Lending out Crypto or how to generate other income streams?

Ask your investment, budget, and other money related questions here
theanimal
Posts: 1716
Joined: Fri Jan 25, 2013 10:05 pm
Location: AK
Contact:

Re: Lending out Crypto or how to generate other income streams?

Post by theanimal »

What are your end goals with your money after you exit? Where are you on the scale of preserving wealth versus growing it?

fireeu
Posts: 5
Joined: Sun Mar 14, 2021 12:37 pm

Re: Lending out Crypto or how to generate other income streams?

Post by fireeu »

theanimal wrote:
Fri Mar 19, 2021 1:20 pm
What are your end goals with your money after you exit? Where are you on the scale of preserving wealth versus growing it?
Goals are to live off 3% of it. What to do with it? Honestly I first won't change my lifestyle. I want to add one more kid to my family, and maybe at some point buy land in Canada (wife is Canadian) and get a hobby farm. Allthough, nothing is set yet. It's a nice addition to be financially free, but I already can pick whatever job I want (almost). I went through a lot of soul searching, therapy and all, and I learned there is no such thing as happiness or not constant happiness. You also learn a lot about yourself by being in different environments and communicating with different people. Therefore my personal self will always want to work with people and solve problems. Right now I enjoy do it in a professional setting because I put 10 years in it to become good in it, but I can imagine doing community work for free as well after a while.

I don't want to grow it too aggresively, just around 5-10%. Reading all the literature around finance leaves me a bit baffled. I think it's outdated, or it all comes down crashing, but I see it as a new chapter in financial markets. I don't think it's too aggresive to grow it by 10% a year, but it should be at least 5%.

I still have to figure out exactly. What I learned from listening to wealthy people, they are basically better in avoiding taxes. So trying to figure out if it's enough to have fixed income through crypto lending which pays for my lifestyle, and leave the rest in a 5-10% diversified portfolio, where, after a few years if crypto goes to shit, this grew enough to take a bit more active approach of rebalancing ETFs etc.

One question I have though (if people are still reading this thread): How exactly are people taking out money? If I have 3 ETFs for example, I don't want to sell everything, or stocks. I can always sell 1 position on a ETF or stock, which might grow too big at some point so I would need to sell half a position or I overpay on tax. Also, after a point I might have sold every position of this ETF? Like how can I take out just a percentage, and let it grow and compound it so the taken position "grows back".

What is a good link/blog post or thread to read up to it?

Humanofearth
Posts: 2
Joined: Sun Mar 28, 2021 3:32 am

Re: Lending out Crypto or how to generate other income streams?

Post by Humanofearth »

Once a Venezuelan left the bolivar for the dollar, why would they ever revert back?

You have the superior currency, keep it.

If you want to be extremely conservative and have 0 other income, I see 2 decent choices:

1) Keep enough relevant fiat (locally denominated) to last 4 years. At the end of every 4 years, convert another 4 years of expenses to fiat. This way, you keep cashing out at higher values and have enough cash to last the bottom of the bear cycle until the next supply shock from the halving leads to a nice bull peaking 12-18 months later (ie- this June to December.)
2) Stake enough eth or loan out enough xbt to generate your desired returns via Celsius, BlockFi, Kraken, or another platform. Not your keys, not your coin. The platforms are also very new. If you can keep hardware constantly running, stake eth directly.

Honestly, I’d try to keep some cash flow and stay out of out world systems. It hasn’t even overtaken gold yet despite being the most secure store of monetary energy in human history, you’re way too early on exiting the trend.

Old Style:
The 4% rule is based on the trinity study and assumes a US stock and bond portfolio where one sells 4% of their portfolio, CPI adjusted (not M2), each year and if at the end of 30 years, you still had a balance above $0, it counts as success.

Stocks and bonds are typically bought through brokerages and held in the brokerage's names. Governments may have an insurance policy- ie- US SIPC on 500k usd equivalent. These can be frozen at any time by various entities and take days to settle transactions but trades are often allowed with unsettled cash and you can margin, although, it’s typically mark to market margin.

In reality, a 3% or variable withdrawal rate and slightly higher stock allocation (70-90%), along with selling mostly bonds and hodling the stocks, has lead to higher success rates and growth of capital over time in CPI terms.

Earlyretirementnow has the best series I’ve found on withdrawal rates, well worth reading, my conclusion was the prior sentence. Google Earlyretirementnow withdrawal rate series. It’s a dense read.

With Bitcoin, you’ll likely have a tax free growth of at least 50% per year above m2 growth of held through a halving cycle. Why would you revert anything beyond the minimum necessary back to the less efficient, more taxed, seizable, third party mediated system? More risk, lower returns. I don’t get it.

Try timing the top of the bull and converting then if you’re really scared till the top of the next. You can dollar cost average those 4 years of expenses out.

If reverting is really your goal, deposit your coin in an exchange, trade, wire the funds to your brokerage, buy 60-90% broad stock index funds and the rest in bonds, cash, commodities, etc. Sell 3% at the beginning of each year.

The monetary network is just reaching escape velocity, every non crypto asset will be cheaper when measured in sats in another 4 years. Hodl.

User avatar
Lemur
Posts: 991
Joined: Sun Jun 12, 2016 1:40 am

Re: Lending out Crypto or how to generate other income streams?

Post by Lemur »

I discovered BitCoin in 2012 and did not invest then. Thanks for the reminder to kick myself haha.

Post Reply