I am saying that $1million worth of bitcoin can be presumed to generate $3,333 in passive income as an ongoing and persistent withdrawal rate that is NOT going to deplete the principle.
Of course, your valuation of your BTC should be at the bottom of the price swing and not at the top in order to be prudent and practical, but I have no reason to doubt that bitcoin is NOT going to be able to generate, on average, a 4% per year amount.
So currently, I am thinking that we could presume the BTC price bottom to be somewhere between $3k and $5k (let's just say $4k for ease of calculation).. but in 3-5 years, hopefully a reasonable BTC bottom would be decently well above $30k.
So, today, in order to have a $1million dollar value in your bitcoin stash, then yeah, you would need to have 250BTC ($1million/$4k). So, maybe I was being a bit overly optimistic with asserting that 10BTC would be sufficient, because presuming a bottom of $100k seems a bit premature. So if we project a possible bottom of $30k in 3-5 years, then that would be 33.33BTC... but maybe in 8-10 years, we could presume well over a $100k bottom?
I don't see any real logical reason to assert that any of us would be reasonable with just hanging onto our BTC when they will be able to generate a sufficient passive income for us. And, currently $3,333 seems to be enough for you, and if $2k is really enough for you, then you won't need as many BTC. If you have $600k worth of value, then you can generate $2k per month from that. That is $600k * 4% = $24k/12= $2k.,
At current projected bottom BTC prices of $4k, $600k would be 150BTC. In 3-5 years when our bottom is $30k, then that would be 20BTC, and in 8-10 years, when our bottom is above $100k, then that would be a mere 6BTC.
4% should be a sustainable withdrawal rate without depleting principle.
But you insist in extracting those $2K from the capital (or current net worth) instead from just the working salary (or universal income instead).
You should have been in BTC long enough to recognize that you do not have to be getting caught up in the need to earn interest on your BTC and a lot of those bullshit defi scam shit.
Furthermore, if you sufficiently and reasonably estimate the bottom, of course, you can draw from the actual BTC, but the worth of the BTC in terms of dollars is NOT really going to go down as long as you are withdrawing a reasonable rate, and presuming 4% seems to be way within the range of reasonable...
Yeah, of course, if you are going to calculate $20k as your price for BTC, then you are kind of going to be fucked in the past 4 years, except for perhaps a few weeks in late 2017 and early 2018.
We gotta be reasonable in our bottom projections. In 2014 our bottom projection should have been in the $100 area, and sure a lot of people likely made mistakes, but by the time we spent considerable time in the $200s in 2015, then by the time 2016 came we probably could have reasonably had $200 as the bottom and $500 as the bottom in 2017, and maybe $1k as the bottom in 2018, and $2k to $3k as the bottom in 2019, and now it is looking like $4k could be the bottom, but maybe we want to be more conservative and stick with $2k to $3k as our bottom.
Those bottom numbers are used to calculate the value of our BTC and reasonable withdrawal rates that is not going to deplete the value of our asset when we are withdrawing in dollars.
Get the fuck out of here with that nonsense of you don't want to deplete the number of your BTC, you are just handicapping yourself into a situation in which you will never be able to do shit, and who the fuck wants to tie their BTC in some kind of defi scam bullshit and get your principle taken from you.
Jimbo tells us what he is doing on a regular basis, and he is not entrusting his BTC to 3rd parties. I don't know if he is employing a 4% per year withdrawal rate, but we can figure out those kinds of matters for ourselves, and I have talked about this stuff thousands of times.
a 4% withdrawal rate can be totally sustainable in perpetuity, and none of us even need perpetuity because at some point we are going to die.. and so at some point we can start to withdraw more than 4% which presumably when we are withdrawing more than 4% we are digging into our principle.. not just our presumed appreciation of value.
I am just saying don't be intellectually handicapping yourself with bullshit, but at the same time, your bottom calculation should give you reasonable calculations too, so long as you are not trying to presume the bottom to be way higher than it actually is.
As I said, I could replace the salary and stop working for money if I received those $2k/month in ADDITION to whatever returns I could get from my capital (which includes the BTC).
Of course, you have to calculate all your income sources together, and if $2k per month is not enough, then what do you need? $3,333k? Yes.. add them all up and if they meet your numbers, such as $3,333k per month, then you have reached fuck you status.
In the case you are assuming, even if I could perfectly live with those $2K (where I live it's cheap, my main home is fully paid and no one depends on me) if that were my ONLY income (ie, not even capital rents or gains) then I would probably not stop working (for a salary)... because... higher goals you know.
Well, if the number is going to be tight, then of course, you have to make sure that you do not pull the fuck you lever too soon, but the whole idea of the fuck you lever is that you do not have to work if you do not want to and still reasonably be able to meet all of your expenses, as well as having some cushion for emergencies etc etc...
For example, if you have not properly calculated all of your expenses, such as maintenance or you do not have proper insurance on your house, then you are kind of fucking yourself when your emergency comes, and you have to exit fuck you status because you pulled the lever too soon and you had more expenses than you had calculated yourself to have.. You have to include the extreme scenarios in your preparations before you actually pull the fuck you lever.
About BTC reaching $100K or even $30K as a BOTTOM in less than 10 years? Well, let's see when we are there... Too good to be true, even though I do believe there is a good chance of that happening.
You can project it...but that does not assume that it is going to happen... but you still can outline a possibly reasonable road map, and of course, if BTC way the fuck underperforms, you are going to know it well before you pull the fuck you lever. Your pulling the fuck you lever is based on current projections based on numbers that have already been reached and hopefully conservative.... for example, once you pull the fuck you lever, you are only presuming an average of 4% per year of BTC price appreciation.
Also the 4% yearly withdrawal rate assumes price will keep raising at a rate more than 4% higher than inflation after the price goal has been achieved. Which, even if probable, it is not guaranteed either.
Yeah, of course, BTC could perform worse than 4% per year. You pick bottom prices because it is way the hell easier to perform 4% per year or better on bottom prices than if you are starting with top prices. Of course it is not guaranteed, but we have been in BTC long enough to have some pretty damned good ideas, and if you are really nervous about the bottom, then currently, you can use $1k as a bottom.. of course, $1k as a bottom is not guaranteed, either, but it is more guaranteed than $4k and even more guaranteed than current price of $6,722. So, I am not saying that all of your problems are going to be solved, and of course, you should be working with some cushions, but at some point hopefully any of us will feel comfortable pulling that fuck you lever rather than working until death.
Of course, some people will not have been able to reach such status, and they might never get to $1million or whatever is the goal... so they have to keep working.
But surely some people do not necessarily need to have passive income, either because they are too fucking old anyhow.. so they are just working on building their principle, so once they pull the fuck you lever, they are depleting everything. I am not talking about depleting everything, I am talking about something that should be able to work for even younger folks to be able to figure a 4% per year withdrawal rate should work as long as they calculate the value of their underlying capital properly and don't get too unrealistic in the amount that you need. Maybe you really do need $3,333, just to have a cushion, and $2k is just not going to do, and therefore, you better be aiming for $3,333 rather than aiming for $2k and end up pulling the fuck you lever too early and without enough to sustain ur lil selfie.
@JJG: I just love it when you include numbers in your posts. Thanks!
Thanks... I get carried away, sometimes.... shit.
Maybe the above post is a case in point?
