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Author Topic: (SSS) - A Sane and Simple bitcoin Savings plan  (Read 78500 times)
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bluemoon
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December 07, 2013, 04:51:40 PM
 #101

De-raking

If the goal is to maintain 80% of your portfolio in Bitcoin, what do you do when the price falls a lot (for a non-catastrophic reason)? If you had $80,000 in BTC and $20,000 in fiat, then the price halved, you'd now have $40,000 in BTC and it'd only be about 67% of your portfolio. Wouldn't you want to buy back enough BTC to bring the ratio back to 80/20?

Obviously there are limits to how low you'd go with this, but does this have any use or does even any rebalancing on price dips ruin the whole point of the rake/hedge?

Depends how well you want to sleep at night Smiley

Rebalancing is a different strategy and trades the possibility of gains for the possibility of the total loss of your portfolio.

Either way you should have a plan and stick to it: then you can benefit from the positive feeling of decision rather than the weak feeling of indecision.
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December 07, 2013, 06:12:38 PM
 #102

De-raking

If the goal is to maintain 80% of your portfolio in Bitcoin, what do you do when the price falls a lot (for a non-catastrophic reason)? If you had $80,000 in BTC and $20,000 in fiat, then the price halved, you'd now have $40,000 in BTC and it'd only be about 67% of your portfolio. Wouldn't you want to buy back enough BTC to bring the ratio back to 80/20?

Obviously there are limits to how low you'd go with this, but does this have any use or does even any rebalancing on price dips ruin the whole point of the rake/hedge?

Zang: I'm usually a big fan of your posts, but I think your de-racking idea is extremely dangerous.  The whole idea of the rake is to allow you to enjoy the run-up, recover you initial investment, and emotionally detach from the bitcoins you are "letting ride."

I maintained a Zen-like calmness through this crash, I think in large part due to the SSS.  By now I have raked* an amount roughly equal to my initial investment, and for some reason when the price rallies or crashes the dollars gained or lost seem ephemeral.

That being said, since I still earn a wage, I take 10% of the extra money I have from each pay cheque for "savings" and put this into bitcoins.  This amount is now trivial compared to my long-term holdings, but I see it as a low-risk vote of confidence in the bitcoin economy.  


*The best way to rake, if possible, is to purchase things directly with your bitcoins.

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rpietila
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December 07, 2013, 06:21:44 PM
 #103

To make any significant benefit of de-raking, one or both of the following have to happen:

- Big enough rake-% to give access to more funds
- Big enough de-rake-% to give enough leverage in dips.

First of them makes a terrible cut in your EV in the long run.
Second is dangerous in final loss.

My gut tells that you should just keep all rakes and enjoy life.
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December 07, 2013, 06:26:37 PM
 #104

My gut tells that you should just keep all rakes and enjoy life.

+1

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December 07, 2013, 06:37:01 PM
 #105

To make any significant benefit of de-raking, one or both of the following have to happen:

- Big enough rake-% to give access to more funds
- Big enough de-rake-% to give enough leverage in dips.

First of them makes a terrible cut in your EV in the long run.
Second is dangerous in final loss.

My gut tells that you should just keep all rakes and enjoy life.

Yeah, that's probably wisest. Like most investment decisions, it really just requires the will to see it through regardless of how the investment plays out vs the expectations.

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December 07, 2013, 07:06:08 PM
 #106

Fantastic thread .... thank you !!


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December 08, 2013, 02:41:31 AM
 #107

De-raking

If the goal is to maintain 80% of your portfolio in Bitcoin, what do you do when the price falls a lot (for a non-catastrophic reason)? If you had $80,000 in BTC and $20,000 in fiat, then the price halved, you'd now have $40,000 in BTC and it'd only be about 67% of your portfolio. Wouldn't you want to buy back enough BTC to bring the ratio back to 80/20?

Obviously there are limits to how low you'd go with this, but does this have any use or does even any rebalancing on price dips ruin the whole point of the rake/hedge?

Zang: I'm usually a big fan of your posts, but I think your de-racking idea is extremely dangerous.  The whole idea of the rake is to allow you to enjoy the run-up, recover you initial investment, and emotionally detach from the bitcoins you are "letting ride."

I maintained a Zen-like calmness through this crash, I think in large part due to the SSS.  By now I have raked* an amount roughly equal to my initial investment, and for some reason when the price rallies or crashes the dollars gained or lost seem ephemeral.

That being said, since I still earn a wage, I take 10% of the extra money I have from each pay cheque for "savings" and put this into bitcoins.  This amount is now trivial compared to my long-term holdings, but I see it as a low-risk vote of confidence in the bitcoin economy.  


*The best way to rake, if possible, is to purchase things directly with your bitcoins.


Funny, I feel exactly the same way.
I've raked enough to be playing with "found money" now and the emotion is almost completely gone.

The crash in April was gut wrenching to me...too much emotion.
This correction...meh.

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December 08, 2013, 02:44:39 PM
 #108

Funny, I feel exactly the same way.
I've raked enough to be playing with "found money" now and the emotion is almost completely gone.

The crash in April was gut wrenching to me...too much emotion.
This correction...meh.

I never got into the trading concept in both times and I'm just grabbing my popcorn. When you're risk free; you're alright. Wink

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December 09, 2013, 07:32:19 AM
 #109

Thanks for the input, gents.

I was thinking the goal was to maintain 80/20 ratio, but actually it should be to bring your holdings to this ratio on the way up, but not on the way down.

Anything else is getting into trading and should be left to advanced traders, or perhaps with a very small percentage just for fun.
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December 09, 2013, 10:56:45 AM
 #110

Thank you a lot for this piece of advice and for this thread.

For a 1 week bitcoin novice who is trying to get as much information on bitcoin as possible, and who is looking to invest as soon as my accounts get validated, this strategy is heaven sent.
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December 09, 2013, 04:47:11 PM
 #111

Anything else is getting into trading and should be left to advanced traders, or perhaps with a very small percentage just for fun.

I agree as long as, like you said, it is a very small percentage.  I was actually trading during the crash with a very small %.  I lost Sad but still it gave me the sweet comfort of the illusion of control.
I trade with 2% of my holdings as well. Helps relieve the urge to buy/sell something.
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December 13, 2013, 05:16:25 AM
 #112

Excellent thread - thanks!!

I hacked together a quick Google Docs spreadsheet to play with the numbers for my own uses, and I'm in the process of creating a small website with an SSS-style calculator on it.

I'll keep you posted when it's up.
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December 13, 2013, 12:30:42 PM
 #113

Excellent thread - thanks!!

I hacked together a quick Google Docs spreadsheet to play with the numbers for my own uses, and I'm in the process of creating a small website with an SSS-style calculator on it.

I'll keep you posted when it's up.


Did you see this,or is it not SSS-like enough for your tastes? Tongue
http://xzist.org/amazing-bitcoin-retirement-fund-calculator/

You're welcome to re-use the source.

HODLing for the longest time. Skippin fast right around the moon. On a rocketship straight to mars.
Up, up and away with my beautiful, my beautiful Bitcoin~
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December 13, 2013, 02:13:24 PM
 #114

Excellent thread - thanks!!

I hacked together a quick Google Docs spreadsheet to play with the numbers for my own uses, and I'm in the process of creating a small website with an SSS-style calculator on it.

I'll keep you posted when it's up.


Did you see this,or is it not SSS-like enough for your tastes? Tongue
http://xzist.org/amazing-bitcoin-retirement-fund-calculator/

You're welcome to re-use the source.

No, I had not seen that one!  That's what I get for skimming though page 4.  Nice work, I like playing with the delayed gains option.

Anyway, the one I was working on is done now too: http://bitcoinsavingsplan.com/

Comments/criticisms/error checking welcomed  Smiley

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December 13, 2013, 06:21:57 PM
 #115

Excellent thread - thanks!!

I hacked together a quick Google Docs spreadsheet to play with the numbers for my own uses, and I'm in the process of creating a small website with an SSS-style calculator on it.

I'll keep you posted when it's up.


Did you see this,or is it not SSS-like enough for your tastes? Tongue
http://xzist.org/amazing-bitcoin-retirement-fund-calculator/

You're welcome to re-use the source.

No, I had not seen that one!  That's what I get for skimming though page 4.  Nice work, I like playing with the delayed gains option.

Anyway, the one I was working on is done now too: http://bitcoinsavingsplan.com/

Comments/criticisms/error checking welcomed  Smiley



Works for me! I too would like to see a delayed gains option on your inspiring SSS calculator.
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December 13, 2013, 10:46:59 PM
 #116

No, I had not seen that one!  That's what I get for skimming though page 4.  Nice work, I like playing with the delayed gains option.

Anyway, the one I was working on is done now too: http://bitcoinsavingsplan.com/

Comments/criticisms/error checking welcomed  Smiley

oooh, yours is prettier Cheesy

nice

HODLing for the longest time. Skippin fast right around the moon. On a rocketship straight to mars.
Up, up and away with my beautiful, my beautiful Bitcoin~
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December 14, 2013, 03:23:23 PM
 #117

Quote

Comments/criticisms/error checking welcomed  Smiley



Nice thanks for your work! I do miss the fields for "$$ if you bailed now" & "$$ if you had held all" from http://xzist.org/amazing-bitcoin-retirement-fund-calculator.

   
bitrider
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December 14, 2013, 03:45:59 PM
 #118

Excellent thread - thanks!!

I hacked together a quick Google Docs spreadsheet to play with the numbers for my own uses, and I'm in the process of creating a small website with an SSS-style calculator on it.

I'll keep you posted when it's up.


Did you see this,or is it not SSS-like enough for your tastes? Tongue
http://xzist.org/amazing-bitcoin-retirement-fund-calculator/

You're welcome to re-use the source.

No, I had not seen that one!  That's what I get for skimming though page 4.  Nice work, I like playing with the delayed gains option.

Anyway, the one I was working on is done now too: http://bitcoinsavingsplan.com/

Comments/criticisms/error checking welcomed  Smiley



Beautiful work. Thanks for sharing it.

If you are interested in adding an additional feature, I would suggest that the "doubling" and rake be more fully variable. For example I will likely be using a more continuous withdrawal plan such that I sell 1% of BTC at each 10% increase in ATH. I'd ideally like to play with these variables as well. I am able to do that on at least one of the other calculators posted in this thread.
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December 15, 2013, 03:28:01 AM
 #119

No, I had not seen that one!  That's what I get for skimming though page 4.  Nice work, I like playing with the delayed gains option.

Anyway, the one I was working on is done now too: http://bitcoinsavingsplan.com/

Comments/criticisms/error checking welcomed  Smiley

oooh, yours is prettier Cheesy

nice

Nah, it was just bootstrap.js that did most of the skinning on the UI.

Thanks for the suggestions everyone, I'll look into adding those features.
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December 16, 2013, 08:49:01 AM
 #120

Excellent thread - thanks!!

I hacked together a quick Google Docs spreadsheet to play with the numbers for my own uses, and I'm in the process of creating a small website with an SSS-style calculator on it.

I'll keep you posted when it's up.


Did you see this,or is it not SSS-like enough for your tastes? Tongue
http://xzist.org/amazing-bitcoin-retirement-fund-calculator/

You're welcome to re-use the source.

No, I had not seen that one!  That's what I get for skimming though page 4.  Nice work, I like playing with the delayed gains option.

Anyway, the one I was working on is done now too: http://bitcoinsavingsplan.com/

Comments/criticisms/error checking welcomed  Smiley



Thank you! Already bookmarked and going to have some fun with it later!
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