Fun ChatGPT income question that I asked today... 🧡✨ Mind you, this does assume that I will live to be somewhat older than 100 and my husband a bit older than 110. 😂

Question that I asked ChatGPT:

Assuming Bitcoin appreciates at 30% per year, how much BTC would someone need by end of 2028 to fund a 30-year weekly income starting at $2000 per week (in AUD), increasing by 7% per year?

Here's ChatGPT answer:

The correct amount of Bitcoin needed by the end of 2028 is approximately 3.61 BTC to fund the 30-year weekly income starting at AUD $2000, increasing 7% annually, assuming Bitcoin appreciates at 30% per year and BTC price is AUD $162,272 at end of 2028.

Then I confirmed with ChatGPT, asking the following:

So, based on our conversation which was: Question:Assuming Bitcoin appreciates at 30% per year, how much BTC would someone need by end of 2028 to fund a 30-year weekly income starting at $2000 per week (in AUD), increasing by 7% per year? Here's it's answer:The correct amount of Bitcoin needed by the end of 2028 is approximately 3.61 BTC to fund the 30-year weekly income starting at AUD $2000, increasing 7% annually, assuming Bitcoin appreciates at 30% per year and BTC price is AUD $162,272 at end of 2028. THEN: AUD$2000 Bitcoin could be sold/used every week, gradually reducing the capital to zero not until 1 January 2059. Is that right?

ChatGPT answered:

Yes, that’s exactly right.

To recap:

•    You start with about 3.61 BTC at the end of 2028.

•    BTC price at that time is assumed to be around AUD $162,272 per BTC.

•    Each week starting 2029, you withdraw AUD $2000 (increasing by 7% annually).

•    Because Bitcoin appreciates at 30% per year, the capital grows faster than the withdrawals increase.

•    Selling BTC weekly to cover those AUD withdrawals means your BTC holdings gradually decrease over 30 years, hitting near zero only by the start of 2059.

This scenario assumes:

•    Bitcoin price growth of 30% annually continues steadily.

•    Weekly withdrawals grow 7% annually.

•    No extra deposits or fees.

•    You convert BTC to AUD at the prevailing price each withdrawal.

So yes, starting with roughly 3.6 BTC in late 2028 will fund your described withdrawals for 30 years under those assumptions.

NOTE:

We need to remember of course that currently the Australian government taxes Capital Gains Tax on that.

In response to the latter, ChatGPT answered:

Great! Let’s estimate the extra BTC needed upfront to cover Capital Gains Tax (CGT), so you still have a net AUD $2000 weekly income after tax.

Step 1: Estimate the effective tax rate on withdrawals

•    CGT applies on the capital gain portion of your BTC sale.

•    With a 50% discount (holding BTC >12 months), only half the gain is taxable.

•    Assuming all withdrawals are gains (worst case), and marginal tax rate is 19% (lowest above tax-free threshold), tax on the total withdrawal is:

So about 9.5% tax on each withdrawal.

Step 2: Calculate gross withdrawal needed

You want net AUD $2000 after tax, so:

Step 3: Calculate total present value of gross withdrawals (instead of $2000 weekly)

Recalculate the total present value of withdrawals, now with weekly income starting at AUD $2208.80 instead of $2000, growing at 7% annually.

Step 4: Divide by BTC price at end 2028 to get BTC units needed

I’ll do the math for you now.

To calculate the extra Bitcoin needed upfront to cover Capital Gains Tax (CGT) so you still receive a net weekly income of AUD $2000 after tax, we proceed stepwise:

Step 1: Effective tax rate on withdrawals

•    With a 50% CGT discount and a 19% marginal tax rate, your effective tax on withdrawals is approx 9.5%.

Step 2: Adjust gross weekly withdrawal

•    To net $2000 after tax, your gross withdrawal should be:

Step 3: Recalculate present value of withdrawals

•    Using this new gross withdrawal, total present value of 30 years’ withdrawals will be:

Final result:

•    You need roughly 3.99 BTC at the end of 2028 to cover weekly withdrawals starting at AUD $2000 net after tax, increasing 7% annually, assuming BTC appreciates 30% per year and AUD $162,272 per BTC.

Concludes:

So, CGT raises your initial BTC capital needed from about 3.61 BTC to roughly 4 BTC to maintain the full net $2000 weekly income.