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.
Cynical though I am, that is to me a shocking view of most investors. Has the world really changed so much while I was sleeping? “Back in the day”, I think, the goal that I stated was a significant motivating factor for
most people who were striving to accrue wealth, and even a
primary motive for not a few.
You could be correct - but I also attempted to frame my response in such a way that it may not matter so much what the motivation is to accumulate wealth.
On the other hand, I did presume that at some point some kind of withdrawal would start to take place, whether we are referring to a kind of perpetually sustainable withdrawal rate that does not necessitate the touching of the principle or some kind of withdrawal rate that is more aggressive and digs into the principle.
I think that you might be overreading the meaning of my use of the more broader liquidation term... and I will concede that maybe the term "liquidation" does imply depletion of the principle when I did not really mean to suggest liquidation to ONLY have that meaning, even though digging into the principle would not necessarily be a bad goal - especially if there might be some preferences to either live beyond the passive income capabilities of the fund or to realize that passing on too much of the investment value might not be a desired outcome, either.
“I want a better future for my children and grandchildren, and their grandchildren” is unrealistic to expect as a motive for most investors?
Might be a bit much to attempt to quantify that most BTC accumulators are accumulating their wealth for someone else rather than for themselves.
I might be repeating myself but there are a decent number of current wealth management approaches that do not necessarily aim towards passing on wealth as a central objective, even though it could be a side objective.
I would rather focus on what I want rather than attempting to figure out what "most people" might want because I am not sure how far figuring out what most people want might get us in terms of deciding what to do. Lot's of people end up NOT even managing their finances in such a way that even allows them to get close to what they want anyhow, just in terms of sufficiently satisfying their own needs rather than trying to figure out how much of an estate they are going to be able to pass on.
On the other hand, maybe that explains why the markets are so fucked up: The types of speculators who seek to Get Rich Quick are not typically long-term thinkers! Of course, they would not give a hoot about their descendants. Perhaps they may be fanatical Christians: They take no thought for the morrow (Matthew 6:34).
You may be correct in regards to the problematic nature of other kinds of long-term thinking and the perverse morality incentives that might come from get rich quick thinking.
On the other hand, it seem to me that we can attempt to address matters that relate to our own finances without becoming morally perverse.
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,
I know that this will shock the hyper-individualists in the peanut gallery: As an ethical matter, heirs do not receive bequests as their
individual property. Ethically if not legally, it is collective property held in trust for the family—for posterity, for future generations.
To protest this would be shameful. There is no such thing as a free lunch. With every privilege comes a duty. People who receive wealth from their parents must accept that duty; thus, enjoy it though they may within the spans of their own lives, they must tend it wisely, and ultimately pass down the gifts that they have received. You can’t have your cake and eat it, too.
Sure there may be ways to pass down property in ways that have those kinds of attachments including inculcating those values into potential heirs, but this seems to be deviating from the original topic that includes considerations of when a person might consider themselves to be in an accumulation, maintenance or liquidation stage in terms of their bitcoin.
So, if you personally never want to get to liquidation stage that is your choice.
It may also be your choice to figure out how to reallocate assets that you inherit.
Do you hang onto the gold or do you convert it to bitcoin? Would converting from gold to bitcoin be unethical? Perhaps.. likely depends on specifics..
No, heirs don’t have a right to spend their inheritances on “hookers, lambos and blow”.
If it is put directly in your name, then you would likely have that right individually, if it is a trust or if the property is passed as some kind of community property there might be fiduciary duties that disallow spending or consumption of "hookers, lambos and blow"
If they do choose to do so, at least they should be subject to severe social shaming. I think that used to be the case, when prodigal heirs were the exception rather than the rule.
I doubt that we can generalize in this regard without knowing more specifics.
Those who insist on having only absolute individual property rights should relieve themselves of this burden by having a solemn talk with their parents, and requesting to be disinherited. That’s only fair. Such individualists should earn their own wealth all by themselves, totally alone, and thus free up their parents to re-allocate bequests to their other children, or spend it all on their own pleasures, or bequeath it all to charity, or put it all into gold and then sink the gold to the bottom of the ocean. It is their individual property right, yes?
I would think that the majority of people are already stuck with trying to figure out how to build their own wealth and also they frequently will either be unsure how much of their family estate is going to be left to them by the time they inherit such estate.
I am not feeling too encumbered by hypothesizing about the lives of the rich and famous because those do not tend to be problems of most individuals - even though some individuals will be more fortunate to have such estate inheritance problems.
That said, I don’t think that laws and legally enforceable terms in wills can help much here. Perhaps a bit.
Seems like a bit of a derailment of the original topic and kind of fringe cases to me, anyhow. Rich people have problems that are good to have. Many people do not have those particular problems as you seem to be framing them, even though perhaps some might.
For example, once upon a time,
You see. How you are starting this framing seems to show that we are talking about fringe matters rather than more likely to be common matters.
in some European countries, there were laws that protected familial ownership of the family home. If the inheritor of the family home tried to sell it outside the family, other potential heirs who were next in line could challenge and prohibit the sale; thus, the family home was effectually inalienable from the family, unless a unanimity of a whole generation should be in folly.
Bitcoin is more liquid than that, but there could be ways to tie down bitcoin, too.
This must be unimaginable to most Americans:
Some americans own property, and some times the property is passed down as community property... frequently those are messy situations.
There were families who held the same home for centuries. I do not speak only of the nobility with their familial castles and palaces: In some parts of Europe, it was not even rare for a family of peasant freeholders or the petite bourgeoisie to hold the same home for ten or twenty generations.
Fair enough.. but we are talking about bitcoin. If you want to buy property with your bitcoin and encumber that property in various ways, there may well be instruments that allow you to achieve your objectives. You may even be able to get an agreement from some life in being to attempt to perpetuate your wishes, perhaps?
I think that most of this broke down during the Twentieth Century, and most of the relevant laws are probably no longer on the books. It’s a shame. Those people had excellent social stability. They were productive and happy. Children did not rebel against their parents, as seems to be expected nowadays (!).
Does bitcoin play any role in this story, at all?
But such things depend on the living.
Do you conjecture that bitcoin helps this kind of situation or makes it worse?
Such “hand from beyond the grave” long, complex chains of devises as prohibited by the Rule Against Perpetuities could not instill in prodigal heirs the character that they lacked; and if they did not lack such character, the terms of long-ago wills would only be an unnecessary burden.
I agree that the law is an ass, sometimes, but if you can get some folks to carry on a tradition and even to perpetuate such traditions, then that surely could work for a decently long time. I don't think anyone is denying that, including yours truly.
The point of my post was that the human element is much more important than the legalities. If you have good kids, you don’t need fancy wills or trusts; but if your kids are
snot-nosed non-appreciative brats
...then no legal instruments can make them behave themselves after you are gone.
Of course, it is up to you to instill those kinds of values.
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.
Not just any others: Their own descendants. I hope that it is not politically incorrect nowadays to point out that people do
and should prefer to benefit their own descendants over arbitrary “others”. If so, then surely, mankind will go extinct. I think that Darwin would agree with me: What creature could long survive, if it did not prefer its own offspring?
You are surely taking this beyond the points that I was making in terms of trying to figure out what the fuck are you going to do in terms of accumulating BTC or to maintain or to liquidate - but seems that you never want to liquidate... and that is your choice, I suppose, if you can get your snot-nosed little descendants to go along with you.
(Of course, people often make bequests to charity, etc.—just as they often give such gifts in their lifetimes. It is a different motive. My point is that a bequest to one’s own posterity is very specific, and not just based on a vague notion of touching someone’s life out there.)
My point is that you can attempt to design as much as you want, and I surely cannot answer the extent to which you can get anyone to follow your preferences after you be die.
I suppose that this ran far afield of the original discussion about investments.
You got that right.
Re-reading the above before posting, I hope that it doesn’t come off as too negative; it’s certainly not intended to be argumentative.
I mean we were mostly talking about liquidation as one of the possible stages that any of us might enter into, and your scenario just comes off as personally specific in terms of how you might want to set up situations in which you are not really striving towards any kind of meaningful liquidation... but still my assertion about ways to have passive income, should still potentially apply in those situations, which would be more of a withdrawal aspect rather than depleting the principle value of whatever bitcoin value you had accumulated, hypothetically.
It seems that whenever I start to think that I am too cynical, I find that to the contrary, I am naïve; and that idea that most investors don’t even include intergenerational wealth in their explicit goals is really shocking to me.
Of course, people do that. I usually suggest that they aim to spend it all. People vary in these regards, and none of the answers are wrong.
Lots of people also end up unintentionally leaving too much wealth to heirs because they die way before they expect or they become too decrepit to actually enjoy their wealth because they defer gratification more than they probably should.
Ultimately each person needs decide how they are going to do this and to structure their own plan around how they are going to do it.
We also seem to lean more towards the accumulation stage and also towards the holding onto your wealth stage rather than seriously getting into aspects of the liquidation phase, even though surely any of those topics can be relevant and good to try to make plans in advance.
Perhaps, to some degree, that may be the “ethnic” in me speaking; in some parts of the world, much of what I have said would be commonplace. But then, as noted above, such thinking used to be commonplace amongst Europeans, too.
I don't think it matters. It is one of the values that you can choose to attempt to put on bitcoin or you can put some other value on bitcoin. If you think that bitcoin hinders you in that regard, then you can buy property and PMs in order to attempt to create material sentimental values and traditions.
No wonder the world is doomed.
Seems to me that bitcoin brings some hope because it allows some possible ways that value is not as easily manipulated by the printing of fiat. Property and gold and other maters have gotten perverted by the printing of money, so maybe bitcoin can help to balance out some of these material value matters more clearly that may also lead to some better abilities to carry out traditional values, too.
Life is cheap, and people have lost all sense of purpose. They are all short-term thinkers:
Not everyone has lost sense of purpose, even if we sometimes like to refer to hookers, lambos and blow.
Life is short!
Of course it is.
Well, it’s an important insight, in and of itself... I’m glad to have this discussion.
Yes.. hopefully .. it does not come out as only pessimism regarding how to potentially fit bitcoin into some of this, even if we might have some differing perspectives regarding whether or how to engage in the various stages of having or liquidating bitcoin.
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