a mistake the useful idiot has made a few times is his idea of standard 4% drawdown via a monthly reverse DCA style of 0.33% without using a plan to sell on the high and reinvest on the low to maximise profits and keep accumulating coin and plan spending
Any reinvestment strategy is an optional angle, and is not a necessary component, even if reinvesting could be a way of attempting to deal with volatility, if volatility might be a factor that is even needed to be accounted for in the withdrawal plan.. again optional to consider and/or to incorporate.
for instance
taking 4% out each year is what most people believe is the equivalent of 1/20th of capital to have a 20 year retirement of declining capital assets (in traditional finance)
this is standard 20 year expectation from 65 retirement age to 85 life expectancy
so he is using tradefi's 4% notion of a 20 year retirement of diminishing assets
(not good notion for people to retire earlier meaning needing alot more years worth of longevity of capital)
also drawing down in reverse monthly DCA means the $ per month will be extremely variable and doesnt help plan for future months lifestyle spending desires
You are going into a lot of details about a portion that is optional, and most likely is not even necessary if there is already a large enough cushion in the size of the investment portfolio.
Surely, if someone is barely making it into fuck you status (or FIRE) status, then he might need to employ more complications to make their finances work as compared to someone who may well even be way beyond entry level fuck you and might even start out with double or some other amounts quite beyond what they consider to be their entry level numbers.
for instance a 4%/y drawdown on 300btc is 12btc/y. and from jan 2018 would be 1btc a month
in january 2018 he would have ~$10k that month but in december 2018 it would only be ~$3k
and due to his reverse month DCA drawdown he wont know he is only going to get to spend $3k in december when he is planning things in the earlier months
so stupidly by him doing reverse DCA to retire.. he is not profiting at the best times to get the best out of the deals
..
my style is to wait for the ATH of each cycle and take out 20%
this represents 4x 4% to cover 4 years, and 1x 4% to use to buy in at the latter correction to accumulate again and reduce how much coin is lost per cycle..
so the 20% of hoard is sold at the ATH season for max fiat
meaning the yearly and monthly budget spend is for the 16%... and keep the 4% extra aside for buying back in at the correction
Sure. You could frontload some of your withdrawal during periods that the BTC price is up.
The instructions of the tool and at the bottom of the page that I had been mentioning has some provisions for including higher levels of withdrawal on the way up and lower levels of withdrawal on the way down.. yet even with flat withdrawals on something like a monthly basis, 4% annual will still end up working out even through ups and downs at least how the historical back testing shows.
Yes... it is already known that future results is not guaranteed based on history, which is part of the justification attempting adjustments, especially if there is less of a cushion in the size of the BTC stash.. ..so surely guys should be able to figure out their various balances, or maybe they need to hire a consultant or send a PM to Franky1 so that you can help them out with the details.
lets use the 2017 ATH as a example seeing as the useless idiot done this too
for instance 300btc turns into 240btc still locked in btc... and 60btc(20%) sold..at the $20k ATH peak of late 2017
60btc at near $20k is upto $1.2m with a split to spend $900k(the 16%) over 4 years and put aside $300k(4%) to rebuy at correction
so the 2019 low of ~$3k/btc adds 100btc back into the pot ($300k / $3k=100btc)
and with the $900k over 4 years allows a averaged allowance spend of $18.75k a month
which is a much better deal over all than the useful idiots reverse DCA game
Sure.. trying to time is optional and not necessary, and surely many of us likely realize that it is much easier to time when we are looking retrospectively, so there can be some disadvantages to be fucking around too much with attempts at timing.. but surely if we are seeing that we are experiencing BTC spot prices that are 5x to 15x higher than the 200-WMA, then surely our risks may well be lessened to cash out some extra BTC during those periods, even though we still run the risk that the BTC price might continue to go up or maybe that we end up cashing out too many BTC too soon...
..taking the 2025 ATH seasons event as a trigger withdrawal event.
a plan of reasonable expectation of ATH of $350k(date to cash out target)
so the 300btc with a 20% withdrawal is 60btc which is $21m
allowing for the 4 year spending of $4.2m per year($350k a month) and a put aside $4.2m to re invest in the 2026-27 correction
the reasonable expectation of correction would be $70k
If we are talking about entry level fuck you status, we may well be looking at way smaller numbers, such as a guy who currently has around 21 BTC.. and sure if he has 35 BTC, then he has around 14 extra BTC, so he could choose to cash out some of the extra BTC within the parameters of a lower level formula such as 4% or he might choose a higher formula or he may even withdraw some advance months within the parameters outlined by the tool or he might calculate his own parameters based on his own formulas.
I personally would not be trying to predict lows or highs, even though surely actions could be taken based on highs in order to attempt to prepare for lows, whether buying back is part of the forumal that is chosen or not.
the reason i say the 2026-27 low correction would be $70k is because:
the 2020-24 low is similar to the 2017 high
the 2016-20 low is similar to the 2013 high
so the 2024-28 low could be similar to the 2021 high
I am glad that you got all of these price moves figured out...and sure nothing wrong with having some base case thesis but it also seems good to have some flexibility in regards to how you might want to get through such volatility levels, even if they might play out differently from expectations.
The way any guys plays these kinds of price expectations would likely be different if he considers himself to have had already reached fuck you status or if he is multiples above it or if he is still building his way up to such status. I am not that BIG of a fan in regards to trying to trade BTC, even though
I have a sustainable withdrawal theory thread in which I go into various approaches to price-based and time-based strategies in regards to dealing with and managing BTC holdings, and my proposed withdrawal strategies tend to presume already reaching and/or exceeding BTC accumulation goals, and I also don't presume any abilities to buy back sold BTC, even though many of us can also recognize and appreciate that the BTC price does tend to move in both directions... but I still try not to presume that buying back will take place, so in that regard selling of BTC is largely based on having had already reached overaccumulation status rather than giving any shits about having enough BTC.
ofcourse my example is not an exact prediction of returns and not a guarantee, but you can at least see how its still better off even with lower returns via not getting the exact numbers right, just by planning to sell high buy low to keep the funds flowing and have plans set for future
Personally, I am not too excited about trading strategies when it comes to BTC portfolio management, but yeah sure, try whatever you like including trading like Franky1 suggests, and hopefully you don't end up selling too much too soon or engaging in other tactics that otherwise cause you to end up without enough BTC.
To give you an idea, it's not that much compared to all of you in here but I can say that hopefully when BTC hits the ceiling, I can say that I can live with my life with less pressure.
One thing is that bitcoin is designed to go up forever, so if you think that if bitcoin goes to a certain price, then you are selling it, that seems to be problematic from my point of view.
I'll take some chunks but there is no point of having an all-out exit point at that time. I'll use that money to generate some other avenues for making more money too so that I won't have to sell the remaining I have.
~snip~
That makes sense, I agree that there are some trade-offs and decisions where we're in a situation that we either choose to get stuck in the midst of it or choose the traditional belief that we should also go with or choose to be different and take some risks. As for your case and the most of us here, we did chose the latter and the trade did well for us, ofcourse to the ones that have held Bitcoin even until now. I think it's harder in the past years to invest and sacrifice some money just for BTC because there were less recognition, more FUD, more scary sentiments and thoughts from the finance sector but those who took the risk, here we go, we're on the greener pasture.
Of course, anyone accumulating bitcoin for years may well have reached sufficiency or greater than sufficiency levels of BTC accumulation, so I personally believe that guys need to keep accumulating BTC until they reach such status of sufficient or overaccumulation of BTC.
It is also my perspective that most newbies are going to have difficulties reaching overaccumulation status in just one cycle or even two cycles unless they have abilities to frontload their BTC investment, and so in that regard, many of us know that it tends to take a decently long time to build up an investment portfolio, and surely some folks are in a better position to front load their BTc investment than others, but if we are merely new to investing, then we are largely depending on spending within our discretionary income which is not always a lot of money to be able to put into bitcoin, which is part of the reason it takes time to build up, and if we have been building up we have advantages over guys who are just getting started in the past year or two, but still no one can turn back the clock and there are going to continue to be people who are just coming to bitcoin and they are likely going to need to get started right away from where we are at rather than employing some kind of a waiting strategy that might not end up working out if the BTC price does not go down to the levels of their wishes.
Selling your house is one thing, and choosing to not even buy a house (defer the purchase) is another thing. I remember times in which folks were really excited about selling their bitcoin and getting into real estate, which I know is an ongoing lingering dilemma for some folks.
Even until now, if you'd ask some holders, they'd totally answer to buy a house after selling BTC. So, I think it always ticks on everyone's box about having real estate and many are willing to sell their BTCs at the right price for it.
Yep. They may or may not end up having regrets about how they choose their allocations in regards to bitcoin versus real estate or even bitcoin versus any other asset that they might be comparing.