I believe the concept is borrow an amount that you live off and use to pay the monthly dues.
Hope that assets appreciate much faster than debt interest... Take tax deductions on interest
Bring out new bigger loan to:
-pay off old loan
-fund life
-Pay monthly dues
Rinse repeat...
I think it works of your capital grows fast enough
So the goal is not necessarily percentage rise as much as net profit. While continuing to stack, it basically just turns into an economic engine at that point. Also sounds like a vector.
I'm thinking out loud, but if the dollar collapses, does that mean you are accountable to forfeiture? In which case NGU turns into NGWTHU. Does that mean never collateralize a number of sats, but a dollar value in sats?
I think the goal is to stay humble and stack sats ... But if one has an enormous stack one could live off rolling debt without losing capital and without a ton of risk.
I hate to be that guy but I'm already leveraged with a personal loan. And two years from now when the bear market is in full swing I'm going even deeper to stack. With the payments I make using fold, my rewards points will counter the interest so I'll damn near break even.
At least that's what I'm hoping.
It's that "bring out a new bigger loan" part that I find sketchy. I know the Bitcoin sits as collateral to balance the loan, but in my mind, debt should be temporary ðŸ«
I hear you different frame of thinking for sure. I don't do it but if you think in % terms then it's easier to understand why people are comfortable.
$50k is 5% of $1M Loan 1
$500k is 5% of $10M Loan 2
Yes you have more debt nominally but as a percent of your assets it probably feels the same
If you have enough of something that's going up forever, Laura, the total amount borrowed will get ***smaller*** as a proportion of the total assets. In fact the total amount of bitcoin posted as collateral can go down over time if you are at this critical mass. If anything goes south, you can only lose up to this amount of the asset, and if not, you still at any time in the future have the option to discharge the debt by selling some of the asset and just go debt-free, though this would have to be for a good reason, such as changing jurisdictions, transferring the asset to an heir or anyone of your choosing, going under the radar, refinancing, or a change in living circumstances or emergency need for the asset.
For myself, I would never do the borrow indefinitely thing until I was pretty sure I was at this critical mass where the total borrowed, even with taking out new loans, went down in BTC terms over time. I plan on living for a very long time and using my bitcoin for much more than mere consumption, like a business and stockpile for my kids.
