Warning to bitcoin traders about taxes: capital gains or income - may depend on your trading patterns!
Most bitcoiners have been playing on the exchanges, some are trying to arbitrage, some reselling on localbitcoins at a premium. Educate yourselves about different tax treatment of capital gains versus income. For example, in Canada all of the income is taxed, whereas only 50% of capital gains are subject to tax. Now, for the interesting part: it seems that, in Canada, the tax authority does not provide any objective criteria as to categorizing your gains one way or another. It depends on how often you trade, what kinds of assets (speculative?), whether you also work elsewhere, etc. You decide if you simply invested, or are more of a "day trader". Then they decide whether they agree with you. If not, you decide whether you are going to challenge their decission. It can get ugly. If your tax return gets audited, you may have to look into your complete trading history at all exchanges, dividends, even spending coins directly. Bitcoin flow is easy to follow. If you are planning to comply, get your books in order. I have discovered, to my horror, that I lost track of a huge portion of my coins due to discarded paper wallets, forgotten donations, and purchases. It was funny money, so I never kept tabs carefully. Now things got serious, and it's a mess.
Nine Countries That Don’t Tax Bitcoin Gains- time to move
Tax liability is a major source of concern for anyone invested in Bitcoin and other digital assets. In sum, some have described it as nothing short of a nightmare. But while some countries are putting pressure on investors and levying taxes on income and capital gains from Bitcoin transactions, many are taking a different approach—often with the aim of promoting better adoption and innovation within the crypto industry. They’ve implemented friendlier legislation, and allow investors to buy, sell, or hold digital assets with no tax liability. Here’s our list of the nine most crypto-friendly tax jurisdictions. ———————
Belarus is taking an experimental approach to cryptocurrencies. In March 2018, a new law legalized cryptocurrency activities in the East European state, exempting individuals and businesses involved in them from taxes until 2023 (when it will come up for review.) Under the law, mining and investing in cryptocurrencies are deemed personal investments, and so exempt from income tax and capital gains. The liberal laws aim to boost the development of a digital economy, and technological innovation. The country was recently ranked third in Eastern Europe and 19th globally in levels of P2P crypto trading.
Germany offers a unique take on taxing digital currencies such as Bitcoin. Unlike most other states, Europe’s biggest economy regards Bitcoin as private money, as opposed to a currency, commodity, or stock. For German residents, any cryptocurrency held for over a year is tax-exempt, regardless of the amount. If the assets are held for less than a year, capital gains tax doesn’t accrue on a sale, as long as the amount does not exceed 600 euros ($692). However, for businesses it’s a different matter; a startup incorporated in Germany still needs to pay corporate income taxes on cryptocurrency gains, just as it would with any other asset.
Hong Kong 🇭🇰
Hong Kong’s tax legislation on cryptocurrencies is a broad brush affair, even after new guidance was issued earlier this year. Essentially, whether cryptocurrencies are taxed or not depends on their use, according to Henri Arslanian, a global crypto leader at PwC. “If digital assets are bought for long-term investment purposes, any profits from disposal would not be chargeable to profits tax,” he wrote in March when the directive was introduced. But he added that this doesn’t apply to corporations—their Hong-Kong sourced profits from cryptocurrency business activities are taxable.
In Malaysia, cryptocurrency transactions are currently tax-free, and cryptocurrencies don’t qualify for capital gains tax, because digital currencies are not considered assets or legal tender by the authorities. But the law is currently fluid; it only applies to individual taxpayers, and businesses involved in cryptocurrency are subject to Malaysian income tax. And things may soon change. Mohamad Fauzi Saat, director of Malaysia’s tax department said in 2018 that Malaysia was committed to working towards issuing comprehensive guidelines on the tax treatment of cryptocurrency by the end of 2020.
The government of the so-called “Blockchain Island” recognizes Bitcoin “as a unit of account, medium of exchange, or a store of value.” Malta doesn’t apply capital gains tax to long-held digital currencies like Bitcoin, but crypto trades are considered similar to day trading in stocks or shares, and attract business income tax at the rate of 35%. However, this can be mitigated to between five percent and zero, through “structuring options” available under the Maltese system. Malta’s fiscal guidelines, published in 2018, also discriminate between Bitcoin and so-called “financial tokens,” equivalent to dividends, interest or premiums. The latter are treated as income and taxed at the applicable rate.
Portugal has one of the most crypto-friendly tax regimes in the world. Proceeds from the sale of cryptocurrencies by individuals have been tax-exempt since 2018, and cryptocurrency trading is not considered investment income (which is normally subject to a 28% tax rate.) However, businesses that accept digital currencies as payment for goods and services are liable to income tax.
Capital gains tax does not exist in Singapore, so neither individuals nor corporations holding cryptocurrency are liable. But companies based in Singapore are liable to income tax, if their core business is cryptocurrency trading, or if they accept cryptocurrency as payment. The authorities consider payment tokens such as Bitcoin to be “intangible property” rather than legal tender, and payment in the cryptocurrency constitutes a “barter trade” where the goods and services are taxed, but not the payment token itself.
Slovenia is another country that treats individuals and businesses separately under its cryptocurrency tax system. No capital gains tax is levied on individuals when they sell Bitcoin, and gains are not considered income. However, companies that receive payment in cryptocurrencies, or through mining, are required to pay tax at the corporate rate. Notably, the Mediterranean country doesn’t permit business operations in cryptocurrency alone (such as only accepting Bitcoin as payment.)
It’s no surprise that Switzerland, home to the innovation hub known as “Crypto Valley”, has one of the most forward-thinking tax policies too. Cryptocurrency profits made by a qualified individual through investing and trading are treated as tax-exempt capital gains. For the complete link to the written article - click here Edit: hey thanks for the award, that was so awesome. Have a nice day everyone.
Rough days transcript: the best is yet to come, kill the old system, BUIDL time, we live in a DeFi bubble, power to the edges, voting challenge and rembeber you're in control kids!
Hi everybody, Charles Hoskinson here, live from warm sunny Colorado! Always warm, always sunny, sometimes Colorado. I got my Massey Ferguson hat on. Take that off, see, my hair's all messed up. One of these days and we'll lose all that hair. It's a rough day today and that markets are terrible down 20 percent for most people and every now and then I talk about price. I rarely do but in general let's talk about the macro. You know crypto is a unique phenomenon. It's a unique thing and these are crazy times. I remember just a few months back when coronavirus first came out and we saw basically everything just bottom out everybody went crazy. They went to cash all asset classes. Just went to hell in a handbasket and I did a video and I said guys our best days are ahead of us as an ecosystem and as an industry and what happened everything got better over time. People started getting more optimistic. You know the reality is that we are seeing an old industry die right now, the legacy financial system. I just read Biden's tax plan. He wants to treat capital gains as ordinary income and put another 12 and a half percent on top of that. All this stuff and at the end of the day all these new taxes amount to a trillion or so extra dollars I think per year in income... Takes six years to the make back what they printed out of thin air for coronavirus and are willing to print again which begs the question why do we even pay taxes anymore if we can just print money out of thin air? We have a whole movement of people: the AOC crowd wake up every day and they say modern monetary theory, the actual supply, doesn't matter. All that matters is how much can we print and get away with it. This is where we're at as an economy right now and globally speaking a lot of other nations agree with this. So, given that the whole world, the leadership of the world, talking about negative interest rates, they're talking about predatory financial systems hyperinflation. Just print money, modern monetary theory, just print as much cash as you want and we look to the cryptocurrency industry, and god, we got a lot of problems... I think this (week's market) collapse is probably because one of the most prominent exchanges in South Korea got hit. They got shut down by the South Korean government and they at one time were responsible for a big part of the Kimchi premium and you know what? Korean government might shut down a few more Korean exchanges and usually the market based these things in. We got crazy yield farming weird stuff going on in the DeFi space. All these other local events and their blips they don't really matter that much just like corona in the long term won't matter too much in terms of the markets. What matters is the trend and where are we going. I had a meeting with some people this morning and we talked about revolutionizing the healthcare industry and getting things better in terms of supply chains. I had another meeting with a soon-to-be former Wyoming state representative about how we're going to get governments to adopt blockchain technology. I talk every day to governors, heads of state, congressmen, senators, mayors. Some cities, sometimes very large cities, with millions of people and they all say the same thing. We need help, we need solutions, we're damn tired of the way that the old system is running. You know what? if we don't solve it a lot of people are going to get hurt or continue to be hurt. The common theme that we all have is no one's happy. Look at the black-lives-matter protests, taking their philosophy of the organization aside, the rank and file people are there not because they love Marxism. They're there because they're unhappy with the way society is and why shouldn't they be? When my grandfather, got his first job, on my mom's side, out of the Korean war, he was a lineman and he made enough money from that job to have seven kids and have his wife stay at home. No college degree, fresh out of high school, fresh out of marine demolitions and a lineman. Five boys and two girls and he could take care of that family and save money every month. Have a car and a house and that was his standard of living. How many people in the middle class today in the United States or Europe for that matter have the ability on a single person's salary to raise seven children and have the wife or the husband stay at home? How many people, not many, why? because our monetary system has failed us. The inflationary policy has created a situation where the Jeff Bezos can have 200 billion dollars and make windfall profits every year regardless of how bad the economy is. The everyday people they don't get a pay increase, so in a lot of cases they don't get to keep their job and their money deteriorates in value a lot more than three percent per year. Our industry has principles in that we worship the math and the protocols and the stable monetary policy. These types of things, and as corrupt as some of the exchanges can be, and some of the bad actors are, all movements suffer from these warts, and they're finite and temporary. You run out of them. At some point self-regulation kicks in or standards kick in and these bad actors flush out and what's left behind is a crucible that contains the truth of the matter which is: we're going to win as an industry. There's just no doubt in my mind. You have bad days in the market, you have damn good days in the market, you get addicted to the good ones and you hate the bad ones but at the end of the day it's only going in one direction which is crypto is going to eat the world: every voting system, every property registration system, every monetary system, the next 25 to 50 years is going to be running on the tech we build and others build and running with the principles of power to the edges. This is the great challenge of our time. To do it in a way that it's fair, transparent, open and doesn't allow a government to co-opt it. It's gonna be a lot of fights here. The least of our concerns and matters are a red day and every now and then I like making these videos to remind people why I'm here and why you should be here too. As toxic as the trolls could be and these other people can be, none of them really matter. Markets don't really matter, what matters are the principles and the purpose behind what we do and you have to ask yourself are you happy with the way that society is? Are you happy with the money in your pocket? Are you happy with the political leadership representing your nations? Are you happy with your future and do you honestly believe if we keep doing the things that we did and continue to do that the future is going to be better or do you think it's going to be worse or stagnant? I think too many people have woken up and they realize that if we continue doing the things that we do the future is going to be a bad place and they don't want that to happen. We're voting with our wallets, we're voting with our feet and we as a collective industry are waking up and figuring out how to build something better and there's some good days and bad days along the way. Today's a bad one but there are going to be good days tomorrow just like I told you back when corona made everything go into free fall and I told you before and I warned you about with ICO mania. We're in a DeFi bubble right now, there's no doubt in my mind about that. I saw it in 2017 with ICO mania. I see it here and there's probably going to be worse days ahead in that respect but the trend is always the same and never forget that and never forget that real people are actually adopting these systems and using them. Every day we see more and more and every day that movement grows and what's so humbling is that I know a lot of you are here with me. It used to be pretty lonely space to be in a few years back. You know, the conferences, they didn't have many people. My first bitcoin meetup group in 2011 in Colorado is at the gypsy house cafe I think, in Denver. I registered for the event I showed up. Two people registered myself and another guy and the other guy didn't show up so I had coffee with myself. Compare that with the Shelley summit that we had in July of 2020. 10 000 attendees, 10 000 from all across the world, compare that to where we are at today just nine years later pretty amazing if you think about how fast things have grown and how many fertile beautiful ideas exist in this industry and what this industry is doing for the world as a whole. That is why we're going to win because at the end of day who can argue against freedom? Who can argue against liberty? Who can argue against putting people in control? The only way you can is when you believe people are stupid, people are evil, people are incapable and I suppose that's a philosophical difference between those who currently lead and the people who want to replace them. The people in charge right now of the world, the big banks, the fortune 500 companies, the media, Hollywood... These things, they're very cynical, people who believe in the worst in us they look at everyday people who sustain and disgust and say these people if left to their own devices will be chaos. These people, if left to govern themselves will burn everything to the ground and destroy everything and every single time I have ever seen a bad event happen what the news doesn't show you and what those people don't talk about is how we come together and help each other out. Someone gets injured in the streets more often than not people show up and help them, people need a helping hand. Someone always shows up more often than not and this is no different. I don't believe the political process is effective anymore in any modern democracy. They've all been co-opted, perhaps they always were but what I do believe is that we can come together and change things economically which is what we're doing. It's messy building our own money, it is messy building our own industry, it is messy. We make a lot of mistakes along the way. We lose a lot along the way, we collect some scars too while we're at it but progress every year keeps being made. The technology every year keeps getting better. Today, right here right now, provably secure proof of stake protocols are in circulation. They were a fantasy five years ago now they're a fact of life today. Right here right now snarks have evolved by an order of magnitude in every category from validation time to efficiency to proof size in all favorable ways which opens up all kinds of new applications and scalability and privacy. Today, right here right now, layer 2 protocols are more advanced than they have ever been in our industry's history giving us the ability to build payment systems that scale to billions of people. Today, right here right now, we are seeing massive innovations in governance and a fertile environment for things like approval voting, threshold voting, preference voting, quadratic voting, that will enable us to build all kinds of new treasuries and governance systems that eventually will scale to nation states. As the politicians of today argue whether the post office can properly count paper ballots that people mail we are building voting systems with state-of-the-art cryptography living on phones where you can vote. It's just a tap of a button and enjoy more security than we have ever imagined before. That is the future this movement, is enabling humanity money flowing at the speed of thought and the speed of thought making new money. How can you compete with that? You can't unless you bring people down with cynicism and disdain and ultimately what competing vision do they offer? That you all should be in chains? That we should just be wage slaves? We should just accept that every year our money deteriorates in value? That we should just accept that the rich will get richer the poor get poorer? Every now and then they throw us table scraps and when we get real angry they usurp the movements and then install their own leadership to basically take those movements from us as we've seen so many times before and we will see again. I'm sorry that's not a road I want to walk down and I'm willing to ride rocky waters, crazy markets, crazy people in unlimited FUD and trolling but I will never apologize for believing in the best in people and I will never apologize for believing that if only we give everyone around us the tools to save themselves and society that they can do it. They don't need great leaders and charisma. No one needs someone to tell them what to do. We all know what to do. We all know how to make the world a better place. We just have to be trusted enough to do it ourselves. You know what for the first time ever we did with bitcoin and then we did it again with ethereum and now we're doing it again with Cardano and we as a movement will continue to do it. I believe our best days are ahead of us and every day I wake up and there's more people marching with me in that respect and one day it'll be millions and one day it'll be billions and one day all those cynics will be gone, replaced with optimists, who once again believe that tomorrow is going to be better than today and that we're going to leave the world just a little bit better than the way we found it. So, every now and then on a tough day I like making a little message and letting you guys all know it's going to be better and you know what? it will be. Just have to have faith that it will be. So, hold the line, hold strong and have faith in each other and go do something, build something, start something. Got a lot of podcasts on the way, a lot of things coming down the pipe. For the dc-fund, a lot of opportunities to actually innovate. Multi assets are coming, soon Plutus is coming, soon guys are going to be able to build a lot. Start thinking today what's the business plan? What would you like to change, small or large. You don't complain about voting. Change voting. Your own organization, maybe you belong to a club, do a blockchain-based voting system. Maybe you have some political influence? Have a primary, democrat or republican, or your local primary or country for selecting candidates done with blockchain-based voting. Maybe you want to build a new financial product? Think about it, figure it out. There's so much there, it's all there, it's ready to go, it's for you to take and build and innovate with. Every day I wake up I try to make the platforms better. I try to push the technology a little further along. I try to hire great people and bring them into our industry. Cardano brought the Haskell industry into the cryptocurrency space. Cardano brought a lot of academics who had never thought about cryptocurrencies into the cryptocurrency space and we made our problems their problems and as a consequence they started solving them in ways we could have never done before. Most importantly Cardano brought a lot of you into the cryptocurrency space and you never thought you'd have this level of control and freedom over the fabric of society in the direction of the human race. Don't let that slip through your fingers. Figure out what you want to do with that super power. Might be small, might be big. I dreamed big, you can dream big too, even if you want to just dream small. Every person counts, every action counts up to the hill. Y'all matter to me and to each other and we're all in this together, never forget that! So, hard day, rough day, tomorrow will be a better one. The day after will even be better. See you guys soon, take care... Source: https://www.youtube.com/watch?v=qM192wAV4LA On Kimchi premium: https://www.investopedia.com/terms/k/kimchi-premium.asp EDIT: title typo -> rembeber -> remember :)
Taxation on investing in your 1 year held bitcoins in Germany
Hello all, as many of you might know about the german tax low of holding your bitcoins for at least one year for the capital gain to be tax exempted. My question is: Does this include investing these bitcoins after one year or lending them for an interest after holding period will also exempt the interest from being taxed? Or this would on contrary extend the holding period to 10 years considering the bitcoins is becoming one source of income!? Example, I have 1 bitcoin is September 2019 and kept it for on year. In say october 2020 I started to lend it for a monthly interest. Not selling it, just lending for whatsoever activity the loaner is performing on my lended bitcoins and sharing a monthly interest. Then should this profit I am getting be taxed? Would appreciate sharing your experience on this. Regards.
Monero Community Workgroup is preparing for the large growth ahead
Diego (u/rehrar), Doug (u/needmoney90), and Justin (u/SamsungGalaxayPlayer) would like to share some exciting news regarding the Monero Community Workgroup (MCW). The Monero community is growing, and so is our support and group of volunteers. The TL;DR is that you can expect some cool things as we grow.
Some MCW History
The MCW initially began as the Monero Marketing Workgroup in March 2017. Diego was interested in helping grow the Monero community, so he contacted Justin and set up the MoneroMarketing subreddit. At the time, the idea of a Monero marketing initiative shocked many in the community, who greatly appreciated Monero's general distance from the marketing efforts by many ICOs and scams around that time. The Monero Marketing Workgroup focused mostly on preparing educational materials and getting people involved to work on Monero-related initiatives. Shortly after the workgroup began, it transitioned into an area that needed more love: community organization and communication. Up until this point, the Monero community was focused around the developer meetings and the Monero subreddit. While these are still highly relevant in the Monero ecosystem (for good reason), there wasn't a great way for people to stay updated with the latest news and to discuss non-development items. The Monero Community Crowdfunding System (at the time Forum Funding System) submissions weren't discussed in the same way that they are today, and there was no central Community Workgroup to help bring initiatives together. It was obvious that with a larger, more diverse Monero community, a dedicated set of resources would be necessary to connect all these projects together. The Monero Marketing Workgroup became the Monero Community Workgroup during the first Community Workgroup meeting on 18 June 2017. These meetings have largely occurred every other Saturday ever since and serve as an essential community service to discuss CCS proposals, hear workgroup updates and news, and discuss new ideas. The Community Workgroup channel (#monero-community) is used for many other purposes, including other scheduled meetings on deemed-necessary items of interest and regular feedback, questions, and chat. On 7 October 2017, the workgroup hosted its first Coffee Chat, a casual conversation covering the month's recent news and most important discussion topics. These Coffee Chats help humanize the Monero community, who until this point typically were only known by their pseudonyms. The MCW played a part in the Monero Konferenco, Critical Decentralization Cluster at the Chaos Communication Congress, and Monero Village at Defcon livestreams and derived content. It also hosts Breaking Monero, a series that features members from the Monero Research Lab who discuss Monero's limitations. A year after the MCW became its new name, the newly-founded Monero Outreach Workgroup took over many of its initial ambitions in June 2018. Other related workgroups like Monero Ecosystem have their own communities and functions.
The Community Keeps Growing
The Monero communities are significantly larger than they were back in early-2017, and they keep on growing. In early-2017, there were no mobile wallets, the GUI was only 3 months old, there were far fewer exchanges, etc. Today, Monero has one of the largest, most respected, and most passionate communities. We have the third largest number of developers of any cryptocurrency project, we are the only project with our own DEF CON village, and we are one of the few names that everybody knows. Awesome work to everyone around, truly. With larger communities comes more work. The community deserves reliable, appropriate resources to sustain this growth. In a decentralized community, this is difficult. Monero Core provides some essential services such as the CCS, getmonero.org, Mattermost, and GitLab. However, they have been unable to meet the growing needs of the community alone. Thus, the MCW has been happy to support other needs to the extent possible: we discuss CCS proposals during our meetings, host several servers, organize Coffee Chats and conference talks, and more, along with efforts of other workgroups. These have become such a significant undertaking, and that's a good thing. As Monero continues to set the gold standard for cryptocurrencies the expectations keep growing. It's awesome to be a part of something where so many people care.
The MCW has grown too much for the three of us to organize all the resources we need, let alone the needs of everyone in the Monero communities and workgroups. Thus, we are furthering our commitment and offering substantially more services in the coming months. To get there, we need your support to fill volunteer leadership and support positions. Expect the following dedicated services from us:
Jitsi server with higher framerate and resolutions than Jitsi Meet, so that our Coffee Chats, conferences, and other events are better quality than before.
NextCloud to safely and securely collaborate on blog posts, share files, and more.
Sandstorm and Wekan kanban board (open source Trello copy) to keep track of, propose, and assign tasks and projects.
Chatwoot to provide tailored support for Monero users with a volunteer support community (also a good learning exercise).
Mastodon to communicate about Monero and other news, so we aren't dependent on Twitter's policies and security.
Flarum forum for Monero news and discussions, so we aren't dependent on Reddit.
We need your help to make this happen! We will form "task forces" to focus on certain areas like marketing, system administration, meetings, moderation, and finance. If you have any of these skills, please join #monero-community and say hi, or shoot us an email ([email protected])! Doug, Diego, and Justin feel that these changes will allow the Monero community to grow in new ways and continue collaborating. The community consists of many workgroups that focus on projects that they are interested in, and we want to support the efforts of these communities. To allow these changes, Justin will form an LLC, with him and Doug being officially on the board, and Diego taking an advisory role. Creating a legal entity serves two distinct purposes. First, it allows us to aggregate payments from many people into a single entity to pay the costs for hosting various community servers/services. This greatly reduces our own workload and out of pocket payment. Secondly, it allows us to aggregate multiple social media handles that are currently controlled by individuals under a single entity, to reduce the "Bus Factor." Of course, the MCW will remain very much grounded in the ideals that made that made it great in the first place. And the entity will always support the Monero communities, never claim to fully represent everyone involved in Monero. It can only ever represent the efforts of those involved. Current and future goals of the MCW include:
Provide resources as necessary and reasonable, such as communication platforms
Organize discussions to promote communication, such as Community Meetings and Coffee Chats
Promote positive culture through events, such as with Coffee Chats, the Monero Konferenco, the Moneoversary, and the Monero DEF CON Village
Support other Monero workgroups and Monero ecosystem projects
Provide mechanisms to collect feedback on community, developer, and research proposals
Discuss the Monero CCS ideas and otherwise support the Monero CCS
Promote Monero and privacy education and marketing
Serve as an available community mediatoarbitrator where reasonable
Communicate the broad interests of the Monero community and provide a voice where and how appropriate
Collaborate with other projects, companies, governments, and communities
Monero Community Support LLC
Q: Why does the MCW think that an LLC is needed? A: For two primary reasons. First, payments. As mentioned, there is existing digital infrastructure, currently paid out of pocket by MCW leaders. Even if a CCS proposal was to be explored, it would make personal accounting and tax reporting very difficult as assets would technically be mixed with personal assets, throwing off capital gains calculations. Up until now this has been a sacrifice of time that we were content to make, but as we continue to ramp up our goals it is becoming increasingly cumbersome, and alternative methods are needed. An LLC would be able to hold these monetary assets as its own entity, and all funds could be kept separate from personal funds, leading to much easier accounting all around. Secondly, an LLC would allow for digital infrastructure to come under the legal purview of several people, reducing the possibility for any particular person going rogue and decimating what has been built. There may be concern about bringing resources under a corporation, and that this is not in the spirit of Monero, but one thing to note is that all assets and services (noted above) are FOSS/CC. Meaning if at any time a community doesn't care for what the MCW accomplishes under this LLC, they can simply start their own infrastructure with low switching costs. Once again: EVERYTHING IS FOSS/CC. Q: Why not a nonprofit, cooperative, or other type of organization? A: While not out of the question, these take additional effort. We hope to grow into these organization types with the help of others. However certain registrations take a lot of time and effort, plus has quite significant restrictions on activities. The LLC will allow us the flexibility and convenience we need now, especially when we currently have no income anyway.
The MCW has a mountain range of opportunities ahead of it, as do all Monero communities and workgroups. We hope that our efforts are of use to you and others, and we hope that you join us in making something great :) Justin, Diego, and Doug
Wandering From the Path? | Monthly Portfolio Update - August 2020
Midway along the journey of our lifeI woke to find myself in a dark wood,for I had wandered off from the straight path. Dante, The Divine Comedy: Inferno, Canto I This is my forty-fifth portfolio update. I complete this update monthly to check my progress against my goal. Portfolio goal My objective is to reach a portfolio of $2 180 000 by 1 July 2021. This would produce a real annual income of about $87 000 (in 2020 dollars). This portfolio objective is based on an expected average real return of 3.99 per cent, or a nominal return of 6.49 per cent. Portfolio summary
Vanguard Lifestrategy High Growth Fund $733 769
Vanguard Lifestrategy Growth Fund $41 794
Vanguard Lifestrategy Balanced Fund $78 533
Vanguard Diversified Bonds Fund $110 771
Vanguard Australian Shares ETF (VAS) $216 758
Vanguard International Shares ETF (VGS) $64 542
Betashares Australia 200 ETF (A200) $237 138
Telstra shares (TLS) $1 540
Insurance Australia Group shares (IAG) $6 043
NIB Holdings shares (NHF) $5 532
Gold ETF (GOLD.ASX) $121 976
Secured physical gold $19 535
Ratesetter (P2P lending) $8 998
Bitcoin $177 310
Raiz app (Aggressive portfolio) $17 421
Spaceship Voyager app (Index portfolio) $2 759
BrickX (P2P rental real estate) $4 477
Total portfolio value $1 848 896 (+$48 777 or 2.7%) Asset allocation
Australian shares 41.5%
Global shares 22.6%
Emerging market shares 2.2%
International small companies 2.8%
Total international shares 27.6%
Total shares 69.2% (5.8% under)
Total property securities 0.2% (0.2% over)
Australian bonds 4.4%
International bonds 8.9%
Total bonds 13.3% (1.7% under)
Gold and alternatives 17.2% (7.2% over)
Presented visually, below is a high-level view of the current asset allocation of the portfolio. [Chart] Comments The portfolio has increased in value for the fifth consecutive month, and is starting to approach the monthly value last reached in January. The portfolio has grown over $48 000, or 2.7 per cent this month, reflecting the strong market recovery since late March [Chart] The growth in the portfolio was broadly-based across global and Australian equities, with an increase of around 3.8 per cent. Following strong previous rises, gold holdings decreased by around 2.2 per cent, while Bitcoin continued to increase in value (by 2.5 per cent). Combined, the value of gold and Bitcoin holdings remain at a new peak, while total equity holdings are still below their late January peak to the tune of around $50 000. The fixed income holdings of the portfolio continue to fall below the target allocation. [Chart] The expanding value of gold and Bitcoin holdings since January last year have actually had the practical effect of driving new investments into equities, since effectively for each dollar of appreciation, for example, my target allocation to equities rises by seven dollars. New investments this month have been in the Vanguard international shares exchange-traded fund (VGS) and the Australian shares equivalent (VAS). These have been directed to bring my actual asset allocation more closely in line with the target split between Australian and global shares set out in the portfolio plan. As the exchange traded funds such as VGS, VAS and Betashares A200 now make up nearly 30 per cent of the overall portfolio, the quarterly payments they provide have increased in magnitude and importance. Early in the journey, third quarter distributions were essentially immaterial events. Using the same 'median per unit' forecast approach as recently used for half yearly forecasts would suggest a third quarter payout due at the end of September of around $6000. Due to significant announced dividend reductions across this year I am, however, currently assuming this is likely to be significantly lower, and perhaps in the vicinity of $4000 or less. Finding true north: approach to achieving a set asset allocation One of the choices facing all investors with a preferred asset allocation is how strictly the target is applied over time, and what variability is acceptable around that. There is a significant body of financial literature around that issue. My own approach has been to seek to target the preferred asset allocation dynamically, through buying the asset class that is furthest from its target, with new portfolio contributions, and re-investment of paid out distributions. As part of monitoring asset allocation, I also track a measure of 'absolute' variance, to understand at a whole of portfolio level how far it is from the desired allocation. This is the sum of the absolute value of variances (e.g. so that being 3 per cent under target in shares, and 7 per cent over target in fixed interest will equal an absolute variance of 10 per cent under this measure). This measure is currently sitting near its highest level in around 2 years, at 15.0 per cent, as can be seen in the chart below. [Chart] The dominant reason for this higher level of variance from target is significant appreciation in the price of gold and Bitcoin holdings. Mapping the sources of portfolio variances Changes in target allocations in the past makes direct comparisons problematic, but previous peaks of the variance measure matches almost perfectly past Bitcoin price movements. For a brief period in January 2018, gold and Bitcoin combined constituted 20 per cent, or 1 in 5 dollars of the entire portfolio. Due to the growth in other equity components of the portfolio since this level has not been subsequently exceeded. Nonetheless, it is instructive to understand that the dollar value of combined gold and Bitcoin holdings is actually up around $40 000 from that brief peak. With the larger portfolio, this now means they together make up 17.2 per cent of the total portfolio value. Tacking into the wind of portfolio movements? The logical question to fall out from this situation is: to what extent should this drive an active choice to sell down gold and Bitcoin until they resume their 10 per cent target allocation? This would currently imply selling around $130 000 of gold or Bitcoin, and generating a capital gains tax liability of potentially up to $27 000. Needless to say this is not an attractive proposition. Several other considerations lead me to not make this choice:
The problem may solve itself as portfolio grows - Growth and continued investments in the portfolio will tend to reduce the variance caused by gold and Bitcoin. The asset allocation targeting approach I adopt has seen continued contributions to equities, reducing the ability of these alternative assets to add to future variance.
Falls in Bitcoin or gold values will also solve the problem - Conversely, price falls in Bitcoin or gold will tend to reduce the variance issue, and such price falls have significant precedents, with for example Bitcoin holdings falling to a value of around $50 000 as recently as January 2019.
If neither of these happen, there may be bigger issues to solve - The only scenario where neither of these alleviating factors occur is should gold and Bitcoin continue to rapidly appreciate compared to other assets, in which case it is difficult to see the value of reducing exposure now.
Does Bitcoin even fit the asset allocation model? - Bitcoin in particular is not a well established or accepted asset class as yet, so it may not be appropriate to apply traditional allocation rules to it - it may be functioning more as a hedge or option against extreme states of the world. Linked to this is the high degree of volatility in Bitcoin. Adopting too tight a target on Bitcoin holdings would potentially see a need to buy and sell Bitcoin frequently, where my intention is to actually never purchase any more.
This approach is a departure from a mechanistic implementation of an asset allocation rule. Rather, the approach I take is pragmatic. Tracking course drift in the portfolio components As an example, I regularly review whether a significant fall in Bitcoin prices to its recent lows would alter my monthly decision on where to direct new investments. So far it does not, and the 'signal' continues to be to buy new equities. Another tool I use is a monthly measurement of the absolute dollar variance of Australian and global shares, as well as fixed interest, from their ideal target allocations. The chart below sets this out for the period since January 2019. A positive value effectively represents an over-allocation to a sector, a negative value, an under-allocation compared to target. [Chart] This reinforces the overall story that, as gold and Bitcoin have grown in value, there emerges a larger 'deficit' to the target. Falls in equities markets across February and March also produce visibly larger 'dollar gaps' to the target allocation. This graph enables a tracking of the impact of portfolio gains or losses, and volatility, and a better understanding of the practical task of returning to target allocations. Runaway lines in either direction would be evidence that current approaches for returning to targets were unworkable, but so far this does not appear to be the case. A crossing over: a credit card FI milestone This month has seen a long awaited milestone reached. Calculated on a past three year average, portfolio distributions now entirely meet monthly credit card expenses. This means that every credit card purchase - each shopping trip or online purchase - is effectively paid for by average portfolio distributions. At the start of this journey, distributions were only equivalent to around 40 per cent of credit card expenses. As time has progressed distributions have increased to cover a larger and larger proportion of card expenses. [Chart] Most recently, with COVID-19 related restrictions having pushed card expenditure down further, the remaining gap to this 'Credit Card FI' target has closed. Looked at on an un-smoothed basis, expenditures on the credit card have continued to be slightly lower than average across the past month. The below chart details the extent to which portfolio distributions (red) cover estimated total expenses (green), measured month to month. [Chart] Credit card expenditure makes up around 80 per cent of total spending, so this is not a milestone that makes paid work irrelevant or optional. Similarly, if spending rises as various travel and other restrictions ease, it is possible that this position could be temporary. Equally, should distributions fall dramatically below long term averages in the year ahead, this could result in average distributions falling faster than average monthly card expenditure. Even without this, on a three year average basis, monthly distributions will decline as high distributions received in the second half of 2017 slowly fall out of the estimation sample. For the moment, however, a slim margin exists. Distributions are $13 per month above average monthly credit card bills. This feels like a substantial achievement to note, as one unlooked for at the outset of the journey. Progress Progress against the objective, and the additional measures I have reached is set out below. Measure Portfolio All Assets Portfolio objective – $2 180 000 (or $87 000 pa) 84.8% 114.6% Credit card purchases – $71 000 pa 103.5% 139.9% Total expenses – $89 000 pa 82.9% 112.1% Summary What feels like a long winter is just passed. The cold days and weeks have felt repetitive and dominated by a pervasive sense of uncertainty. Yet through this time, this wandering off, the portfolio has moved quite steadily back towards it previous highs. That it is even approaching them in the course of just a few months is unexpected. What this obscures is the different components of growth driving this outcome. The portfolio that is recovering, like the index it follows, is changing in its underlying composition. This can be seen most starkly in the high levels of variance from the target portfolio sought discussed above. It is equally true, however, of individual components such as international equity holdings. In the case of the United States the overall index performance has been driven by share price growth in just a few information technology giants. Gold and Bitcoin have emerged from the shadows of the portfolio to an unintended leading role in portfolio growth since early 2019. This month I have enjoyed reading the Chapter by Chapter release of the Aussie FIRE e-book coordinated by Pearler. I've also been reading posts from some newer Australian financial independence bloggers, Two to Fire, FIRE Down Under, and Chasing FIRE Down Under. In podcasts, I have enjoyed the Mad Fientist's update on his fourth year of financial freedom, and Pat and Dave's FIRE and Chill episodes, including an excellent one on market timing fallacies. The ASX Australian Investor Study 2020 has also been released - setting out some broader trends in recent Australian investment markets, and containing a snapshot of the holdings, approaches and views of everyday investors. This contained many intriguing findings, such as the median investment portfolio ($130 000), its most frequent components (direct Australian shares), and how frequently portfolios are usually checked - with 61 per cent of investors checking their portfolios at least once a month. This is my own approach also. Monthly assessments allow me to gauge and reflect on how I or elements of the portfolio may have wandered off the straight way in the middle of the journey. Without this, the risk is that dark woods and bent pathways beckon. The post, links and full charts can be seen here.
Selling BTC on Paxful for fun and profit -- any experience?
So I was researching non-KYC methods of purchasing BTC for myself and came across the Paxful P2P exchange which seems to even allow PayPal as a payment method. There's a pretty high price spread for these listed PayPalUSD-BTC transactions -- like 15 to 20% and higher. I'm a HODLer myself, have no interest in selling my own personal stash, but receiving additional income as a bitcoin middleman is pretty attractive. Does anyone have experience trading on this platform? If I were to spot purchase BTC on-demand from Coinbase or Gemini, trade for USD via Paxful/PayPal at a premium, then as long as I used LIFO tax ordering I don't see how the tax impact would be much of an issue. With such quick turnaround the capital gains would be negligible (or they'd be losses) and wouldn't really eat much into my profits from selling at a premium. I could leave my 'old' coins untouched for the long term and just trade with the 'fresh' ones. Anyone have any success with being this type of middleman either on this platform or another? EDIT: Looking into things a bit more, I bet a lot of replies to this will be to suggest Bisq instead. How does fiat trading work with Bisq? EDIT2: Thinking a bit further about this whole process, it seems like these P2P exchanges would make it trivially easy to buy some Bitcoin on a traditional exchange, "sell" it to yourself at a loss for tax purposes, and continue to hold your coins privately. These platforms must be rife with 'laundering' abuses.
I did it today. On my 47th birthday, I reached $3 million in cash & investments, a paid off house & 2 cars. I have reached my FI target of $100k @ 3.3% SWR. I knew it was going to be close with the markets, payday, and my company's equity coming in today. Plan is to FIRE in 3 months. $3 million was a symbolic number, I could have FIREd 2 months ago at $2.95 million and lived pretty much the same life. However, I am getting another ~$70k in equity in 3 months and would like a bit of a buffer especially with the volatile markets. Also, the plan was to take a nice trip to Europe in August - I don't see that happening. It is crazy, I know of many people who are laid off, working reduced hours, worried about their job or tapping into debt. And I am making plans to quit working. Mega edit: Asset allocation Cash & short term investments: 25% (increased 10% from equities due to C19) Employer's Equity: 10% Equity ETFs: 45% (down 10% - sold in early march, will buy back in later) Bond ETFs: 10% Crypto: 10% Please bring on the flames for timing the market, but I sold early-ish, it helps me sleep at night, and right now I am trying to be more conservative vs. aggressive. The crypto is a flyer. I bought casino level bitcoin in 2012 at $18, then sold a bunch when it went up to $150. Then bought a bunch more at $1000, and have been selling little bits for a few years. Total investment: $45k, total value sold and still held: $500k. I would like to sell more, but it has a capital gains tax liability, so FIRE with no income next year would help reduce taxes. About my journey Grew up middle class. Money was tight from time to time, but I never really saw that. Part time job when I was 16 for spending cash. Never went into debt. Saved a little. Went into a good college for STEM, received $8000 total for tuition from family and received a student loan for $1000. Did a few paid internships while in college. Paid off the loan with my first post-school paycheck. Graduated in the tech industry in 97. Started full time at the last internship. $40k base. Stayed there for 2 more years, increased base by 20%. $48k base. Left (co-worker left and pulled me), for a ~100% increase. $90k base. Stayed there 6 months (dying ship), left for ~10% increase. $100k base. Stayed there for 2 years (all of my managers up to CEO left in 2 weeks), left for a 0% change. $100k base. Stayed there for 1.5 years, was let go, started consulting at +50% (but no benefits). $150k consulting. Consulted for 8 months, left when project was wrapping up for -40% (+10% from previous full time) $110k base. Stayed there for 11 years (company was acquired 3 after years), increased pay by ~20% in 11 years. $133k base. Left for 5% increase. $141k base. Worked there for 6 months (bad fit), left for 5% increase. $150k base. Here now. Making about 4x after 20 years. Did not include any bonus (or not), benefits (health/retirement/etc...) stock options, quality of life, etc.. Current investments Canadian ETF / funds I invest in in decreasing amounts. XGRO VCN VXC VAB VT TDB900 TDB902 TDB909 TDB911 Tangerine Balanced (part of emergency fund) TDB661 CDZ
First time investment/financial planning 28F single income
Hi all! I'm new to investing and planning for retirement etc, and also kind of new to reddit so apologies if I don't follow etiquette or rules properly. I've finally saved beyond my emergency fund goal and am ready to start putting money into retirement/investing etc, but I've got a lot to learn. I don't have anyone in my personal life who can give me advice or teach me about investing. Firstly I'm looking for recommendations on easy reads and cheap/free ways of learning about finance and investment for someone who doesn't know any of the lingo. I don't know the difference between a bank and a credit union for example, or what capital gains or assets mean. I've only been in Canada 5 years (I'm from the UK, no plans to return yet but if I do it probably won't be for another 5 years). Secondly, I'm looking for hints and tips for my current financial plan (below) before I actually start moving money around. I'm earning ~$50k and save an average of $800/month. I have ~$40k in student debt from the UK but at only 1.5% interest rate, and I'm currently repaying just above the interest rate which is more than the minimum payment. The debt supposedly wipes out after 25 years, but I don't trust the UK government not to sell off the loans and the idea of my debt increasing rather than decreasing makes me uncomfortable. With what I'm repaying I should finish paying it off in about 25 years anyway. I have $15k in savings currently in EQ earning 2% interest (1.43% after tax I think). I want to keep $10k in emergency funds in my EQ savings, and invest the remaining. I have never opened an RRSP or TFSA. I joined my company retirement savings plan in April which is 6% of my income with 9% match funding (about $3200/year from me and $8k from my company). I was thinking of putting my spare $5k into WealthSimple as follows: -RRSP: $1k starting balance, risk level 6 balanced, then $250/month added in. Probably won't touch it ever unless I decide to buy a house, so I'm hoping that the higher risk level will be worth it after 5-10 years. -TFSA: $1k starting balance, risk level 4 balanced, then $450/month. This I want to play a bit safer but still earn a decent return. I may want to dip into it in the next 3 years if i decide to buy a car or in 5 years+ for a downpayment for a house. -Crypto: when it opens, I want to put $1k into bitcoin and just leave it for 10-20 years and just see what happens. I tried getting into Quadrixa and another crypto trading site a year ago but had issues verifying my identity and ended up giving up. So that leaves me another $2k to play with for now. Should I hold onto it and keep it in EQ until I have a better idea for how to use it, or put it in my TFSA, or is there something else that's safe but will offer more than 1.43% interest after tax that I can put it into? I was going to put it in a low risk (level 3) personal account on WealthSimple but I think the yield on that was only 0.43% which was way less than EQ so I don't see the point? Alterna bank offers a 1.63% TFSA account so seeing as I won't meet my allowance anytime soon it could be worth putting some money in there, though I'm not sure it's worth the effort opening yet another bank account. I'm not really earning enough that I want to max out my RRSP for the tax income break yet. I'd rather have more 'useable' (cash?) savings, but perhaps someone can convince me otherwise. Any help/advice/personal experience would be appreciated! As well as reassurance not to panic if I lose money in the first X years. Thank you! Edit: Sounds like everyone is saying I should keep my RRSP allowance for when I'm earning more, and keep my emergency funds in the HISA and everything else into a TFSA. Not heard anyone say not to use the WealthSimple TFSA so I guess that's where it's going! Thanks everyone!
Should the federal government institute a mandatory buyback of assault weapons? No
Should a business be able to deny service to a customer if the request conflicts with the owner’s religious beliefs? If they are not engaged in interstate commerce, the Federal Government shouldn't hold any power to legislate on the matter. At the state level (and federal if interstate) Yes, so long as they are not discriminating on the basis of race, sex, sexual orientation, transgender, or other uncontrollable factors.
Should the government continue to fund Planned Parenthood? Yes, with oversight to make sure the money is going o where it is supposed to.
Should universities provide “trigger warnings” and “safe spaces” for students? No
Do you support the death penalty? Generally no, with the possible exception of treason during an insurrection or invasion.
Should the government support a separation of church and state by removing references to God on money, federal buildings, and national monuments? No, this is referring to God as a concept.
Should businesses be required to have women on their board of directors? No
Do you support the legalization of same sex marriage? Yes, through a constitutional amendment. At the state level, yes.
Should the military allow women to serve in combat roles? Yes as long as they meet the same physical standards as men and pass the same tests.
Should marital rape be classified and punished as severely as non-marital rape? This should be a state-level issue, but yes.
Should terminally ill patients be allowed to end their lives via assisted suicide? Only if there is no chance of survival.
Should hate speech be protected by the first amendment? It is, and yes.
Should gay couples have the same adoption rights as straight couples? Yes
Should states be allowed to display the Confederate flag on government property? They have the right, but I would prefer my state not.
Should women be allowed to wear a Niqāb, or face veil, to civic ceremonies? I am not fully certain. I am leaning towards yes, as long as another woman has verified her identity.
Should welfare recipients be tested for drugs? Only if they have a criminal history related to drug abuse.
Should employers be required to pay men and women the same salary for the same job? This shouldn't be a federal issue unless it involves interstate commerce. But at the state-level (and federal if interstate), Yes if they work the same positions and for the same hours and conditions.
Should there be fewer or more restrictions on current welfare benefits? More, reform it so it supplements, rather than replaces, an income.
Should the government raise the federal minimum wage? The federal government should not have the power to enact minimum wage laws unless it involves interstate commerce, in which case yes, it should be $15 an hour. Each state should be able to set its own laws on the matter.
Should the government make cuts to public spending in order to reduce the national debt? No.
Should the U.S. increase tariffs on imported products from China? Yes, China should be punished for violations of international law.
Should businesses be required to provide paid leave for full-time employees during the birth of a child or sick family member? At the state-level, yes. At the federal level, yes, if they are involved in interstate commerce.
Should the government increase the tax rate on profits earned from the sale of stocks, bonds, and real estate? Capital gains should be taxed the same as ordinary income.
Should the current estate tax rate be decreased? No, I am satisfied with the current system.
Should the U.S. continue to participate in the North American Free Trade Agreement (NAFTA)? No.
Should the President offer tax breaks to individual companies to keep jobs in the U.S.? No, but put tariffs on all imported goods.
Should the government prevent “mega mergers” of corporations that could potentially control a large percentage of market share within its industry? No.
Do you believe labor unions help or hurt the economy? Help, in theory, but are sometimes harmful.
Should the government break up Amazon, Facebook and Google? No.
Should the government add or increase tariffs on products imported into the country? Yes, all imported goods should be taxed 20%.
Should the U.S. raise or lower the tax rate for corporations? Keep at current rate, but close all loopholes.
Should the government require businesses to pay salaried employees, making up to $46k/year, time-and-a-half for overtime hours? At the state level, yes. At the federal level, only if they are involved in interstate commerce.
Do you support the Trans-Pacific Partnership (TPP)? No.
Would you favor an increased sales tax in order to reduce property taxes? No.
Should pension plans for federal, state, and local government workers be transitioned into privately managed accounts? No.
Should the government subsidize farmers? For now, yes, but once we get out of trade deals, put tariffs on all imports, and tax all interstate sales, subsidies should be ended.
Should the government use economic stimulus to aid the country during times of recession? No, recessions are natural cycles.
Should the Federal Reserve Bank be audited by Congress? Yes, we should know where that money is going.
Should the IRS create a free electronic tax filing system? Yes.
Should an in-state sales tax apply to online purchases of in-state buyers from out-of-state sellers? No, the federal government should not enact an intrastate sales tax.
Should pension payments be increased for retired government workers? Yes, adjust them yearly for inflation.
Should U.S. citizens be allowed to save or invest their money in offshore bank accounts? Yes, as long as all income is reported.
Should the government classify Bitcoin as a legal currency? Yes, but maintain the system of the dollar and cash as a legal currency.
Should the government acquire equity stakes in companies it bails out during a recession? No.
Do you support charter schools? No.
Should the government decriminalize school truancy? No for Elementary school. For middle and high school, no social studies and English, yes for everything else.
Should there be more restrictions on the current process of purchasing a gun? States and the federal government should not be allowed to enact any restrictions on black powder weapons or ammunition for them. For cartridge firearms, the federal government should only have the power to regulate interstate sale of them. At the state level, cartridge firearms should require a license to obtain. The process should involve passing a mental and physical health exam, having a decent criminal record, and passing a written and shooting exam. Handguns and centerfire semi-automatic weapons should have higher standards for licensing and should be registered before being obtained, but automatic CCW to anyone who has a license for a handgun. fully automatic weapons should be illegal to sell, except to collectors, who must meet an even higher standard to obtain.
Should victims of gun violence be allowed to sue firearms dealers and manufacturers? No, this is just dumb.
Should the President of the United States have the power to deploy military troops in order to stop protests? If any state governments are overthrown, yes. Otherwise, only if the Governor of a state requests assistance.
Should teachers be allowed to carry guns at school? Yes if they have a valid license 9see above).
Should it be illegal to burn the American flag? No, but I have no respect for anyone who does.
Should the state government order schools to provide online only classes in order to combat coronavirus? No, let each school decide.
Should there be term limits set for members of Congress? Yes, maximum four terms for the House, and maximum two for the Senate.
Should people on the “no-fly list” be banned from purchasing guns and ammunition? No, this denies one of due process rights.
Are you in favor of decriminalizing drug use? Yes, for most but not all drugs (basically the really bad ones, e.g., meth, heroin, etc;)
Should the NSA (National Security Agency) be allowed to collect basic metadata of citizen’s phone calls such as numbers, timestamps, and call durations? Only with a warrant and probable cause of a crime.
Should the Supreme Court be reformed to include more seats and term limits on judges? No, this is just trying to pack the court, which should not be politicized.
Should the government regulate social media sites, as a means to prevent fake news and misinformation? No, this violates free speech.
Do you support the Patriot Act? Not the clause that allows warrantless searches.
Should the government be allowed to seize private property, with reasonable compensation, for public or civic use? Only for public land and not for privatization, and the owner must be paid for losses in full.
Should college sports be played in the fall of 2020? Yes, but let teams decide.
Should local police increase surveillance and patrol of Muslim neighborhoods? No, this just breeds resentment.
Should the government raise the retirement age for Social Security? No
Should the government pass laws which protect whistleblowers? Yes, so long as national security isn't compromised.
Should the redrawing of Congressional districts be controlled by an independent, non-partisan commission? Yes, gerrymandering breeds corruption.
Should internet service providers be allowed to speed up access to popular websites (that pay higher rates) at the expense of slowing down access to less popular websites (that pay lower rates)? If they are privately owned, yes.
Should the U.S. government grant immunity to Edward Snowden? For his leaks on domestic surveillance, yes. Some other things, maybe not.
Should foreign terrorism suspects be given constitutional rights? Yes.
Do you support the killing of Iranian Major General Qassem Soleimani? Yes.
Should the U.S. continue to support Israel? Yes.
Should the U.S. accept refugees from Syria? Yes, but only after extensive background checks to confirm that they are not a threat and are genuine refugees and not economic migrants.
Should the government increase or decrease military spending? Decrease by streamlining it, and making it more efficient, through eliminating wasteful spending.
Should the military fly drones over foreign countries to gain intelligence and kill suspected terrorists? No, unless said country has approved it, and American citizens should be given fair trials.
Should the military be allowed to use enhanced interrogation techniques, such as waterboarding, to gain information from suspected terrorists? No.
Should every 18 year old citizen be required to provide at least one year of military service? No, but maintain the Selective Service system and allow states to draft people if necessary.
Should Jerusalem be recognized as the capital of Israel? Yes.
Should the U.S. go to war with Iran? No, they should be disarmed through diplomatic channels.
Should the U.S. remain in the United Nations? Yes.
Should the U.S. remain in NATO? Yes.
Should the U.S. defend other NATO countries that maintain low military defense budgets relative to their GDP? Yes, but get them to pay their share.
Should the United States pull all military troops out of Afghanistan? If the Afghan government wants us to, then yes.
Should the U.S. sell military weapons to India in order to counter Chinese and Russian influence? Yes.
Should the U.S. conduct military strikes against North Korea in order to destroy their long-range missile and nuclear weapons capabilities? No, use all diplomatic means first.
Do you support President Obama’s move to lift the trade and travel embargo on Cuba? Yes.
Should it be illegal to join a boycott of Israel? No.
Should the government cancel production of the F-35 fighter? Yes, until the price has been lowered or our deficits have been drastically reduced, and its hardware is drastically improved.
Do you support the Patient Protection and Affordable Care Act (Obamacare)? No.
Should people be required to work in order to receive Medicaid? No.
Should cities open drug “safe havens” where people who are addicted to illegal drugs can use them under the supervision of medical professionals? Yes.
Do you support the legalization of Marijuana? The federal government should not have the power to ban marijuana, except to regulate or ban its interstate sale, which it shouldn't at the state level, legalize.
Should the government regulate the prices of life-saving drugs? No.
Should health insurers be allowed to deny coverage to individuals who have a pre-existing condition? At the federal level, no, if they are operating in interstate commerce. At the state level, no.
Should there be more or less privatization of veterans’ healthcare? Less, improve the current system.
Should the federal government increase funding of health care for low income individuals (Medicaid)? Yes.
Should the federal government be allowed to negotiate drug prices for Medicare? Yes.
Should the government fund the World Health Organization? Yes.
Should the government increase environmental regulations to prevent climate change? No.
Should researchers be allowed to use animals in testing the safety of drugs, vaccines, medical devices, and cosmetics? Yes, but not for cosmetics.
Should the U.S. expand offshore oil drilling? No, but maintain current rigs.
Do you support the use of hydraulic fracking to extract oil and natural gas resources? Allow it to be legal, but don't subsidize.
Should the government stop construction of the Dakota Access pipeline? No.
Should disposable products (such as plastic cups, plates, and cutlery) that contain less than 50% of biodegradable material be banned? No.
Should drilling be allowed in the Alaska Wildlife Refuge? No.
Should cities be allowed to offer private companies economic incentives to relocate? Yes.
Should the government give tax credits and subsidies to the wind power industry? No, no industry should be favored.
Should the government require children to be vaccinated for preventable diseases? No.
Do you support the use of nuclear energy? Yes, lessen restrictions, but no subsidies.
Should producers be required to label genetically engineered foods (GMOs)? Yes.
Should illegal immigrants have access to government-subsidized healthcare? No.
Should immigrants be deported if they commit a serious crime? Yes, after serving their sentence.
Should illegal immigrants be offered in-state tuition rates at public colleges within their residing state? No.
Should the U.S. build a wall along the southern border? No, but make a high tech surveillance barrier instead of a physical wall. This is because a physical wall would be too costly and ineffective.
Should local law enforcement be allowed to detain illegal immigrants for minor crimes and transfer them to federal immigration authorities? Yes.
Should sanctuary cities receive federal funding? No.
Should the U.S. increase restrictions on its current border security policy? Yes.
Should immigrants be required to pass a citizenship test to demonstrate a basic understanding of our country’s language, history, and government? Yes.
Should children of illegal immigrants be granted legal citizenship? Yes, if they were born here.
Should Muslim immigrants be banned from entering the country until the government improves its ability to screen out potential terrorists? No.
Should immigrants be required to learn English? Yes, if they wish to become citizens.
Should there be a temporary ban on all immigration into the United States? No, but increase border security.
Should the US increase or decrease the amount of temporary work visas given to high-skilled immigrant workers? Increase, our economy relies on businesses hiring the highest skilled workers at the lowest cost.
Should working illegal immigrants be given temporary amnesty? No.
Should immigrants to the United States be allowed to hold dual citizenship status? Yes.
Do you support Common Core national standards? Yes, but only for English and social studies.
Should a photo ID be required to vote? No, but gradually update voter rolls and purge voters who are required to be according tot eh Voting Registration act of 1993.
Should foreigners, currently residing in the United States, have the right to vote? No, only citizens should.
Should the minimum voting age be lowered? No.
Should the electoral college be abolished? No.
Should the US have a mail-in ballot process for whole states in local, state, and federal elections? No.
Should foreign lobbyists be allowed to raise money for American elections? No.
Should there be a limit to the amount of money a candidate can receive from a donor? No.
Should corporations, unions, and non-profit organizations be allowed to donate to political parties? No.
Should there be a 5-year ban on White House and Congressional officials from becoming lobbyists after they leave the government? No.
Should political candidates be required to release their recent tax returns to the public? No.
Should funding for local police departments be redirected to social and community based programs? No, increase funding and training for police departments in higher crime rate communities
Should police officers be required to wear body cameras? Yes.
Should convicted criminals have the right to vote? Yes, but only after completing their sentence and probation.
Should drug traffickers receive the death penalty? No.
Should non-violent prisoners be released from jail in order to reduce overcrowding? Yes, but have them do community service.
Do you support mandatory minimum prison sentences for people charged with drug possession? No.
Should the government hire private companies to run prisons? No.
Should prisons ban the use of solitary confinement for juveniles? No, but it is currently being overused
Should the US assassinate suspected terrorists in foreign countries? No, capture, interrogate, and imprison them instead
What is your position on Abortion? Adopt a constitutional amendment overturning Roe v Wade and allow state to enact their own laws. At the state level, abortion should be legal within the first 20 weeks, but afterwards, should be banned except for exceptional cases.
Little about me first and foremost so I’m not dismissed as a WSB hack. 38 years old, net worth about 3 million. Income is about $500-700k a year. Recently moved to Puerto Rico where most of my income now is taxed at 4% with 0% capital gains tax on any equities I buy while living here (homes and assets in the state’s are taxed by IRS but my income falls to about $50-100k on the mainland which helps for overall tax bracket). No debt other than monthly card. Own house stateside that rents, own some land, and am currently not married or have kids. Life is good. The HELOC DILEMMA: so every one of my Uber rich friends are getting home equity lines because rates are super low and they 1) like have big loan approval for quick purchases of discounted assets and 2) like putting low interest money to work in higher interest paying equities (stocks, gold, bitcoin, real estate, new businesses etc). I like risk taking to some degree but I’ve never liked risking my primary house. Now that I live in Puerto Rico and rent the home I actually live in, I’m wondering if taking a HELOC on my investment home stateside is a decent idea. I’d mainly want this approved line of credit so that if I find my dream home highly discounted I could pull the trigger quickly (I believe we could be heading towards a massive housing market correction). That being said, I can’t help but wonder what a HELOC would do if I allocated it all in the stock market. Again I’m not a big risk taker but mathematically it doesn’t seem like the worst idea (until it is right?). I’m getting approval for a $300k loan at 5.234% for 10 years. If I run the amortization schedule on this for 5 years (and I think I read the rate can’t change for 60 months), I will be paying $41,748 in interest for the duration of the 5 year loan. If I were to put all $300k in the market and diversify it but still place it heavily on FAANG type tech stocks and maybe even gold/silver, I can make $125,000 in 5 years with a 7% interest rate. All in all that’s $83,000 gains in 5 years with a modest 7% gains. 10 years changed things to about $203k at 7% gains. Keep in mind, many of these tech stocks have done much much better than 7% per year but I’m trying to be reasonable here. You see my obvious question. Unless we see stocks divebomb or move completely sideways for 5-10 years, how would this not be a decent play? Keep in mind, this $300k is currently half the equity in my house with my home being modestly priced at $600k (I think it could be closer to $800-900 when looking at comps that have sold). At the moment my home is completely paid off. I like the 5 year term because the rates should be locked in if I read that correctly. Puerto Rico also makes this interesting because as long as I live here for the next 5 years, all the gains on this deal will be taxed at 0% regardless of what the next Congress might pass with or without Trump as president. I don’t understand hyper inflation and some of the doomsday scenarios I’ve been reading about but if the dollar were to stumble, perhaps my debt would be eaten away as long as my interest rate remained constant. If the HELOC has a variable interest rate at any time or after the 60 months, hyper inflation could be awful for this scenario but hopefully I’d just pay off the loan right away even if that meant selling other assets. I’m sure this is a game many of you have played or have considered playing. Again, my main thought process with the HELOC is to just get approved for one and not use it at all so that if I see a foreclosed property or want to make a deal quickly, I’m already approved for a good chunk of the down payment. Thoughts?
Warning, long post from my mornings contemplation. See https://twitter.com/markjeffrey/status/1300175793352445952 (Mark Jeffery 30 mins) for a video explaining DeFi. This is my attempt at explaining DeFi. I’m still learning this stuff, so any corrections are welcomed. Links are provided for information, none are recommendations, nor referral links. Do your own research (DYOR) before investing :) I’ll try not to shill YFI too much... Not all platforms use the same mechanics as I describe, but I think I’ve covered the most common ones. Stable coins Crypro currency that is intended to maintain a level value. Normally with respect to USD $. Some rely on a trusted third party who has actual USD sitting in a bank account (USDT aka Tether, USDC…), others are trustless (DAI) Maker Lock collateral into the smart contract. Then DIA can be generated, and used for other things. DAI is designed to match the USD, and is completely trustless. You must have more value staked than the DAI removed (at least 150% over collateral) or you will get liquidated. BTC on ETH Bitcoin can not be directly used on the etherium chain. So, there are a number ways to make the value availble. Most involve trusting a 3rd party and the most common is wrapped BTC wBTC. Notes WETH (Wrapped ETH) is used by some contracts to use ETH (direct use of ETH is not possible in some contracts) Unlinke WBTC, WETH is trustless as evrythign is done on the etherium blockchain (I think). Lending You deposit a valuable token onto a pool on platform, someone else borrows it. They pay interest to the pool. You get a proportion of the pools interest over time. When there is high demand for a particular token, the interest rate increases dynamically. e.g. look at the interest rate model and click on the figure for https://compound.finance/markets/USDC Borrow rates increase lineally as more of the available pool is loaned. 2% at zero and 12.5% when the pool is emptied. Earnings are lower than the borrowing rates because: There is more in the pool than borrowed. The platform takes a cut. e.g. 50% of the pool is borrowed, the borrower pays 7.25%, but the lenders only get 3.38%. 3.38/0.5 = 6.76%, so about 0.5% of the interest is being taken by compound. Different pools have different interest rate functions, DAI has an inflection point to maintain a buffer https://compound.finance/markets/DAI The interest rate increases slowly to 4% until 75% of the available pool is loaned out. Then it’s much more expensive to borrow e.g. 16% APR at 90% utilisation. When lending a single token into a single pool, you should always get the (slightly ?) more of same token back. How lending works You deposit ETH, you are given a token back as proof of participation in the pool (cETH for comound.finance). The exchange rate for cETH to ETH is NOT fixed. Rather is changes over time. As the ETH interest is paid into the pool the cETH becomes more valuable compared to the initial deposit. e.g. you deposit 10 ETH, and get 499.52 cETH. In a months time, you repay the 499.2 cETH cETH and get 10.1 ETH back. You have just gained 1%. Taxes In many jurisdictions, converting ETH to cETH would be classed as a taxable event (DYOR ! ) Lego Bricks The cETH represents your ETH, so it has value. This means it can be used for other things... Lego bricks is taken to mean that all these things fit together and you can sue them in different ways. How borrowing works You need to be over colarteralised to borrow from most platforms. So, if you deposit 10.0 ETH into a smart contract, you (currently) have $4,000 of collateral to work with. The platform may then let you borrow a % of your collateral in other tokens. So, you can borrow $2,000 of USDC, to buy more 5 ETH. Then when ETH price goes up you sell $2100 back to USDC and repay the interest. Now you have 10.x ETH. This is a form of Leverage, when the price goes up, you win. However, if the ETH price goes down, you risk being Liquidated. This means part of your collateral will be sold at the (lower) market price to repay your loan. There will likely be a penalty for you. (e.g. @ ETH = $300, 7.33 of your ETH is sold for $2,400, your USDC loan is repaid, and you keep the remaining 2.67 ETH and the 5 ETH you purchased. Shorting Deposit $8,000 collateral, Borrow 10 ETH and sell for $400 each. If the price drops to $380, buy 10.1 ETH and repay the loan and interest. You have just made $162 profit. However, if the price goes up you will still need to buy 10.1 ETH. Flash Loans A technomage creates a single transaction that borrows lots of money. Then within the same single ~13 second block uses it to do lots of complex things to hopefully make a profit. As it’s all within a single block, collateral is not required. See https://mobile.twitter.com/nanexcool/status/1297068546023993349 for a transaction that made ~46,000 USDC profit (without collateral) If this post is introducing you to the possibilities of flash loans, you are very unlikely to ever do one in the near future. I think Aave is the most common source for flash loans. Simple farming lending: Simply put you token in which ever platform offers the largest interest rate. Moving to the best option costs gas (and attention). Complex lending farming Some platforms offer tokens in return for using a platform, so simple APR comparisons aren’t sufficient. If the additional platform token has high value it can distort the market. E.g. when COMP was initially offered, it was profitable to:
Place collateral on compound.finance
Borrow BAT at 30%
Lend the BAT back to the same platform at 15%
Collect the COMP accrued due to interest paid and interest earned.
Sell the COMP on the open market.
This technique was made less favourable by compound changing the distribution model so smaller pools (like BAT) couldn’t be exploited in this way. DEX Decentralised exchanges range from ones that operate with depositing assets, trading with an order book and then withdrawing, to simple interfaces that allow you to swap tokens. of the latter, the most popular is uniswap. Liquidity provision The swap based DEX’s rely on liquidity providers (LP). Here you deposit equal values of two tokens e.g. USDC and ETH. Then any time someone wants to swap USDC for ETH on the exchange, they add USDC and remove ETH from the pool. Each time someone does a swap, they pay a fee to the liquidity pool and you get a share. Impairment loss However, if the price of one asset goes up, the pool with stabilise to have less of it. So you see an overall increase, but not as much as if you had just hold’ed. See https://twitter.com/ChainLinkGod/status/1270046868932661248 for an example. Hopefully, the fees accrued are greater than the losses. https://twitter.com/Tetranode/status/1300326676451057664/photo/1 Stable coin pairs If you restrict yourself to similar things (e.g. USD stable coins, or different versions of BTC on Ethereum), then the impairment loss is much reduced. Curve.finance focuses on such like for like pools and allows multiple tokens in a single pool. Complex farming liquidity pools Taking advantage of governance token rewards for using certain exchanges / pools. This can be done to boot strap liquidity and / or allow a decentralisation of the governance of the DEX. The tokes received have value because of expected future income, or governance rights (which may be exploited for future income) Yearn Yearn is a group of smart farmer protocols that allow pooling to reduce gas costs and benefit from smart developers / contracts. The simplest EARN take tokens / stable coins and place them in the highest yielding platform for that token. https://yearn.finance/earn The yCRV vault provides USD stable coin liquidity within curve for trading fees, but also lending fees via Yearn pools for each stable coin (oh and it gets CRV governance tokens…). Other vaults use more complex strategies. The collateral is used to generate stable coins that then generate income from interest rates, Liquidity provision fees, and accrual of governance tokens. Some governance tokens are sold, others are used to optimise the rewards from other platforms. For example, see this video on the Link Vault (Mark Jeffrey 13 mins). https://twitter.com/markjeffrey/status/1300175793352445952 I expect the ETH vault may be similar, but may include Maker to generate the stable coins (rather than borrowing on Aave). This video is a good intro on curve / yearn products (DeFIDad 31 mins) https://www.youtube.com/watch?v=yP-4pJpKbRU All of these steps can be done by yourself, however, gas costs would be significant unless you have a large amount invested. Yearn, and vaults pay fees to the YFI protocol. YFI YFI is the token for yearn. There are only 30,000 issued. So, you can not earn them, you can: 1) Stake them for governance rewards 2) place in a yYFI vauly to gain more FYI 3) Use them as long term Ventrue capital funds within a DAO (coming soon (tm) ). YFII, YVFV etc. Forks of the YFI with different tokens / fees. YAM, Sushi, YFII, etc. To be completed… Synthetix To be completed... Finally: This is not financial advice. There are multiple risks which get larger as more moving parts are added. Errors and omissions expected. Do you own research. Comments and corrections welcomed
Let's look at this example: "Let's say Sienna purchased 0.1 Bitcoin for CA$1000 in August 2017. In November 2017, she exchanged 0.05 Bitcoin for 2.1 Ether. On the date of the transaction, the market value of 2.1 ether was CA$1500. This means her capital gains would come to CA$1000 as the cost basis would be CA$500. Once again, 50% of the total gains or CA$500 would be added to her taxable income and she would have to pay tax as per her income tax slab." But that means Sienna in this case still does not have any realized gains, so that means she would have to sell some of her coins by December 31st, essentially cashing out to fiat and getting taxed again? What happens if by Dec 31st she did not cash out anything to fiat and ETH went to zero? And if Sienna does not want to sell her coins after that BTC -> ETH, then CRA is assuming that Sienna must pay out of her pocket?
I didn't realize what people meant when they said "When the time comes, you won't have to sell your Bitcoin", Until Now:
The one thing people don't realize Bitcoin is for. You can take out loans on it. So in 10 years when you want a house, or duplex, or triplex, or apartment, or business; you can take out low interest rate loans for them with your Bitcoin, and buy that house, or rental property, or business you want. Something you could never do before any other way. This is what Bitcoin does for you. It grants you the net-worth and financial access so you can have the ability to get loans you could never get approval for before. Something as small as 20$ a month for 1 year or more, 10 years from now, can get you a loan for that house, or business you want but could never afford, or get an approved loan for. This is also better than selling your bitcoin for a property too. Because chances are, the Bitcoin will be a better investment value wise in the long run, so collateralizing it let's you keep your coin, and get your property, or business. Preferably a rental property, or solid proven business so it pays itself off. >Edit: A little example of how I realized this lesson the hard way. I lost a bit over 100 million dollars worth of Bitcoins in today's value by selling off almost 1.5 times the value of my first rental property that I'll most likely never recoup. The rental property was 3.87 million at the time, and I had to sell over 5 million dollars worth in Bitcoins at an average of 500$ a coin price in 2015 to acquire it. That was a little over 11 thousand Bitcoins I had to sell for the property. I had to sell off that much because I had to pay off the capital gains tax for selling the Bitcoins in the first place, and still have enough left over to pay for the rental property after capital gains taxes were paid. Since then, I learned my lesson seeing what my coins would've been worth today, and am never making that same mistake again. On my second rental property, I used some of my remaining Bitcoins as collateral to take out a low interest rate loan for it, and sold a smaller amount of Bitcoins so I could make a down-payment on the property. I've already recouped the small amount I sold off in Bitcoins for my down-payment on the second property too with the rental income from both properties. >The rental income on the second property is 4 times the cost of the mortgage payment every month, so I keep 75% of the rent as profit, and the other 25% that pays off the mortgage. That 25% that pays off the mortgage is a write off too, a perpetual write off at that. It's a write off I get to use on every years taxes that I have to pay on the first property's, and second property's rental income since they're owned under the same entity. And best of all, I still own all my Bitcoins used for the second property, and more now. Unlike the huge loss in Bitcoins I have for the first property's flat out purchase that I'll probably regret for the rest of my life. Learn from me. Edit 2: A great resource explaining this thanks too u/statoshi's comment: "Check out Chamath Palihapitiya's spin on this from 2014": https://www.youtube.com/watch?feature=player_detailpage&v=NV5ubkGQUes#t=81
Hello, Just wanted to make a post discussing this matter in Egypt. I hope someone from government also reads reddit. I can understand logical reasons why Egypt would want to prohibit Bitcoin mining:
Paying electricity at subsidized price and then selling Bitcoins for money means you're stealing the subsidy.
Untraceable Bitcoin can be used for criminal activities or terrorist finance.
Income from Bitcoin mining is not official and counts as income, so taxes are not being paid on it.
Since they suspect people who buy GPUs of doing this, I propose the following:
Let people declare that they are mining Bitcoin and remove electrical subsidy from them (let them pay the highest electricity tier price). Let them also count the electricity as expenses to avoid double-taxing.
Require that the wallets that receive the mining proceeds be made known to the government.
Open a local Egyptian Bitcoin exchange and when mining bitcoins are sold for EGP, count the EGP as capital gains or income and make people pay taxes on them as such.
Prohibit any transfer of those bitcoin between individuals and allow the only action to be done on them is keep them or sell them on a legitimate exchange which requires KYC/AML.
Instead of causing unnecessary headache for people who want to simply buy a GPU to play games by stopping or delaying all GPUs being imported, simply require that the imported GPUs be registered to the individual name (file automatically opened by customs without need of input from the importer), and set a limit for the number of graphics cards imported annually for individual use. In addition, for people who are not registered as bitcoin miners (or doing high electricity load work), if there's an unnatural large increase in the electricity consumption suddenly that doesn't coincide with a legitimate reason (eg: summer time and start of use of Air Conditioners) and the increase goes beyond the level historically consumed by the residence, then you can suspect that they are mining bitcoin, and then you can then investigate them. This way, both the government requirements can be satisfied and at the same time, people who just want to play games or do 3D work do not need to be unnecessarily harmed or impeded by regulations. This post can be considered as an open letter to anyone from authorities.
Charles Hoskinson on the Rough Days - [Text Version]
https://preview.redd.it/h49t3t6u9pl51.png?width=1221&format=png&auto=webp&s=fde73f432fd15d2b361f4e1621e67785bc27e30e We as AzureADA SPO watch all the videos by Charles Hoskinson. These videos are not only great news on Cardano development and ecosystem, but very often a source of inspiration. The video with the name “Rough Days” streamed live on September 4, 2020 is really a historical speech, that’s why we decided to transcribe for everyone who prefers to read rather than to watch and listen. The video you can watch here: https://www.youtube.com/watch?v=qM192wAV4LA And here is the text version. Hi everybody Charles Hoskinson here live from warm sunny Colorado. Always warm, always sunny, sometimes Colorado. And I got my Massey Ferguson hat on. Take that off, see my hair's all messed up. One of these days and we'll lose all that hair. It’s a rough day today and that markets are terrible. down 20 percent for most people. And every now and then I talk about price, I rarely do, but in general, let's talk about the macro. Crypto is a unique phenomenon, it's a unique thing and these are crazy times. I remember just a few months back when coronavirus first came out and we saw basically everything just bottom out, everybody went crazy they went to cash all asset classes just went to hell in a handbasket. And I did a video and I said: «Guys, our best days are ahead of us as an ecosystem and as an industry. And what happened? Everything got better over time. People started getting more optimistic. You know, the reality is that we are seeing an old industry die right now, the legacy financial system. I just read Biden's tax plan. He wants to treat capital gains as ordinary income and put another 12,5% on top of that. And at the end of the day, all these new taxes amount to a trillion or so extra dollars, I think, per year in income. Takes six years from the make back what they printed out of thin air for coronavirus and are willing to print again. Which begs the question why do we even pay taxes anymore if we can just print money out of thin air. And we have a whole movement of people, the AOC crowd, wake up every day and they say: «Modern monetary theory: the actual supply doesn't matter. All that matters is how much can we print and get away with it." This is where we're at as an economy right now. And globally speaking, a lot of other nations agree with this. So given that the whole world, the leadership of the world is talking about negative interest rates, they’re talking about predatory financial systems hyperinflation, just print money modern monetary theory, just print as much cash as you want. And we look to the cryptocurrency industry and, God, we got a lot of problems. I think this collapse is probably because one of the most prominent exchanges in South Korea got hit. They got shut down by the South Korean government. They, at one time, were responsible for a big part of the kimchi premium. And you know what? Korean government might shut down a few more Korean exchanges. And usually the market base these things in. We got crazy yield farming weird stuff going on in the DeFi space. All these other local events and their blips, they don't really matter that much. Just like corona in the long term won’t matter too much. In terms of the markets what matters is the trend and where are we going. I had a meeting with some people this morning and we talked about revolutionizing the healthcare industry and getting things better in terms of supply chains. I had another meeting with a soon-to-be former Wyoming state representative about how we're going to get governments to adopt blockchain technology. I talk every day to governors, heads of states congressmen, senators, mayors, some cities, sometimes very large cities with millions of people. They all say the same thing: «We need help, we need solutions, we’re damn tired of the way that the old system is running». And you know what? If we don't solve it - a lot of people are going to get hurt or continue to be hurt. The common theme that we all have is - no one's happy. Look at the black lives matters protests. Taking their philosophy of the organization aside the ranking file people are there not because they love marxism they're there because they're unhappy with the way society is. And why shouldn't they be? When my grandfather got his first job on my mom's side out of the Korean war, he was a lineman. And he made enough money from that job to have seven kids and have his wife stay at home. No college degree fresh out of high school, fresh out of marine demolitions and alignment five boys and two girls. And he could take care of that family and save money every month, have a car and a house and that was his standard of living. How many people in the middle-class today in the United States or Europe for that matter have the ability on a single person’s salary to raise seven children and have the wife or the husband stay at home? How many people? Not many. Why? Because our monetary system has failed us. The inflationary policy has created a situation where the Jeff Bezos can have 200 billion dollars and make windfall profits every year regardless of how bad the economy is and the everyday people they don't get a pay increase, so a lot of cases they don't get keep their job and their money deteriorates in value a lot more than three 3% per year. Our industry has principles in that we worship the math and the protocols and the stable monetary policy, these types of things. And as corrupt as some of the exchanges can be and some of the bad actors are: all movements suffer from these warts. And they're finite and temporary. You run out of them at some point. Self-regulation kicks in or standards kick in and these bad actors flush out. And what's left behind is a crucible that contains the truth of the matter, which is: we're going to win as an industry. There's just no doubt in my mind. You have bad days in the market, you have damn good days in the market. You get addicted to the good ones and you hate the bad ones but at the end of the day, it's only going in one direction which is: crypto is going to eat the world. Every voting system, every property registration system, every monetary system the next 25 to 50 years is going to be running on the tech we build and others build. And running with the principles of power to the edges. This is the great challenge of our time: to do it in a way that it's fair, transparent, open, and doesn't allow a government to co-opt it. It's gonna be a lot of fights here the least of our concerns and matters are a red day. And every now and then I like making these videos to remind people why I’m here and why you should be here too. As toxic as the trolls could be and these other people can be - none of them really matter. Markets don’t really matter. What matters are the principles and the purpose behind what we do. And you have to ask yourself: - Are you happy with the way that society is? Are you happy with the money in your pocket? Are you happy with the political leadership representing your nations? Are you happy with your future and do you honestly believe if we keep doing the things that we did and continue to do that the future is going to be better? Or do you think it's going to be worse or stagnant? I think too many people have woken up and they realize that if we continue doing the things that we do, the future is going to be a bad place. And they don't want that to happen. And so we're voting with our wallets, we’re voting with our feet and we as a collective industry are waking up and figuring out how to build something better. And there's some good days and bad days along the way. Today's a bad one, but there are going to be good days tomorrow. Just like I told you back when corona made everything go into free fall. And I told you before. And I warned you about with ICO mania. We're in a DeFi bubble right now. There’s no doubt in my mind about that. I saw it in 2017 with ICO mania, I see it here. And there's probably going to be worse days ahead in that respect. But the trend is always the same and never forget that. And never forget that real people are actually adopting these systems and using them. And every day we see more and more and every day that movement grows. What's so humbling is that I know a lot of you are here with me. It used to be pretty lonely space to be in a few years back. You know, the conferences, they didn't have many people. My first bitcoin meetup group in 2011 in Colorado is at the gypsy house cafe, I think I was 13th in Pearl over Capitol hill in Denver. And I registered for the event, I showed up. Two people registered: myself and another guy. And the other guy didn't show up so I had coffee with myself. Compare that with the Shelley summit that we had in July of 2020: 10 000 attendees. Ten thousands from all across the world. Compare that to where we are at today just nine years later. Pretty amazing if you think about how fast things have grown and how many fertile beautiful ideas exist in this industry and what this industry is doing for the world as a whole. And that is why we're going to win. Because at the end of the day who can argue against freedom? Who can argue against liberty? Who can argue against putting people in control? The only way you can is when you believe people are stupid, people are evil, people are incapable. And I suppose that's a philosophical difference between those who currently lead and the people who want to replace them. The people in charge right now of the world, the big banks, the Fortune 500 companies, the media, Hollywood, these things - they're very cynical people who believe in the worst in us. They look at everyday people with sustain and disgust and say: «These people if left to their own devices will be chaos. These people if left to govern themselves will burn everything to the ground and destroy everything.». And every single time I have ever seen a bad event happen, what the news doesn’t show you and what those people don't talk about is how we come together and help each other out. Someone gets injured in the streets more often than not people show up and help them. People need a helping hand someone always shows up more often than not. And this is no different. I don't believe the political process is effective anymore in any modern democracy. They've all been co-opted, perhaps they always were. But what I do believe is that we can come together and change things economically, which is what we're doing. And it's messy. Building our own money is messy, building our own industry is messy. We make a lot of mistakes along the way, we lose a lot along the way. We collect some scars too while we're at it. But progress every year keeps being made. The technology every year keeps getting better. Today, right here, right now provably secure proof of stake protocols are in circulation. They were a fantasy five years ago, now they're a fact of life. Today, right here, right now snarks have evolved by an order of magnitude in every category from validation time to efficiency to proof size. In all favorable ways which opens up all kinds of new applications and scalability and privacy. Today, right here, right now layer 2 protocols are more advanced than they have ever been in our industry's history. giving us the ability to build payment systems that scale to billions of people. Today, right here, right now we are seeing massive innovations in governance and a fertile environment for things like approval voting, threshold voting, preference voting, quadratic voting that will enable us to build all kinds of new treasuries and governance systems that eventually will scale to nation-states. As the politicians of today argue whether the post office can properly count paper ballots that people mail, we are building voting systems with state-of-the-art cryptography living on phones where you can vote with just a tap of a button and enjoy more security than we have ever imagined before. That is the future. This movement is enabling humanity. Money flowing at the speed of thought and the speed of thought making new money. How can you compete with that? You can’t, unless you bring people down with cynicism and disdain. And ultimately what competing vision do they offer? That you all should be in chains. That we should just be wage slaves. We should just accept that every year our money deteriorates in value. That we should just accept that the rich will get richer the poor get poorer. And every now and then they throw us table scraps. And when we get real angry - they usurp the movements and then install their own leadership to basically take those movements from us. As we've seen so many times before and we will see it again. I'm sorry that's not a road I want to walk down. And I'm willing to ride rocky waters, crazy markets crazy people in unlimited flood and trolling. But I will never apologize for believing in the best in people. And I will never apologize for believing that if only we give everyone around us the tools to save themselves and society that they can do it. They don't need great leaders and charisma. No one needs someone to tell them what to do. We all know what to do. We all know how to make the world a better place. We just have to be trusted enough to do it ourselves. You know what? For the first time ever we did with Bitcoin. And then we did it again with Ethereum. And now we're doing it again with Cardano. And we, as a movement, will continue to do it. So I believe our best days are ahead of us and every day I wake up and there's more people marching with me in that respect. And one day it'll be millions. And one day it'll be billions. And one day all those cynics will be gone. Replaced with optimists who once again believe that tomorrow is going to be better than today. and that we're going to leave the world just a little bit better than the way we found it. So every now and then on a tough day I like making a little message and letting you guys all know it's going to be better and you know what it will be. Just have to have faith that it will be. So hold the line, hold strong, and have faith in each other and go do something. Build something. Start something. Got a lot of podcasts on the way. A lot of things coming down the pipe for the DC fund. A lot of opportunities to actually innovate. Multi-assets are coming soon. Plutus is coming soon. Guys are going to be able to build a lot. Start thinking today what's the business plan. What would you like to change? Small or large. You don't complain about voting - change voting! Your own organization. Maybe you belong to a club - do a blockchain-based voting system. Maybe you have some political influence. Have a primary democrat or republican or your local primary in your country for selecting candidates done with blockchain-based voting. Maybe you want to build a new financial product. Think about it! Figure it out! There's so much there! It’s all there! It's ready to go, it's for you to take and build and innovate with. Every day I wake up I try to make the platforms better. I try to push the technology a little further along. I try to hire great people and bring them into our industry. Cardano brought the Haskell industry into the cryptocurrency space. Cardano brought a lot of academics, who had never thought about cryptocurrencies, into the cryptocurrency space and we made our problems their problems and as a consequence, they started solving them in ways we could have never done before. But most importantly Cardano brought a lot of YOU into the cryptocurrency space and you never thought you'd have this level of control and freedom over the fabric of society in the direction of the human race. Don't let that slip through your fingers. Figure out what you want to do with that superpower. Might be small, might be big. I dreamed big. You can dream big too. Even if you want to just dream small: every person counts every action counts. Up to the hill. Y'all matter. To me and to each other and we're all in this together. Never forget that. So, hard day, rough day. Tomorrow will be a better one. The day after will even be better. See you guys soon Take care!
Well, February 22nd makes it one whole year. I think that's deserving of a top level post, right? Here are screenshots of the Mint Trends, which has every single expense from the past year categorized. I've added comments on each page. Expenses Overview Auto Expenses Food Expenses Home Expenses Utility Expenses Tax Expenses Healthcare Expenses Entertainment Expenses Main takeaways, my total expenses for the year was $37,700, but I'm going to dismiss about $15,000 of that as "one time" expenses from paying off my car and my furniture loan. A more reasonable number for my annual spend is $22,700. With my car payment gone, my highest expense category is Food, averaging $500 per month. This has room for improvement. Healthcare will look artificially low last year because of taking Tax Credits up front. This year I am not and will be paying $325 per month for health insurance. At ~$4000 per year, this puts healthcare at nearly 20% of my total expenses. Nothing else is particularly interesting. That $22,700 figure is a reasonable real-world number for me, but for future planning I'd still inflate that to $25,000 just to have more wiggle room. I may look into traveling this year, which would add some expense. Investments: Vanguard Investments: (All in VTSAX)
Traditional IRA: $299,000 -> $348,000
Roth IRA: $14,500 -> $18,150
Brokerage: $18,400 -> $22,900
Total Rollup: $331,800 -> $389,100. ~17% return
Other LTCG holdings: $145,000 -> $291,000 (other investment accounts and bitcoin) HSA Investment Account: $6000 -> $7400, with another $1700 in the "cash" holdings of the HSA. $9000 cash in Money Market & Checking Account. Finances Going Forward I had earned income last year so I didn't start my Roth Conversion Ladder last year. This year I decided I will be converting the $12,400 standard deduction + $9600 of the first tax bracket for a nice round $22,000 converted. Yes I'll owe a little bit of taxes, but it sets up my Roth with $22k in 5 years which should cover the majority of my expenses. And with $350k currently in tIRA and converting $22,000 per year, I won't be able to chew through it all before actual retirement age. I have about $20k from an old stock purchase plan that unlocks come April, which I will be selling and likely moving over to my money market account to shore up my "cash" holdings. My plan is to not really tap any of my "normal" investment accounts for as long as possible. I've been deferring to selling Bitcoin if I need to move some cash over. Last year I sold 3 bitcoin, one for $9300 in June, and then two at the end of December (for tax year Capital Gains reasons) for $7300 each. These were all LTCG at 0% taxed. AGI for last year is around $35,000. The Living Part: There's all the boring expenses and financial stuff. Now for the ever painful question that my beloved Grandmother loves to ask, "But gosh, what do you do with all of your time! I can't imagine being retired at your age!" Step 1, restful sleep. During my working career I lived off 6 hours of sleep every day. It made for exhausting weekends trying to "make it up." And luckily I'm not a generally stressful person or else it'd have been worse. But now I go to bed when I'm tired, and whenever I naturally wake up, I get up. This can lead to VERY weird hours since I'm often an extreme night owl. But I generally get 9-10 perfect restful uninterrupted dream-filled hours of sleep. I'm betrayed by my "Food Expense" breakdown, but I really am cooking more and eating better. I drink a lot of coffee and water at home and generally try to eat only one meal per day, but sometimes lunch and dinner. I don't normally eat breakfast, just have coffee when I wake up. And did I mention how much less painful it is to go grocery shopping when it's in the middle of the day and everyone's at work. It's so nice. I spend a lot of time on reddit browsing my front page, and I check out the YouTubers I follow that post daily, then check out any of the irregular posters. Depending on how much good stuff there is, this could go on for a few hours. I have a lot of hours playing video games. I tend toward puzzle games or building games (Factorio, Satisfactory) because they scratch that itch in my engineering brain. There are times at night where I'll spend hours on this website: https://www.puzzle-sudoku.com/ and play Sudoku or Nonograms or any of the other puzzle types on the bottom of the page. I'm doing my best to watch every single last show on Netflix. It's a daunting task, though it's surprising how often I drift back toward watching the same smattering of Star Trek: The Next Generation episodes rather than try something new. But I try and take recommendations and work my way through shows. And Podcasts! The joy of joys is when I come across a new-to-me podcast that has a huge backlog. I found a great ST:TNG rewatch podcast that had 108 episodes already done. I spent like 2 months watching the episode of TNG then immediately listening to their podcast about that episode, repeat repeat repeat. I'm currently working my way through The Adventure Zone, I'm on episode 46 of 155 with them. And they keep advertising the other podcasts The McElroys do so I'm sure I'll roll into one of those next. For many people podcasts are background noise, but I'll often just sit on the couch and concentrate on just listening the podcast. Outside of home, I can't wait for the weather to get nicer so I can go on more walks. Being a night owl I like going for walks at night. I live near our city center so I'm within blocks of city hall, the main library branch, and the fountain / park. I jump at any opportunity to hang out with friends. It's just about every weekend that we are getting together to hang out and play board games. Like I mentioned in one of the breakdowns, I've started to play D&D with my buddy and his wife. I'd never played before but he's been DMing for years (but hasn't had a group for 10+ years now). He's glad to be playing again, his wife loves it, and it's super convenient for them to stay home with the 5 month old daughter. (And baby gets to hang out with Uncle Oracle.) I get together with former co-workers every few months to keep in touch with them. One in particular I have a standing every-2-month bar date with. I remind them every so often that if they want to go out to lunch ever to just call me. Personal History Just a quick personal history in closing. I was an automotive engineer working for OEMs and Tier 1 suppliers in the Metro Detroit area. In the 2008 downturn I lost my job and was unemployed for 2 years and ended up getting my house foreclosed in 2010. By the time i got a job in March of 2010 I was basically at $0. I had a tiny amount in an 401k, had about $20,000 in credit card debt from being unemployed. But then I got a very well paying engineering job ($108k annual and eligible for time-and-half overtime). I kept living like I was unemployed, spent as little as possible and saved as much as possible. Through my parents I secured a mortgage on a nice 1 Bed / 1 Bath 900 sq ft condo. I paid off my CC debt in less than a year and kept banking cash and maxing my 401k every year. I heard about bitcoin in early 2013 (from a guildmate in World of Warcraft, believe it or not) and jumped on board. All time bitcoin price chart (log scale) for those unfamiliar with the history. I got in before the first spike to $1000 in December of 2013, and kept buying throughout the downswing in 2014 / 2015. In 2017 I sold 5.6 BTC for a total of $6000 and paid off the last of my student loans and my car, then a few months later I sold 4.25 BTC for $6700 and paid off the last of my condo mortgage. So in May of 2017 I was officially debt free and had a net worth of about $200,000. Then in the fall of 2017 was when bitcoin exploded. I knew I had to take profits here. Every time the price went up 10% I sold another bitcoin. $7500, $9000, $10700, $13000, $15500, $18600. I sold all the way up. I ended up selling about $100,000 in bitcoin that year and I pushed most of it into my Roth IRA and Brokerage accounts. Then I really started thinking about FIRE in early 2018. Started doing the math, tried to see what my expenses would be, and thought I'd give it ago. I've told myself from day 1 that I'd give this trial a solid 2 years. If I don't feel good about it, or the money doesn't seem right, then I'll still only be 40 years old and could (IMO) easily jump right back into an engineering gig. So I targeted early 2019 so I could frontload my 401k for two months, grab the annual bonus, then peace out. TL:DR: 38, FIREd, Money's looking right, Life is feeling right, everything is fine
Testing the Tide | Monthly FIRE Portfolio Update - June 2020
We would rather be ruined than changed. -W H Auden, The Age of Anxiety This is my forty-third portfolio update. I complete this update monthly to check my progress against my goal. Portfolio goal My objective is to reach a portfolio of $2 180 000 by 1 July 2021. This would produce a real annual income of about $87 000 (in 2020 dollars). This portfolio objective is based on an expected average real return of 3.99 per cent, or a nominal return of 6.49 per cent. Portfolio summary Vanguard Lifestrategy High Growth Fund – $726 306 Vanguard Lifestrategy Growth Fund – $42 118 Vanguard Lifestrategy Balanced Fund – $78 730 Vanguard Diversified Bonds Fund – $111 691 Vanguard Australian Shares ETF (VAS) – $201 745 Vanguard International Shares ETF (VGS) – $39 357 Betashares Australia 200 ETF (A200) – $231 269 Telstra shares (TLS) – $1 668 Insurance Australia Group shares (IAG) – $7 310 NIB Holdings shares (NHF) – $5 532 Gold ETF (GOLD.ASX) – $117 757 Secured physical gold – $18 913 Ratesetter (P2P lending) – $10 479 Bitcoin – $148 990 Raiz app (Aggressive portfolio) – $16 841 Spaceship Voyager app (Index portfolio) – $2 553 BrickX (P2P rental real estate) – $4 484 Total portfolio value: $1 765 743 (+$8 485 or 0.5%) Asset allocation Australian shares – 42.2% (2.8% under) Global shares – 22.0% Emerging markets shares – 2.3% International small companies – 3.0% Total international shares – 27.3% (2.7% under) Total shares – 69.5% (5.5% under) Total property securities – 0.3% (0.3% over) Australian bonds – 4.7% International bonds – 9.4% Total bonds – 14.0% (1.0% under) Gold – 7.7% Bitcoin – 8.4% Gold and alternatives – 16.2% (6.2% over) Presented visually, below is a high-level view of the current asset allocation of the portfolio. [Chart] Comments The overall portfolio increased slightly over the month. This has continued to move the portfolio beyond the lows seen in late March. The modest portfolio growth of $8 000, or 0.5 per cent, maintains its value at around that achieved at the beginning of the year. [Chart] The limited growth this month largely reflects an increase in the value of my current equity holdings, in VAS and A200 and the Vanguard retail funds. This has outweighed a small decline in the value of Bitcoin and global shares. The value of the bond holdings also increased modestly, pushing them to their highest value since around early 2017. [Chart] There still appears to be an air of unreality around recent asset price increases and the broader economic context. Britain's Bank of England has on some indicators shown that the aftermath of the pandemic and lockdown represent the most challenging financial crisis in around 300 years. What is clear is that investor perceptions and fear around the coronavirus pandemic are a substantial ongoing force driving volatility in equity markets (pdf). A somewhat optimistic view is provided here that the recovery could look more like the recovery from a natural disaster, rather than a traditional recession. Yet there are few certainties on offer. Negative oil prices, and effective offers by US equity investors to bail out Hertz creditors at no cost appear to be signs of a financial system under significant strains. As this Reserve Bank article highlights, while some Australian households are well-placed to weather the storm ahead, the timing and severity of what lays ahead is an important unknown that will itself feed into changes in household wealth from here. Investments this month have been exclusively in the Australian shares exchange-traded fund (VAS) using Selfwealth.* This has been to bring my actual asset allocation more closely in line with the target split between Australian and global shares. A moving azimuth: falling spending continues Monthly expenses on the credit card have continued their downward trajectory across the past month. [Chart] The rolling average of monthly credit card spending is now at its lowest point over the period of the journey. This is despite the end of lockdown, and a slow resumption of some more normal aspects of spending. This has continued the brief period since April of the achievement of a notional and contingent kind of financial independence. The below chart illustrates this temporary state, setting out the degree to which portfolio distributions cover estimated total expenses, measured month to month. [Chart] There are two sources of volatility underlying its movement. The first is the level of expenses, which can vary, and the second is the fact that it is based on financial year distributions, which are themselves volatile. Importantly, the distributions over the last twelve months of this chart is only an estimate - and hence the next few weeks will affect the precision of this analysis across its last 12 observations. Estimating 2019-20 financial year portfolio distributions Since the beginning of the journey, this time of year usually has sense of waiting for events to unfold - in particular, finding out the level of half-year distributions to June. These represent the bulk of distributions, usually averaging 60-65 per cent of total distributions received. They are an important and tangible signpost of progress on the financial independence journey. This is no simple task, as distributions have varied in size considerably. A part of this variation has been the important role of sometimes large and lumpy capital distributions - which have made up between 30 to 48 per cent of total distributions in recent years, and an average of around 15 per cent across the last two decades. I have experimented with many different approaches, most of which have relied on averaging over multi-year periods to even out the 'peaks and troughs' of how market movements may have affected distributions. The main approaches have been:
An 'adjusted income' approach - stripping out the capital gains components of Vanguard funds to reach an estimate of underlying income generation, both across the entire investment period, and during the sharpest low of the Global Financial Crisis
A long-term asset class approach - relying on long-term historical data on averages of the income produced by various asset classes
A 'tax method' approach - this derives an income estimate as a percentage of the portfolio by drawing on taxable investment income totals from tax return records
Simple historical rolling average - this is a rolling three-year measure, based on the actual distributions record of the portfolio
Average distribution rate approach - this method uses a long-term average of annual distributions received as a percentage of the total portfolio since 1999
Each of these have their particular simplifications, advantages and drawbacks. Developing new navigation tools Over the past month I have also developed more fully an alternate 'model' for estimating returns. This simply derives a median value across a set of historical 'cents per unit' distribution data for June and December payouts for the Vanguard funds and exchange traded funds. These make up over 96 per cent of income producing portfolio assets. In other words, this model essentially assumes that each Vanguard fund and ETF owned pays out the 'average' level of distributions this half-year, with the average being based on distribution records that typically go back between 5 to 10 years. Mapping the distribution estimates The chart below sets out the estimate produced by each approach for the June distributions that are to come. [Chart] Some observations on these findings can be made. The lowest estimate is the 'adjusted GFC income' observation, which essentially assumes that the income for this period is as low as experienced by the equity and bond portfolio during the Global Financial Crisis. Just due to timing differences of the period observed, this seems to be a 'worst case' lower bound estimate, which I do not currently place significant weight on. Similarly, at the highest end, the 'average distribution rate' approach simply assumes June distributions deliver a distribution equal to the median that the entire portfolio has delivered since 1999. With higher interest rates, and larger fixed income holdings across much of that time, this seems an objectively unlikely outcome. Similarly, the delivery of exactly the income suggested by long-term averages measured across decades and even centuries would be a matter of chance, rather than the basis for rational expectations. Central estimates of the line of position This leaves the estimates towards the centre of the chart - estimates of between around $28 000 to $43 000 as representing the more likely range. I attach less weight to the historical three-year average due to the high contribution of distributed capital gains over that period of growth, where at least across equities some capital losses are likely to be in greater presence. My preferred central estimate is the model estimate (green) , as it is based in historical data directly from the investment vehicles rather than my own evolving portfolio. The data it is based on in some cases goes back to the Global Financial Crisis. This estimate is also quite close to the raw average of all the alternative approaches (red). It sits a little above the 'adjusted income' measure. None of these estimates, it should be noted, contain any explicit adjustment for the earnings and dividend reductions or delays arising from COVID-19. They may, therefore represent a modest over-estimate for likely June distributions, to the extent that these effects are more negative than those experienced on average across the period of the underlying data. These are difficult to estimate, but dividend reductions could easily be in the order of 20-30 per cent, plausibly lowering distributions to the $23 000 to $27 000 range. The recently announced forecast dividend for the Vanguard Australian Shares ETF (VAS) is, for example, the lowest in four years. As seen from chart above, there is a wide band of estimates, which grow wider still should capital gains be unexpectedly distributed from the Vanguard retail funds. These have represented a source of considerable volatility. Given this, it may seem fruitless to seek to estimate these forthcoming distributions, compared to just waiting for them to arrive. Yet this exercise helps by setting out reasoning and positions, before hindsight bias urgently arrives to inform me that I knew the right answer all along. It also potentially helps clearly 'reject' some models over time, if the predictions they make prove to be systematically incorrect. Progress Progress against the objective, and the additional measures I have reached is set out below. Measure Portfolio All Assets Portfolio objective – $2 180 000 (or $87 000 pa) 81.0% 109.4% Credit card purchases – $71 000 pa 98.8% 133.5% Total expenses – $89 000 pa 79.2% 106.9% Summary The current coronavirus conditions are affecting all aspects of the journey to financial independence - changing spending habits, leading to volatility in equity markets and sequencing risks, and perhaps dramatically altering the expected pattern of portfolio distributions. Although history can provide some guidance, there is simply no definitive way to know whether any or all of these changes will be fundamental and permanent alterations, or simply data points on a post-natural disaster path to a different post-pandemic set of conditions. There is the temptation to fit past crises imperfectly into the modern picture, as this Of Dollars and Data post illustrates well. Taking a longer 100 year view, this piece 'The Allegory of the Hawk and Serpent' is a reminder that our entire set of received truths about constructing a portfolio to survive for the long-term can be a product of a sample size of one - actual past history - and subject to recency bias. This month has felt like one of quiet routines, muted events compared to the past few months, and waiting to understand more fully the shape of the new. Nonetheless, with each new investment, or week of lower expenditure than implied in my FI target, the nature of the journey is incrementally changing - beneath the surface. Small milestones are being passed - such as over 40 per cent of my equity holdings being outside of the the Vanguard retail funds. Or these these retail funds - which once formed over 95 per cent of the portfolio - now making up less than half. With a significant part of the financial independence journey being about repeated small actions producing outsized results with time, the issue of maintaining good routines while exploring beneficial changes is real. Adding to the complexity is that embarking on the financial journey itself is likely to change who one is. This idea, of the difficulty or impossibility of knowing the preferences of a future self, is explored in a fascinating way in this Econtalk podcast episode with a philosophical thought experiment about vampires. It poses the question: perhaps we can never know ourselves at the destination? And yet, who would rationally choose ruin over any change? The post, links and full charts can be seen here.
Hello Guys, how is your day? It is nice to meet you. My name is Martin. This article is going to be a bit long. Prepare yourself. I would like to use the internet as a way how to be opened minded. I do believe, that I will find a few people who have a similar point of view about life. Let´s start. These books are the books which I have listened/read so far Robert Kiyosaki: Rich Dad Poor Dad Napoleon Hill: Think and Grow Rich Robert Cialdini: Psychology of Persuasion Dale Carnegie: How to Win Friends and Influence People Eric Reiss: Lean Startup Jason Fried and David Hansson: Rework Henry Hazlitt: Economics in One Lesson Mike Weinberg: New Sales Simplified Mike Weinberg: Sales Management Simplified Joe Girardi (I am using his previous surname because he had to change it due to business): How to Sell Anything to Anybody Chriss Voss with Tahl Raz: Never Split the Difference: Negotiating As If Your Life Depended On It Kevin Horsley: Unlimited Memory Daniel Kahneman: Thinking Fast and Slow Now I do hope, that you realized, that I am trying to improve if anyone has any book, which has value in the crypto sphere bring it here (or economy). I want to say, that I took my risk and I am comfortable with it. I know that the tax year is next year, however it is better to be prepared now. Let´s say that I am 23 years old. I don´t have commitments (expect bills and work) currently living in UK I realized, that I have two important dreams.
Be independent ( Don´t get me wrong I like to work and gain the money for initial investment, however, I would rather be doing long term investing/ day trading and be around my kid (in the future), than working long hours as a waiter plus I realized, that people talking to me differently when they have a higher position. I do agree, that humanity was raised in a hierarchy, therefore I want to get out of it as soon as possible.
Take care of my family and friends plus give the spare money back to the community (music festival, homeless people, donations, etc.
I made move-in crypto. I did some day trading 2-3 per day because I wanted to know if I can do it. Otherwise, I am thinking about it as long term ( I will go back to work when we open a restaurant). I did a few successful trades. Few not so much, but I waited and they become successful as well. I got lucky or fundamentals got lucky. I don´t know. I also realized, that for date trading I need more money. My road map is. a) Try to get as much as I can from this bull market b) Leave the job and become day trader I want to do everything legally, therefore here is the problem https://www.gov.uk/government/publications/tax-on-cryptoassets/cryptoassets-for-individuals https://koinly.io/ I have heard from other people who are using this software (on youtube) what are your thoughts? 1.) What if I am holding a Security token, which I have to convert to exchange token, therefore I will be paying capital gain tax or income tax? So far I know, that people converting to fiat money only Bitcoin. I might miss something. 2.) How do I pay tax, If I don´t want to change my tokens to Cryptocurrency? 3.) Is it better to trade as an individual or create a business? I know that this topic is complicated for many people therefore if my questions are hard to answer. Give me a shout and I will try to explain it. Is there anyone who could help me out or give me a link on a good accountant? ( I am going to ask at work our accountant about this topis) For me, this is serious problem. Obviously I want to pay as fewer taxes as I can because I will use this money for buying a house etc. therefore I will put the money back to the economy. On the other hand, I agree with paying taxes. So far I am doing well guys I have a 75 percent return on investment in 2 months. It can go to 0 even minus, but I do believe it can go even higher. Thank you for reading it so far! If you want I can get here more links of tax software providers. (I am curious how they are thinking about exchange, security and utility token). I hope, that I can post it here because it is a cryptocurrency group. I do like cryptocurrency. It consists of sociology, economy, international relationship etc. Thanks to everyone who read it so far. PS. I don´t want to promote anything. This is my life. I am real. Kind Regards Martin
Hello all, If you are interested in joining a (hopefully) newly formed island nation then this is the place to be. the subbreddit is reddit.com/theredditnation I have prepared a plan that explains how we will go about doing such a task. More detailed elaborations for each component of the plan will be given at request. Obviously the first question is where we would have our island. I have identified places of interest. One place of interest is the Nation of Belize. Belize is a small nation with a low GDP of 2 Billion and they are selling off most of their island. Islands with 50-100 acres can be acquired for around 500,000; give or take 50,000. From the people (Government Officials) I have contacted, they are perfectly okay with this plan. Now here is a 5 step proposal of how this will come to fruition (I will expand on how we will finance this)
Acquire the island
Set up the initial infrastructure
Form of Government that I propose is a constitutional monarchy (for now I will be the “king”)
Country will be run as a democracy (two chamber form of parliament)
Noble titles such as Duke, Earl, Count, Lord, Baron etc will be sold off to help initially finance the island.
Establishment of the Government Building
For now this is where the government will convene until more infrastructure is added and the island is improved.
People will be made citizens at this location
Establishment of Civil Services
Waste collection, Police, Social Services
Establishment of a Port
This will allow supplies to enter the island.
This will allow for the island to participate with the rest of the world economically(I will expand on this later).
The port will function as the entrance point and exit until the runway can be constructed.
Establishment of Resident Housing
This temporary housing will be until the island can be developed and more permanent buildings can be put up.
Resident Housing and the Government building will be set up near the port until island development is completed
Set up a massive solar powered crypto mining operation to help finance further development of the island
A partnership with big mining companies can be brokered to have this set up
Make the Island a desirable location
Set up the island as a luxury city
Free housing for citizens
Free healthcare for citizens
Free schooling and university for citizens
Build resorts and legalize gambling on the island
The revenue generated from such activities will help finance further development of the island
With the revenue generated from this, the island will be able to provide for the residents a luxury city
The gambling industry investments will help to finance the island as well
Make the island a banking haven
Set up a bank on the island
No KYC laws will be enforced on the island
This will attract forgien investment into the island
Allow cryptocurrency companies to conduct business without oversight and for miners to set up large scale operations using solar powered energy
No income tax,sales tax, capital gains tax or corporate on the island
Commercial businesses such as casinos, resorts, and banks will just pay slightly inflated property taxes
This will help attract a lot more forgien investment as well
Will attract companies to set up offices here and thus bring jobs to the island.
Expand on the island infrastructure
Build an airport. The islands have enough space to accommodate runways for planes even up to jumbo jets
Build more free luxury housing for residents
Establish schools and universities
Establish a healthcare system
Enjoy the luxury haven of an Island that we have built
Now for the question of how much this island will cost and how we will get the funding According to my calculations (you can look at them below) it will cost us $2,600,000
The Island itself
200,000 to build
This will benefit us later when we receive forgien investments
500,000 for 250 passenger ferry
We will budget around 100,000 for operating costs
These buildings will be permanently built but occupied until the island is built and then will be sold off to recoup the investment.
Around 50,000 to purchase initial equipment and medical supplies
Another 100,000 to purchase ATVs
Another 100,000 to purchase off roading vehicles
Bitcoin mining operation
We will get the money for the operation by partnering with a large company
We will purchase MRE’s and other preserved food products for the island
An exact count of this cannot be made until we move further into the plan
Further development of the island
This will be financed by the forgien investments in regards to banking, gambling and tourism along with money raised from property taxes
Now in regards to how we will raise that sum
We will sell off noble titles (this is why we will set up a constitutional monarchy)
While no price has been established yet, the titles for sale can include
A small percentage of the island (less than 25%) will be earmarked for sale immediately. The part earmarked for sale will be part of the planned downtown district/capital and developers of this land will be allowed to build whatever structures they want and won't have the problem of jumping through hoops like zoning laws.
On a 60 acre island, 15 acres would be marked for sale
The acres on this haven of an island will be sold for 250,000 each so the island would raise 4.5 million and the sale of said acres will help kickstart the massive infrastructure of the island and provide the island with adequate funding.
Once the island is set up, the island will continue to profit from digital activities which will allow it to not have to charge an income tax or corporate tax
Digital activities include the solar powered bitcoin mining operation
We will partner with an existing bitcoin company for this
Solar powered web hosting
People can become citizens for a fee of $10 which will mainly go to the printing of their ID and filing in the government archives but the island will profit a few dollars off of this
If you have made it this far, please join the subreddit More information to come soon, thank you.
To determine the correct reduced tax rates and calculate long-term capital gains tax appropriately, the taxpayer is highly advised to use the instructions on Form 1040. Ultimately, the taxpayer’s total net capital gain or loss of Bitcoin (i.e. net short-term and long-term capital gains and losses) will be reported on the taxpayer’s Form 1040 . While no capital gains is levied on citizens for the sale of bitcoin and other cryptocurrencies, they are still expected to pay income tax regardless of the currency being exchanged. An Example of Capital Gains Tax . Let's assume that you purchased Bitcoin for $30,000. You then sell it for $50,000, so you have a $20,000 capital gain. This would be a short-term gain if you held the Bitcoin for a year or less, so it's taxed as ordinary income according to your tax bracket. It's a long-term gain taxed at a rate of either 0%, 15%, or 20%, depending on your overall income, if ... Bitcoin.Tax is the most established crypto tax calculation service that can work out your capital gains and losses and produce the data and forms you need to file your taxes. Simply upload or add the transaction from the exchanges and wallets you have used, along with any crypto you might already own, and we'll calculate your capital gains. In countries where tax residents pay 0% tax, it’s logical that in those countries, gains made from Bitcoin transactions would be tax free in the same way that other tax-free income might be. But note that this isn’t a special tax-free status for Bitcoin, it's a tax-free territory to start with , which is a big difference.
Tax on your Bitcoin and cryptos – 2019 – Play by the rules ...
Bitcoin / altcoin tax 101 - Capital gains and first-in first-out - Duration: 8:24. TheBitcoinCPA 15,967 views. 8:24. 80 Trillion Dollar Bitcoin Exit Plan - Duration: 22:12. Mineable 335,281 views ... #NRImoneyclinic #NRItax #Incometax #CapitalGainstax TYPES OF INDIVIDUAL TAXES INCOME TAX CAPITAL GAINS TAX DISADVANTAGE OF INCOME TAX No Escape Follows Slab ... Understand Capital Gain easily. Download book here https://drive.google.com/file/d/1VM7LgUJe4vjPliCqLytPz94b4V8oOfmL/view?usp=drivesdk https://drive.google.c... I tried to call the IRS....4 times. No luck. I decided to hunt around on my own. This is what we got. The IRS wants every single transaction calculated to US Dollars. Buying and selling on ... NOTE: At 1:30 the formula for Capital Gains should be Fair Market Value - Cost Basis = Capital Gain/(Loss). Quick super high-level overview on how to calculate gains, the First-In First-Out method ...