{ "episodeId": "SLP727", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "trey_sellers": { "name": "Trey Sellers", "role": "guest", "tag": "TREY" } }, "segments": [ { "speaker": "stephan", "time": "00:00", "start": 0.08, "text": "A lot of people think about reaching financial independence as like a light switch. You either are financially independent or you're not. And what this allows you to do is think about it more like a spectrum, more like a journey instead of this on-off switch, that I think people sometimes get hung up on. And, and that helps you to maintain motivation as you're going through this." }, { "speaker": "trey_sellers", "time": "00:19", "start": 18.77, "text": "Hi everyone, and welcome back to Stephan Livera podcast. Today we're talking about Bitcoin and fire, financial independence, retire early, or maybe just financial independence for some people that aren't really interested in one aspect of that. Obviously, this has been kind of a thing for a while, and I know, Trey Sellers joining me on the show today has also been interested in this and has been talking about it for a while. Trey is also working at Unchained as a VP, I believe, of- Yeah, I've been in the sales organization for about four years over there. VP FireBTC dot io, which is a like a newsletter, and of course, the creator of the FireBTC calculator. So we're gonna get into all these things today, but first of all, welcome to the show, Trey." }, { "speaker": "stephan", "time": "01:00", "start": 59.74, "text": "Yeah, thanks. really excited to be here, Stephan. I've been a long time listener of yours, and I know we've connected a few times at different conferences and that kind of thing, so, happy to be here. Excellent. And so," }, { "speaker": "trey_sellers", "time": "01:10", "start": 70.3, "text": "yeah, look, let's just talk-- obviously, the big topic for you is Bitcoin and FIRE. now, people who've been around a while, you might have heard this term, FIRE, Financial Independence, Retire Early. Generally, people think of like, okay, the four percent rule, and I guess there's maybe this intersection of Bitcoin and FIRE. Now, ironically, some of the FIRE people don't actually like Bitcoin that much, right? they've kind of famously been against Bitcoin. but I know you're trying to do your part" }, { "speaker": "trey_sellers", "time": "01:39", "start": 99.04, "text": "Our community or just generally. So what has your experience been like interacting with the fire community from a Bitcoin perspective?" }, { "speaker": "stephan", "time": "01:47", "start": 107.41, "text": "I don't really try to interact with them too often, actually. I, I don't think it's really that, that fruitful to try to inject Bitcoin into the fire movement. I certainly write in a way that is accessible to the traditional fire movement, but I've found it's, it's a little bit like pushing on a string, right? And that's generally the case for Bitcoin. Is that people are People are ready for it when they're ready for it. There's something that happens in their life or they come into the right, you know, thread or their, their, their timeline puts Bitcoin, in front of them in a way that actually resonates at some point in their life, and then they start getting curious. And I think that's true for people of all different contingents. so w-what I, what I primarily po-focus on though is helping Bitcoiners see this, view of personal finance in a way that's very structured. And And that can actually put together a plan for, getting to a place where you are intentional about reaching financial independence and framing that in a way where you can maximize your sat stacking, where you can put yourself in a position of, you know, really being in good control of your expenses and just thinking about things from different angles there that I think a lot of bitcoiners don't think about. there, there are a lot of people that I've come across where it's like, okay, I understand Bitcoin and I- I know I wanna stack as much as possible, but they haven't really thought about that in terms of like a comprehensive view of their personal finances and how they should think about their spending, what kind of timelines they should be, thinking about, what does an actual withdrawal process or withdrawal rates look like? How much Bitcoin do you actually need to get to some, you know, certain level of enough? We always say like Bitcoin, there, you can never own enough Bitcoin, but that's like not technically true, right? it, it all depends on your goals and what you're trying and so I just try to frame things in different ways that, will allow Bitcoiners to put a more structured and intentional view on their personal finances for their families, for their, their kids, and so they can get to a place where they, they feel like they've got control over this and they're not just stacking stats, s-stacking sats with no end goal in mind." }, { "speaker": "trey_sellers", "time": "04:01", "start": 241.06, "text": "Right, like the idea is to have a holistic plan around your sat stacking and not just kind of sort of this willy-nilly ad hoc process, but actually, no, you've got actually a plan to this. So can you, if you were talking to somebody and trying to contrast, let's say, just traditional, you know, trad fire versus, let's say, a Bitcoin-aware fire approach, how would you, let's say, contrast those two approaches? Like, can you just quickly explain what's the trad fire version of fire and what's the Bitcoin version of fire?" }, { "speaker": "stephan", "time": "04:28", "start": 268.26, "text": "The trad-fi version of FIRE is simply, trying to maximize your savings rate and take the, in that extra capital that you've got of your income relative to your expenses and shoving it, typically into the stock market, broad market index funds that will-- You're not trying to like beat the market, you're just trying to, create some real savings, you know, savings above and beyond the inflation rate that will allow you to compound a portfolio of assets, in such a way that you can cover all the expenses that you have. So it's, and, and the way that I talk about this for Bitcoiners is really the same approach, it's just using Bitcoin, as the primary savings vehicle instead of using stocks or sometimes real estate. Some people do use bonds, as part of that portfolio. there's this idea of the four percent rule where you are looking to, save enough where you can draw down four percent of your portfolio in any given year To cover all of your expenses, and that will, in, in most historical s- cases, looking back at historical stock and bond market returns, it will cover your expenses over the course of thirty years or much longer. In most cases, you actually end up with much more money than you started with, even after thirty years, because of that power of compounding, and then you're able to continue to draw either four percent or less, just whatever you need, to actually cover those expenses. The traditional way that people think about this is that, you know, the stock market is compounding at, call it eight to ten percent per year, you've got maybe like two to four percent inflation rate, and so your real return there is the difference between those two things. Now, as we all know, as Bitcoiners, we've studied this, everybody's got their own view of expenses, their own costs that they need to account for, and so this isn't like a one size fits all, exact formula. It's more of a guideline to say, hey, for, for For most people, most parts of the world, you can think of this as a guidepost, a way to, have a goal in mind for reaching a portfolio that is able to cover the expenses that you've got in the lifestyle that you are currently living that you want to extend, or, you know, you can think of it as, \"Well, what's my ideal lifestyle? What are my expenses going to be in that ideal lifestyle?\" And then I can do a little bit of math to figure out how much I need to save, going forward to reach, a Portfolio size that will cover those expenses. And, and just to, to wrap that up, the math that, that, that four percent rule implies is that you need twenty-five times the amount of your annual expenses, in order to be able to withdraw four percent per year and have that, cover, cover your expenses into perpetuity. So if you, have, you know, expenses of a hundred thousand dollars per year, then you need to save two point five million dollars in the traditional fire sense. In order to cover those expenses on a year-to-year basis, and then that compounding just takes care of the rest." }, { "speaker": "trey_sellers", "time": "07:33", "start": 452.79, "text": "So the obvious follow-up from a Bitcoin perspective is Using Bitcoin as part of your FIRE approach, can Bitcoin accelerate your retirement or independence point?" }, { "speaker": "stephan", "time": "07:45", "start": 464.56, "text": "Yeah, I think, I think it can. I think we all expect that it can, and that acceleration comes from a higher growth rate than stocks, typically speaking. Bitcoin's a fixed supply asset, it's in this adoption phase, right now, and so we, we all kind of expect that the value of Bitcoin is gonna grow much, much faster than the stock market will. there's obviously a question of, well, exactly what is that growth rate going to be? I tend to be very conservative when I'm doing the modeling out and when we talk about the, the, the compass tool, this calculator that I've built. I'm using a conservative, what I think is a conservative twenty-five percent per year, over a very long time horizon, as opposed to some of the, you know, historical returns that we've seen in Bitcoin, which are upward of fifty percent or seventy-five percent in, in some cases. If you can expect that the value of your portfolio is going to grow at a much faster rate than what the traditional fire approach looks at, which is that eight to ten percent in nominal terms, then you can actually, get to that fire level, much more quickly, or you can look at it in an inverted way, which is that you just need a whole lot less saved in order to get to that retirement standpoint or that financial independence standpoint, and the way that I've kind of talked about this is, let's be even more conservative than the twenty-five percent, than the four percent rule, and just double it. Bitcoin should be able to outperform traditional stock markets by at least twice over a long period of, of time. And so if you think about an eight percent withdrawal rate, which sounds kind of crazy, you're gonna be selling down potentially eight percent of your Bitcoin stack, but it really is just math, right? If, if at the end of the Is the performance that you are getting from Bitcoin, then that eight percent withdrawal rate will actually work for you, and it works for you quite well relative to the stock market. Now, most people own stocks and Bitcoin, they own other assets like real estate, bonds, whatever, whatever they have in their portfolio. And so the way that I'm calculating all this when I'm, when I'm doing a lot of the examples that I have in my newsletter or, in the, calculator tool, this Fire BTC Compass tool, is kind of a blend of that. It's saying Okay, how much stock do you have? We're gonna assume a four percent, withdrawal rate there. How much Bitcoin do you have? We're gonna assume an eight percent withdrawal rate there, and then you can get to some kind of blended number that will allow you to, see what is your BTC adjusted number, right? What is your BTC adjusted timeline for reaching financial independence, and you can start making decisions around how you are living your lifestyle based on that. Well, here," }, { "speaker": "trey_sellers", "time": "10:23", "start": 622.57, "text": "let's talk about the calculator. So it's calc dot firebtc dot io, and as I read Like a dashboard, you punch in your numbers, you kind of, you give us a bit of an overview, how should listeners use the calculator?" }, { "speaker": "stephan", "time": "10:36", "start": 636.04, "text": "Yeah, so when I started my fire journey back in like twenty nineteen is when I was like really hardcore, okay, I, I didn't love my job and I wanted to just get out of there, and so I was like, okay, I found the fire movement, I also found Bitcoin around the similar time in terms of like really being convicted in it, and I started keeping track of all my finances, all my expenses My portfolio values everything in this spreadsheet that I had built, and it had some macros in it, and it's got some really cool charts and, and all this stuff, and I've been keeping that spreadsheet since twenty nineteen. Well, that obviously, applies to me and my particular, situation, but it doesn't really translate to a tool that other people could use. So the idea behind the FireBTC Compass tool is that it's something that's web hosted, that you can, keep all of your data, data private, so, everything is stored in the br Browser locally there, nothing is sent to any type of server, but you can start to enter in all the information that you've got about your finances, whether it's your expenses, whether it's your portfolio values, the amount of Bitcoin that you own, and then there's gonna be some calculation and some historical tracking, in that tool that allows you to see how you're progressing toward your fire goals. it's pretty rudimentary at this point, like launched it with some, kind of basic functionality, and I'm already working on building some new features in terms of like projecting you know, different scenarios. like right now, I'm, I'm working on a bear market survival feature that will go in that projections tab if anybody goes to the tool, and it's, and it's looking at historical bear markets. Could my portfolio, based on everything that we know, have survived that drawdown of seventy-five or eighty percent in twenty twenty-one or, or, twenty seventeen, twenty eighteen? And these are just really cool visualizations and tools that will allow you to gain comfort in this approach approach to reaching financial independence and feeling like, hey, if I retired at the tip-top of the bull market and started drawing down based off of this, this number, would my portfolio actually survive? And would I be able to, to last for the, the full thirty years? which is a question that we all have, and, and there's obviously no one answer for everybody, but this helps to kind of guide your thinking in, in term-in terms of that process and, and give you some vis-visualizations and some tracking over time so you can- Continue to feel mot-motivated and, and use that to your advantage." }, { "speaker": "trey_sellers", "time": "13:03", "start": 782.74, "text": "Yeah. So, yeah, a few, a few kind of directions we can co-talk about. Now, you mentioned one concept of your- Bitcoin fire rate might actually be higher than your TradFi fire withdrawal rate. That's one idea. Or, said another way, maybe you hit retirement earlier or financial independence, depending on if you're actually trying to retire or you just wanna have the, in-the feeling of having independence. and then of course, on the calculator, there's the point about like which projections are you looking at. Like, as an example, I'm, I'm a fan of power law, so I'd love to see that built in as a, projection. I think that's A good, sort of baseline of where things are going. Of course, there are times where we're above and below the line or the trend or whatever, but, I think that's an interesting one, and, yeah, for anybody who's listening," }, { "speaker": "stephan", "time": "13:51", "start": 830.78, "text": "if you go to the tool and start playing around with it, and you have any, you know, suggestions or, questions or you see any bugs, please reach out to me. You can either do that, you know, via X DMS or whatever, or there's a little spot at the bottom to" }, { "speaker": "stephan", "time": "14:10", "start": 850.16, "text": "Australia, I said, \"Sure,\" and I just kind of quickly, you know, built up a little, you know, conversion, or toggle where you can select any one of the, the top seven fiat currencies and see everything in, you know, denominated in those terms instead of in dollars. so yeah, h-happy to, to implement any of those types of changes." }, { "speaker": "trey_sellers", "time": "14:33", "start": 872.93, "text": "The other topic I know you've spoken about and written about is this concept of the different levels of fire. So I think in your post you talk about nine levels. Do you wanna just overview a little bit what are some of these different levels of fire?" }, { "speaker": "stephan", "time": "14:46", "start": 885.54, "text": "Yeah, the traditional financial independence retire early community thinks about different lifestyles, and they give them these names. So there's this name of \"lean fire,\" and a, a lot of the people that I've seen stories talking about, they are reaching lean fire, and then they're done, they just retire. Basically, it means you're just living off of like the very bare minimum of expenses. Maybe you're like living out of an RV, and you're just traveling around, and you've, you know- So you, you don't like have, you know, a car, it's just like very lean amount of expenses so that you could retire, maybe you're only spending twenty thousand dollars a year, and so you could retire very, with a much smaller, portfolio because you just don't have this kind of, more luxurious or extravagant lifestyle that you need to fund. And so lean fire is one flavor of this, fat fire is kind of the exact opposite of that, where it's like, oh, you're spending a whole lot, right? And you need a more Much bigger portfolio in order to fund that lifestyle. There's this concept of barista fire where you, you decide, okay, well, I don't mind working a little bit, I want my portfolio to cover, call it sixty percent of the expenses that I've got, but I'm gonna work at the coffee shop or I'm gonna work at the, you know, you know, some, just have some kind of like local job just to keep me busy and engaged in the community and that kind of thing, and that's gonna cover the rest of the expenses. That's where the term barista There's this idea of coast fire, and coast fire is where you get to a certain point where if you add no more to your savings, you will eventually reach financial independence. I think of this as like a five year period, like I've saved up enough where in the next five years, assuming the, the normal compounding rates, I'm gonna reach that full fire twenty five times my expenses number, and so I can just kind of coast from here on out. I can start spending more on my lifestyle right now, because I don't need to be saving anymore and adding to my investment portfolio. So all of these are like different ways of thinking about, what the lifestyle of your financial independence, retire early, process might look like. I'm much more of a kind of structured, linear thinker, in, in these types of things. I like, like, a system. And so what I decided to do was put together a framework for a progression from basically where you're starting at zero All the way up to fat fire, and it's based off of the amount of, you know, your portfolio saved versus your expenses, that multiple that you have, you know, twenty-five times your expenses is the full fire standpoint, if you get to forty times your expenses plus, considering that fat fire, and then there's a whole bunch of other levels in between, and what this does is it allows you to kind of think of this as a progression, you can think about the, the different- Lifestyle amenities, so to speak, or opportunities that open up to you as you go along this journey. And I think a lot of people think about reaching financial independence as like a light switch. You either are financially independent or you're not. And what this allows you to do is think about it more like a spectrum, more like a journey instead of this on-off switch, that I think people sometimes get hung up on. And, and that helps you to maintain motivation as you're going through this, right? It's not, it's not like something that you're doing for a couple A couple of months, right? building towards financial independence takes years, it takes dedication, it takes intention, and you wanna like use some kind of tricks to, to keep you motivated along that journey. That's what this, this whole framework, and it's built into the, the, compass tool, that's what it's intended to do." }, { "speaker": "trey_sellers", "time": "18:36", "start": 1116.07, "text": "When it comes to actually doing the drawdown, can you talk us through some of your thoughts there? 'Cause I understand there are different, you know, especially in Bitcoin land, there are different approaches you hear people talk about. One is obviously borrowing against your stack. Now, you're at Unchained, obviously Unchained does loans, so that's kind of an obvious one. Although I believe you guys have commercial loans only, but nevertheless, it's an option for some people. some people might just sell four percent a year, right? Like just sell that ma- amount a year, There's Stretch, STRC and Sada, which are like, you know, Bitcoin-flavored forms of income, right? It's like eleven or twelve percent, and then it for an American after taxes, like this ROI concept, it might actually be even more than that. So when you blend all these different ideas together Where, where does it come out for you? How do you think about actually doing the, you know, if you're in the retirement phase, how do you think about doing the actual drawdown?" }, { "speaker": "stephan", "time": "19:31", "start": 1171.22, "text": "Yeah, I was just at the strategy conference in Las Vegas last week, and STRC and Zeta were a very big part of that in terms of the topics that, that people were covering. they're really great tools. So the way that I think about this is, you do have all of those options at your disposal. I think the cleanest way to do this is to actually draw down. We say as Bitcoiners, like, never sell your Bitcoin. I don't, I don't really think about it like that. Like, that's a great meme, and it's true in a lot of respects. It's like, this is the, the thing that you wanna sell last. But ultimately, Bitcoin is a tool, right? It's money. we're saving it for a particular purpose, and that is to fund our lifestyle, to be able to, you know, give charitably, to pass down wealth to future generations and all that." }, { "speaker": "stephan", "time": "20:21", "start": 1220.91, "text": "you know, strict rule about, okay, I'm never ever gonna sell my Bitcoin under any circumstances. we, we need to create some type of income in retirement but I think the way that a lot of people think about income is like, okay, well, I need to create some passive income stream, which means I need to own a business or I need dividend stocks or I need, you know, real estate that is, is bringing in rents and, and that's how I'm gonna create income for my retirement, and then I'll just have this nest egg over here. I think about it a little bit differently, that the traditional FIRE approach here is to create income by drawing down on your portfolio, and that's okay. We should be okay with that. you're creating income actually in a fairly tax efficient way. the long term, you know, capital gains tax in the US at least is lower than short term capital gains, and lower than ordinary income tax. And so especially if your expenses are, you know, quite large and you're in that like coast fire to fat fire range and you're, you're wanting to live well in your retirement You're probably gonna have larger ex-expenses, which means you're probably gonna need more income, and if you're or-- if you're earning that through ordinary income or through dividends, which are taxed at ordinary income rates, then you're probably gonna pay more taxes. If you are instead selling down your portfolio, you're paying a lower tax rate to fund that lifestyle, the effect is essentially the same. And so I think of this as still actually probably the best and simplest tool out there is just sell down your portfolio. Trust the math, trust the process that this is what's gonna work for you. When we think about loans, loans are a great way to fund your lifestyle as long as you understand it. there are a ton of risks, I've written about this in the newsletter in the past, a couple of different articles on, you know, how I think about Bitcoin-backed lending, and, and how I would approach it. but you need to be very aware of how that collateral process works. The volatility of Bitcoin makes this a little bit of trick-- a little bit tricky. And over time, from like a nominal and dollar standpoint, you're probably gonna pay more than if you're just selling down your, your Bitcoin, in terms of like the actual nominal cost of doing this. Now, the trade-off is that you still have the Bitcoin, it can grow hopefully faster than what you're paying in interest rate, and so there's a nice arbitrage there. I am totally on board with, using the fiat financial tools that we have in order to, to fund our lifestyle. I write a lot about mortgages and how those are really great tools because Because they're not actually tying up your Bitcoin as collateral for the loan, they're typically low interest rate, and they're, they're long duration. so like all of those are tools that we should consider, to make sure that we've got a really great, solid approach to maximizing the, the approach that we've got toward reaching financial independence and then funding ourselves in, in retirement. and then the last question that you have here is around like, something like STRC- See something like Sada. these are really great new tools. I will emphasize that they are new, and so the time testedness of them is still kind of out there, like I, I think there's still a, a valid question there. I- The, the, return of capital, stature of that actually, you're, you're right, like makes them more attractive because you're, you're Actual return, if you aren't having to pay taxes on that income, is, very much, amplified by the fact that this is return of capital. I mean, you do end up having to pay taxes at some point, but it's deferred. The way that I typically think about like dividend investing versus just buying Bitcoin is that anytime you are investing for dividends, you are giving up longer term total return For the sake of income in the here and now, if you don't have to pay taxes on that in the, in the here and now, then that absolutely makes things, a lot more attractive to pursue income, generating assets like dividends or real estate, versus, things that you do have to pay taxes on, but you are still giving up this longer term total return profile. And me and the way that I approach it is that I would much rather have- More wealth, over a longer period of time than less wealth and sacrificing that, that longer term wealth for income in the here and now. I'd rather have a larger portfolio and draw down on it than, not have that larger portfolio but still have this income. People think about this differently, though, right? Like everybody's got different emotional triggers and ways that they, they want to do this. So we should be pulling from all of these different tools." }, { "speaker": "trey_sellers", "time": "25:20", "start": 1520.2, "text": "Yeah, I think, as you said, there is kind of the, the maths of it. Just like maximize your Bitcoin hodling and just minimize the fiat hodling whatsoever, and then maybe there's a psychological component for some people, like they just psychologically feel better just having, you know, a small amount of income coming in, 'cause then they feel-- and I think some of that is, you know, especially if you're like a die-hard long-time hodler, you sort of feel this Like you really don't wanna give up your, your sats, right? And hey, all of us as Bitcoiners, we've all been there, right? Like we've all, at least even whether you're a, you know, first cycle or you've been around for, for ages, many of us feel that kind of, I really don't wanna sell this coin, you know? I really, I really, rather, you know, it hurts. And so maybe there's like a psychological sort of crutch element to it, or maybe, you know, maybe there's ways to kind of Put it somewhere in the middle, like as an example, let's say you sell, let's say you're doing your four percent rule, you sell, you know, four percent for a year, and then the amount that you're not spending right now, you could keep that amount in like a stretch or a Sada or something like that, and so that way you've sort of got most of it in the Bitcoin, but you're kind of keeping a little bit in straight USD and some of that in stretch or Sada or something like that. Maybe that's an approach people would ap-employ. So" }, { "speaker": "trey_sellers", "time": "26:38", "start": 1597.7, "text": "As you said, you could just say, \"Look, just trust the process, like just four percent a rule, the four percent a year, like that's just, you've done the maths, you've saved up enough. Let's say, for example's sake, you're gone.\"" }, { "speaker": "stephan", "time": "26:47", "start": 1607.48, "text": "And trusting the process is much easier when you see the value of Bitcoin going up or the value of your stock portfolio going up. It's harder in the bear market to say, \"Oh, just trust the process,\" right? Because, and, and that's just how we are emotionally wired. So," }, { "speaker": "stephan", "time": "27:07", "start": 1626.88, "text": "what And, you know, doing that extra little ten percent, like, make sure that you can actually sustain this journey over the long time period so that you can, can reach that goal. And even if it takes you an extra year, to, to actually reach that goal because you're not like fully optimized for that total return and, and getting to that number, at least you're getting there with your sanity intact. So, now, I, I will say, look, I'm still working. I, I, you know, make a, make a good income. I've got this portfolio of assets that I've built up. I'm like basically there at that, you know, financial independence, you know, area, but, but I haven't started drawing down on my Bitcoin yet 'cause I haven't needed to. I understand that pull, but what I will say is that my business does run on a Bitcoin standard, and so I have started to develop the, the muscles for selling Bitcoin a little bit more to actually cover the expenses for that business. And, you know, that, that hurts at first, right? I didn't like doing that, but, you know, o-over the long term, I'm trusting the math that if you're, if you're holding, you know, a hundred percent of your assets, in Bitcoin, over time, you know, Bitcoin goes up over, you know, on average. So any short term losses that you might have, will offs-be offset by those short term and longer term gains as you build that, that treasury." }, { "speaker": "trey_sellers", "time": "28:31", "start": 1711.18, "text": "Yeah, and I think it's just, I mean, it's so relevant, especially the comment around bear markets, right? Like, now as we, for listeners as we speak, the price is seventy-three thousand dollars per BTC. It's the fourth of March, twenty twenty-six, right? And so, yeah, we've had a bit of a pump today, but so maybe people are feeling good now. I mean, who knows? Maybe there'll be a pullback or whatever. I'm not a, I'm not a short-term, market timing guy, but I think for most people" }, { "speaker": "trey_sellers", "time": "29:01", "start": 1740.54, "text": "I wonder like, who knows, maybe sixty K was the bottom, none of us knows. But that, that feeling of like, after you've just coped a fifty percent drawdown, it's kinda hard to be like, \"Yeah, I'm trusting the math, like, you know, as long as you-- \" Now of course, you've done your sums, if you've got, or if you've, even if you've built in enough of a cushion, right? Like maybe you're, you're not actually living at four percent, you're living at even less than that just to kind But, you know, nevertheless, the psychological- And that's why I, that's why I tend to--" }, { "speaker": "stephan", "time": "29:33", "start": 1773.25, "text": "That's why I tend to approach these things in a very conservative manner, like I think twenty-five percent over a long time horizon, especially over the next, call it, ten to twenty years, is pretty conservative. You know, people might, might bite my head off for saying that, just given the fact that we've had this fifty percent drawdown. But I've lived through many of these, I know you have too, and I know that it will, like, ultimately come back" }, { "speaker": "stephan", "time": "30:01", "start": 1800.54, "text": "appreciating in value, and then that's gonna balance out relative to the drawdown that we just had. So I trust that process and I trust the math with it. you know, there, there's just something to be said for making sure that you maintain this understanding of the long term and zooming out, and that you are putting these structures in place and this approach of intentionality around your spending and around your saving, with this framework in mind, so you're not just flying by the seat of your pants and being like whipped around by the market, 'cause the market has a tendency to do that." }, { "speaker": "trey_sellers", "time": "30:33", "start": 1832.9, "text": "Yeah. one other topic. Now, obviously you're at Unchained, you have loans as a product there on that side. the other big concept, you know, it's kind of a very sexy or hot topic people talk about is buy, borrow, die, right? Like that's the big thing of, like, that's, you know, that you see all these videos and people talking about, like, that's what the rich people do, you should do that, like, that's the efficient way, you should just never sell and just Listeners, your big boys and girls, please be conservative. You know, run your own spreadsheets and analysis, don't just go crazy with this, obviously. but how do you analyze this kind of buy, borrow, die question? What kind of numbers can it even make sense to do that? Like, is that only at, like, very large stack sizes that it's like, you can do it conservatively? Or how, how would you explain this buy, borrow, die concept in Bitcoin?" }, { "speaker": "stephan", "time": "31:24", "start": 1883.69, "text": "Yeah, so, I, I, like I said before, I, I'm definitely a fan of using the different fiat tools that are out there in order to maximize your wealth and maximize the ability to stack Sats and hold on to those things. we should use the fiat finance-- I, I call this Aikido finance, right? If you're familiar with, with Aikido, it's like using your opponent's weight and momentum against them, right? that's what the speculative attack is, that, that Pierre Rochard. kind of coined, you know, back in the day, and that we talk about a lot in the Bitcoin world. And so like the, the fact that we have these tools available to us is, is great. It's, it's, you know, we, my, my view is that like down the line, as Bitcoin becomes, more and more of a constraint on the fiat financial system, that will-- that may not always be the case, but for the time being, you should take advantage of it." }, { "speaker": "stephan", "time": "32:21", "start": 1941.46, "text": "the idea of buy, borrow, die is great as long as you are approaching it in a conservative manner. you shouldn't never be like borrowing against your entire stack because then you can't actually defend that position, unless you've got some other type of windfall coming in from like, the fiat side or, you've got other assets that you can sell to, to defend it, which is really stressful and you may not be able to react that quickly. so if you're gonna- You wanna borrow against your stack, make sure that it's a very small portion of that, and then be able to react in the moment as this volatility comes to, comes to bear on the market and you need to be in a position to re-collateralize the loan or pay it down or what have you. The way that I would approach this question is, I wanna exhaust all of the fiat financing mechanisms that I have before I encumber my Bitcoin. Because," }, { "speaker": "trey_sellers", "time": "33:17", "start": 1996.96, "text": "yeah. So you'd rather put like a fiat mortgage or a fiat loan before you're doing Bitcoin collateral loans, because the- Right, exactly. Because you're gonna be borrowing at" }, { "speaker": "stephan", "time": "33:24", "start": 2004.1, "text": "lower rates. Like a mortgage, again, is a perfect example of this. If you can borrow against your house at six, seven percent, you're, you're getting this, rate on the fiat- Money at much lower than what you can certain, can currently do, with, with Bitcoin back loans, and it's not callable relative to your house, right? Like those mortgages typically, don't, can't be called away from underneath you unless of, of course, you're missing your payments and that kind of thing. So it's much easier to bear, there, there is no volatility in the underlying asset that is backing those loans. Now, of course, you have income and, and that kind of thing that is actually used to underwrite the loans, but look, If you're taking that, those dollars that you're borrowing against your house and you're buying Bitcoin with it, or you're buying stocks with it, or what have you, now you have this other asset that's running in parallel to your house, which is also going up by a few percent every year, and if you need to, you can always sell down those assets to continue to cover that mortgage. that's the way that I think about it, and over the long term, you're gonna end up with a lot more in terms of your total wealth if you are using this Aikido finance Of satoshis that you're able to stack. Again, this isn't for everybody, some people do, you know, are totally anathema to any kind of debt, but I think it's a very important tool in the toolbox and, and you should be thinking about how you can, can benefit from it, even if you're not maximizing that part, part out." }, { "speaker": "trey_sellers", "time": "34:55", "start": 2094.73, "text": "Yeah, of course. And, I mean, obviously, there's no one size fits all here because some people have income, some people have other, other assets and different skill sets, different age, different family size, different living expenses and so on. So it's just, there's no one size fits all. But I guess the, I guess the appeal with the buy, borrow, die for a lot of people is just, you know, 'cause it's selling people this idea of, \"Hey, you know,\" and maybe for some people, they're stuck in like, you know, just like Or are you really like, have you actually done a spreadsheet, calculated this out, and sort of thought about the risk in a deep way, so that you are covered, you know, in a downside scenario or if the interest rates rise or if, you know, various things happen? But, it's an evolving space too, because even in Bitcoin land, interest rates, ideally, they will come down over time and the loan-- Yeah, they already have been. Will expand out too. It won't just be one year loan terms, so it is gonna expand out over time." }, { "speaker": "stephan", "time": "35:51", "start": 2150.79, "text": "Yeah, absolutely. the banks are coming for lending against Bitcoin. I, I'm, I'm still, I, I still don't know exactly how that's going to look. I, I find it hard to believe that like the, the major commercial banks are gonna be lending against Bitcoin in the way that Unchained or some of the other, players in the, in the space are doing, to like their retail clients. it's probably gonna start in their private wealth practices and, you know, for institutions and that kind of thing. but over time, Be the case. you know, one, one of the big things that I think Bitcoin provides to, people who hold it that the traditional finance, financial independence retire early community doesn't get is this like sovereignty aspect of it. If you are actually holding your own Bitcoin, you're holding your own keys, you're doing that in a self-sovereign way, you not only get financial independence, but you also get this sovereignty aspect overlaid on it, right? If you are just in the traditional, financial independence retire- Early movement, you've got a portfolio full of stacks, stocks, and it may be, you know, worth two million dollars or whatever. There are scenarios where you lose access to all of that money because you've got this counterparty risk, you've got this like systemic risk built into this, this, approach that you're taking. And hopefully that's never a problem for you, but it is a problem for some people. And just having a bag of Bitcoin that you control, yourself, even if you're- Not like totally all in like a lot of us are, is a really important hedge against potentially losing access to all of the wealth that you've accumulated over the years of working. so that's another important aspect of this is like, how do you create resiliency not only of, like, against losing your job or wanting to reach for this aspirational financial independence, framework, but how do you actually create resiliency in the assets that you own and, and control? Well, Bitcoin is a really, really important tool For being able to do that. I, I write quite a bit about that particular aspect of it as well." }, { "speaker": "trey_sellers", "time": "37:56", "start": 2275.87, "text": "Yeah, I see. yeah, it's, it's about, I guess, yeah, finding the right balance of, you know, how much Bitcoin you hold and, you know, what tools, what financial tools you are using, if any, or you're just kind of just doing the straight sell down a p- a portion, a small portion every year, and I guess- Putting it into, let's say, an American, you know, I guess the other aspect I wanted to talk about is it matters what life phase you're in, right? Because people often will run the numbers for their current phase of life, or they might buy a home thinking, \"Ah, whatever, they're a single person, or they're married but no, they're, they're married but no children, then having children.\" And then, I mean, you and I are in that phase, but then later, once you become a so-called empty nester, that's like another phase of life" }, { "speaker": "trey_sellers", "time": "38:44", "start": 2323.52, "text": "You know, plan for some of those unknown scenarios, right? So there are scenarios where people have thought, \"Oh, just go retire somewhere in some cheap country,\" but then sort of not have enough to come back, you know, or like the cost rises there, you know, there's just all these different- Different contingencies or different situations that come up, just because of the phase of the life that, of life that you, that we are in, and that could change, right? You could get married, you could have a child, you could then have that, it really changes the way you do things, it changes your costs, all these things." }, { "speaker": "stephan", "time": "39:15", "start": 2355.42, "text": "Yeah, the intentionality behind all of this approach is really important to, to think about. on, on the one hand, like the fire approach is super simple. It's like, I'm gonna save as much as I can and I And I'm just gonna get to a number and then I'm good to go. On the other side of it, it's like, you probably do want to be much more intentional about making sure that the money that you're spending today, one, is actually adding value to your life, and if there's any froth or excess in there that could be cut, well, that can actually have a very large amplification, effect on the ability to reach that timeline much more quickly. But then you also need to think about it, not just in the here and now, but like, what is actually That you want to maintain when you reach financial independence. What's your aspirational lifestyle? And maybe it makes sense in order to think about your fire number, based off of your current spending, well, what is that aspirational lifestyle spending actually gonna be? Do I wanna have a golf membership that's gonna cost me ten thousand dollars a year that I don't have now? Well, if that's part of your goal, then you should build that into the expense structure that you're using to calculate that fire Goal for. and so, I've thought of a lot about like this for my own personal stuff, and I'll, I'll probably be building a lot of these different tools into the Fire BTC Compass tool so that people can play around with like their different perspectives. Some people are like, \"I love my lifestyle right now, I can't imagine it changing, there's no reason that it would, and so I can just base my fire number based on my current expenses.\" And some people are like, \"Well...\" You know, the whole point of this is to be able to retire in luxury and go play golf and travel the world and, and do all these really cool, amazing things. Well, if that's the case, and it's-- that's very different from your current lifestyle, you should probably be thinking about what exactly that looks like and what is it gonna cost for you to, to, to do that. so there is a lot of thinking that goes into this, but it's a lot of fun thinking, right? It's like, how, how can I like really craft this story and this" }, { "speaker": "stephan", "time": "41:24", "start": 2483.91, "text": "Where I, I'm, I'm loving where I'm going. And, you know, you mentioned this like a lifestyle" }, { "speaker": "trey_sellers", "time": "41:29", "start": 2488.75, "text": "design kind of question. Lifestyle design, exactly. Yeah." }, { "speaker": "stephan", "time": "41:32", "start": 2492.17, "text": "Yeah, you, you were mentioning escapism, like when I started this, like I absolutely wanted to escape. But now I'm in a job that I love, I get to talk to people like you all the time and go to conferences and do all this stuff, like I don't need to retire anymore, even though I've kind of reached that level of financial independence. And so like, it's important can, can dynamically change over time, exactly how you're saying, and then think about things from a point of, of flexibility, right? if you decide that you're gonna retire because you've reached that fire number, and then something happens, you know, a, a year later, the market has tanked and you're just feeling nervous about it? Not a big deal, like, go do some extra work and bring in some extra income. Like, we, we, I think a lot of people get wrapped around the axle, when they think about these big plans as if, like, okay, I've thought about this and I put a plan in place and that's the plan and it can never change. Well, that's just not how life works, right? And so I think the perspective of being flexible is actually really important as part of this process as well. If you- Retire, you don't wanna go back to work, you, you know, don't wanna go sit in a corporate office, but you like to travel. Well, maybe one way to deal with a bear market is to, rent your house out and go move, you know, somewhere cheaper around the world, for a year so that your expenses drop, and now all of a sudden you're in a much better place. Maybe you can't do that with kids, and so you've gotta think about that. So, it's all dynamic and flexible, but the, think of this as like a fun thought process in, in lifestyle design, like you're saying, and then use this as like a really great framework to, be able to set a path forward for yourself that is a, a rule of thumb, it's a guideline, it's something to shoot for, it gives you progress markers along the way, but there's no hard and fast rule for exactly, you know, what you need to get to versus, Stephan versus like anybody else on the planet." }, { "speaker": "trey_sellers", "time": "43:37", "start": 2616.58, "text": "Yeah, I think a lot of good advice Advice in there. So, the last topic that I wanna touch on, a bit of a fun one, is, and we were touching on this before, I think, we, we kind of exchanged a little bit on, X, I think, a little while back. Why is, and I, I, I will credit American Hodel for this, initial idea where he said, \"Why is there no Dave Ramsey of Bitcoin show?\" Now, i- now in modern days today, there's this guy Caleb Hammer, I think it's called Financial Audit. Basically, So my question to you, Trey, is why is there no Caleb Hammer of Bitcoin show?" }, { "speaker": "stephan", "time": "44:14", "start": 2654.28, "text": "Well, I think the main reason is because nobody's done it yet. I would be happy to do that. I, I, I launched a podcast fairly recently, I had Joe Burnett on as the first guest, and this is a, a pretty, nonchalant type of approach to podcasting, like not doing a regular shows, but I'd be happy to do that if people are willing to actually talk about their, their numbers And what they're holding. Finances, yeah. Well, I mean, Caleb managed to do it somehow," }, { "speaker": "trey_sellers", "time": "44:42", "start": 2681.52, "text": "so maybe-- Yeah. 'Cause that, that's the other thing, like, I've seen like maybe a few clips, I haven't like watched a lot of it, but he managed to get some really, like, you know, just out there people, and of course, it's for content, right? So he must have good ways of sourcing these people, right? Because they're really-- Look," }, { "speaker": "stephan", "time": "45:00", "start": 2700.03, "text": "if there are any Bitcoiners out there who-- Remarkably open, you know? Public open conversation around this, I would love to do that. That would be absolutely awesome. The way that I've thought about the podcast, for the FireBTC podcast is, hey, let's have general conversations with Bitcoiners about how they actually approach personal finance and how they answer some of these questions. the, the, you, you've done a great job, and there's so many other people who do like kind of a general Bitcoin podcast out there, like I don't think I can add any value to that as launching a podcast, but for the niche that I've got here with I think a lot of people would like hearing those conversations from real people talking about their real situations, maybe not with exact numbers and everything, but like, how are you thinking about this, from the place in the world that you're coming from? Joe, you know, people should go check out that episode with Joe Burnett. He's a young guy, he, kind of came out of college and went to a, a Big Four firm, but then immediately pivoted to working in Bitcoin, and now he's getting married, right? Like, these are all interesting dynamics. of, of Bitcoiner who's young, getting ready to get married, and like, how is he thinking about all of these, these questions that I'm writing about from a totally different perspective, which is, I'm forty-one, I'm married with two kids, I'm kind of settled down, I've already got the house and everything, I also work in Bitcoin, but I've also taken this financial independence, retire early approach, and, and that's put me in a particular situation, right? So, the, these like bespoke stories, I think" }, { "speaker": "trey_sellers", "time": "46:38", "start": 2797.86, "text": "So maybe these, so, and there'll be a range, right? So maybe your story might be seen like a bit more aspirational, right, for someone who is already, who's not yet financially independent, and there'll be others who are kind of like, they can resonate with that person 'cause they're on the same, they're at the same, they're at a similar level in their life. Right. Now, to be fair, I think the cult, the whole Caleb Hammer thing, I think part of what drives some of the virality is he just gets some like really people, people Like a no-coiner and like get them on, not like somebody who's already a bitcoiner. So maybe that's like, you'd have to find a few people who, who can come, you know, to the table with a, you know, a trad-fi perspective." }, { "speaker": "stephan", "time": "47:20", "start": 2840.38, "text": "I'll give it, I'll give it some thought. For better or worse, I'm, I'm not as flamboyant as some of these people who are just crushing it on these social media platforms, so, you know, pretty, pretty straight" }, { "speaker": "trey_sellers", "time": "47:32", "start": 2852.43, "text": "and narrow when it comes to that. Yeah. Listeners, make sure you share this episode if, you're interested about Bitcoin and Fire, check out Trey's work. the website is firebtc.io, and, Trey is on X as ts underscore hodl. Trey, thanks for joining me today." }, { "speaker": "stephan", "time": "47:54", "start": 2873.63, "text": "Thanks so much. Enjoyed it." } ] }