🧩 Is the 4% Rule Still Relevant for Bitcoin? 🔥
The 4% rule is the standard for financial independence. What happens when you factor in BTC’s explosive growth & volatility?
Can bitcoin lower your target number?
I break it down in FIRE BTC Issue 21.
https://firebtc.substack.com/p/is-the-4-rule-relevant-to-bitcoin
This is great, Trey.
I did similar work last summer and came up with the same 8% "rule" for Bitcoiners.
A word of caution, some pro-Bitcoin financial planners on X think that this is "reckless" and "irresponsible" ... which was very surprising to me when I shared my thoughts publicly.
Thanks Jeff! The way I look at it is there are no hard rules, just guidelines. Everyone has a different level of comfort with risk, and some people have more flexibility to work with. Balancing all of this for your personal situation is where art vs science comes in!
Anyway, appreciate the thoughts.
if bitcoiners follow the 4% rule, instead of 8%, does that mean that sats could last 60+ years?
Thanks for your POV Jeff. I like M.R. but I don’t understand how she can understand BTC so deeply and yet still think anything over 4% is reckless over the next 20-30 years. I’m all for being conservative, but the math just seems clear that 4% is too conservative.
Trey awesome work.
I did some cals looking at retiring at 65 living to 100, with a constant percentage withdrawal using the power law model for an average USD price.
4% didn’t payout much in your younger years and had you dying with a huge unspent portfolio.
8% was a good balance of early payouts but portfolio value increased all the way till death.
10% payed out good early with the portfolio value flat the last 10 years.
16% payed out great early but portfolio value declined in the last 20 years.
So i concur with your results. 4% is probably too low. 10% -12% might be theoretically optimal but with volatility and the uncertainty of life 8% is probably better. Ideally you would have some optionality in payout size so you could adjust to suit your needs at the moment.
Keep up the good work.
Awesome, thanks for sharing!
Recommend Trey’s Substack🔥
