everything they're teaching you about how to build wealth and retire off of Bitcoin is wrong all the YouTube videos all the blog posts all the Articles all of it because they're all using the exact same framework as the traditional Financial system which of course is all wrong now the people teaching you these Concepts fundamentally misunderstand money and the monetary system we are in which is why in this video I'll show you the strategy that the rich use to pull cash flow out of Bitcoin taxfree without ever having to sell their Bitcoin which allows them to create generational wealth and I'm going to show you the math behind it I'm going to show you a tool that I created which we'll use to back test this strategy and then we're going to forecast this strategy into the future now just in case you're wondering why you should listen to me let me introduce myself real quick my name is Mark Moss I created this channel to take complex Financial subjects like Bitcoin and make them easy to understand for everyone now since then my videos podcasts and stuff have gone on to receive over 100 million views I've spent the last s years speaking at the biggest Bitcoin conferences in the world and I've been buying Bitcoin since 2015 when it was only $300 and so believe me when I say that I've seen I've heard it all and no matter where I go I get asked the same question which is Mark at which price will you sell your Bitcoin and I always have the same reply which is you don't understand the game that we're playing do you so before I break down exactly what I mean by that state statement I want to tell you just a real quick story that's not only just personal to me but it's also really the reason behind me making this video today now about a week ago I was over at the gym and I saw one of my good friends dad my my friend Rich his dad was there we we call him Papa rich now he mentioned uh you know I watched some of your videos and I still remember the time we were at the beach and you you were sketching out on the ground about Bitcoin and I remember you Bitcoin was about $116,000 at the time and I was looking at you like you were crazy but now I see that you're not and we started talking about this and I asked him if he has Bitcoin and he talks about how you know he's retired and he doesn't have a lot of money he basically has enough money saved up that he hopes that it will last the rest of his life all right so think about that he's hoping just like everybody else go to school get your grade save for retirement he's hoping what he saved will last him for the rest of his life and basically he'll just spend it and he'll try to match it perfectly to kind of have like no money left by the time he dies but like what if there's a market crash like in 2008 everyone had to go back to work what if there's like really high inflation which there will be and even if he makes it then he's got nothing to pass down to his kids no Legacy now the reason I say that you don't understand the game we're playing is because we don't want to save our whole lives with the hope that we're going to have enough to spend until we die all right that's how you end up in the same position is Papa rich now no offense Papa rich but that method doesn't take into account Market crashes like I said or inflation it's all fundamentally wrong okay the game of money that we're playing is to turn fiat currency into assets not assets into currency and the ultimate goal in this game is to buy the most scarce hard trophy assets and continue to add to them not cash them in so I buy assets to keep forever and eventually pass them down to my kids and even my grandkids so how do I do that with Bitcoin well let me explain okay now before I show you the really cool tool that I built that back tests this strategy as well as projects out where this could take you and I'm going to give it to you for free so you can kind of put in your own assumptions there before I get there let me just tell you the be you know behind the scenes the background of the strategy and what I call the game of money and like I said at the beginning and like I've said in this tweet right here I've shown you before when someone says when are you going to sell your Bitcoin I say they have no idea the game that we're playing in the game of Building Wealth certainly wealth is not the single most important part of of our life but in the game of Building Wealth you have to understand the game now I don't want to go deep into what the game is um I wrote a whole ebook on this it's for free if you want there's a link in the description but in this game you have to know a couple things all right number one you don't know the game because it's been hidden from you it's been hidden from you intentionally not just talk to you but it's been hidden from you and more importantly we need to know that the system that we're in the game it's a debt-based game it's a debt-based monetary system now we can see this in a couple of ways here we can see right here like uh this I pulled this up on Reddit why doesn't anyone understand why doesn't anyone understand America's debt-based monetary system the answer is because it's not taught right so most people don't even know it's a debt-based monetary system they don't even know what that means and it's because it's not been taught in Canada I found there is no Reserve requirement talking about the bank the system that we're in money is created on demand for loans money is created on demand for loans remember that back to the question which is why doesn't anybody know that we're in a debt based monetary system as Henry Ford told us 100 years ago that if the people of the nation understood the banking and monetary system there would be a revolution before the morning not tomorrow not next week before the morning and so that's where we're at so we are in a debt-based monetary system okay now back to everybody's wrong not just traditional finances wrong I a whole video about why Boomer in retirement why they're having a problem we'll go ahead and Link that to here and we'll link it in the show notes if you want to watch that video if you want to understand why the financial system is fundamentally wrong but back to bitcoin all these people posting videos um just like this you'll see them all across um YouTube right here how much Bitcoin do you need to retire how much Bitcoin do you need to retire how much Bitcoin going to retire how they all just make the same videos and they're all based off the exact same fundamental problem the exact same fundamental problem which is our financial system that's broken okay and so you'll see like this this is a a YouTube search that pulled it up they say that you need 2. 5 times as much Bitcoin is to retire Rich than you would have you need 6. 25 Bitcoin you know all these things according to another video you would need 2.
63 Bitcoin to reach $1 million see that this is what's broken you need 2. 63 to reach $1 million Bitcoin so basically what they're thinking is just like traditional Finance which is whatever for the American for the average American you need about $1. 5 million to retire well some people need more some people need less but they say 1.
5 million so what they're saying is if you had 2. 63 Bitcoin it'll be worth about a million dollar and you'll be okay but that's completely again understanding the entire game that we're playing even uh one of my friends pomp he writes a daily newsletter which is really good by the way but he wrote this in his newsletter and he said that I hate to break it to the bit bitcoiners but um if Bitcoin is trading at 1 million and you hold one of them then you don't have the 1. 3 million necess NE AR to retire today the 1.
3 million will continue to go up in value too because the dollar is being devalued so what he's saying is the same thing look the average person needs 1. 3 most people aren't going to get that much in Bitcoin and so it's still the same thing which is how much Bitcoin do I need to retire so that I can spend that money down and it will hopefully last until I die just like Papa Rich so that's the old way this is what everybody's got wrong it's what traditional Finance has wrong if you want to understand this from a deep lever like I said I'll link a video down below that really breaks this down but there's a better way let's just talk about the better way okay the better way that the wealthy build wealth is that they buy wealth wealth is measured in goods and services not currency goods and services remember we don't want money we don't goods and services but we don't want the money the currency we want the goods and services so the families that have generational wealth the ones that you've heard about like the Rockefellers and the carnegies they buy assets they build wealth through assets and they pass those down to Generations they don't spend them down to zero before they die you don't get generational wealth so like Michael sailor says is you never sell your Bitcoin you buy and you hold assets you never sell them you take the currency you buy assets then those assets continue to appreciate they continue to go up in value and then when I give them to my kids they hold them and they go up in value when they go to my grandkids they hold them they go up in value but here's the key A lot of people are asking yourself right now but Mark when do I get my money out what if I want to buy something and that's the key so what we want is we want assets that can provide us cash flow and not just cash flow but cash flow forever let's go back to Papa Rich for a second so if Papa Rich has his savings let's Call it Whatever let's call it a million for round numbers he has a million dollars and he's hoping that he can pull whatever hundred grand a year until he dies but what if he took that million dollars and bought real estate that paid him 100 Grand a year now he could continue to pull the 100 Grand a year out out and that million dooll balance never goes down as a matter of fact it goes up because the price of the home is going up then when he dies instead of spending it down to zero the house goes to his kids which continues to pay them 100,000 a year and continues to go up in value and goes to their gret and it continues to pray cash flow forever while you hold the asset and it continues to go up that's how you create generational wealth sounds pretty easy right but you're saying markk Mark but but that's fine for Real Estate or in paying stocks or businesses I get that but Bitcoin has no cash flow so what do we do how do we make this work with Bitcoin and that's what I'm going to break down for you right now okay so what we want to do is remember in the game of money we're in a debt-based monetary system that means money is created through debt we talk about the Federal Reserve you know printing money um putting ink in the printers and printing the money that's not how it works right when the banks issue loans when you take a house a car a boat loan when you take that loan the money is created into existence through debt so what we want to do is we want to leverage our assets with debt I don't I know Dave Ramsey tells you don't use debt pay off your debt all you guys are sitting here trying to figure out how you can pay your house off faster no no no we want to use debt obviously responsible and I'm going to show you how don't worry we'll break down the math so we have to understand we're in a debt based monetary system so what we want to do is we want to hold the asset we don't want to sell the asset if I sell the asset Bitcoin I have to pay tax on that that I lose a huge chunk of my wealth right off the bat then I take whatever is left over but I no longer have the asset for the appreciation back to the house example I can keep the asset to go up now the other benefit of doing this by leveraging debt against the asset not only do I keep the asset for appreciation but the income or the money I take off the asset with debt is taxfree so option one I sell the asset pay a big chunk of tax and I have a little bit left over to spend but I no longer have the asset going up in value option number two leverage it with debt get tax-free income and keep the asset to go up in value this is how you create generational wealth it's the same thing you're already doing the work why not just make sure that your hard work last for future Generations by making this small shift now I know you got a whole bunch of questions about this it's a little bit more complex than I make it seem so let me break this down for you okay now in order to understand how this works Works leveraging Bitcoin with debt so I can have generational tax-free income my kids can have it my grandkids can have it we have to look at two things the past and we have to look at the Future Okay so number one we want to look at bitcoin's past now we're going to go back to about 2010 and till now 20 2025 about 15 years now we can see that Bitcoin has been the best performing asset you already know this we can see the types of returns it's been averaging over a 200% compounded annual growth rate compounding that means it adds on to each additional year now what is a 233% compounded annual growth rate actually mean it means your money is tripling every year imagine that and it's the it's the triple the triple the triple the they keep getting bigger bigger bigger like a snowball and so 233% that's been the history now we can see that of course you know this and you're already telling me in your head but Mark bitcoin's so volatile the price goes up and down yes you're absolutely right it's extremely volatile which is good and bad you want volatile for the upside but then you want to make sure we don't have too much volatility on the downside now when you measure this volatility what we would consider a risk adjusted return you get what's called a sharp ratio now a sharp ratio gives you a return based off of the risk or the volatility that you have and this is a report from Fidelity I believe the second largest asset manager uh in the world and you can see that the sharp ratio show which is the risk adjusted return is about on par with gold all right so it's it's uh it's pretty high it's not the highest but it's about on par with gold that's what you can expect and what we can see when we look back through bitcoin's volatility is we typically have like three or four good years and then a bad year then we have like three good years and we have a bad year three good years and then a bad year so we have these fouryear Cycles this is all important to understand the history I'll show you back tested results so we can understand the future okay so now let's take a look at some of these back tested results now by the way I do just want to let you know this is a tool that I created you can have it for free you can put your own numbers in and see where you would turn out uh if you scan this QR code that's up on the screen or we'll link to it down below you can download this whole workbook that explains it and get access to the tool but let's just take a look at some of the math that I pulled from the tool okay so basically what this is showing right here we're going to start at year 2011 the first recorded price was in 2010 but there wasn't really much trading it's really hard to find pricing so let's just start at 2011 now what we do is we started January 1st 2011 the price of Bitcoin was 30 cents 30 cents now let's say in 2011 year one I I had $5,000 I put into it most people didn't because it was so risky what the heck is this thing I'm not going to put 5,000 I'll put 500 maybe but for the purpose of this back testing results put 5,000 again you can have the calculator you can put any number you want in 5,000 what that means is that we would had 16,667 Bitcoin okay $5,000 gets a 16,000 Bitcoin now this is back tested so that year Bitcoin went up by 1,00% the next year it went up 270 the next year it went up 5,500 and then the fourth year went down by 76% because Bitcoin has all these big crashes then it went up 80% 160,50 and then it crashed again it went up up up and then it crashed again okay so these are actual real historical numbers now what this tells is if I would have put $5,000 in here year one 20 2011 and I would have waited till till the year five I would have approximately $3 million in Bitcoin so I started with 5,000 I now have 3 million now here's where we leverage it with debt so what we can do is if I would borrow only 5% of my total valuation you see what most people get wrong is they don't understand leverage they don't understand debt they get themselves into too much trouble I think about debt or leverage like fire I can use it to heat my home but it could also burn my house down little kids shouldn't play with fire because they don't understand how to manage it and like Dave Ramsey most adults don't know how to manage debt either they shouldn't play with it and so most people are like well I want to borrow 50% of uh 50% of that money and then they get themselves into trouble the VA the the volatility gets them into Margin Call requirements they get liquidated so I don't advise that I advise 5% all right that means the price of Bitcoin would have to drop very very far farther than it has in history to get liquidated all right so I if we take 5% that's $156,000 so we have $156,000 of free cash flow all right that's money I can go spend it's debt it's non- taxable okay now the next year Bitcoin went up by 80% which now puts my valuation at 5. 6 million next year I borrow 6% I have to take some of the money of the 337 pay off the debt from the year before cuz they're one- year loans and then I still end up with about $180,000 of free cash flow the next year I'm at 5.
6 I borrow 3% I pay off the old I keep 190 as free cash flow um but the next year it crashed then it went down by 72% so in order to do that the next year I have to increase the amount that I borrow in order to get that amount and basically each year I'm borrowing more to pay off the year before and I end up with about 150 to 250 of free cash flow each year now this is back tested results from 2011 through 2024 okay now what we can see here as you play around with this tool like I said we'll link to it down below you can get it for free this gives you the price of Bitcoin so again price of Bitcoin was at 30 cents and today well at the beginning of 2024 January 1st we were about 4546 $6,000 so this kind of shows you how much free cash flow you could have by borrowing just a little bit of your stack each year and what the price of Bitcoin will be okay that is back tested now as we say in investing past performance is no guarantee a future performance so let's take a look at where this future performance could go no guarantee let's take our best guess now I'm going to give you some assumptions of some very big financial analyst I'm going to give you my assumptions I'm going to give you a calculator and you can put put your own assumptions in so how does that work again if you want the calculator just scan the QR code on the screen or we'll link to it down below now the first thing we want to do to project out how much Bitcoin we're actually going to need to retire based off of this model not the save and spend and die with zero model but in this model I want to look at bitcoin's Future valuation three ways now I'm not going to spend a lot of time doing this because I have many other videos where I've broken it down in depth so I'm going to go over this very quickly if you want to get this more in depth Again download the free book I have links and resources you can dig more into so we're going to look at it three ways number one metc caps law number two Venture Capital um and number three we're going to look at through inflation okay so three ways to identify what bitcoin's valuation is so the first one is what we call metaps law now Fidelity again Fidelity is the second largest asset manager they have been in Bitcoin I believe since 2014 they put out amazing research on bitcoin and the kind of cryptocurrency space in general highly advise just Google it Fidelity Bitcoin report as well as in the free um resource I have down below I have their uh research pretty well expanded plus I have links to all of it if you want to go look at it but one of the ways they value bitcoin's future potential is using what they call Mets law and that means that the more nodes there are on a network the more they're worth if you're the only one in the world with a telephone it's not worth very much as a matter of fact since I'm pretty old my first mobile phone that I had I was the only one that I knew I was the first one of anybody I knew that had a mobile phone so I had no one to call and I didn't even really carry it around with me I just pretty much left it at home um and uh it wasn't really valuable to me because not a lot of people had phones back then but the more people that get phones the more valuable they are which is more people that use Bitcoin the more valuable it becomes and what um what Fidelity has put out is they say using these analogues of past Market Cycles like this they predict per Fidelity they predict Bitcoin would be 1 million by 20 30 and 1 billion by 2040 now that's pretty high it's a lot higher than my own valuation is but I do believe in this 1 million by 2030 number I think this billion by 2040 is pretty high uh we'll come back to that in a minute but Fidelity says 1 million by 2030 let's hold that number now another way we can look at this is Venture Capital so the way venture capitalist look at something is like if I was in Silicon Valley 15 years ago they're pitching me on Uber I look at it and I say well how much could Uber be worth one day well what are the markets it's disrupting taxis limos Vans Etc how much is the total valuation of those markets and what percentage do I think is reasonable that we could get from those markets all right that's a way that a venture capitalist would approach this What markets are we disrupting now I did a video recently um where I broke all this down in depth and I showed that Bitcoin gets to $43 million per Bitcoin I think this is in like 50 years so much more conservative than what Fidelity thinks if you want to watch watch that video uh we'll put it right here or we'll link to it down below you can go watch that later if you want the in-depth but let me give you the cliff notes so basically Bitcoin is a lot of things it's more things than what we know it will be but one thing that we do know it is is it's a store of value so we can say it's disrupting store of value assets like gold cars and collectibles Fine Art stocks real estate bonds and money those are all just things we just store we we save our money in okay if we add all those up we get to 9 $900 trillion of value do you think it's realistic for Bitcoin to get 10% of that 5% of that 50% of that you can decide on your own again I'll give you the calculator you can play with it but let's just say that it takes 10% of that now Goldman Sachs JP Morgan they've said that Bitcoin will overtake gold I'm just saying it can get 10% all right they're saying it will overtake it uh if we did that that gives us 10% gives us 200 trillion which puts Bitcoin at 10 m million per Bitcoin so Fidelity said 1 million by 2030 here we're looking at $10 million per Bitcoin if we only get 10% of those um and another way we can look at this is through inflation so what do I mean by that the reason why prices go up is because the government won't stop making money they won't stop printing money and what we can see right here is the supply of the or the the growth of the money supply and I put some trend lines here so you can see this is the old trajectory that we were on on and then we started going much steeper and then we started going much steeper and we started going much steeper and now we're like going like straight up and as the money supply increases the costs of goods and services go up so the money supply increased by about 35% real estate went up by about 35% stocks went up by about 40 or 50% so as the money supply increases the cost of all these assets like real estate go up and so then I would say well much money do we think will be created in the future well we can just turn directly to the government's own projections this is from the CBO Congressional budget office and what they show us is that the amount of debt that we have today ain't nothing they expect us to add another 20 trillion do of debt in the next 20 years another 20 trillion of debt basically doubling so if you increase the money supply by that much then the price of homes goes up that much the price of the stock market goes up that much and we can see it in this chart right here so the money supply went up by about 35% and the S&P 500's threeyear return is what 33% do you understand this so another way we can look at it is well how much more will the money supply increase well they already told us 20 trillion we can see what happened with it before put stocks up by 30% we know that Bitcoin moves up many multiples more than stocks so we would expect it to go up at least 30% if not more okay that's three different ways we can look at it now let's take a look at the calculator and see what this looks like now again you can get this calculator and you can play with it on your own um just so you know only only I would only play with the green arrows you don't want to mess up all the formulas that I have here but now we're going to start in year 2024 um January 1st 2024 Bitcoin was about $43,000 per coin and if I started with $100,000 in January of 2024 that would be about 2. 3 Bitcoins that I have okay now this year 20124 Bitcoin will go about 200% we haven't finished the year yet so we have to kind of wait and see based off of the 200% annual compounded growth rate maybe that's approximate we don't know all right then let's say next year it goes up 150% because we're in the having cycle as most of you know if you're following along most of the growth in the in this uh in this four-year cycle should come over the next 12 months or so so let's say we have that and then we're probably going to have another big crash I hate to tell you but it happens on a four-year cycle we'll probably have another big draw down right here then we'll have a couple good years we'll have another big draw down a couple good years another big draw down couple good years and another big draw down because of the four-year having cycle that happens this is what's been historically there's no guarantee it will continue but I think it probably will now I don't think that it's going to continue going up by 200% forever as a matter of fact it's going to continue to slow down pretty aggressively but if the money supply continues to increase like the CBO says it will and it pushes stocks up at least 30% and Bitcoin moves up multiples of that then I think it would be pretty conservative to think that Bitcoin would go up at least 30% right so I have it going up by 200% and then slowing down to 150 then a massive draw down then slowing down to about 100% 100% 50% 50% a big draw down and eventually it's only going up by 25 or 30% down here in my opinion I think that's somewhat conservative ative based off of all of these numbers that we've taken a look at and if we look at where does this put us by 2030 right here it puts us at about a million dollars per Bitcoin which is in line with what Fidelity predicts which is in line with sort of what I predict as well none of us have a crystal ball you might think I'm out of my mind and so you can put in whatever valuations you want but let's just take a look at this so let's say hypothetically you put $100,000 into Bitcoin and it follows this model this is very conservative based off the historical and off of the three forecast looking uh ways that we've looked at it but you decide so $100,000 goes in here we wait four years then we have about $750,000 worth of bitcoin we borrow 10% against our stack a little bit more than I said in the original model now we're borrowing 10% that gives us about $75,000 of free cash flow it goes up the next year we have 1. 5 we borrow 10% again gives us enough to pay off the old debt plus keep another 75,000 of free cash flow and on and on and on this year it had a big draw down and went down by 35% so the next year I have to borrow 20% Which is a little bit more than I'd like to it's a little bit more risk again play with these numbers as you see fit now I got to borrow 20% to pay off the old debt and still get me my 100,000 but then it starts coming back down and as you can see I'm never really borrowing more than about 10% of my stack so I'm keeping my risk low but there is risk but I'm keeping my risk low now again I don't have a crystal ball but assuming that it goes somewhere in line with this what happens is my $100,000 in the year 2043 fidell said it' be worth a billion dollars I think that's uh crazy um I'm saying that Bitcoin would be worth 16 million a lot less than the four billion um but assuming that this model in 2043 you would have about $37 Million worth of bitcoin now that's the valuation of the Bitcoin but you would also owe $2.
5 million but you owe 2 and5 million out of the 30 million that you have I think that's a pretty good deal and what you've done is you've continued to hold the Bitcoin for this appreciation and you've pulled out free cash flow every year because of inflation starting at 75 grand down here the last year you're at $230,000 of free cash flow never drawing down on your Bitcoin stack but still having all the money that you need to live and then of Kiss of course your kids can hold the what do we have 2. 3 Bitcoin your kids get the 2. 3 Bitcoin your grandkids get the 2.
