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Author Topic: Cash out, or keep?  (Read 1822 times)
Confidence Man
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June 04, 2011, 06:05:37 PM
 #1

I'm currently using both of the high-end videocards in my main rig for pool mining (a GTX 580 that I had for games and an HD 5870 I recently got on eBay for this purpose). I'm running at 510 Mhash/sec in Phoenix with both of them active, and receive about 1 BTC every 24 hours or so.

Since I got started on May 19th, the price in USD of a bitcoin has more than doubled, and I'm trying to decide if I should cash out what I receive each month and pay down some high interest debt I have over the next three or four months, or save most of the bitcoins in hopes that they become worth even more, and just make slightly over minimum payments on these bills.

What would you do?
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Jack of Diamonds
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June 04, 2011, 06:09:34 PM
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Paying interest is always a losing proposition.

First get rid of debts & paying interest to a third party, then save up your BTC or sell it as you wish later.

The more you postpone a high interest loan the more you set yourself up for cumulative losses. If I were you I'd pay it off a.s.a.p

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PLATO
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June 04, 2011, 06:15:56 PM
 #3

Well, if the value of your bitcoins continues to appreciate faster than the interest on your debt, it's in your best interest to save the bitcoins and pay off the debt later.

Of course, there's no gurantee that'll happen. IMHO value will continue increasing longterm but we'll see a correction soon.
jancsika
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June 04, 2011, 07:20:37 PM
 #4

1. Pay debt now + future $1,000,000 Bitcoin + you generating 1 Bitcoin/day = Win

2. Pay debt now + future $0 Bitcoin + you generating 1 Bitcoin/day = Win

3. Pay debt later + future $1,000,000 Bitcoin + you generating 1 Bitcoin/day = Win

4. Pay debt later + future $0 Bitcoin + you generating 1 Bitcoin/day = Lose

The only possible way to lose is if Bitcoin market crashes AND you put off paying debt.  I assume you cannot control the future but that you CAN control whether or not you pay off your debt.

So if you want to be a sure winner, pay off that debt.  Unless of course the shame and regret that potentially comes from becoming rich-but-not-AS-rich-as-you-could-have-been-had-you-been-able-to-predict-the-future is just too heartbreaking to bear.
shady financier
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June 04, 2011, 07:43:33 PM
 #5

go with minimax.

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zby
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June 04, 2011, 08:36:41 PM
 #6

What kind of answer do you expect?
tomcollins
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June 04, 2011, 08:54:10 PM
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Paying interest is always a losing proposition.

First get rid of debts & paying interest to a third party, then save up your BTC or sell it as you wish later.

The more you postpone a high interest loan the more you set yourself up for cumulative losses. If I were you I'd pay it off a.s.a.p

Always?  You using Dave Ramsey logic or something?

I wonder why businesses take out loans to expand their business if it's always a losing proposition.  Must be a lot of idiots or something!
c-rock
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June 04, 2011, 09:05:59 PM
 #8

Debt is slavery.

There is a happy medium.

They say the average millionaire saves more than 12% of their income.  Make a plan.

But my suggestion is pay off the debts.   I live a debt free lifestyle.  My mortgage is my only concern right now. 

Makes life simplistic in a way.   

Jack of Diamonds
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June 04, 2011, 09:32:06 PM
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Paying interest is always a losing proposition.

First get rid of debts & paying interest to a third party, then save up your BTC or sell it as you wish later.

The more you postpone a high interest loan the more you set yourself up for cumulative losses. If I were you I'd pay it off a.s.a.p

Always?  You using Dave Ramsey logic or something?

I wonder why businesses take out loans to expand their business if it's always a losing proposition.  Must be a lot of idiots or something!

Debt is a bond.
We are not talking IPO's or new issues of shares/corporate loans with low annual rates.

Going as small scale as a single person with a few thousand bucks at best, I think it's pretty safe to say he has nothing to gain from paying 25% or higher interest per month
(he said high interest so I'm assuming one of those quick loan/payday schemes). Especially if he keeps postponing it & the interest starts compounding.

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June 04, 2011, 09:56:35 PM
 #10

Paying off your debt is pretty much always a good idea. I'd put at least half your bitcoin income toward it.

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PLATO
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June 08, 2011, 12:28:04 AM
 #11

Well, if the dollar crashed, and hyperinflated, I could pay off my fixed-rate loans with a single bitcoin.
Dobrodav
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June 08, 2011, 02:31:56 AM
 #12

Well, if dollar will hyper inflated, best currency`s will be bullets and alcohol.

We will  meet in not-so-distant future.
Today`s strange music :
http://www.youtube.com/watch?v=V8mCgjbBPMk
Yesterday`s  strange music:
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rezin777
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June 08, 2011, 02:35:26 AM
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Well, if dollar will hyper inflated, best currency`s will be bullets and alcohol.

You forgot beans. And bullion.  Grin
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