Borrow fiat with your Bitcoin and never sell - page 6.

sheenshane

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Quote from: Cannabijoy on August 01, 2022, 06:27:53 PM

Have any of you heard of “Buy, Borrow, Die”? It’s what billionaires do, and it’s why they never pay taxes. If more Bitcoiners followed this strategy, the price of Bitcoin would also rise because we would have more holders.

I get you and this is how I love how Robert Kiyosaki inspired people about debt and taxes and it might it's good if you watch this short clip of him.
https://www.youtube.com/shorts/vZv-7NqI3NM

This man I most admire, it's sure you've learned a lot with him and I think this idea is also good to apply if you want to invest in Bitcoin and aim for a target range time so that you can get paid the interest.

Your idea seems good, but make sure you can handle it very well. There should be a game plan.

bittraffic

hero member

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It could be a tragic end when there is a bear market and more than half of BTC value drops. If the lender is not reassuring I guess this will work. Isn't something like this already in a Defi platform?

I wouldn't be getting into a loan if I have BTC. What I can suggest is to keep your coins and when ATH, you sell. That's what you should do and then wait for the bear market to come as it always does. You can do whatever you plan with that fiat.

Cannabijoy

newbie

Activity: 14

Merit: 6

Have any of you heard of “Buy, Borrow, Die”? It’s what billionaires do, and it’s why they never pay taxes. If more Bitcoiners followed this strategy, the price of Bitcoin would also rise because we would have more holders.

Basically, you buy an asset that is sure to appreciate. What you lose in interest, you gain substantially more in equity- allowing you to borrow even more. This is why I said I wouldn’t borrow more than half of what Bitcoin is worth at any given time. This will ensure you do not lose all your Bitcoin.

https://www.wsj.com/amp/articles/buy-borrow-die-how-rich-americans-live-off-their-paper-wealth-11625909583

Quote from: KingsDen on August 01, 2022, 06:21:59 PM

Quote from: Cannabijoy on August 01, 2022, 05:34:29 PM

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

Does anyone else plan on doing this?

I have been trying to get the real picture of what you meant. I read through twice and I was able to understand that;
When you have enough bitcoin maybe amounting to $100,000 you will have to borrow fiat of half the value. Let's say $50,000 and use your bitcoin as a collateral. When your bitcoin rises to Let's say $130,000 you will pay your debt with the bitcoin and still have enough left in bitcoin. The whole scenario was sounding fine until you said that you will clear the debt without selling the bitcoin. Let's assume it was a mistake.

Meanwhile, how long loan are you gonna get, how will you know if bitcoin will bull or bear and how will you be able to prove to the lender that you own the bitcoin. By sharing the address for him to checkup on blockchain? Not a good idea, or by sharing your secret keys, not also a good idea or by showing the person your bitcoin balance?

Please explain your idea very well.

Not exactly. I don’t plan to live on Bitcoin alone. I will still have a job that ensures I can make the payments until I invest in enough things that offer a steady return.

[moderator's note: consecutive posts merged]

KingsDen

legendary

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Goodnight, o_e_l_e_o 🌹

Quote from: Cannabijoy on August 01, 2022, 05:34:29 PM

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

Does anyone else plan on doing this?

I have been trying to get the real picture of what you meant. I read through twice and I was able to understand that;
When you have enough bitcoin maybe amounting to $100,000 you will have to borrow fiat of half the value. Let's say $50,000 and use your bitcoin as a collateral. When your bitcoin rises to Let's say $130,000 you will pay your debt with the bitcoin and still have enough left in bitcoin. The whole scenario was sounding fine until you said that you will clear the debt without selling the bitcoin. Let's assume it was a mistake.

Meanwhile, how long loan are you gonna get, how will you know if bitcoin will bull or bear and how will you be able to prove to the lender that you own the bitcoin. By sharing the address for him to checkup on blockchain? Not a good idea, or by sharing your secret keys, not also a good idea or by showing the person your bitcoin balance?

Please explain your idea very well.

hatshepsut93

legendary

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How do you plan to settle the debt without selling Bitcoin? Bitcoin is not a legal tender in most countries, so you will have to liquidate it.

And now imagine the worst case scenario. You borrow money, Bitcoin crashes, you now have to sell your coins for a very bad price to settle the debt. But if you wasn't so greedy and simply sold Bitcoin while it's high, you would have more wealth, even with taxes and inflation.

Yogee

sr. member

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Quote from: Cannabijoy on August 01, 2022, 05:47:19 PM

....
If I have to pay 5% interest, but Bitcoin’s price raises over 5% a year, then I would be making money.

You're not really gaining anything unless you sell them right? You will just be paying interest regardless of the fiat value of your BTC. What would you do when you borrowed money and then BTC price drops?

It's easy to say things when you have not been into those situations yet. Focus on accumulating those bitcoins first before saying what you're going to do with them.

Bitcoin_Arena

copper member

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฿itcoin for all, All for ฿itcoin.

Also remember that once you borrow fiat, you are giving the lender opportunity to make way much money using your collateral (Bitcoin) on top of charging you very high interest rates. If anything goes wrong and you default the loan, your valuable Bitcoins are gone.

I would rather sell a small portion of my bitcoins for survival, while I keep the rest for the future.

Cannabijoy

newbie

Activity: 14

Merit: 6

Quote from: n0ne on August 01, 2022, 05:39:39 PM

I don't get you. Based on what I understood you're planning to borrow fiat once you've got enough bitcoin. Does this mean you're planning to borrow money placing bitcoin as the collateral. For borrowed money you need to pay regular interest.

Maybe this can turn to be effective, if the borrowed money is invested on something that brings you regular income.

Yes, if I need something, I would borrow the money instead of selling the Bitcoin to purchase it. Michael Saylor talks about this. If I have to pay 5% interest, but Bitcoin’s price raises over 5% a year, then I would be making money. If I sell the Bitcoin for fiat, then inflation will eat up that money. This is apparently what everyone from Elon Musk to Donald Trump does. They don’t actually have any money. They just have property, and borrow against the property because the property is more valuable than the cash.

n0ne

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DGbet.fun - Crypto Sportsbook

I don't get you. Based on what I understood you're planning to borrow fiat once you've got enough bitcoin. Does this mean you're planning to borrow money placing bitcoin as the collateral. For borrowed money you need to pay regular interest.

Maybe this can turn to be effective, if the borrowed money is invested on something that brings you regular income.

Cannabijoy

newbie

Activity: 14

Merit: 6

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

I hope Bitcoin will eventually replace the fiat system, but until then, the market for cash favors borrowers over savers. This seems like a win-win situation.

Does anyone else plan on doing this?

Topic: Borrow fiat with your Bitcoin and never sell - page 6. (Read 1173 times)