Okay, now that the clickbaity title got you here, we’re gonna give a double disclaimer here: I’m not certified to give financial advice, and you probably can’t get rich on bitcoin. And to top it all off, it’s not quick. On the contrary, it requires you to take a huge risk, gamble it all on an experimental technology and get real frugal with your expenses and personal finances.
HUGE FUCKING DISCLAIMER: DON’T DO THIS. YOUR CAPITAL IS AT RISK. SERIOUSLY, IT’S NOT EVEN QUICK.
Alright, now that we’ve lost 90% of the readers let’s get into the nitty gritty.
Michael Saylor describes it very well, I’ve rigged the video to start at the relevant part:
The ideology can be summed up in this tweet, which I’m copying in case something happens to it:
How to get rich:
•Personal Balance sheet•
-Assets- | -Liabilities-
₿ ₿ ₿ ₿ ₿ | $$$$$
Going back to the simple terms found in Rich Dad Poor Dad, assets are what give you money in cashflow or appreciate in value, meaning go up in value. Stuff like gold, collectibles, real estate, stocks hopefully, things like that. And liabilities are stuff that depreciate in value or cost you money to maintain, like the house you live in, a car, a boat, a swimming pool you’ve added in your back yard, that sort of thing (Unless you’re monetizing your pool for youtube videos and wet t-shirt parties.)
Another thing to understand is what being wealthy means. Simply put, it means how long can you survive with what money you have on hand? Is it six months? Three months? One month? That’s your wealth. So, wealth is a measure of what your monthly expenses are and how long till your cash reserves dry up. One way to become wealthy is to have more cashflow than your average monthly expenses, essentially making you infinitely wealthy. A clever person would argue at this point that you should lower your expenses, thus stretching out your wealth over time. And that would be a very clever, frugal person, who is on their way to becoming
Now, the idea is that you wanna die in fiat debt. You wanna leverage the fiat system and the classic asset system as much as possible to get capital so you can buy bitcoin. If the stock to flow model holds, all you need is one bitcoin epoch, meaning one halving cycle. Halving cycles take about 4 years. Every single time so far the price of bitcoin has increased by 10-20x in each epoch. That means, if you put in 100.000 euro, in under 9 years you’ll have a million euro. That’s right, you’ll be a millionaire. If you want this faster and you wanna leverage everything around you, squeeze every last bit of fiat currency and pour it into bitcoin, you can remortgage a house, get loans however you can, get really risky and just buy bitcoin, hopefully at a dip.
Okay, and what then?
Then you have to cut down on living expenses. Really get frugal. Lots of bitcoiners have done that, and it’s easy to find some guides in the community. You cut down on expenses, pay the minimum on the loans you have taken out, and just ride it out for about 4 years if you’re in 100.000, or 9 years if you’re in 10.000. That’s it. Just downsize everything, cars, expenses, bills, entertainment, literally everything. You become a frugal millionaire.
Okay, let’s say I do that. Then what, do I sell?
No, ’cause that would be dumb. That’s the get-rich-quick mentality, and hopefully we’ve lost those guys already at the very first paragraph. No, you never sell your bitcoin. At that point in time, you’ll have been so deep in the ideology and things would have gone so mainstream that you won’t want to part with it. The FOMO will be so intense, the opportunity cost will cut so deep that you’ll simply refuse to sell. That’s where DeFi comes in to the rescue.
By taking small loans against your bitcoin, it doesn’t even have to be too much, you can start using your saved-up million. If you’re frugal enough and you balance the loans correctly, bitcoin will keep on increasing and you’ll be able to pay out whatever interest it costs. Also, you can put some bitcoin in services like BlockFi or YouHodler that pay you interest on simply parking it there. I’m sure their huge percentages of 6% or 4.8% will eventually go down, but even if it’s a solid 2% at some point you’ll earn 20.000 euro annually just by keeping it there. And there are even riskier investments to make, liquid stake earns out 10% on average. It all depends on your risk tolerance level.
If bitcoin continues to appreciate at a rate of 25% per year and your fiat loans are 2-5%, you never need to pay them back in full. You can just ride the wave. And if you get a CeFI service like Binance that gives you a debit card, you can just get crypto loans and spend that money on fiat expenses.
But I can’t survive on 20-40.000+ euro per year!
Sure you can. It doesn’t mean you have to stop working. This is on top of your usual income, which means that you can either keep working and reinvest, or, and this will excite some people, you can quit a job you don’t like and do something meaningful that maybe pays less money but brings you joy. It’s a whole different thing to retire comfortably at a late stage in life, and a whole different discussion about a younger person, even someone younger than 50, to start having some freedom to do what they want in life. They’d still be considered a wealthy person if they manage their expenses and reinvestments properly, just not a big-spender like celebrities and athletes. Just rid yourself of this envy and greed and be content with what you have. Appreciate the important things in life, family, kids, friendships, experiences, personal and financial freedom, creating, art, all those things.
Is this what you plan to do?
Yes. I think I will attempt this. The goal is simple: Get 10.000 euro in bitcoin before 2024. That’s when the halving happens. Then ride it out in a frugal lifestyle until 2029. Hopefully, if the stock to flow model holds, that same bitcoin will be worth about 1.000.000 euro.
The risk is not that big. By euro cost averaging this and buying small amounts here and there, buying the dip, reinvesting into bitcoin up until 2024, an investment of 10.000 euro is not even that large. People waste half of that in Apple crap like iMacs and iPhones over the course of that timespan. People go out at bouzoukia and waste 500-2000 euro on a single night of drunken fun and debauchery, with nothing to show for it the next day other than a hangover and a venereal disease. It’s easy to save up 10.000 euro, or dollars or whatever fiat shitcoin you use daily, risk it on this strategy, and the reward is astronomical. Yes, it requires a mental shift, yes, it requires to get some frugality in your personal finances, yes it’s still quite risky.
But is it really?
Bitcoin has been the best-appreciating asset of the decade. Seifedean Ammous says this neat little thing in one of his podcasts:
Bitcoin will teach opportunity cost to the entire world.Seifedean Ammous
Another thing he says is that the other investments need to prove that they’re better than bitcoin, bitcoin doesn’t need to prove a thing at this point. The arguments are moot. It’s like debating if a brick-and-mortal business needs a website or not in 2021. Or, if you wanna get dumber than that, does it really need a phone number? At this point in time, yes it fucking does. That’s where the argument has gone to, to a point where the network effect has swallowed any late adopter arguments and excuses and has blown past any reasonable expectations.
So yeah. Use fiat debt, buy some Bitcoin, get frugal, and get rich. It’s that simple, but it ain’t easy.