I was wondering what you actually mean by it not being wise to put your coins in a paper wallet and just forget about them? I'm assuming you mean that one day you will wake up being very rich and that will be somewhat of a shock and may not end well. Like someone winning the lotery?
Yes. I think most people enjoy periodic cashouts and gradual increase of lifestyle more than a huge all-in gamble with the intention to cash out $100 million in one swoop or nothing.
The parameters of the savings plan (initial investment, rake%, and when to start raking) should be simulated beforehand. This way you can plan for all possible outcomes before even committing any money, and you are then much better equipped to withstand the exchange rate fluctuations. It is like flying autopilot. Also you can see that you will
not become rich if you commit $100 and insist on 30% rake. If, on the other hand you commit $1,000 and rake is 0% (same as putting all in paper wallet) you will become rich.
rpietila, I'd also like to hear what you think your non bitcoin investments should consist of? What percentages would you allocate to gold, silver, stocks, bonds, cash etc?
There are two forces at work,
- What you want;
- What acts as the best diversification if Bitcoin fails.
What you want part is that you buy all the things that keep their value and increase your satisfaction, such as cars, houses, collections of exotic spirits, etc.
Diversification is instruments, which appreciate in value if Bitcoin fails. These are currencies and precious metals, financial instruments etc.
I personally seek quality real estate, and I like silver, because it is really cheap and used to be the lynchpin of global monetary system before Bitcoin. I don't like gold so much, but that is easier to sell than silver if need be (in this plan you never sell anything (except bitcoins), just buy. I don't have much currencies, but they are not necessary bad. I just abhor having positive balance in my account as much as having a negative one.