How many Bitcoins needed to retire in 5-6 years?

[vuduchyld]

2014 + 6 = 2020. If 10x/year trend continues, by that time the bitcoin will complete it's exponential phase. It'll reach or almost reach it's limit and it's total purchasing parity will slowly grow with the growth of world GDP (which is about 7% annually, on average). The number of bitcoins will grow with rate about of 4%, and after the halving of 2021, - 2% per year.

So, your bitcoin's capital purchasing parity will grow, on average, 7%-2% = 5% per year. For this 5% worth 30K$, your whole bitcoin capital must be worth (in today's purchasing parity) 600K$.

How much will bitcoin cost in 6 years? Optimistic scenarios vary from 100K$ to 1M$ (pessimistic - zero  ). Therefore to retire in 6 years time with equvalent of today's 30K$ annuall income you will need capital of 0.6 - 6 btc.

Another GWP reference in the same thread?  BTC is not a measure of productivity or even economic activity.  It correlates far more closely with money supply, specifically M2. 

If GWP increases 7% and velocity increases 7% (and all BTC are mined), you should only see minor fluctuations.  If mining continues, you'd see mild degradation in value.

[bigasic]

Most people think that you need 2 million to retire. I say you only need 500k-1m if you invest it right and get between 5 and 10 percent, (and if soc. security is still around) and you've paid off your house, you should be okay. Bitcoin could be worth 500k or it could be worth nothing, my money is on in the low 6 figure range at its peak.

[Mobius]

Assume average North American, requiring $30,000 per year of today's purchasing power, no other debt.

This is by no means average. $30k is well under the average income that most people in the US have. Unfortunately most people also have debt so this would also not be "average"

You need to add how old you are. It would take a lot more money to retire if you are 30 then if you are 70 as your money would need to last a lot longer. If you want your money to last forever then you would need enough to purchase an immediate annuity that pays "forever"; I would say that the long term expected rate of return for conservative investments would be no more then 5% so you would need $6 million to get $30k every year forever, however this would not be in today's dollars but rather a fixed amount.

You would need to say what you expect the long term inflation rate would be in order to accurately calculate how much you would need to keep your draws indexed to inflation. 

[Wary]

Assume average North American, requiring $30,000 per year of today's purchasing power, no other debt.

This is by no means average. $30k is well under the average income that most people in the US have. Unfortunately most people also have debt so this would also not be "average"

You need to add how old you are. It would take a lot more money to retire if you are 30 then if you are 70 as your money would need to last a lot longer. If you want your money to last forever then you would need enough to purchase an immediate annuity that pays "forever"; I would say that the long term expected rate of return for conservative investments would be no more then 5% so you would need $6 million $600K to get $30k every year forever, however this would not be in today's dollars but rather a fixed amount.

You would need to say what you expect the long term inflation rate would be in order to accurately calculate how much you would need to keep your draws indexed to inflation. 

FTFY

[mybitcoincharts]

Assume average North American, requiring $30,000 per year of today's purchasing power, no other debt.

This is by no means average. $30k is well under the average income that most people in the US have.

The median per capita income in the US ist actually $28k. (source: http://quickfacts.census.gov/qfd/states/00000.html). That includes children, though. On the other hand you can substract opportunity costs of having a job, like commuting and business clothing etc. So $30k should be quite fine.

[TwinWinNerD]

Assume average North American, requiring $30,000 per year of today's purchasing power, no other debt.

This is by no means average. $30k is well under the average income that most people in the US have.

The median per capita income in the US ist actually $28k. (source: http://quickfacts.census.gov/qfd/states/00000.html). That includes children, though. On the other hand you can substract opportunity costs of having a job, like commuting and business clothing etc. So $30k should be quite fine.

Older people need more health care, is that included in those calculations?

[mybitcoincharts]

Assume average North American, requiring $30,000 per year of today's purchasing power, no other debt.

This is by no means average. $30k is well under the average income that most people in the US have.

The median per capita income in the US ist actually $28k. (source: http://quickfacts.census.gov/qfd/states/00000.html). That includes children, though. On the other hand you can substract opportunity costs of having a job, like commuting and business clothing etc. So $30k should be quite fine.

Older people need more health care, is that included in those calculations?

No idea (not from the US). Usually income in a census is gross income, though.

[TwinWinNerD]

Assume average North American, requiring $30,000 per year of today's purchasing power, no other debt.

This is by no means average. $30k is well under the average income that most people in the US have.

The median per capita income in the US ist actually $28k. (source: http://quickfacts.census.gov/qfd/states/00000.html). That includes children, though. On the other hand you can substract opportunity costs of having a job, like commuting and business clothing etc. So $30k should be quite fine.

Older people need more health care, is that included in those calculations?

No idea (not from the US). Usually income in a census is gross income, though.

Was just wondering, because usually the older people have higher average incomes but also higher costs, especially health related.

[djangocoin]

What if gene therapy & nanotechnology allows you to live for hundreds of years or infinite? how much btc then?

[TwinWinNerD]

What if gene therapy & nanotechnology allows you to live for hundreds of years or infinite? how much btc then?

This is called perpetuity and a common concept in finance. Basically depending on the interest rate perpetuity isn't much higher than paying an amount for 30-50 years.

e.g.: If you want to pay 1000€ forever @ 5% market interest rate ---> 1000/0.05 = 20000€

So you see, you don't need much capital to pay out a rate for ever!

[cbeast]

Here's the answer to all these "what if?" questions.

https://www.youtube.com/watch?v=AY-2einPmd4

[JayJuanGee]

Assume average North American, requiring $30,000 per year of today's purchasing power, no other debt.

This is by no means average. $30k is well under the average income that most people in the US have. Unfortunately most people also have debt so this would also not be "average"

You need to add how old you are. It would take a lot more money to retire if you are 30 then if you are 70 as your money would need to last a lot longer. If you want your money to last forever then you would need enough to purchase an immediate annuity that pays "forever"; I would say that the long term expected rate of return for conservative investments would be no more then 5% so you would need $6 million $600K to get $30k every year forever, however this would not be in today's dollars but rather a fixed amount.

You would need to say what you expect the long term inflation rate would be in order to accurately calculate how much you would need to keep your draws indexed to inflation. 

FTFY

Thanks for that correction Wary......   I do think that if a person wants to protect for lower purchasing power of the dollar in the coming years, then will need to add an extra amount upon the withdrawal amount - such as 3-5% per year (let's say 4% for the purpose of argument).  Therefore, in 6 years, would have needed 4% extra per year, just to maintain $30k purchasing power in today's dollars. 

Assuming a 4% inflation rate:

Savings year 1 (2015) = $30k = $31,200
Savings year 2 (2016) = $30k = $32,448
Savings year 3 (2017)  = $30k = $33,746
Savings year 4 (2018) = $30k = $35,906
Savings year 5 (2019) = $30k = $36,500
Savings year 6 (2020) = $30k = $37,959

Continuing to assume a 4% inflation rate:

Withdrawal year 1 (2021) = $30k = $39,478
Withdrawal year 2 (2022) = $30k = $41,057
Withdrawal year 3 (2023) = $30k = $42,699
Withdrawal year 4 (2024) = $30k = $44,407
Withdrawal year 5 (2025) = $30k = $46,184
Withdrawal year 6 (2026) = $30k = $48,031

Maybe we can assume that BTC will appreciate in value, greater than the amount that the dollar depreciates in value; however, by 2021, we would need $39,478 per year just to start out... which would imply that in 2020, we would need approximately a $789,560 dollar equivalent value in our BTC portfolio (assuming a 5% withdrawal rate) to accomplish an adequate $30k in today's dollars withdrawal rate per annual.   

Of course, if we have a known or anticipated period of time that we know that we are going to live or that we are going to be withdrawing from those funds (such as 10 years or 20 years), then we can draw into the principle during that period which would reduce the amount that we would need to have accumulated in order to sustain the same level of income off of the accumulated funds.   

Difficult, but NOT impossible, to project these kinds of things... We may be wrong about how many years we actually live, but we could still project a number of years that we would like to be able to anticipate drawing upon the accumulated funds.... and in this regard, in my thinking it is frequently better to overproject rather than to underproject... so we would have a bit of a cushion, just in case all the variables to NOT play out, as we had projected.

[chunglam]

To OP question, 800-1000BTC and learn a few tricks from Jacob of ERE(http://earlyretirementextreme.com/) then you can retire

[SquallLeonhart]

Only need like 50BTC if you don't mine cooking yourself and don't overspend..

[lucaspm98]

What if gene therapy & nanotechnology allows you to live for hundreds of years or infinite? how much btc then?

And those treatments and methods will cost more money as well!

But really, the chances of that actually happening anytime soon are very slim.

[chunglam]

Only need like 50BTC if you don't mine cooking yourself and don't overspend..

True, if you believe Bitcoin can appreciate 10x in near term. I assume Bitcoin appreciate 10% yearly, 5% withdrawal rate and 5% inflation rate

[money420weed]

I think the problem with the OP's question is that it is unlikely that the price of bitcoin will be stable over the next 6 years, although probably will be more stable then it is now. The same applies with adoption of bitcoin.

Even if you could calculate the future inflation rate, and how long you will live, you can likely not calculate the bitcoin price.

There is also the question of is the OP going to convert his bitoin into fiat when he retires, or will he convert it as he needs the fiat, or will he spend his bitcoin on goods and services?

[sed]

In your opinion how many Bitcoins would someone need today in order to retire by August 03 2019 or Aug 03 2020?

How old are you? Male/female? Any congenital diseases? Smoker/non-smoker?

Any children? Plan to have children? Have any fiat savings?

Anyway, assume 500,000 $usd per BTC by 2020 and do the math yourself. Less than 0.1 BTC per year * number of years you expect to live.

Ouch, it's so depressing trying to decide how many years you expect to live.  Terrible.

[JayJuanGee]

What if gene therapy & nanotechnology allows you to live for hundreds of years or infinite? how much btc then?

And those treatments and methods will cost more money as well!

But really, the chances of that actually happening anytime soon are very slim.

If they happen, then you devise a plan that provides an income off of the principle, without eating into the principle.  Accordingly, the $30,000 per year would account for the annual cost of living increase (about 4%), the appreciation in the asset (at least 5%) and the withdrawal rate (5%).  Thus the accounting that I made above, that starts with the equivalent value of a principle of about $790K value....

The next question would be how many BTC would it take to achieve that approximately $790k level of value?  If we estimate that BTC values will be anywhere between $2k and $50k per BTC in 2020, then that would mean anywhere between 15.8 BTC and 395 BTC would be sufficient to achieve the desired outcome.   There remain quite a few unknowns and estimates; however, and if you are really unsure, then strive towards accumulating up to 395BTC would be helpful.. but if you are only able to accumulate 15.8BTC, you may get lucky and have enough BTC to serve your purposes.. I would aim towards the high end rather than the low end.. and then just see what happens in 5-6 years...  

This kind of planning should all go without saying that any such investor should continue to monitor BTC values and the market and world events other possible options (including crypto-currencies) and if it appears other options are appearing to be better than BTC or some other diversification of assets seems to be more likely to achieve the objective, then the money should be invested into those assets, rather than BTC... However, at this time, BTC seems to be among the best games in town in order to realistically aspire to such above-described goals:)

[JayJuanGee]

Only need like 50BTC if you don't mine cooking yourself and don't overspend..

True, if you believe Bitcoin can appreciate 10x in near term. I assume Bitcoin appreciate 10% yearly, 5% withdrawal rate and 5% inflation rate

I think that those numbers are fairly reasonable...   Yet, you may get lucky (as has happened in the past) and achieve a higher than 10% appreciation rate.