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You said one ONLY need to have around 10 years worth of your annual expenses for your 10% withdrawal rate to be sustainable, and I ask what is the person's weekly or monthly salary is small maybe just $100 or $200 a month will this advice still go.
Salary is not as important as expenses, and yeah of course, when we are working with such small numbers it might be more difficult to create a realistic scenario, since presumptively someone who is investing is going to have expenses that are less than his current income, yet sometimes it is not bad to error on the upside in terms of how much you think that you need to make sure that you are covered, since no one is going to rescue you, feel sorry for you or take the blame if you fuck up your amounts and you pull your personal fuck you lever too soon So, ultimately you have to make sure that you have enough....
So if your income varies between $100 to $200, then maybe it averages around $150 per month. How much do you have left over? What are your conditions of livelihood? Do you want to more or less continue with your already existing standard of living? Even if we go with $200 per month, that is only $2,400 per year, so if we have a 10% withdrawal rate, then that would be $24,000 as enough, and since I am measuring from the 200 WMA, so currently that $24k valuation would be right around 0.663 BTC.
https://bitcoindata.science/withdrawal-strategyI will admit that I am a bit uncomfortable with working such small numbers, since I am expecting something like a withdrawal of $200 per month to be a pretty low withdrawal rate, and of course, my projection is that with bitcoin, if you manage your matters well, you are going to be able to withdraw at higher levels in the future or at least that your bitcoin holdings will still continue to grow at least to the cost of living (debasement of the dollar or whatever fiat currency you are living with), even with annual 10% withdrawal rate.
Well for me I think one's salary and how much he or she invest on Bitcoin weekly or monthly using the DCA strategy plays a very important role when it comes to reaching a rate to be sustainable because if for example I'm investing on $10 or $20 weekly or monthly on Bitcoin and another is investing $100 to $200 weekly or monthly it will have different time for reaching a rate to be sustainable. ( My point of view).
Sure. The more you invest, then the faster you will be able to reach your levels, and so if a person is investing 10% of his income, then it is going to take 10 years to reach 1 years worth of income invested, yet if that same person is investing 25%, it is only going to take 4 years to reach 1 years worth of income invested, and surely you are making a good point that if a person retains reasonably low expenses, then he might be able to invest his whole level of his expenses in one year, which would likely end up causing the need for a lower amount of time to reach 10 years worth of income (expenses) being invested into bitcoin... so yeah, if the guy considers his level of expenses to be sustainable and even maybe to modestly go up and he can account for how his expenses will go up, then surely, he would be able to get to a point that he can start to withdraw bitcoin to cover his expenses and also to account for his stash maintaining its value sufficiently that his withdrawal rate is sustainable forever into the future.
Yeah everyone has there own assessment and I love that you assess the value of your Bitcoin based on the 200-WMA rather than based on spot price and that is what I was saying earlier that accessing one Bitcoin by price will make you sale off your bitcoin thinking that has reached or you have accumulated enough and for me I think accessing it by price will be a big mistake anyone will do because it will always end in regret, I know was someone that once accessed his Bitcoin by price and and he also went ahead and sold everything and till date he is regretting his actions.
Yep.. spot price is going to leave too much erraticness and likely overassessing the value of your holdings.. so trying to measure from bottom prices seems to be a more solid approach to BTC value assessment
In my own sense I think before thinking about selling our Bitcoin we should really think about it and ask ourselves what will I stand to gain if I start selling now and what will I stand to lose if I start selling now, I think this question will help you make a good decision.
I think that the better question is whether you are able to assess your withdrawal strategy as being sustainable or not, so if you do not have enough to have a withdrawal strategy, then you have not reached a high enough BTC accumulation to begin your withdrawals.. but hey whatever you can do what you like whether it is sustainable or not.. I personally believe sustainability of your withdrawal system (amounts and do you have enough) is the key to success with your long term investing rather than ending up cashing out all of your BTC prior and then ending up with a bunch of worthless dollars or whatever was your inferior investment and/or decision to consume rather than to make sur taht you have enough prior to staring to consume.
Yeah you are correct and I agree with you, sustainability of one withdraw system helps, before one will consider withdraw he or she should first check if he or she has a sustainable withdrawal strategy and if there's no good withdraw strategy then it means one has not accumulated enough Bitcoin, this point of yours if followed very well will really help in knowing if one has accumulated enough or not.
If you don't have enough and you start to withdraw from it, at some point down the road, you are going to realize that you are fucked because your bitcoin holdings is not holding value well enough to sustain your withdrawals (or alternatively, you have to lessen your withdrawal rate until your holdings are going to grow), and so in either case, you might well conclude that you made a mistake when you star your withdrawal based on an erroneous assessment of having enough when you don't.
So, my earlier example of 0.663 BTC amount will likely support something like a $200 per month withdrawal rate forever (and including being able to increase the amount with the likely increases in the cost of living (debasement of the dollar and other fiat currencies)... so if you need a higher income, then you need to figure out ways to make sure that your BTC stash is large enough.
It is possible that you might come to differing calculations than me, including that you believe that you don't need as much, and surely those are likely discretionary decisions in which any of us might end up being wrong, yet I personally would like to make the mistake of having too much rather than too little.. yet we also have to be careful in our having too much too.. since sometimes we might believe that we need more than we do.. so we could make errors in our assessment in either direction of not having enough or alternatively having too much.. and needless delaying of our pulling of the fuck you lever.