Even though I am already coming to conclude that it is likely in bitcoin that we are not going to need as much of a nest egg as we need in traditional finances in order to support ourselves from our BTC stash, since in traditional investment we need right around 25x our income in order to be able to live off of our income (which is assuming a 4% withdrawal rate), and I am starting to consider that with bitcoin 10-16.7 years of income may well be enough (which is assuming a 6% to 10% withdrawal rate).. but it is still risky to overly rely on the newer models and those kinds of potential more aggressive withdrawal rates that bitcoin might be able to provide since it is more of an untested system and fairly new, so it may well be much better to rely on more conservative models and to have some cushion in the size of he BTC stash before pulling any fuck you lever that would then put you in a position where you are having to live off of your BTC stash.
I didnt get that withdrawal rate point. Can you just elaborate it a bit for my understanding. Will be grateful.
In traditional investments, there is generally a recommendation that you should be able to withdraw 4% per year from your investment portfolio and to be able to withdraw at that rate forever, so long as, on average, your investment is growing in value at least 4% per year.
So if you have $1 million, then a withdrawal rate of 4% per year would yield you $40k of passive income for the year or $3,333 per month.
BTC could fairly conservatively facilitate 6-10% per year or perhaps even more, as long as you are valuing your stash based on the bottom price (or the 200-WMA) rather than attempting to value your BTC based on top (or spot) prices that tend to be all over the place... even though when you sell, you will of course be selling based on then BTC spot prices.
From
my fuck you status chart, you can see that the BTC's 200-WMA (or the bottom) has gone up by more than 20% per year, and there is no reason to believe that it won't continue to go up more than 20% per year, especially if averaged out, and also you can see with my fuck you status chart that the worst period for the 200-WMA rate of increase was between mid 2022 until late 2023 (which was 20% annually for that period). So in theory, if you are measuring your BTC's value from the bottom price, then you could expect to withdraw based on that even up to 20% and it would still continue to sustain itself in terms of dollar values.. .and to be safe, you could withdraw at a lower rate such as 6% to 10% and still have a cushion, and since the 200-WMA is a lagging indicator, you can watch it to see if it is starting to get to lower values, otherwise you should be able to sustainably withdraw at way higher rates than you would have had been able to do under traditional investments. You can see more of my sustainable withdraw discussions in
my sustainable withdrawal thread, and some of the linked tools and threads.
Of course, with
my sustainable withdrawal tool (powered by bitmover), you can back test a variety of theories and timelines to see for yourself that you could have had engaged in pretty high withdrawal rates (even maximizing out the tool at 30%), and BTC still has held its dollar value.. especially over longer periods of time. I recently discussed an example that goes back to June 1, 2019 in
this post.