This is an opinion editorial from content creator and small business owner Robert Hall.
Do you dream of retiring someday? You work all day and work hard to grow your business or to do an excellent job for your employer so that you can get promotions and earn more money. What should we do with our salary after the bills are paid, the food is put on the table and the kids are looked after?
Conventional wisdom tells us that we must save for retirement to enjoy our “golden years.” It’s not bad advice because we can’t do things forever. Having money to rely on after you stop working is a prudent financial plan. As you know, there is an entire industry dedicated to planning for your future.
Most financial advisors will tell you to invest your money in a 401(k) and let it grow over time. It has worked for millions of Americans. For example, the S&P 500 10-year annualized return was 14.25%. It’s not bad when you take it at face value, but once you factor in inflation, that number drops a lot. Instead of getting the full 14% gain after you factor in the Federal Reserve target of a 2% inflation target every year, your purchasing power adjusted for inflation is more like 12%. If inflation continues this year for an extended period, your retirement savings may look a lot smaller than you think. This 2% loss also equates to your profit year after year; remember this.
This is not correct! Why should we suffer because of the monetary policies set by the Fed? Mind you, we didn’t vote for any of these jokers, which caused so much trouble to us and the rest of the world. The Federal Reserve’s policy of printing trillions of dollars and buying out the exchequer is creating a situation that could lead to a monetary collapse of the dollar.
Everyone thinks that this cannot happen here, but it can happen. No one is immune from stupidity and arrogance. Jerome Powell and the rest of the Federal Reserve have come down with a bad case for it. Do they honestly think they can control the economic lives of millions? How crazy do you have to be to believe this? Once people lose faith in the dollar, it’s all over, and that day is coming sooner than you think. Inflation at a 7% clip is a good way to scare people away from the dollar. I’m not saying it’s imminent, but the overall trend doesn’t bode well for America
So with all this economic turmoil, how do you effectively save for retirement?
Bitcoin is your new retirement account
Bitcoin is the perfect vehicle for retirement for a number of reasons. The first is that it is designed to be appreciated in perpetuity. There are only 21 million coins that will ever be produced. This is called inelastic supply. This means that as the demand for bitcoin increases, so will the price of bitcoin due to the lack of supply. Did you know that an estimated three million coins have been lost, so the total supply will be closer to 18 million by the time the last coin is produced in the year 2140?
The inelastic supply of bitcoin is exactly what you want to see in a retirement fund asset. Investing your retirement savings in bitcoin will protect your future retirement needs to the point where you can live comfortably.
Bitcoin is the perfect retirement vehicle because you are in control of your assets, not a bank or some asset manager. Believe it or not, none of these actors have your financial interests at heart. Banks and asset managers are in the business of making money for themselves and their businesses. This means that there are many hidden fees that you have to pay to manage your money. This hides the real cost of saving your money with a bank, and they will go to great lengths to make sure you don’t fully understand all the charges. These organizations want to take your money and keep quiet for you.
When you compare this experience to buying and holding bitcoins, the experience could not be more different. The price of bitcoin is transparent and there are no hidden fees associated with buying, selling and sending to non-custodial wallets. This price transparency gives you a better picture of how much you are spending on fees. The cost of holding your bitcoins in the long term is very low. Buy a hardware wallet for cold storage and you are good to go. There is no constant cost to store your bitcoin money. The money you save on fees alone by investing in bitcoin instead of a 401(k) or IRA will add up over the years.
What cannot be underestimated is that you control your money and not your retirement administrator. The economy isn’t exactly great right now, and with inflation rising to 7%, having easy access to your money in times of crisis will make all the difference. Can you imagine running a bank during which you cannot withdraw cash? Can you imagine your stock portfolio going to zero? This can happen to all of us. Lebanon is a good example of what can happen when the debt bomb explodes and everything becomes unrecoverable. You wish you had bitcoins! Luckily for you, if you buy bitcoin now it doesn’t have to end like this.
Leaving a 401(k) or IRA may sound like a radical idea, but have you stopped to think about why you invested in a 401(k) in the first place? What does it benefit you other than having money when you retire? The most obvious reason beyond saving for the future is the tax breaks you get from investing your money in the stock market.
I understood; It becomes very attractive when you can deduct your retirement contributions from your tax liability. If you think about it you are being forced to do so. The government is telling you that if you do not invest your money in the stock market, we will take more of your money. Retirement investing is not entirely a free will option.
If there were no tax breaks, would you save for retirement? Will retirement even be a concept? That’s for another article, but you get my drift.
Saving for retirement with self-protected bitcoin won’t give you any tax write-offs at the end of the year, but gives you the security of knowing that your money is completely safe and appreciating. Any day of the week I’d happily remove that trade-off. Who would you rather be in control of your money? Big Bank or Yourself? Which do you trust more, bitcoin or stocks? We all have to make this choice.
This is a guest post by Robert Hall. The opinions expressed are solely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.