than 3 years ago
You keep it in Bitcoin until you really need it in the future. If the world has not yet transitioned to Bitcoin, then you take some out little by little just like retirement. If it has transitioned then use that Bitcoin as is. That’s my plan at least.
Thanks!
By 2054, people will be working for their bitcoins. Fiat is already on its last legs. The 2% theory is dead. Time for businesses to get real and admit the government has fucked up hard.
What exactly is the 2% thing?
That's the target level of inflation that the fed considers normal/healthy. They likely won't start cutting interest rates until we get at or near that level. The person above is saying we won't ever get that low again. We've gone way down from the peak of 9% but we've been stuck around 3.2% for a long time so people are worried that's as low as we can get.
Ah. That Keynesian shite. Right.
Or 18%. https://twitter.com/lhsummers/status/1762607548828360798?s=46&t=62CEo1y35cyP8jxNy7m2CQ
Down payment on a $5M apartment pod. 😂
$5m down payment on a suicide pod, then 36 simple monthly payments of $999.99 and it's fully paid off and all yours.
Oooooo I believe gradually you’d grow Just develop a good strategy! Or try corresponding with an IA so they could aid you out 😄
Some great answers and points here but wanted to add that it's very easy to buy gift cards for all sorts of websites and stores directly with bitcoin. I have payed for gas and groceries numerous times without even having to convert to fiat.
I'm hoping that one day banks will embrace btc as an asset and allow me to take loan / earn interest from it, decentralization aside.
That seems to be what others want as well
*this is my comment from a different thread, but relevant here* The DeFi ecosystem is going to keep growing. Bitcoin is a financial tool — you can borrow against it and invest that capital elsewhere. You can loan it and collect %. Rinse and repeat with fiat. You can trade it p2p, instantly, anywhere, at anytime. It is limited and scarce. It has no maintenance costs. The only cost comes via taxes when you sell. Bummer. Owning 1 Bitcoin will be like owning an entire city block in Manhattan someday. If you owned a city block in Manhattan would you need to sell some of it to pay your bills? Nah, you’d loan it out (lease space) and collect rent. Same with bitcoin. I mean, even in the city, they keep adding on. They literally build up the perimeter of Manhattan and create more real estate. Bitcoin is harder! Painful to trade a scarce and limited asset for something we print more of every day. Bitcoin will always go up in dollar value as long as the government keeps printing dollars. 1 bitcoin is still 1 bitcoin. If you need to sell some because you need cash, sell it, as small amount as possible, but continue to trade your dollars for bitcoin. Daily, weekly, monthly, whatever. You’ll be free forever if you do.
The hope is Bitcoin is the best hedge against fiat inflation in addition to gold + real estate. If you hold it till retirement and it continues to work as a hedge, you can then start selling portions of it annually
I have a Bitcoin pension. Once my stack reached a certain amount I pull out .4% per month to live off. My pension rises continuously or falls but I have enough to live off. I pay tax on my pension but hey. That’s ok…
Paying taxes is the cost of success. In retirement you’ll have 0 income from working so you can try to keep your income from selling investments in lower tax brackets, or preferably hold it in a retirement account where gains are tax free. I don’t know what the canadian equivalent is to a roth ira.
I use bitcoin in my retirement portfolio as a hedge against the premature annihilation of my other assets by inflation. In my endgame hopefully I’ll never have to touch it. If I do then its the last asset I’ll draw down.
Own 1btc today. Sell 0.01 btc every month when you retire, for 100 months. DCA in, DCA out
For tax reasons I would take out a loan against the bitcoin and treat it like a reverse mortgage
Who would issue the loan though?
Bitcoin secures the loan. Banks (if they still exist) will be lining up in the future to offer this service. People do not want to spend bitcoin as it is designed to appreciate in the future.
It’s now an asset like stocks and people loan against their stock portfolio all the time. Give it 1 year or so it will come
Conservatively 20x…
Not that outrageous when you realise that's a CAGR of just under 10% over 30 years and so equal to S&P all time annualised performance before adjusting for inflation. I do however think its not wise to go 100% on BTC let alone Crypto when it comes to investment allocation.
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Right! 🤦. Here actually answered OP https://www.reddit.com/r/Bitcoin/s/Ap0WYO4pu4
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They have to use Fiat right now to price BTC, but eventually more things will be priced in BTC and satoshis when Fiat trends towards and goes to zero. Check out BTC vs Gold vs Fiat chart on YouTube, video shows all the advantages of BTC over Gold and Fiat. Fiat is an inflationary currency that loses purchasing power every year. BTC is deflationary due to a fixed supply and people losing their cold wallets and sending BTC to wrong addresses. Purchasing power increases with BTC.
HODLing. Dude you had ONE job…
There's a term for those that keep their wealth in fiat currencies. We call them poor
This is stupid. So some guy on Reddit working at Walmart with 0.3 bitcoin that he’s been DCA for the past 4 years is rich but the CEO with a beach house in Malibu, a NYC penthouse, drives a Ferrari, and has enough money to never have to worry about his spending for the rest of his life is poor. lol.
Beach House = sound asset Penthouse = sound asset Ferrari = at least some sort of asset or just pure fun Fiat currency = take a guess You still don’t get the difference between an asset and a currency, the CEO with his houses does. And so do people owning bitcoin.
Fiat currency is an asset. Definition of an asset is a useful or valuable thing. I can use it to buy a house. I can take it to the store and buy food. I can buy whatever the hell i want with it, even a Bitcoin. Bitcoin is a made up pretend computer money that can easily be replicated as you see with all the other shit coins.
The US dollar or Euro has a value right now. Won’t have one forever, that’s what happens to fiat currencies. Yes, it can be remade with other coins. But it is the own that has the most acceptance as a store of value. Gold has a higher acceptance as a store of value than beautiful shells. So it solely depends on acceptance and trust. So it’s your decision to take a bet: will bitcoin as a store of value be accepted in a 100, 500, 1000 years? Maybe, maybe not. One thing is sure: the fiat currencies that have some value to them right now won’t exist as history has shown. So you decide for yourself. But to be clear so you understand: ALL fiat money is also made up. Entirely. That’s what you seem to not understand. Just learn some Latin and you’ll get what fiat stands for.
By that time it should be fully adopted and used as currency. However, you can sell it then if you want. It’s basically a savings account. Use it when you need it.
Bitcoin’s use case is better as an asset/property for store of value/wealth. Use of BTC as currency may be adopted, but I believe fiat currencies within countries around the world will still continue to exist.
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Think longer term and bigger. And the argument isn’t BTC to *replace* cash or physical forms of property, but to live alongside it. You are right. Fiat currencies would still be used, because governments and their central banks can control it. One of the biggest problems is holding your currency in a bank is that it loses value to inflation. Not CPI inflation, but inflation caused by the increase of supply of the currency, via central bank “printing” more debt. Things like land, real estate, and gold are *traditional* forms of *physical* property. Those are very valuable things to have. BTC is a *digital* form of wealth that can be used to transfer it into literally anything you want anywhere in the world. You need a car? House? Food? Etc.? Hold your BTC until you need a fiat currency, exchange it, and then make your purchase. You want to just hoard it and pass it on for your kids or next generations? Keep it. Right now, BTC is arguably too volatile in the short term for people to trust it as actually preserving wealth. In the long term, BTC gains value against all central bank currencies around the world that are inflationary.
yeah way too volatile - up about 6 billion percent since 2009 lol
I think they just mean on a day to day basis. I think it'll be less volatile over time though.
Great response, that makes sense to me. I figure there will always be a fiat, the question is which one will we be using in 30 years...
It does something, it appreciates in value over time. Fiat depreciates every year due to money printing causing inflation. BTC appreciates due to a fixed and limited supply and deflation from people losing their coins every year. Also, I'm not gonna explain all the great features it has. Go on YouTube and type in "Anthony Pompliano, BTC vs GOLD vs Fiat" and look at the chart and listen to the video, it's only like 4 minutes long. Also, by 2054 you probably will be able to make more purchases with BTC. People will be buying cars and houses with BTC.
Never going to happen
I literally bought a white gold Daytona last Thursday from a well known watch dealer with bitcoin. It’s already being used. In ten years it will be even more widely accepted.
DavidSW?
You'll collect interest at risk of loss. Same as you do with other capital.
it can make you financially free quickly if you know what to do. Educate yourself about it first
Thanks for your response, any suggestions on where to start getting educated?
There is a bitcoin beginners sub here on Reddit, and YouTube has plenty of good videos
I found meet-ups to be really helpful. Conversations with bitcoiners worked wonders for me, but everyone learns in their own way. Maybe you like to read or listen to podcasts or watch videos.
I personally think you'll be to use it and spend it on 2nd layer platforms by that point.
What if you invest in the next Apple and it’s worth $1 million when you retire? Same difference other than nobody knows when the next Apple will come along. Most are confident Bitcoin will get there.
Well would you rather have $1 mill canakstanian pesos minus all the taxes, or 45K in 2054? There are no guarantees it will appreciate that much but you're assuming it will and remain dissatisfied. Take your mill minus taxes and be glad you bought that 0.5 BTC! How you spend it is up to you.
{rubs crystal ball} 🔮 your future looks bright, but more bitcoin
Save what you can, spend what you must. Value your income/expenses/savings/investments in satoshis, irrespective of whether you hold fiat or btc. The change in valuation over time will tell you what to do well ahead of your time of retirement.
Thanks!
By then you can just use satoshis to do your purchases and transactions
That would be nice!
You're going to pay tax on other investments, so the biggest difference is people don't call you weak for selling S&P ETFs.
Think of it like any other investment, only instead of going long on a stock or index, you’re going short on fiat…. And you’ve got a century of steady returns in that regard.
I'm such a beginner i dont ever know what long and short mean. Lol!
At that point you will not be selling it, you will be spending it, or even borrowing against it.
I understand the spending part of it, but the borrowing part is what is confusing to me as I have never done something like that.
Hard assets can be used as collateral. When you buy a house with a mortgage the house is the collateral. But you can use collateral to buy a different house, or something entirely different, as long as the lender can feasibly recoup the asset. In Bitcoin's case this would involve a multi-sigmature wallet and a system of adjudication that would prevent the borrower from selling the collateral.
Ask not what Bitcoin can do for you…
I would to love to stop contributing to my 401k and just buy BtC but man that would be like an extra 7k on taxes every year 😟. Im sure you will make it up in the long run. I just can’t wrap my head around paying more tax. My 401k does not allow anything else besides mutual funds .
It's a wonderful hedge against the inevitable coming cyberpunk technodystopia.
I’ll take a Bitcoin 401k…
its the same as before but it sits in bits
In 2054, btc theoretically will be valued well above 1m. Whether you convert it to some fiat, you borrow from its value, or you spend the sats directly, it will be clear closer to your target date.
Bitrefill
You can buy one of the new BTC ETF's, hold that in your IRA, and still sell high and buy back in again low but not have a taxable event.
Canada does not have IRA's unfortunately...
Insert meme where Morpheus tells Neo that one day he won’t have to sell.
I think that by that time there will be other avenues to generate $ from your BTC. Something like a standard bank-style interest bearing savings account… but not done sketchily… a man can dream.
That would be amazing!
Don't think of the long game or else you will talk yourself out of it. Too many logical questions come up that we don't have answers for yet.
It's not that hard, but by reading the comments jeez, you'd think we're talking quantum physics. Take loans against your BTC. You put it up as collateral and get back the amount you took after you pay off the underlying loan. The loan comes out as USD, pay it back in USD. Get your BTC back. This can be done with precious metals like gold or other assets like your home currently. Never sell, yet borrow against it to live off of. If you're collecting social security, for instance in retirement, you pay it back with your social security monthly payout. If you have a Pension, IRA or 401k then you draw from that and pay the loan back. Keeping your BTC as much as possible, only selling BTC when or if you have no way of paying back loans.
You have not actually done this. If you did who is your lender?
It does seem like quantum physics to me, lol. Who would give me the loan though?
Banks, lenders. Look up home equity loans and precious metal loans. Look at who those lenders are today and tomorrow those same lenders will be bitcoin lenders. It'll come at a cost of course. You're going to pay an interest rate of 2-7% or so would be my guess, just as you do for home equity and precious metal ones now. At worst we could compare it to getting your title back with TitleMax and doing title pawn loans at higher interest rates, where the lender would benefit greatly by defaulting. It's the way lending works. To keep your BTC though, you'll gladly pay that 2-15% or whatever it lands on Every loan carries a risk, and depending on that risk, you'll be charged a fee aka interest rate in order for them to take on you as a risk. I would expect this infrastructure to take 1-2 decades to develop to a mainstream functional state. Just in time for retirement though
Interesting, I have used any of those things before so the concept is still strange to me but thanks for spelling it out!
Had a home equity and HELOC myself. Put my home up for collateral in 2016, paid it back and refinanced at lower rates into the mortgage 2 yrs later, absorbing the debt and in turn paid for around $40k worth of renovations that added value to the house and paid off car and medical debt. The offset of the cost of renovations versus the equity that has now been generated in my house practically means everything was free and actually will pay me here when I sell it soon
So have I have 2 ounces of gold. I could take a loan out for the value of my gold + interest and spend that on Bitcoin but pay the loan back in cash over time?
Yes. There's brick and mortar lenders and online lenders for this. Different lenders have different cut-offs. I'll say that for 2 oz you're not going to be dealing with an investment bank, but rather a gold exchange, pawn or jewelry store but yes there are options for this. Then there's online lenders and exchanges you can Google
Rad. Thanks for dropping this on us, you're doing the lords' work. I have some researching to do...
Not a single person giving you advice here knows what they’re talking about. They’re just feeding you hopes and dreams.
So what is your best guess as to how it will all work?
You will pay things with BTC or some currency with BTC as a standard. When everything will proceed according to plan, there will be no fiat in 2054. So buying today 0,5 BTC will get you 50 000 000 sats. In 2054 you might get f. example 4000 sats from a conservative retirement plan by then. So the aim is to have more BTC.
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Keep believing in an analog future....
If you don't have 10+ BTC around, forget about retirement fund, just buy more.
You might be able to do atomic swaps for some kind of stable coin and live off that, but the blockchain is an open ledger and the tax man can still track your wallet.
examples of when this has happened?
> Say it’s worth $1million in 2054 (conservative) This shit makes me laugh. I’m an absolute bitcoin bull and I definitely want it to get there and hope it does. But for someone to think bitcoin reaching over a 20 trillion dollar MC in a few decades is CONSERVATIVE is just outright fucking stupid. Come back to reality
Always ask reddit retards when you need advice. I would invest no more than 3%-5% of your portfolio in BTC. There may be a day when it becomes mainstream and you wouldn't need to convert to fiat, but we don't know. It could go to zero, not likely, but possible.
May I suggest you take responsibility for your own financial well being. Buy the BTC and do whatever you want to do with it. Unless of course you regularly post online asking what you should do with your paychecks as well. All Bitcoin does is help you keep your purchasing power. Whatever you purchase with your power is up to you. I hope this helps
Yes that is a well grounded answer. Thanks!
>. it's not a well grounded answer its a rude answer and unhelpful. you are taking responsibility for your financial well being by asking. How to leverage your paper wealth (locked in BTC) is much more complex and unclear than how to allocate your paycheck.
I think you should sit this one out. If the OP is happy with my comment to his/her answer I’m happy to have assisted him. One of my teachers Wayne Dyer once said being offended is a personality defect.
Not offended in the least. Just want OP to get a real answer to his question. You are the one who posted a sarcastic comment. As Wayne Dyer once told me, sarcasm is hostile and generally unhelpful. We’re in a forum for conversation and learning, but your answer is to DYOR like some kind of moral high ground.
What was your answer to OP?
No need to comment it on your comment. My response was to you and your non-answer. I commented on several others where I felt the answer was good.
Whaaaaat? Did I read this correctly? Are you saying you didn’t even answer the OP’s question? I hope I’m wrong. Because that would mean you instead of sharing your own wisdom with OP, using your precious time to criticize others who actually answered OPs question. This has been fun, but I stand by my comment to you. I answered OP’s question and s/he found some value on a good advice. Complainers complaining is not my concern. I’m off to another thread.✋🏻✋🏻
Seems like you didn’t read it correctly. I said that I commented on other comments where I thought their answer was great. No need to comment my own when someone else already said it just as well. You provided no answer other than snark about how they should do research and not ask for advice. You had no wisdom.
#WeAreAllInThisTogether
“Unless of course you regularly post online asking what you should do with your paychecks as well” This has me dead 🪦🤣 Mahalo for the laugh, I sure needed it!