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How to use Bitcoin to achieve financial freedom

Bitcoin is not something to play around with, it's serious and can be emotionally taxing.

By

Skyler Vondra

on

May 28, 2021

Bitcoin is an innovative technology that offers its users many advantages. The most important one is an unprecedented amount of freedom. You can free yourself from the traditional financial system, but the most important part is the control that Bitcoin lets you take over your finances.

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I want to take you on a journey that will help those of you who are having a tough time getting a foot in the door. That could be because you're new to taking control of your finances, or you just don't know where to start. I'm going to first share with you the 4 steps you need for financial freedom. Then I'll try and outline a few situations you could be in, and how Bitcoin fits in. And lastly I'll show you how to buy bitcoin.

4 steps to financial freedom:

Step 1: Pay off bad debt like credit cards or high interest auto loans.

Step 2: Build up some type of savings, preferably 3-6 months of your average monthly expenses in cash.

Step 3: Aggressively invest any extra money from your budget in high growth assets or businesses (like stocks, real estate, or crypto).

Step 4: Once your high growth investments are big enough, you can sell them, then live off of the interest and retire.

I think that Bitcoin can help a generation of early adopters achieve financial freedom by addressing steps 2, 3, and 4. The problem is that most people don't know how much to buy or how to even get started.

Bitcoin works like a savings account AND as a high growth investment. (These are needed in steps 2, 3 and 4)

I'll type up an explanation about why I think bitcoin is a good investment, I'll link it below:

Click here: Why is bitcoin a good investment?

Bitcoin is not something to play around with, it's serious and can be emotionally taxing.

[Full disclosure β€” I have 90% of my investments and savings in bitcoin and other cryptocurrencies. People outside of the crypto world will say this is madness. People inside the cryptocurrency world will say it's not enough ...]

It should be noted that bitcoin is NOT a get rich quick scheme.

Buying bitcoin is a legitimate investment into a scarce, real asset that grows in value over time just like real estate.

Even though you CAN get rich quickly, ... the majority of your profit is going to be made by holding for a long period of time (like any other investment, the longer you hold the better).

I tell people to NOT invest any more than you're willing to LEAVE in and not sell for at least 12 months (like you would keep your money in a normal savings account), but preferably for 5 to 10 years (like you would with a normal savings account).

I believe that bitcoin will reach a price over $250,000 before the end of 2021, currently that is 6.7x your investment, and well over $1,000,000 by 2025 (27x).

But you have to beware, bitcoin is prone to having large drops in price, like, +30% in one day. This price volatility can make some people very scared, and unfortunately these people tend to SELL right BEFORE the price shoots back up!

So just imagine β€” You put $1,000 in bitcoin at the start, then it grows all the way to $3,000! But the next day it drops quickly down to $2,100 πŸ˜– before rebounding back to $3,000 a few days later.

If the thought of all of that makes you squeemish β€” YOU SHOULD INVEST LESS.

Of course, the easy way to avoid this is to buy a normal amount and then never look at the price. Just sit there and wait and wait and wait. That is all you have to do to get the most profit from bitcoin.

If this responsibility is intimidating to you, you should make it harder for yourself to panic-sell when your emotions are high. You can do this by locking it in an secured account, or by hiring someone to help manage your crypto investments for you (I can do this, just give me a call or dm)

Okay, we've addressed the emotions of investing in Bitcoin. Now on to the strategy.

First you need to decide how much to invest. The amount you invest is going to completely depend on your situation, so I'm going to try and address the main situations someone could be in.

If you have ...

Credit card debt and no savings

If you're in credit card debt (bad debt) and have no savings, you should pay off that debt, then start buying bitcoin to build up that savings.

Note: If your credit card has an under 10% interest rate (very few do, most are +20%) then I would start to build up your savings by buying bitcoin before paying that debt. Otherwise, focus on paying off your credit cards and getting your credit score UP.

If you have ...

Some savings and no bad debt

If you're someone who has a small savings account and no investments, you should put a chunk of your savings account into bitcoin. At least 25% and up to 75% depending on your risk tolerance. (young people should always have high risk tolerance) (anybody over 50 years old I would say stay under 50% of your savings)

BUT if you're confident, have zero debt AND a steady source of income, I would recommend 75%-100% of your savings. (don't sue me bro, i'm not a financial advisor)

This is assuming that you have paid off your credit cards already.

Savings and investments

If you're someone who has a savings account AND investments, I think you should put a large chunk of your savings into it (75%-100%), and 25-33% of your investments.

Yuge investments ($1m+)

I don't have much liberty to talk about huge investments. But for accredited investors (net worth over $1m) the standard is to invest 1-5% in inflation hedges (see: Why is bitcoin a good investment above) I think that this number is way too low. And for this year, 2021, I think 10-20% minimum of your investments should be in bitcoin, and some gold. This includes the value of your estate. The reward to risk of bitcoin is just too high.

So at this point I'm sure you've come to a number in your head that makes sense. Now it's time to buy your bitcoin:

There are two places that I recommend for United States citizens to buy bitcoin:

  1. For phones - CashApp
  2. For computers/phones- Coinbase

Both have their advantages.

CashApp works like a bank on your phone. You can receive direct deposits and buy, sell, send and receive bitcoin. CashApp is a great product by Square.

Coinbase is the best place to buy and hold cryptocurrency, they are very trusted for having low fees and an easy platform to use.

(I personally use Coinbase to store my cryptocurrency.)

Step 1: Open your account

Use my referral link https://www.coinbase.com/join/vondra_3 to open an account. We will both get $10 of bitcoin when you buy or sell $100 worth.

Step 2: After you've signed up for the account, verify your identity and link your bank account.

Step 3: Fund your account

Once your bank account is linked, there are several ways to fund your account. One option is to click the buy/sell button on the top of the screen. Then simply change the options to buy bitcoin and have it come from your bank account.

Type in the dollar amount and click "buy bitcoin"

Tip: There will be a fee involved with your purchase. It's difficult to avoid paying this fee anywhere you go.

Hint: You can try to watch the price to time a good buy, but this is a waste of time unless you know how to predict prices. This is another reason to hire someone to help manage your crypto investments.

When should you sell your bitcoin?

Depends. If you have an emergency, you have no other option than to sell it.

If you want to sell right at the top (where the profit is the highest) you'll need to do some research on the stock to flow model β€” which predicts a bitcoin price over $100,000 (my prediction is over $250,000) and this should tell you when a good time to sell is. (also see bitcoin NUPL)

If you want to be a part of the revolution that disrupts the banking industry and fiat currencies worldwide, never sell. Eventually you should be able to spend a few small bits of bitcoin called sats at the coffee shop. If you hold that long you will be filthy rich.

It's up to you! If you need help deciding, talk to me as your crypto investment advisor (don't sue me bro I'm not a licensed advisor) and you can copy the trades I'm placing. If you want to do it on your own, no problem, I can point you in the right direction. If you want to buy your bitcoin and never look at it until you're rich, lock your password in a time capsule or come invest with me πŸ™‚

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