(SSS) - A Sane and Simple bitcoin Savings plan

[jmw74]

Can someone explain to me why the plan is only to sell at every doubling?  Why not continuously (or at whatever the smaller practical interval is)?  Of course, you would use a smaller rake that matches your interval. 

Seems like a continuous rake is better.  Otherwise you're basically betting that *if* bitcoin fails to reach your next rake, it fails just after your last rake.  If it fails just before your next rake, you'll miss your selling opportunity.  I don't think anyone wants to intentionally make those bets, since the first rake point is arbitrary.

[1714121316]

1714121316

[1714121316]

1714121316

[bitrider]

Yes, I'm actually choosing a more frequent draw with a proportionally smaller rake. Also thought I'd bump this thread for folks thinking about planning for the year ahead.

[rpietila]

Of course it is better to sell continuously. The reason why initially a doubling was chosen for selling point is that it is easier to grasp for people who are not proficient in math.

[explorer]

Of course it is better to sell continuously. The reason why initially a doubling was chosen for selling point is that it is easier to grasp for people who are not proficient in math Almost Everybody (granted this forum is better off than the general populace).

 Fixed
Those capable will quickly modify the plan to suit their own needs.

[kdrop22]

Hi Risto,
I just read this thread, and have thoroughly enjoyed what you've written. Your investment plan seems simple and easy to follow. However, I feel raking is only a good strategy for large holders, and cumbersome for small timers. I don't have much btc, so my current plan is to hold for as long as possible, without withdrawing any funds. Perhaps I'll reconsider raking a small percentage if the price stabilises at $10k. However it seems silly to rake a fixed percentage, and then leave those funds tied up in depreciating fiat.

Perhaps another good strategy is to make a list of required purchases. ie new laptop or phone etc....... And only purchase those goods when the btc is high. That way we're stimulating the btc economy, and not removing excessive btc from our investment?

Also, selling btc for fiat, would mean jumping from sound money, to debt-based garbage.

Just my thoughts. Perhaps you could comment on my strategy?

Thanks
And, this thread has made me think, so its me helped alot.

You can start raking only after your BTC investments reach a certain percentage of your portfolio. For example you can defer raking until Bitcoin reaches 50% of your portfolio.

[healthandwealth]

Say at one point down the road one wishes to withdraw a sizable % of Bitcoin for fiat conversion to use in that realm.  What site/exchange would allow the largest bank transfer in one sitting?  Would a sizable transfer have to be made incrementally?

[bitrider]

The exchange situation will look very different a year from now, and unrecognizable within 3 years. Massive movements of value to and from BTC will likely be happening with some regularity (by traders and investors) similar to current forex markets and so I expect this will not be a problem. I hope.

[Mike@Coinswag]

Just jumped back on the train (or train to come). Time to start the SSS plan. Here's what I am doing, please scrutinize it so I have all the information needed to make an informed decision.

5 BTC > 4 in cold storage, 1 in hot for BTC trading (only selling at a premium with an immediate repurchase).

Additionally, I am printing out paper wallets (laminated) for each cash out value and will be investing a proportion of each cash out value into something else for diversification (real estate, commodities, etc.)

https://i.imgur.com/Z6VQ23v.png


Any suggestions?

[paulsonnumismatics]

Nice calculation. Im terrible at spreadsheets, but i just made another experiment. I took the jump that BTC made from $5 to $1000 and projected by about 90, which puts us on the average price lately and to an hipotetical mark of $87,500 USD per BTC in a 'hope-not-too-distant' future   Also, i toyed with the factors. Instead selling when price doubles, i take a more defensive stance acting when price gets a 50% increase. And also defensive, when the system tells me to sell, i sell not a 10% stake, but a 15%. Lets say im not a complete convert :-)
The results are nice though. I breakeven sometime between BTC reaching about $1800. When BTC breaks the 10K USD mark, and all my friends start telling me "hey, you are rich now or what?" i will not, but i will have netted about $10K from the investment and i will keep a healthy 1,35 BTC. In the boom scenario, with BTC at $87K each, i have $41000 in my pocket and still have more than that in BTC, just in case we literally go to the moon. I didnt advance further because i firmly believe that not in 1 million, but in anything between $50,000/$100,000 per BTC, the world will have changed a lot, and one hamburger probably will cost $50. We will see. Hope this can be useful to someone.



   Factor   1,50   Factor 15%               
   BTC   Price           Remaining BTC   BTC Sold         $ Value sold            $ sold totalBTC     $ Remaining Value   All Holdings BTC+USD
   5   450,00   5,00000000                   0                 0                               0                      2250                   2250
            675,00   4,25000000         0,75000000            $506,25                 $337,50              2868,75                   3206,25
      1012,50   3,61250000         0,63750000            $645,47                  $982,97              3657,65625           4640,625
      1518,75   3,07062500         0,54187500           $822,97                 $1.805,94              4663,511719           6469,453125
      2278,13   2,61003125         0,46059375          $1.049,29                 $2.855,23              5945,977441           8801,208984
      3417,19   2,21852656         0,39150469          $1.337,84                 $4.193,08              7581,121238          11774,19771
      5125,78   1,88574758         0,33277898          $1.705,75                 $5.898,83              9665,929578          15564,75832
      7688,67   1,60288544         0,28286214          $2.174,83                 $8.073,66             12324,06021          20397,72311
      11533,01   1,36245263         0,24043282          $2.772,91                $10.846,58             15713,17677          26559,75322
      17299,51   1,15808473         0,20436789          $3.535,46                $14.382,04             20034,30038          34416,3416
      25949,27   0,98437202         0,17371271          $4.507,72                $18.889,76             25543,73299          44433,4918
      38923,90   0,83671622       0,14765580          $5.747,34                $24.637,10             32568,25956          57205,35829
      58385,85   0,71120879         0,12550743          $7.327,86                $31.964,96             41524,53094          73489,48807
      87578,78   0,60452747         0,10668132          $9.343,02                $41.307,98             52943,77695          94251,75354


Raising the 1,50 raise of BTC to 2 or lowering the selling factor from 15% to 10% outputs really nice numbers to dream with :-)
Cheers

[softron]

Great guide

[softron]

Great guide

[sgk]

Glad I came across this guide, time to go SSS!
Since BTC is now at very low, I plan to buy some and work out the plan now. Thanks to OP!

[rpietila]

If you buy now, it is quite likely you will get to dividend phase this year

[paulsonnumismatics]

If you buy now, it is quite likely you will get to dividend phase this year

rpietila, any comments on my table? Do you think its unproductive in terms of capital allocation/risk reward the numbers i used? Also, about alex post in page 1 if i remember well, are you agree that also the inflationary forces on USD vs. the BTC theoretical deflationary/stable environment will help to shape the equation even better?
Thanks for your amazing post! You are responsible for half an hour lost toying with excel 

[rpietila]

If you buy now, it is quite likely you will get to dividend phase this year

rpietila, any comments on my table? Do you think its unproductive in terms of capital allocation/risk reward the numbers i used? Also, about alex post in page 1 if i remember well, are you agree that also the inflationary forces on USD vs. the BTC theoretical deflationary/stable environment will help to shape the equation even better?
Thanks for your amazing post! You are responsible for half an hour lost toying with excel 

I think you should conserve the bitcoins by skipping the first few sales, only start selling at $2,000 would make it better imo.

Buy now as they are cheap.

[durrrr]

Great post and thank you. Although I don't understand do you think bitcoin is still profitable for the people coming into the game now ?

[canth]

Great post and thank you. Although I don't understand do you think bitcoin is still profitable for the people coming into the game now ?

Bitcoin market cap: $5-6 billion
Gold: $6-7 trillion
USD: M2 money supply - $ 10 trillion
Offshore wealth: $20-30 trillion

Either bitcoin becomes useful to lots of people and ends up being worth more than today or it fails miserably. Yes, there's plenty of room for growth for those that get in now, in 2015 and probably 2016 & 2017.

[drakoin]

Just to make sure, I understand the concept:

Buy.

When 1st doubling happens, sell 10% of what I have.
When 2nd doubling happens, sell 10% of what I have.
When 3rd doubling happens, sell 10% of what I have.
...

right?

And it should apply to anything that seems to keep on growing in price.

[rpietila]

Just to make sure, I understand the concept:

Buy.

When 1st doubling happens, sell 10% of what I have.
When 2nd doubling happens, sell 10% of what I have.
When 3rd doubling happens, sell 10% of what I have.
...

right?

And it should apply to anything that seems to keep on growing in price.

The rationale is that Bitcoin seems to have much more upside (100,000s of %) than downside (max 100%), but we do not know the probabilities. It has gone up so far, but if it fails, we only know from the hindsight. Therefore a risk-balancing way is to buy in now with whatever amount you want to risk, wait for price to go up, and sell gradually after price has increased. This way both the cash and bitcoin balance keep going up as long as bitcoin price goes up.

In my opinion you should apply this method only to things that can go really high. Most things cannot

[dogechode]

Back to bitcoin...

The problem I see here is that, while a great savings/investment plan, it seems to be assuming that BTC will just keep going up indefinitely at some radical rate of growth. What we have seen over the last few months should shed some light on how realistic that is. There isn't really a precedent for assuming that Bitcoin will continue to rocket up in value and double many times within an average person's life span.

I'm not anti-bitcoin growth, I'm holding some and certainly hope it will rise. But you need to be careful when everyone starts urging you to BUY! BUY! BUY! It may well be that they are trying to sell.