So my friend got into crypto pretty early on and has now amassed a pretty penny.
The wisdom goes "don't keep all your eggs in one basket", but we all know how hard cashing out crypto is.
But an even bigger problem comes to mind. So, you have managed to cash out a 7-digit amount into fiat. What to do with it?
Banks, those few who will tolerate this at all, will pretty much force you to buy stocks or some other s**t that, frankly, is in a worse bubble than Bitcoin. We are on the verge of a massive downturn so buying stocks now (mid- or long-term) is IMO stupid. Bonds or some other crap is barely keeping above inflation. Real estate in most countries is taxed to hell and using offshore structures to own property is punished by higher taxes on property. Renting it out (excl Airbnb which is a hassle requiring someone doing it as a part-time job, pretty much like running a small business) gives you a yield of 3-5% of property value, will still get taxed and there is paperwork and time invested into it. Buying property speculatively just to hold and resell later is punished in many civilized countries either with high round trips to buy/sell property or a tax on unused property, which will pretty much eat most of your potential profits. Plus managing property one way or another is still business, which means either yourself or any trusted person of yours needs to manage this.
Gold and some other stuff, sure maybe, but there is much friction (big cuts taken by middleman if you need to buy/sell quickly, risk of getting fake gold, harder to transport across borders than crypto). Buying some crap like gold certificates is even worse, there are more of those certificates around than gold itself.
Holding cash? It's hard. Banks don't want you to have a lot of cash on your account. Many countries now even have negative interest rates , either direct or through big fees, so you are gradually losing the value of your cash (not mentioning inflation, which is WAY higher than 1-2% reported for first world countries. The statisticians are lying. Stuff like buying good food and clothes, using good transport and staying at good hotels is growing at 10-20% per year. I don't talk about buying Versace clothes and staying at Four Seasons, but just good quality decent consumer goods (foods that don't give you cancer) and staying in decent holels (where your back is not aching from lying in bed and gym does not have pubic hairs thrown around) is getting A LOT more expensive. Anyway, so cash is also slowly losing its value. Assume you get some cushion worth 5-10% of your crypto wealth in cash just for expenses and for a rainy day, etc. the question remains, what about the rest.
Buying luxury s**t is, for most part, waste of money (cars, yachts, watches) or will get taxed to hell and/or will require moving around a lot (villa / maximum number of days residence allowed in the jurisdiction of villa). Also, keeping value for these is questionable, whereas maintenance (villa, yacht) is also sizeable every year.
With all this in mind, my friend has decided to stay in crypto for now, apart from having a few small chunks in cash/gold just in case something bad happens. Seems there are no better options for the rest.
So the question really remains, if not having money in crypto, then in what?
Let's have a discussion on this. Especially any other users who are deep in crypto, would be good to know if I am the only one thinking like this.
The wisdom goes "don't keep all your eggs in one basket", but we all know how hard cashing out crypto is.
But an even bigger problem comes to mind. So, you have managed to cash out a 7-digit amount into fiat. What to do with it?
Banks, those few who will tolerate this at all, will pretty much force you to buy stocks or some other s**t that, frankly, is in a worse bubble than Bitcoin. We are on the verge of a massive downturn so buying stocks now (mid- or long-term) is IMO stupid. Bonds or some other crap is barely keeping above inflation. Real estate in most countries is taxed to hell and using offshore structures to own property is punished by higher taxes on property. Renting it out (excl Airbnb which is a hassle requiring someone doing it as a part-time job, pretty much like running a small business) gives you a yield of 3-5% of property value, will still get taxed and there is paperwork and time invested into it. Buying property speculatively just to hold and resell later is punished in many civilized countries either with high round trips to buy/sell property or a tax on unused property, which will pretty much eat most of your potential profits. Plus managing property one way or another is still business, which means either yourself or any trusted person of yours needs to manage this.
Gold and some other stuff, sure maybe, but there is much friction (big cuts taken by middleman if you need to buy/sell quickly, risk of getting fake gold, harder to transport across borders than crypto). Buying some crap like gold certificates is even worse, there are more of those certificates around than gold itself.
Holding cash? It's hard. Banks don't want you to have a lot of cash on your account. Many countries now even have negative interest rates , either direct or through big fees, so you are gradually losing the value of your cash (not mentioning inflation, which is WAY higher than 1-2% reported for first world countries. The statisticians are lying. Stuff like buying good food and clothes, using good transport and staying at good hotels is growing at 10-20% per year. I don't talk about buying Versace clothes and staying at Four Seasons, but just good quality decent consumer goods (foods that don't give you cancer) and staying in decent holels (where your back is not aching from lying in bed and gym does not have pubic hairs thrown around) is getting A LOT more expensive. Anyway, so cash is also slowly losing its value. Assume you get some cushion worth 5-10% of your crypto wealth in cash just for expenses and for a rainy day, etc. the question remains, what about the rest.
Buying luxury s**t is, for most part, waste of money (cars, yachts, watches) or will get taxed to hell and/or will require moving around a lot (villa / maximum number of days residence allowed in the jurisdiction of villa). Also, keeping value for these is questionable, whereas maintenance (villa, yacht) is also sizeable every year.
With all this in mind, my friend has decided to stay in crypto for now, apart from having a few small chunks in cash/gold just in case something bad happens. Seems there are no better options for the rest.
So the question really remains, if not having money in crypto, then in what?
Let's have a discussion on this. Especially any other users who are deep in crypto, would be good to know if I am the only one thinking like this.
Last edited:
.
.
