39 Comments

I like how you wrote mental health twice...

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Hahaha nice will leave it actually better that way

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Thoughts on best way for a psychiatrist to capture this trend?

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Last cycle I was up $2m on paper and wanted to sell at a price target, that target never came and my bags were worth $300k in the 2022 lows. Recommend people DCA in and out over time otherwise market will manage your risk for you. FWIW I'm at $1.2m now but more responsible behaviour would've placed me at $5m. Hope people learn from my mistake.

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Common mistake, price targets don't make a lot of sense towards the end, all about looking at your own personal expenses and if you're close just de-risk

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really similar situation, i made myself pay for my mistakes by working multiple jobs to increase cash flow and replenish a portion of what i "blew" on timing. Sold IRA and bought spot too which hurt tax wise.

This time, sold some in the low 60s to basically remove all principal and still have a 7 figure crypto bag now. But boy did it suck to be flat after being so deep in crypto for like 4 years (although not as bad as being down 80% for a few years like cycle prior lol)

currently struggling with increasing cash flow because im back to 1 job (good situation just zero motivation, not a career for me) and relatively burnt out from past few years to start a business at the moment.

Another mistake I made was not paying attention to expenses more during bull runs. "What does another $1-2k/mo matter when my net worth is going up 6 figures a month" but the expenses were actually going up like $5-10k/month and reversing that is not as easy as it sounds with a family lol.

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Makes sense

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The problem that the GME guy ran into is that bank risk department people are mid-curve LinkedIn types. They're the types to get 50 booster shots and 60 pronouns - meaning they'll just blindly follow whatever guidance is given them. The more schizo GME types took it that this is all a giant conspiracy, of course. It was a fun story to watch in 2021 but at the end of the day, GME is a brick and mortar retail business in a sector where games are now mostly sold via online downloads, plus with declining consumer spending going into a recession. I'm not touching this one. It's definitely not a $100 stock or whatever the more schizo proponents of GME say.

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Its pure gambling thats why it's hilarious to watch for a publicly traded company with billions on the line

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A monte carlo simulation of the net present value of rent vs buy will typically show an enormous 95% confidence interval (+-50% equivalent rent) especially with short timeframes (less than 10 years). The simple reason why is that to truly calculate the opportunity cost of the down payment (and appreciation of the house, etc.) you'd need to be able to predict stock, housing, and crypto returns. The shorter the timeframe, the less predictable it is.

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Jun 4·edited Jun 4Author

Agree hence why we emphasized it has to make sense on a cash flow basis, since the risk in the low 7 figure range is your investments go down 25-50% in a downturn.

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Don't forget to max your liability insurance limits. Umbrella insurance is usually a no-brainer given the low premiums versus the peace of mind

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Thoughts on offshore trusts strictly for asset protection? Overkill or smart?

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Not at this low of a net worth, you have to be into the 8-figure range to go down that rabbit hole majority of time.

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One thing I’ve learned the hard way. Collectibles are only useful derisking if you can sell it easily. Rolexes are great because you can sell it in any country, at any time. My copy of Fantastic Four #48 that’s “worth” $8,800? Good luck trying to sell that quickly (if at all). Only exceptions might be Michael Jordan rookie cards. Collectibles should be viewed as a fun hobby that you might benefit financially from, but the lack of ability to liquidate easily and quickly should make buyers be clear on exactly what they are getting into.

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Jun 5·edited Jun 5

If somebody had a major sell opportunity Jan 1st, say $1 million USD worth, can they just move to PR and sell there, stick around for majority of the year, then move back to residence and have sold tax free?

I know you're not attorneys just curious if this sort of hypothetical is possible.

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No

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Is the tax benefits just an expanded version of a ROTH? I think Roth maxes are 7k (maybe more in a business?) so gifting to relatives expands that by a multiple?

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Basically yeah, really doubt inheriting $1M for example gets a massive tax burden in the future.

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Loved the ways you shared to reduce your tax burden. Does BTB have any old articles on this topic with similar ideas or discussion on the topic?

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What is your specific questions it's really only a few things: 1) inheritance is stepped up to $13M so you can gift family members money and legally never pay tax on gains when you inherit, 2) corporate tax structures already covered here a million times, 3) trust funds are for protecting assets because they are not owned in your name and 4) if you really make it, you're going to move to a tax haven which is a decision made by your accountants/lawyers not the cartoon network since it gets too complicated at that level

That's really it, if you're trying to reduce tax burden on a W-2 you're completely screwed because the whole goal of the government is to make sure W-2 gets no benefits by design (not a job creator a job taker)

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As someone who sells trading cards, I would add those to liquid assets. Pretty easy to slip a few PSA slabbed cards into a carry on and move around. They are surprisingly easy to move as well. You can also vault things and run them in auction (I know, taxes and fees) at your own will. great write-up again.

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Yeah those work but then we'd have to guess which ones are the best and don't know enough to go down that rabbit hole beyond "all flows to the top players/cards"

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Couldn't he just hedge his position with puts rather than sell?

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Volatility through the roof so the cost will explode

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I value your discussion on primary residence RE, it lines up with your age band (20-30) who are probably looking to buy their first home.

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Yeah usually 20s/30s is when people look at the primary just gotta make sure they understand it's not a good idea if renting is way cheaper than buying. It's a cash flow play and you better be sure about living somewhere for a decade.

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Noob Q: what does net worth exclude? Real estate equity, IRAs, 401k?

Or does net worth include every single liquid and illiquid asset?

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Net-worth is everything except primary residence value and after taxes on everything.

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« …look to rebalance your portfolio to lower volatility stocks/bonds/computer coins… » Is it also good with ETH or only BTC?

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If you own a page 2 coin that triples it means you would move into BTC/ETH at minimum or maybe even some cash and btc/eth

Hence "sell half at double" when any asset goes up. Take out the volatility.

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since this post is aimed at newbies I will ask this beginner question - where to buy/sell rolex internationally and what are the methods to verify it's integrity?

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