More then a Meme
- It is said that a picture is worth a thousand words and in this case I think it truly is true.
- In one of the ever increasingly common points of intersection between traditional finance and cryptocurrency finance is a point of intersection where you never sell your bitcoin, but you take profit on it another way.
Loans on assets
- Traditional finance has long taught that once you buy an asset, you should never sell it. If you need money, take out a loan.
- The advantages of this are many, and include normally paying no taxes on loans, and maintaining control of an asset which is appreciating in value.
- The idea being that a house you buy for 50,000 will continue to rise in value. So that the 25,000 dollar loan which was half its value, will only be one fourth its value when the house is worth 100,000. And the loan, which is spendable cash, is not considered taxable income. So you pay no taxes on it.
- This is the opposite of a situation where you sell the house for a profit and have spendable cash, but you must pay taxes of 20% or more!
What about loan payments?
- In traditional finance a loan on an asset involves monthly payments. These can be large and if you don’t plan well, could lead to loss of the asset, if you don’t make the payments.
- But in cryptocurrency finance there are no monthly loan payments.
- So now you are using a strategy from traditional finance to avoid taxes, and you are using features from cryptocurrency to avoid monthly loan payments.
- This probably sounds to good to be true, but there are people doing it and living a life most of us can only imagine.
Peak into the world of cryptocurrency finance
- while less the 1/10th of 1% of the worlds investors are involved in cryptocurrency finance, those that are have reaped great benefits.
- Amongst those benefits you will find instant loans on assets without a credit check or waiting period by a bank or loan committee. No monthly loan payments. Non-taxable income from their cryptocurrency asset investments without selling them. The ability to keep assets which appreciate in value over the long term and ignore the day to day volatility that keeps cryptocurrency traders up at night and causes ulcers and gray hair.
- These benefits are unique to cryptocurrency finance, but represent things valuable in traditional finance too.
- It is this point of intersection, which is known to few, and used by an even smaller few, that creates a path to financial security, which I think is well worth the effort to learn.
- As in all things involving investing, this path is not risk free. You would be wise to start low and slow. Low loan to asset ratio and slow to spend your money and maintain a slow DCA pattern to create a continue reduction in leverage.
Last Words
- I have given you a brief introduction to these concepts.
- It is now up to you to decide if you want to learn more.
- If you want to learn more, please click on this link to read Part Two Part Two Link
About @shortsegments
Shortsegments is a writer focused on cryptocurrency, the blockchain, non-fungible digital tokens or NFTs, and decentralized finance for over fiveyears.
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