Jay,
That veritable mini-book you wrote to me is much appreciated. I spent a long time drafting a reply thereto—then, a longer time contemplating whether or not it reveals too much potentially identifying information. Not in the way you may think—but it’s nevertheless a concern, and I am still thinking about that. With apologies, for now, I’ll need to cut the main part, and leave only the tangent at the end:
Fair enough.
Sometimes there are OPsec risks in oversharing personal details or even some of the strategies can sometimes be too personally revealing.
I have had sometimes where I drafted a response, and then I decide to change some of the details to either make them percentages or to change it into a hypothetical or even to take out or add some information to remove it a bit more from myself (whether we are talking about what I have done, what I am doing or what I might do).
For me, I have batted this topic around so much that I have found several ways in which I can feel comfortable putting out the information, and maybe some guys might proclaim: "hey your detail 1, detail 2 and detail 3 do not match up with what you said 3 months ago".... Do I give any shits? likely not.
Accordingly, I understand that sometimes you may want to reconsider your phraseology or even some of the details that you are providing or to suggest that you are asking (or responding) for a friend...
Not that any of us internet personalities have any real world friends.
I understand that even forum members who have been around a long time might not have completely left their BTC accumulation stage, so the three stages of long term investing are accumulation, maintenance and then liquidation, [...]
As a matter of thinking differently about goals, I posit that, unless a major expenditure is desired, there should be no “liquidation” phase for any asset with the fundamentals to constitute a long-term investment (as opposed to a short-term speculation). Given your apparent familiarity with estate planning, you can probably guess why: A goal of parlaying personal success into the intergenerational accumulation of familial wealth.
Sure it is possible that you could suggest that one of your goals is to pass on all or some of your wealth, but seems to be somewhat unrealistic to suggest that to be any kind of reasonable goal that should motivate the vast majority of regular investors.
Let's say that your goal is to reach the accumulation of $2million in value because you believe that once you reach that level, then you can have a passive income of $6,666 per month, and that is more than sufficient for yourself to live in perpetuity on that amount of passive income per month. So by the time you pass from this here earth, you still have not dug into your principle, but you have just lived off of the passive income for however much time you end up living.
i would proclaim that you have both achieved a kind of fuck you status and you have also been able to pass on value to your heirs, to the extent that those snot-nosed non-appreciative brats deserve any of your wealth to be passed on to them.
On the other hand, you might decide (purely discretionary) that your goal is to reach as close to zero as you can by the time that you die, without necessarily becoming a burden on anyone else... So you reach your $2million goal, but at some point, you decide to not only draw from the passive income, but that you are going to create a schedule in which you are withdrawing from the principle... You may need to create a timeline for this, such as 10 years or 20 years, so if you have $2million dollars, it could well take you more than 20 years to deplete the whole value of your principle in BTC and asset value appreciation, even if you were to double your withdrawal rate from $6,666 to $13,332 per month.. partly depends upon how well the asset appreciates, so if you are trying to withdraw both principle and value, then the goal would be to make sure that you are withdrawing at some kind of rate that sufficiently exceeds its average appreciation rate in order to ongoingly dig into the value of the principle and to deplete the value down to zero over a timeline that may well be within your discretion to choose.
What is best left to one’s children? Depreciating fiat currency? Or a portfolio of gold, real estate, and nowadays, Bitcoin? (I don’t consider stocks to be a “long-term” investment, unless either it is a large share of a privately held company under management personally known and trusted, or you have a Warren Buffet strategy with commensurate capital.)
Sure if you put the assets in a kind of trust, then the you have chosen the various allocations, but if you give the assets to the kids outright, then as soon as they get control of the asset, they can choose to reallocate into whatever kind of asset that they prefer, including if they want to convert such assets into hookers, lambos and blow. Their choice.
Of course, such planning must assure insofar as practicable that one’s heirs are of a character to grow the wealth and pass it on, rather than irresponsibly dissipating it. Now, there is a discussion which could delve deeply into the context of the rule against perpetuities—among many other topics: The legal terms of devises cannot substitute for sound breeding and upraising.
So, yeah,
generally speaking, the rule against perpetuities suggest that you can only create some kind of legal instrument to control your assets and the wealth determinations for the measurement of any life in being plus 21 years.. So you are not going to be able to control how those assets are held forever, and I am NOT even sure if that is a reasonable goal, but hey, I understand that people sometimes want to contribute to some kind of lasting legacy that extends beyond their lives and perhaps touches the lives of many others.
A small anecdote: Many years ago, I had an affair with a woman whose late father had devised significant assets to a trust with her as a beneficiary. The trust was made to convey its assets to her when she was thirty-five years of age, on condition that she was married. Obviously, the late gentleman must have desired some assurance that he would have grandchildren who would naturally benefit from their mother’s enrichment. Well—she was past age thirty-five, married, independently wealthy thanks to papa, and—she didn’t want any children, ever! In a sumptuous hotel bed that she paid for, she told me that she had never before cheated on her husband; take that for what it’s worth.
I would suggest that for having heirs worthy of the estate, the human element is much more important than legal concerns over the rule against perpetuities, etc.
I think that you are making my point for me, or maybe it is that we just agree about this point.
The further out the limitations, if those limitations can even be sustained through such legal instrument as a trust, the more difficult it is to attempt to incentivize or to control behavior or to get your wishes fulfilled, so might be a lot easier to pass those assets and values onto someone that had been much more influenced by your values, but even that could be a very difficult goal to achieve because sometimes kids engage in rebellious behavior (as your anecdote kind of suggests), they pre-decease their parents or their values change along the way. Difficult objectives to achieve, but there are likely some people who are successful in both being that kind of influential and having some heirs that end up ready, willing and able to carry out such wishes - even generations down the road.
[edited out]
Exactly... and we would need to have some way of using our assets (btc) in the future without selling them.
I predict that there will be a huge industry helping those with btc achieve just that.
Additionally, very rich today rarely sell their assets as there are many ways to profit without selling.
BTW, aren't South Dakota trusts able to overcome 'no perpetuity' clause?
Personally, I am not really into it.
Surely, I do not proclaim to be any kind of expert, yet property rights tend to be a combination of state law and common law, so there could be some jurisdictions that allow for some deviation beyond the general rule against perpetuities that I stated in my above post.
Namely:
>>>>>generally speaking, the rule against perpetuities suggest that you can only create some kind of legal instrument to control your assets and the wealth determinations for the measurement of any life in being plus 21 years.<<<<<
Poll
