How Do You Retire on Bitcoin? With Morgen Rochard SLP593
Jul 22, 2024
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Morgen Rochard, a financial planner, delves into retiring on Bitcoin with topics like the 4% rule, conservative planning, rebalancing, borrowing against Bitcoin, and separating Bitcoin from 'Crypto'. Discussions include estimating currency debasement, Bitcoin's CAGR, and the sentiment shift towards HODLing Bitcoin.
Adapting the 4% rule to include Bitcoin requires strategic planning and adjustments to ensure sustainable retirement income.
Conservatism is crucial in retirement planning to navigate uncertainties like inflation, unexpected expenses, and shifting life circumstances.
Balancing asset allocations, including Bitcoin holdings, is vital for financial stability amidst potential government debt defaults and currency debasement.
Deep dives
Understanding the 4% Rule and Portfolio Management
The podcast delves into the concept of the 4% rule based on the Bill Bengen Trinity study, where a 50% stocks and 50% bonds portfolio over a 30-year period allows for a sustainable withdrawal rate. The discussion highlights the importance of adjusting spending based on portfolio performance and the need for individuals to tailor investment strategies based on their specific asset allocations like Bitcoin or equities.
Challenges of Relating Fixed Expenses to Withdrawal Rates
The episode addresses the mismatch between fixed expenses and fluctuating withdrawal rates. It emphasizes the significance of considering individuals' varying financial goals, life events, and spending needs outside a strict 4% withdrawal rule. It suggests a critical review of spending patterns and considerations for multi-generational wealth preservation amidst different expense scenarios.
Risk Assessment in Retirement Planning and Financial Conservatism
The conversation explores potential risks in early retirement, such as unexpected expenses, changing life circumstances, and evolving cost of living. It advocates for a conservative approach in retirement planning, encompassing factors like taxes, inflation, and future uncertainties. It discusses strategies to maintain financial stability, including analyzing loan options, business ventures, and the impact of Bitcoin on traditional financial advice.
Financial Advising and the Shift Towards Bitcoin
Financial advisors are facing challenges disseminating information about Bitcoin due to restrictions by institutions like the CFA and CFP. The traditional advice on investing, such as relying on past performance, is being questioned as the financial landscape rapidly changes, especially with the emergence of cryptocurrencies like Bitcoin. The introduction of ETFs has made Bitcoin more accessible to clients, though challenges remain in transitioning clients from ETFs to direct Bitcoin holdings.
Concerns Over Debt Defaults and Portfolio Management
There are discussions around the increasing likelihood of government debt defaults due to continuous money printing, leading to concerns for investors holding government bonds. Financial planners emphasize the importance of a balanced asset allocation, particularly regarding Bitcoin holdings, to protect against potential defaults or debasement scenarios. Clients are advised to consider their net worth in Bitcoin terms and actively manage their portfolios to align with their risk tolerance and long-term financial goals.
Can you retire on Bitcoin savings? What do the numbers look like? Morgen Rochard, Founder and Lead Financial Planner of Origin Wealth Advisers joins me to explain:
The 4% rule and how to modify it
Being conservative in your planning
CPI inflation being hard to predict
Do you rebalance?
Timestamps:
(00:00) - Intro
(01:03) - 4% rule, Bitcoin & FIRE
(04:41) - HODLers vs TradFi allocation
(12:34) - Why you should be conservative with Bitcoin retirement
(20:16) - What if you retire during a Bitcoin bull run?
(22:24) - Sponsors
(24:55) - Should you borrow against your Bitcoin stack?
(31:41) - Where are the fiat financial planners going wrong?
(37:34) - Separating Bitcoin from ‘Crypto’
(40:55) - The shift in sentiment about HODLing Bitcoin
(42:39) - Sponsors
(44:51) - Should you rebalance your Bitcoin allocation?