@bitmover
It just hit me, that your tool does not take into account any taxes that have to be paid on each withdrawal.
So the amount of cash you will effectively have will be lower than the monthly amount that is withdrawn.
Why don't you make an input field for tax percentage, which is then factored into the algorithm? 0% would mean there is no tax and should probably be the default.
This could be interesting. But I must think about how to implement it.
I don't how it works in other countries, but we usually pay 15% tax over the gains here.
So, I would also need to add an average price and the tax percent, to calculate it correctly. What do you think JayJuanGee?
I thought that we discussed this previously and largely rejected it because there are so many variabilities in both tax treatments, but also how tax treatments could be offset by the individual too (including if they might have some of their funds in tax privileged accounts). I would not be opposed to any kind of an additional general slider that might incorporate anticipated extra "fees or taxes" that a person could self-select a percentage expectation.
It's almost like I would prefer to have the current period for projecting forward and the simulated past period to have their own input and output areas, even though that would lead to a certain level of redundancy - and maybe it would have to be on a separate page if the two concepts (or two calculators might potentially interfere with each other?). It seems to me that the simulator portion of the tool is not engaging in withdrawals of months in advance or buying back months, so the simulation does not need to have the advance withdrawal portion of the tool when it is calculating how the numbers would have had played out historically.
In other words, for the current portion, I know what is my current BTC stash size (which I might actually have that number of BTC or I might be imagining an amount of BTC that I want to put into the tool or I might want to use of fraction of the amount of BTC that I already have and put that amount of BTC into the tool).
For historical portion (and/or the simulation), if I was using the tool and engaging in historical withdrawal, if I want to end up with the same amount of BTC that I have now, then by definition, I would have had to have started with more BTC than now in order to still have the number of BTC that I have right now.
It is not practical for me to apply my present stash to past withdrawals, even though sure I might want to see what the historical numbers look like for my present stash size, yet at the same time, if I hypothesize using my present BTC stash size for past withdrawals I know that with the use of this tool, I currently would not have as many BTC as I have right now, which seems to justify having redundant input areas and redundant output areas for the current projection forward and for the projection of past performance (or the simulation) based on how many BTC I might have had in the past or how many BTC I speculate myself to have had in the past.
For now, I added just the month withdrawal, without any advanced. This can be added, however we must think about how to do it.
I would not want to add any presumed extra advanced monthly withdrawal to the simulator - because the extra monthly withdrawal is complicated and very discretionary. I largely mentioned the advance monthly withdrawal not being in the simulator because I anticipated that it would not have been in there and should not have had been in there. The tool is already complicated enough, just the idea of it, since so many folks gravitate towards calculating their strategies towards spot price, and this tool is attempting to ground calculations based on the 200-WMA, even though in the real world, the price that we get for making sales is going to be spot price at the time of any of our sales.
Sure, you could put something like monthly withdrawals into the simulator for the middle of the range as an automatic, but then once it gets executed then the clock would start to run in regards to if the middle of the next range is hit in order to calculate potential additional months of withdrawal, and so if the BTC price continues to move up an then it hits the middle of the next range, then further advance months could be withdrawn automatically but how much could be withdrawn may well depend upon how much time has passed between the earlier withdrawal and the next withdrawal, but then if the price moves down a couple of levels, then some of the months could be bought back (perhaps starting at the middle of the range of at least 2 levels down, but we would have to invent a formula for that (or an input fields that say how many levels down is going to be the buy back and then what percentage will be bought back at each level and then how much time passed between the sale and the buying back). It is way too complicated and discretionary and without any formulas that would likely be needed to be customizable.
I think that it almost defeats the whole purpose of the tool to be getting too caught up and distracted into seemingly trading dynamics rather than the intended sustainable withdrawal ideas that would not revolve so much around the potential trading aspects of the advance withdrawal ideas.
The reason that I put advance withdrawal within the framework in the first place is to have some discretionary options in place to be able to get some guidelines regarding the extent to which the BTC price as compared to the 200-WMA is at any point in time is becoming frothy and/or overly-frothy, and there are surely degrees of frothiness in the BTC price, so the more frothiness the greater the ability to withdraw more months in advance, yet it may not even make sense to withdraw months in advance at certain levels of BTC's price performance.
For example, right now when we are going through the middle of noman's land (from $55k to $82k-ish), and it might not make sense to be withdrawing month's in advance in places like this, even though the tool allows for it.. and a person might even get nervous about withdrawing 23, 35, 47 or 59 months in advance for some of the higher ends (the 200-400% range or the 400-650% range or the 650 to 900% range or the 900% to 1,400% range or the 1,400% range), even though the tool allows those specific levels of advance withdrawals at each of those levels.
The 2021 price run ONLY got into the lower end of the 400-650% range, and only during the early peak. The second 2021 peak, even though the BTC spot price ended up higher, it was only in the lower end of the 200-400% range. The 2013 and the 2017 price runs surely ran into the supra 1,400% range, the highest for the tool, which I am not sure if those kind of discrepancies are going to to happen again (especially the level of the one in 2013 in which BTC spot price reached more than 2,600% higher than the 200WMA), yet we later saw that they would have been good times to sell extra to make it through the subsequent bear market (but we did not know that at the time or in advance).
So maybe I should be bothered by the tool even recommending the consideration of advance withdraw, which causes me to consider that maybe I should attempt to explain within the tool a bit better what I am wanting to say about my recommendation to consider and to employ advance withdrawal - which I probably don't even know what I mean, exactly.. . because I am probably trying to say that it should be seriously considered to use the advance withdrawal.. but at the same time to have some kind of idea within your own thinking about when you might employ such idea, and in the mean time a place to put the withdrawn money and realize that it could later be used to live off the money if the BTC price drops or to be used to buy back months in order to go back to using using the tool for sustainable monthly withdrawals.. because if you sell months in advance then you cannot sell further months if the price drops below that range until the months have passed.. and all of this would be self-directed and potentially complicated to keep track of.
For example, does the advanced withdrawal will work like a a super aggressive withdrawal? For example, can I just multiply the current month x 5, if that is the case, for example?
If trying to employ for the simulator, we would have to figure out formulas for when the withdrawals would be exercised that would thereby account for the date that it was executed, and if further advance withdrawals are authorized and thereby executed by the tool because the BTC price reached the next authorization threshold, then it would need to account for how much time passed since the previous advance withdrawal execution in order to calculate the balance of how many months would be remaining for the next advance withdrawal.
Or do I have to compensate it later? And if i need to compensate later, when? This might be very subjective for this tool.
The buying back could be some kind of formula like is used in
my raking tool, but it would also have to consider passage of time in terms of how many months could still be bought back. We would also have to consider that when the BTC price drops that the sold months could be bought back at lower amounts, so there likely would be some discretion in terms of calculating if a month is fully bought back.
About future withdrawals, I would need to fix a withdrawal percentage every month, because we cannot predict the price.
We have not gotten into discussion of adapting these tools for future withdrawals, which like you said would have to have a prediction element.
My entry-level fuck you status chart has a prediction element that seems to be changing all the time, but it attempts to predict the 200-WMA, in a 4-year cycle fashion that may or may not end up playing out, and while my fuck you status chart does not try to predict BTC spot price, a range of possible BTC spot prices could be implied from the attempts to predict the 200-WMA.. which again is all amorphous.
I think with any kinds of sustainable withdrawal tool, there is are presumptions about the growth likelihood of the underlying assets, and in the traditional financial world, 4% is considered to be sustainable withdrawal based on expectations that the underlying assets in the investment portfolio will perform at least 4% on average... So in bitcoin, we likely can presume higher than 4%, more like 6-10% seems more than reasonable and even conservative, since I backed tested the tool and even 30% seems to work for BTC, even though I would not want to rely on 30% continuing to be sustainable.. so I personally believe it remains more than conservative enough to continue to stay with 6% to 10% as our defined "moderate" sustainable withdrawal rate.
By the way, I consider
my raking tool to be way more practical (and straight-forward) for the basic ideas of managing your BTC holdings since there are not as many variables to play with, especially if you are not sure if you have enough BTC yet... so using this sustainable withdrawal tool way too prematurely (before you have enough BTC or able to establish using it with a certain quantity of your BTC), then you may well end up with way less BTC than you should have because you may well end up selling way too many BTC too soon, rather than erroring on the side of HODLing - even though the sustainable withdrawal tool gives a lot of guidelines for establishing a potential monthly budget with a certain quantity of BTC as the base... and yeah it does not hurt to provide guys more and more tools, even if they might end up using them differently from their original design intentions.
