Wen Sell

in LeoFinance3 years ago

Tonight, I ventured out on a limb and took my wife through various incoming (potential) revenue streams I have, and after listening for a bit, she asked when would be the time to sell - as she thinks that paying off the house would be a good enough outcome from the last almost five years of work. She is right and wrong in this, depending on how one looks at it.

If for example I was able to pay off our house now, it would be quite an incredible accomplishment, considering we bought it less than two years ago. Being mortgage-free would be awesome! However, if to do so I had to sell all of my tokens, it would mean I would not only have nothing available for the future, but the "passive" (it seems a full time job to manage crypto) income would also stop.

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Even mortgage-free, there are still a lot of expenses that roll in, which means we still need incoming funds to pay costs of living. This means that we would still need to work and likely, til retirement age, something that is far from guaranteed as a possible, considering the world that is quickly coming and us both having 25+ years left in our working life - more if you think that retirement age is continually increasing, due to the constant addition of debt, borrowing from the future.

Also, being debt-free today, but having no crypto, isn't only the loss of those streams, but even if I started buying back in with the equivalent amount of the mortgage saved into crypto, the most I could have before the next bullrun (assuming 2025, is perhaps 10% of what I hold now in value, but it would be far less, as the value of tokens keep increasing, meaning the value of fiat today, is going to by less and less in the future.

This will mean that while debt-free, I'd still have to work and my savings would still be relatively insignificant to carry me through into retirement anyway. Sure, I would have potentially 25 years of no mortgage to save, but even assuming I work all of that time, it still wouldn't be enough to retire on.

However....

If the markets climbed for the next six months and the stock to flow model on Bitcoin was correct for the next few years (BTC pulls everything still), that "pay off the mortgage" turns into, pay off the mortgage and buy 5 rental apartments using something like 30% of what I hold, leaving 70% still available for the future, where perhaps the magical million dollar Bitcoin becomes a reality.

but, I do understand my wife's concerns and I do get that she is scared that it will all go south into a bear market or worse. But even under those conditions, is it better to have several incoming revenue streams, even if they are a tenth of what they are now and have crypto for the future, or have the house paid off now and risk having to work the rest of lives to pay our bills?

I know that for her, the last five years of me working on this has been somewhat hard too and probably feels like a very long time, but I don't consider it a long time at all, if those "wildest dreams" times arrive and what was hard and poorly rewarded work, becomes the most lucrative hours ever spent. So lucrative, that both she and I would be able to pick and choose exactly what we want to do in life, as we won't be obligated to do anything for money, as we will not only be debt-free, we will also have continual revenue streams incoming, whether it be through staking, curating, renting, or several other options available, and more to come.

For me to sell now for example, would bring a lot of relief in the short-term, but I would be torn apart in the long-term if what I expect could happen, happens - and instead of financial freedom, I will just be on a slightly higher rung of the same ladder I am currently on - day to day though, my life doesn't change much. Giving up life-changing potential for the security of a higher standard status quo, would crush me.

I don't want to unlock the door, I don't want to open a vault. Ideally, I want to be able to live solely off the cream, never dipping into the capital, but I don't suspect that will be the case, so I will more than likely have to use some at some point. How much, is going to depend on many aspects of the crypto industry, and the global economy as a whole.

It isn't easy to decide when to sell, but it is very easy to decide when to buy. It is just that too often, when that time arrives, there is nothing to buy with. In someway, it is a catch-22 situation, but I'd rather be caught in that trap holding crypto, than without.

Taraz
[ Gen1: Hive ]

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Here is the fact, and there are no such thing called alternative facts...

  1. Never pay off your 30 yr fixed rate mortage on your primary home (several keywords here, I am assuming they are all true for you, even if you live in Finland). Why? because it is a good debt. It is probably at an interest rate of 5% or less. Anything you do in the investing world will give you more than 5% return (not just crypto)

  2. If you feel uncomfortable about holding a lot of crypto (and you should), you should sell a portion of it, and buy another house. Investment property. And put it for rent. Collect the income.

  3. Soon you will have a portfolio of houses, the rental income from which will pay for the mortgage of your primary residence (the magic number is usually 4, here in the US, which offsets the mortgage payment of primary).

Once you have done that, you are golden. Live happily ever after.

Good ideas, but I think it is easy to underestimate the work involved in rental property (finding renters, collecting rent during bad times, and maintaining the properties).

I have a few friends that did this, some successfully, others not so successfully. The ones who liked it did a lot of the upkeep work and property improvements themselves (one started out as a roofer, the other was an HVAC guy).

OTOH, it can be a headache if you are a working professional. One of my friends who did this was a doctor, who kept his old house when he moved to a new one. I think he was inspired to do it by our mutual friend (the roofer). But he began to hate it after a while, because of all the extra offhours work associated with it. And then his renter developed terminal cancer and could no longer make payments, but he didn't have the heart to evict him...

You can pretty much find an agency for all that and i would recommend it. It is a pain in the ass otherwise. Ive had horrible experiences since i lived 300km from my property i was renting in another city. From torn out appliances, flooding etc.

Agencies are godgiven for this.

Yes, all good points. All true. It depends on the market too. I live in Houston, TX which is a flat steady market where this works easily. I work full time and I have a property manager. Yes, I have to evict one person. But it's my property mangers job not mine. It's critical to find a good one.

Hi - I was wondering if your funds became unfrozen after they were initially frozen. It looks like they were released based on the delegation of almost all of your funds, but just curious after all this time.

No, my Steem was never unfrozen. Locked up on Bittrex and subject of ongoing legal dispute.

Genius wise words! I agree wholeheartedly. No 2 though, I never thought of that, taking a portion of cash and buying another house.

Yes, first target is 4, then 10 (usually that is enough for retirement, and you will need to hire a property manager), and then if you really like it....and employ couple of other people, 50!

These are not my idea exclusively, sort of a standard template.

It's great, I was of the mind that paying the primary mortgage off was best too but the idea of getting a 2nd 3rd etc then using them to pay of the primary, Its awesome!

I need to learn more standard templates. :OD

Great thinking in my opinion. Would love to have the crypto that allowed me to follow that path though :P

If you feel unfortable about holding a lot of crypto (and you should), you should sell a portion of it, and buy another house. Investment property. And put it for rent. Collect the income.

This is what I would prefer to do, especially considering we have a 10 year collar on the interest rate from here and we are well below 5. The other thing I like about this, is that we can get rental properties that earn"cheap", meaning potentially the first 2-2.5 for the value of our mortgage, especially if there is a housing price collapse.

To me, this makes a lot of sense - thanks! I will forward this to my wife.

This is a standard template here, and numerous people from all parts of the society are doing it to get out of 8-5 jobs. That's the main reason, US property market is this high even after 2 years of pandemic.

I think the prices have been somewhat held back here in houses, but the apartments are booming - I have read a lot from Australia on this however and it is getting insane there - it has to come down at some point.

This sounds way to familiar...

My wife is still in doubt that this whole thing is real and is going to last

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"What if it all goes to zero?"

Haha, among other things, I have half a bitcoin and if I had sold it a couple of times on the high in the last few years and then bought it again on the low I would have one now. Fuck it, I just hodl ... 😎

Yeah, but if you sold it and it climbed a bit more, would you have bought it back at a loss, then when it dropped, sold at another loss again - perhaps you would have 0.25 now :D

Yes, that's possible, too ... but the last time I bought it was when it was significantly less, I think it was €20K, so all I would have traded would have been profit ... if I had done that I would probably have become addicted to trading 😎 ...

Traders are addicts for sure. I had an interesting conversation with a colleague about this today - I should write a post on it! :D

This now ancient meme from Reddit seems appropriate here:

A94200D6-B25B-45EE-8BA8-7230BBD81CB3.jpeg

This is definitely what I am hoping for for the majority of my holdings.

It doesn't need to be an extreme decision, why should it?. It's more (in my opinion) a matter of use some of those revenue streams to progressively pay the mortgage beforehand.
I wouldn't definetely sell my cryptos unless is to buy cheaper when it's the time in case you know when is the time :P

Doing this way you would accomplish 3 goals: with some time you would be mortgage free, your wife would be feeling more comfortable with your strategy, you still have your stake so you could profit from that "bullrun to the magical million dollar Bitcoin".

How does it sound my algorithm solution? ;)

I prefer the slow and steady approach to most things - though looking back, this is going to look insanely rapid. I haven't started taking anything out into the "real world" yet - one day :)

I prefer the slow and steady approach to most things

Yeah no rush will help take good choices.

Here in Spain there are very hard tax laws for cryptos. If you try and take something out to the real world you would find that "they" will beat you more than 40%... I'm not entering on details but it comes with a crazy system to declare your "every single transaction" made with your cryptos no matter what's its name, mad!

I always take out a little bit to cover for my life. Since I live off my crypto earning, I need to ensure I have reasonable capital invested that brings in passive I come to run my life.

In recent times, some of my investments have mooned and I've contemplated selling them off, then putting in the money for my relocation plans. My country is in a fucked up situation and it's getting close to crunch time around here. In my case, liquidating and relocating could be a matter of life and death, so if push comes to shove, I'll do it.

The point is, if your family's safety and life isn't under threat, don't sell it all. Just keep on taking tiny profits and servicing your life. Eventually, you'll get to the point where your profit will be able to pay for the house and other major spending.

In my case, liquidating and relocating could be a matter of life and death, so if push comes to shove, I'll do it.

Yep, this is a different situation obviously - makes sense.

Eventually, you'll get to the point where your profit will be able to pay for the house and other major spending.

This is what I keep working toward - whether it comes about or not, at least it has meant something on the journey :)

Hope you all stay safe.

dificult decition, the good thing is sell your 5% or portfolio cripto for stablecoin and hold jus hold and when the market crash you are ready to buy again, this is very hard, i want to buy a house but with my little penny, in cripto this is very dificult but hive, cub and ltc are my coin winnner, i hope with this could do my dreams, hope your wife understand this your plants to long term.
by the way, so please please
please see this movie with your wife.

Le Scaphandre et le Papillon
this is very important is a gem,specially when you have problem with your brain and you do not know if tomorrow you could not speak, the movie give you a great sistem of comunicatión with your eyes only.
and is special if you do not know if tomorrow you need to transfer your keys to the family this is the form.
Best regard.

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It is hard for people who are not in crypto to really understand the potential of it, especially when they are looking for immediate security of some kind.

I have never heard of the film, thanks!

Good luck on the journey to your own house mate :)

Thanks sr, i hope you take the better decition to get the financial free.

Yes the movie Is very great Is about a Man who get a paraplegic sick and do not could speak AND an woman learn to him how comunicate with their eyes Is a great sistem to trasñate información, people learn you the alphabet AND when you identify the correct letter, you clowe tour eye AND in this form you form word with tour eyes, please please see with tour wife i think un you when you salud about brain problems.
Happy weekend sr.

I'm really glad it's J making those decisions now (and I also like to pretend that he's secretly wishing he'd listened to me all that time ago even though he said when he got in ages later was about right for him XD), I'm just hoarding all my little things (which is pretty much hive, he's at least got a range).

seriously the buying and selling side of crypto does my meagre brain in, I can't

Easy, borrow cash against crypto to pay it off :)

( Celsius [centralized], Aave, makerdao, etc )

I would keep those several incoming revenue streams and the passive income. It's not clear that you will able to work till the retirement age, and the cryptos could double or more in the future.

withdraw a % of every source

Take some time to make some trigger points (either total holdings or per coin) where you will sell a percentage to either pay debts, hold in stable or out towards super/other assets. Stick to the plan, but don't sell everything, likewise, don't hold everything!

It is the reverse side of DCA, being brave enough to sell as well!

With a plan, you avoid the emotion side. Plus, you can go through it together with your wife.

PS, mortgage free is pretty though!

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