Can Bitcoin help you retire early? with Trey Sellers | SLP727

“Bitcoin should be able to outperform traditional stock markets by at least twice over a long period of time. And so if you think about an 8% withdrawal rate, which sounds kind of crazy, you're going to be selling down potentially 8% of your Bitcoin stack. But it really is just math, right? If at the end of the day, that is the performance that you are getting from Bitcoin, then that 8% withdrawal rate will actually work for you.”

“I call this Aikido finance, right? If you're familiar with Aikido, it's like using your opponent's weight and momentum against them, right? That's what the speculative attack is that Pierre Richard kind of coined back in the day and that we talk about a lot in the Bitcoin world. And so the fact that we have these tools available to us is great.”

“The way that I would approach this question is, I want to exhaust all of the fiat financing mechanisms that I have before I encumber my Bitcoin. Because you're going to be borrowing at lower rates. Like a mortgage again is a perfect example of this. If you can borrow against your house at 6-7%, you're getting this rate on the fiat money at much lower than what you can certainly can currently do with Bitcoin back loans. And it's not callable relative to your house.”

“A lot of people think about reaching financial independence as like a light switch. You either are financially independent or you're not. And what this allows you to do is think about it more like a spectrum, more like a journey, instead of this on off switch that I think people sometimes get hung up on. And that helps you to maintain motivation as you're going through this.”

“You're creating income actually in a fairly tax-efficient way. The long-term capital gains tax in the US at least is lower than short-term capital gains and lower than ordinary income tax. And so especially if your expenses are quite large, and you're in that like, coast fire to fat fire range, and you're wanting to live well in your retirement, you're probably going to have larger expenses, which means you're probably going to need more income. And if you're earning that through ordinary income or through dividends, which are taxed at ordinary income rates, then you're probably going to pay more taxes.”

“What is actually the lifestyle that you want to maintain when you reach financial independence? What's your aspirational lifestyle? And maybe it makes sense in order to think about your FIRE number based off of your current spending. Well, what is that aspirational lifestyle spending actually going to be? Do I want to have a golf membership that's going to cost me $10,000 a year that I don't have now? Well, if that's part of your goal, then you should build that into the expense structure that you're using to calculate that FIRE goal for.”

“If you retire, you don't want to go back to work, you don't want to go sit in a corporate office, but you like to travel, well, maybe one way to deal with a bear market is to rent your house out and go move somewhere cheaper around the world for a year so that your expenses drop. And now all of a sudden, you're in a much better place. Maybe you can't do that with kids, and so you've got to think about that. So it's all dynamic and flexible, but the key point here is be very intentional about it.”

“If you are actually holding your own Bitcoin, you're holding your own keys, you're doing that in a self-sovereign way, you not only get financial independence, but you also get this sovereignty aspect overlaid on it. If you are just in the traditional financial independence retire early movement, you've got a portfolio full of stocks, and it may be worth $2 million or whatever. There are scenarios where you lose access to all of that money, because you've got this counterparty risk, you've got this systemic risk built into this approach that you're taking.”