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Title: Which is better, 401k or Bitcoin? Post by: nanobtc on November 20, 2013, 11:52:52 PM I admire the early adopters for holding on. I congratulate the miners who hung in there. I admire the successful day-traders who blaze paths of glory for themselves. Sometimes, anyway.
Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: BitchicksHusband on November 21, 2013, 12:00:32 AM You know that you can borrow up to 50% of the value of your 401k and pay the interest back to yourself, right?
I just did this because I wanted to put some of my 401ks/IRAs in bitcoin and there's no way to do it right now. Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: dominicwin on November 21, 2013, 12:09:44 AM Welcome to full on Bitcoin!
Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: C10H15N on November 21, 2013, 12:20:14 AM I cannot recommend you stop contributing to your 401(k). You will be giving away matched qualified funds that need time to compound.
You are looking back on the last couple of years and are seeing the astronomical rise of bitcoin. I understand the need to be part of it (that's why we are here). You also need to appreciate the astronomical risk. You will be purchasing at the height of the market. This is uncharted territory. Anything could happen. Find a way to invest in bitcoin without impacting your 401(k) contribution. Give up something that is not good for you: booze, cigs, gambling, etc... Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: BitchicksHusband on November 21, 2013, 12:38:34 AM I cannot recommend you stop contributing to your 401(k). You will be giving away matched qualified funds that need time to compound. You are looking back on the last couple of years and are seeing the astronomical rise of bitcoin. I understand the need to be part of it (that's why we are here). You also need to appreciate the astronomical risk. You will be purchasing at the height of the market. This is uncharted territory. Anything could happen. Find a way to invest in bitcoin without impacting your 401(k) contribution. Give up something that is not good for you: booze, cigs, gambling, etc... That's the beauty of borrowing against it: 1. I still get all the matching funds and I still contribute normally to it. 2. I'm paying myself the interest at 8%. 3. I get to buy the bitcoins now but pay them back at $50 per check which is automatically taken out. So this does what the OP is saying about buying a little every week, except that I also get all the bitcoin profit upfront starting at $525. (The OP already said he could double his 401k withholdings if he had to, so taking out $50-$100 extra per check should be doable.) 4. This is only 5% of my retirement funds (for now, soon it will be 90% bwah hah hah), since I also have some large IRAs comprised of the rollovers of previous 401ks. And if I lose it all, I've only lost 5% of my retirement. In fact, probably none, since I can easily continue to pay the $50/check. 5. If the Winklevoss fund opened tomorrow, I would put 20% of my retirement in it, but because of my situation, I'm limited to 5%. Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: C10H15N on November 21, 2013, 12:53:41 AM The drawback to borrowing against your 401(k) is that should you lose or leave your job before repayment, the loan balance is treated as an early withdrawal complete with taxes, 10% penalty, and loss of qualification.
Rather than futzing with the 401(k), just take the after tax dollars you would have used to eventually double your 401(k) contribution and start buying bitcoin now. Investing in bitcoin only is almost as insane a retirement strategy as not investing in bitcoin at all. :D Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: BitchicksHusband on November 21, 2013, 01:11:30 AM The drawback to borrowing against your 401(k) is that should you lose or leave your job before repayment, the loan balance is treated as an early withdrawal complete with taxes, 10% penalty, and loss of qualification. Rather than futzing with the 401(k), just take the after tax dollars you would have used to eventually double your 401(k) contribution and start buying bitcoin now. Investing in bitcoin only is almost as insane a retirement strategy as not investing in bitcoin at all. :D I already have enough bitcoin holdings to easily pay back the loan in the event of a job loss. In fact, I already made ¼ of the full loan amount back in profit in 1 day. How is it an insane retirement strategy? Because I will retire at the end of next year in my mid-forties instead of at 65 or 69 like "normal" people? I know a lot of people that lost half of their 401ks in the recession in the stock market and have never recovered more than 10% of it. How is bitcoin more insane than that? Just because "normal" people don't do it? "Normal" people don't invest in bitcoin at all, so I'm not sure normal applies to us anyway. In any event, I'm pretty sure having 5% in bitcoin isn't going to kill me. Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: C10H15N on November 21, 2013, 01:24:50 AM How is it an insane retirement strategy? Because I will retire at the end of next year in my mid-forties instead of at 65 or 69 like "normal" people? I know a lot of people that lost half of their 401ks in the recession in the stock market and have never recovered more than 10% of it. How is bitcoin more insane than that? Just because "normal" people don't do it? "Normal" people don't invest in bitcoin at all, so I'm not sure normal applies to us anyway. In any event, I'm pretty sure having 5% in bitcoin isn't going to kill me. That comment was not directed at you (we are obviously not bitcoin only investors). It was directed to the "bitcoin only - bitcoin all in" crowd. You are going to beat me, I'm projected at retiring at 55 given a reasonable rate of return over the next six years. Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: BitchicksHusband on November 21, 2013, 01:31:45 AM OK, for normal people, the downsides are:
1. If you lose (or want to change your job) you have to pay the loan back in full immediately. But that would only require you to sell (some of) your bitcoins. Of course, if you somehow bought during yesterday's peak, it could limit you for a few months until bitcoin recovers. 2. Bitcoin COULD lose all its value, but so could anything else in your 401k. I had a stock in my IRA which went to zero when I wasn't paying attention to it. Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: C10H15N on November 21, 2013, 01:47:25 AM I lost half my valuation in my 401(k) in '08, but I did not panic sell, continued to buy cheap, and today I'm up over 300%.
I was late to bitcoin, I bought in at 10 :) Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: BitchicksHusband on November 21, 2013, 03:20:00 AM I was late to bitcoin, I bought in at 10 :) Then how are you not retired already? You're doing this wrong. My cheapest was $48. Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: C10H15N on November 21, 2013, 05:19:40 AM Then how are you not retired already? You're doing this wrong. My cheapest was $48. lol - I want to live very well when I retire. Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: maurya78 on November 21, 2013, 10:14:46 AM Please don't go all in with your 401k even for 6 months
It is still a very risky investment By all means commit capital to btc but don't go all-in Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: EvilPanda on November 21, 2013, 02:05:58 PM {snippity} Find a way to invest in bitcoin without impacting your 401(k) contribution. Give up something that is not good for you: booze, cigs, gambling, etc... {/snop} C10H5N: I have been on a mission to do those things. I smoked cigs hard for 35 years, now 2.5 years tobacco-free. I used to gamble, not at any casino, but because I raised row crops and cattle for 25 years. I play in small-time weekend bands, so I get drinks for free on Friday/Saturday. I don't use caffeine, and no drugs. To the extremes, I use practically zero salt in my diet. I drive a 1992 van, no cable or satellite @ home, not locked into %%% rate cellphone plans, no credit card debt. I live in a 40-year old house, that I can fix most things that go wrong. I know about the matching contrib, my workplace will match 6%. At the end of the 6 month experiment I am allowing for that. I could tighten the belt and up my contribution enough in the next 6 months to hopefully make up for that. BitchicksHusband: I have borrowed against it several times, but free and clear now. I am old, but yet very employable in the tech world. In the non-tech world, I can still drive a tractor for another 20 years, if need be. I am not looking to retire quickly, I am impressed by the future of bitcoin. I physically worked Real Damn Hard(tm) before I left the farm and became a tech guy. I am just trying to do what I can for what I believe. My father lives like that: has free water, heating, vegetables from the garden, keeps bees, but he can't stop smoking. He worked 30 years as a safety inspector and the only thing country gave him is a shitty pension. What is more they are cutting pensions every year because the fund is compromised and is said to fail completely in 6 years. Unfortunately there was no BTC in his days, don't miss your chance ;) Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: C10H15N on November 21, 2013, 03:46:24 PM I know about the matching contrib, my workplace will match 6%. At the end of the 6 month experiment I am allowing for that. I could tighten the belt and up my contribution enough in the next 6 months to hopefully make up for that. Don't ever leave free money on the table :D If you insist on touching your 401(k), don't drop it below 6% - that's literally taking a pay cut. Optimal plan: Fund 401(k) to max match (in your case 6%) - deferred tax retirement Open and fund ROTH IRA to yearly max - after tax retirement that you can use invested funds at any time (only earnings are restricted) Grow herb - use profits to buy BTC (I'm joking, but you get the idea) :D Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: thezerg on November 23, 2013, 12:30:07 AM don't retire and remove your obvious capabilities from an economy that needs you. use btc to get that llc and ins sell your nic 4 50% china price not 30% and remove one more import (and dont forget to take long vacations!)
Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: C10H15N on November 23, 2013, 02:09:36 AM ^^^ - great idea.
Title: Re: I am stopping 401k investing for 6 months, buying BTC Post by: BitchicksHusband on November 23, 2013, 03:04:52 AM don't retire and remove your obvious capabilities from an economy that needs you. use btc to get that llc and ins sell your nic 4 50% china price not 30% and remove one more import (and dont forget to take long vacations!) Don't worry. I'll still be writing software. Just that it will be whatever I want to write. |