# What’s your Crypto Exit/Investment strategy?



## landlord

I am looking for a balance between taking profits and taking advantage of the hype before the potential bubble bursts. (Although Bitcoin has had many 80%+ drops in the past and recovered)

My strategy.

Do not invest any more !!!
Take initial seed money off the table permanently (about 1/6 of holdings) Return it to my bank and pay CGT.
Psychologically write off the rest (to sleep better at night)
Diversify portfolio into other top 10 cryptos.
Consider very small bets on other lower ranked cryptos and ICOs.
Remove 50% of any profits weekly. Convert back to Euro and pay CGT.


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## Brendan Burgess

Hi landlord

That sort of "argument" gives a false sense of rationale to your strategy. 

Either you believe that Bitcoin is worth $18,000 or it's not. 
If you don't believe it's worth $18,000, then you should sell it.  

The only exception is that you believe that you have some insight into the timing of the bubble.  If you think that it will rise to $30,000 before crashing to zero, then you might consider holding it until it rises further. The reality is that no one can time the irrational. It could crash to zero tomorrow or it might not happen until June 2018. 

I don't think you should even consider CGT reasons. CGT will be 33%. The fall in Bitcoin will be 100%.  So you are better getting 67% of your holding than 0%. 

Even, if you believe that Bitcoin is worth $18,000, you must also believe in the fact that it is extremely risky.  You must accept that there is a possibility, no matter how small, that every economist of note, Warren Buffett et al., are right and the Bitcoin faithful are wrong. 

If a fall to zero won't affect your financially, then by all means, hold onto them for the craic. 

If, like the thousands of people who back horses every day, you enjoy the thrill of losing money, then hold onto them.

But if you want to make a good financial decision, sell all your Bitcoin now.



landlord said:


> Diversify portfolio into other top 10 cryptos.
> 
> Consider very small bets on other lower ranked cryptos and ICOs.



This makes no sense at all.  When Bitcoin crashes to zero, they will all crash to zero.  It is not diversification, to buy the same asset. 

Brendan


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## landlord

Brendan Burgess said:


> I don't think you should even consider CGT reasons. CGT will be 33%. The fall in Bitcoin will be 100%. So you are better getting 67% of your holding than 0%.



Sorry. Brendan. I think you misunderstood me here. 
CGT has nothing to do with my decision to buy or sell. I was only pointing out by mentioning it that I have every intention of paying it when I do sell. 



Brendan Burgess said:


> Either you believe that Bitcoin is worth $18,000 or it's not.
> If you don't believe it's worth $18,000, then you should sell it.



“I” DO NOT BELIEVE BITCOIN IS WORTH $18,000 !!!
But I do believe the mania has only just got going and others believe it is worth way more than $18,000... (Its $20,000 now by the way). 
Consider CME futures, TD Ameritrade entering the market and more importantly the massive hurdle presented to residential investors in entering the market, which is the identity verification process which has stalled at many exchanges due lack of staff to deal with this. This potentially could be a coiled spring waiting to explode when the masses are verified and allowed to purchase BTC. 



Brendan Burgess said:


> This makes no sense at all. When Bitcoin crashes to zero, they will all crash to zero. It is not diversification,



Different crypto currencies are not the same asset, just like, Microsoft and Apple are not the same, they fall within the same asset class. If you believe as I do that the asset class will not fall to zero then this must be considered a sensible approach. 

When i have sold down to my initial seed capital (approx 2 weeks from now). This becomes a zero risk game for me. I will be speculating that the bubble will continue to inflate while continually taking profits. 



Brendan Burgess said:


> Even, if you believe that Bitcoin is worth $18,000, you must also believe in the fact that it is extremely risky. You must accept that there is a possibility, no matter how small, that every economist of note, Warren Buffett et al., are right and the Bitcoin faithful are wrong.



I put my faith in the more technologically savvy Bill Gates and Richard Brandon, who I believe would have a much better understanding of the crypto blockchain technology than a 90+ year old equity picking veteran.


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## Brendan Burgess

landlord said:


> This potentially could be a coiled spring waiting to explode when the masses are verified and allowed to purchase BTC.



Eh, will they not be allowed to sell it for the first time? 

I am trying to figure out how to sell it and I imagine that there are many others like me.

Brendan


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## Brendan Burgess

landlord said:


> When i have sold down to my initial seed capital (approx 2 weeks from now). This becomes a zero risk game for me.



No, no, no, no, no.

This is a beginner's mistake.

John owns 10 Bitcoin worth $200,000.  Mary owns 10 Bitcoin worth $200,000. Their other assets and liabilities are identical.

Which one is taking more risk?   (It's not a trick question by the way.)

Brendan


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## landlord

Brendan Burgess said:


> Eh, will they not be allowed to sell it for the first time?



They don’t own any yet?????

That would be like millions of people who have never invested in shares and don’t own any rushing to open up accounts with Degiro to sell Ryanair shares, due potential industrial action.


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## Brendan Burgess

Hi Landlord 

Anyone who felt that Ryanair was overvalued has been able to sell it short for some time.  

Those of us who believe the Bitcoin is overvalued by 100% have not been able to sell it short up to now.  

I don't own Bitcoin but I want to exploit the value.  Ideally, I would like to bet on its value in 12 months time to be zero. Or else a put option for 12 months' time. But, in the absence of these, I will take the very risky step of selling short.  So I will agree today to sell 1 Bitcoin for $20,000 in March 2018. If Bitcoin has risen to $30,000 by then, I will lose $10,000. If Bitcoin has collapsed to zero, I will gain $20,000. 

Brendan


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## BreadKettle

Brendan Burgess said:


> I don't think you should even consider CGT reasons. CGT will be 33%. *The fall in Bitcoin will be 100%.*  So you are better getting 67% of your holding than 0%.



It's statements like the above that make me mentally invalidate everything else Brendan comes out with. This is an example of someone with no idea what he's talking about giving advice in absolutes on the subject.



Brendan Burgess said:


> Even, if you believe that Bitcoin is worth $18,000, you must also believe in the fact that it is extremely risky.  You must accept that there is a possibility, no matter how small, that every economist of note, Warren Buffett et al., are right and the Bitcoin faithful are wrong.



You might also take on board what innovators like the Winklevoss twins, Peter Thiel, Steve Wozniak, Richard Branson, et al think.
It certainly is risky at current and I would prepare for a harsh correction, but it's extremely unlikely to die at this point and will recover as it has done countless times already.




Brendan Burgess said:


> This makes no sense at all.  When Bitcoin crashes to zero, they will all crash to zero.  It is not diversification, to buy the same asset.



Rubbish, there are many cryptocurrencys with many different applications. There is a possibility that ethereum, Ripple or the likes of IOTA could surpass bitcoin in the future and diversifying amongst the top 10 makes absolute sense.

'All cryptocurrency are the same asset' - in a few years time these quotes could come back to haunt. It is simply an incorrect statement.


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## landlord

Brendan Burgess said:


> Anyone who felt that Ryanair was overvalued has been able to sell it short for some time.



Folks are not opening up accounts (or trying to at least) in exchanges like Coinbase, Cex.io, Kraken etc.... to short bitcoin. In fact you can’t short bitcoin in theses exchanges. They are desperate to jump on the bandwagon and go long Bitcoin. Most of these investors don’t even know what it means to short something. 
These potential investors are being inhibited by the account verification process. Coinbase and other exchanges are desperately trying to recruit staff at the moment to deal with the backlog of account verifications.


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## BreadKettle

landlord said:


> Consider very small bets on other lower ranked cryptos and ICOs.



ICO's this year gave incredible returns, I think the SEC will put an end to it in it's current form at some point next year though. Make hay while the sun shines.


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## Brendan Burgess

BreadKettle said:


> in a few years time these quotes could end as infamous as Brendan's pre-crash property and bank shares advice.



Hi BK



My investment recommendations have been pretty much the same over the years and they have turned out to be broadly right

Buy your own home and get the mortgage down to a comfortable level 

When you are investing buy a broad portfolio of directly owned shares 

A portfolio of shares will generally do better than  property and is less risky
You will get a much fuller discussion here

*What Brendan Burgess has actually said about property, prices and borrowing*

I have made few forecasts as I don't believe markets can be timed

But I was very clear about the dot.com bubble.  It was a bubble and it was destined to collapse. And I am watching a re-run of it again with the Bitcoin Bubble. It is a bubble and it will crash. Not sure when. But it is as sure to crash as the dot.com one was.  

I couldn't figure out a way to exploit the dot.com bubble but I am determined to make money out of the Bitcoin bubble, if I can do so without excessive risk.

Brendan


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## Brendan Burgess

BreadKettle said:


> It certainly is risky at current and I would prepare for a harsh correction,



This was my key point. If you are billionaire and you own one Bitcoin, it doesn't matter what you do. 

But if more than 10% of your wealth is in Bitcoin, you should sell it down to this level.  Of course, you should sell it all. But even if you are a fanatic, and you agree that it is risky, then 10% is the absolute maximum exposure you should have. 

Brendan


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## joe sod

"I put my faith in the more technologically savvy Bill Gates and Richard Brandon, who I believe would have a much better understanding of the crypto blockchain technology than a 90+ year old equity picking veteran."



Is this not a form of "identity investing", I want to be associated with the cool guys . I think Bill gates said a few approving words about bitcoin more about the blockchain technology than about bitcoin. However the bill and melinda gates foundation does not have any money invested. (unless a very small one that they dont have to disclose).
I thought your exit strategy was to invest in the precious metals, just go ahead and do that. I know gold is not a "cool" investment like bitcoin is now. You said yourself anyway that when the bitcoin bubble collapses the money will go back to gold.


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## landlord

joe sod said:


> I thought your exit strategy was to invest in the precious metals, just go ahead and do that. I know gold is not a "cool" investment like bitcoin is now. You said yourself anyway that when the bitcoin bubble collapses the money will go back to gold.



Yes I continue to occasionally buy more precious metals, although it hasn’t paid off so far. I now have a fairly even split in value P.M to crypto. 

Actually a question to everyone out there ....
When you talk about the percentage of crypto as an asset in your overall portfolio, do you calculate it considering your property equity or property total value? I would imagine equity?


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## BreadKettle

Brendan Burgess said:


> This was my key point. If you are billionaire and you own one Bitcoin, it doesn't matter what you do.
> 
> But if more than 10% of your wealth is in Bitcoin, you should sell it down to this level.  Of course, you should sell it all. But even if you are a fanatic, and you agree that it is risky, then 10% is the absolute maximum exposure you should have.
> 
> Brendan



That's not really what you said though Brendan, as I wouldn't have issue with that. You've been saying it's worthless and it's correct value is zero, which is what I felt the need to correct.

This isn't the first mega spike BTC has had, and it probably won't be the last. It's due to correct and I'm sure the next bit of bad news with teeth might just set it off. We'll then probably get treated to more articles like this one. It will then recover over time and it's long term trajectory will remain unchanged through the boom and bust cycle. That's my prediction, and why I'm not buying now (and wouldn't really to comfortable telling anyone else to either right now) but I'm not selling 100% either.


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## Brendan Burgess

BreadKettle said:


> That's not really what you said though Brendan


It's exactly what I said. 



Brendan Burgess said:


> Even, if you believe that Bitcoin is worth $18,000, you must also believe in the fact that it is extremely risky.



Just to clarify 
1) Bitcoin is worthless. 
2) Even if you are blind to this, you must agree that it's very risky (which you appear to do) 
3) You should not have more than 10% of your wealth in any single asset. 

If you can see that Bitcoin is worthless, you should not have any of it at all.
If you can't see that Bitcoin is worthless, you should not have more than 10% of your wealth in it.

Brendan


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## Brendan Burgess

landlord said:


> do you calculate it considering your property equity or property total value? I would imagine equity?



Let's say your balance sheet is something like this: 

Family home: €500k
Mortgage: (€200k) 
Investment properties: €400k
Mortgages: (€200k) 
Gold: €100k 
Bitcoin: €200k 

Total assets: €1.2m
Total borrowings: 0.4k 
Net assets: €800k 

Is your question - should I have 10% of €1.2m or of €800k in Bitcoin or Gold? 

Brendan


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## landlord

Brendan Burgess said:


> Is your question - should I have 10% of €1.2m or of €800k in Bitcoin or Gold?



Yes
I would imagine it's the latter (net assets).....I must figure out how to use pie charts in Microsoft Excell.


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## Brendan Burgess

OK, let me rephrase the question, which might help you answer it 

Let's say your balance sheet is something like this:

Family home: €500k
Mortgage: nil 
Investment properties: €400k
Mortgages: (€200k)
Gold: €100k

Total assets: €1.0m
Total borrowings: €0.2k
Net assets: €800k

Your net assets are the same. 

Would you remortgage your home to buy €200k worth of Bitcoin?


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## landlord

Brendan Burgess said:


> Would you remortgage your home to buy €200k worth of Bitcoin?


No
But still not sure what your point is.


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## Sarenco

landlord said:


> No.


Why not?  

That's effectively what you're doing by investing in Bitcoin while carrying mortgage debt.


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## ant dee

Sarenco said:


> Why not?
> 
> That's effectively what you're doing by investing in Bitcoin while carrying mortgage debt.


That's a good point...


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## TheBigShort

Sarenco said:


> Why not?
> 
> That's effectively what you're doing by investing in Bitcoin while carrying mortgage debt.



No its not. The question was ' remortgage your _home_ '


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## Sarenco

TheBigShort said:


> No its not. The question was ' remortgage your _home_ '


Sorry BS but financially it's the same thing.


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## landlord

I would not re mortgage my home to purchase cryptos. 
I would not re mortgage my home to purchase shares. 
I would not re mortgage my home to bet on the horses. 

Is the point your making that crypto investing is riskier than for example equity investing. 

I have a strategy in place to pay off my mortgage debt. I have allocated a very small percentage of my income for higher risk investments.  If it were not Bitcoin, it might be another high risk investment, but either way I have no intention of ever diverting these initial funds into my mortgage. Sure if I eventually make a killing then maybe.


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## Brendan Burgess

Hi Landlord

This is a really important point. Don't just reject it out of hand. Read it. Think about it. And then maybe reply. 

While you have €200k of borrowings and €200k of Bitcoin, you are borrowing to invest in Bitcoin.  It's sometimes hard for people to see this and to accept it.

Look again at the figures

*First situation*
Family home: €500k
Mortgage: (€200k)
Investment properties: €400k
Mortgages: (€200k)
Gold: €100k
Bitcoin: €200k

Total assets: €1.2m
Total borrowings: 0.4k
Net assets: €800k

*Then my question: *

Family home: €500k
Mortgage: nil
Investment properties: €400k
Mortgages: (€200k)
Gold: €100k

Total assets: €1.0m
Total borrowings: €0.2k
Net assets: €800k

Your net assets are the same.

Would you remortgage your home to buy €200k worth of Bitcoin?

*You said you would not, but why not? This would be the result: 
*

Family home: €500k
Mortgage: (€200k)
Investment properties: €400k
Mortgages: (€200k)
Gold: €100k
Bitcoin: €200k

Total assets: €1.2m
Total borrowings: 0.4k
Net assets: €800k


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## Sarenco

landlord said:


> Is the point your making that crypto investing is riskier than for example equity investing.


No, the point is really very simple - investing while carrying debt is leveraged investing.

Leverage always increases risk - it amplifies gains and losses.

Your strategy for paying off your mortgage debt may well falter if your high risk investments don't work out as you expect.

If you are happy with your risk profile then that's obviously fine but don't fool yourself into thinking that investing while carrying mortgage debt is somehow different to remortgaging a property to make those investments.


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## landlord

I understand that my net assets do not change. 
A more realistic example for an average crypto investor would be 
Family home: €500k
Mortgage: (€200k)
Investment properties: €400k
Mortgages: (€200k)
Gold: €5k
Bitcoin: €5k

If I pay for a 5k holiday I am then in your eyes effectively borrowing to pay for this holiday. 
If I pay for a 5k yacht I am then in your eyes effectively borrowing to pay for this luxury item. 
Neither of these would be considered to have any appreciation prospects.


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## TheBigShort

Sarenco said:


> Sorry BS but financially it's the same thing.



Sorry Sarenco, but it is not. If I have €10,000 in my bank account, I could buy bitcoin with it. Or, I could take the kids to Disney in florida for a two week holiday.

Either or, it does not constitute re-mortgaging the family home.


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## Brendan Burgess

landlord said:


> Family home: €500k
> Mortgage: (€200k)
> Investment properties: €400k
> Mortgages: (€200k)
> Gold: €5k
> Bitcoin: €5k



That would surprise me - I thought you were all Bitcoin millionaires. Sure €5k is hardly covering the time you have spent studying it. 

The key point is that while you have a mortgage, you are effectively borrowing money to invest  in shares, buy Bitcoin or to go on holidays. 

If the amount spent is not material - then it does not matter. 

But if it's a material amount, as it must be for many Bitcoin fanatics, then they should sell and pay down their mortgage. 

Brendan


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## landlord

Sarenco said:


> No, the point is really very simple - investing while carrying debt is leveraged investing.



I have not borrowed any EXTRA to invest in this asset, so I still don’t see how it’s leveraged. 
Surely the average stock market investor   also carries mortgage debt.


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## Brendan Burgess

landlord said:


> I have not borrowed any EXTRA to invest in this asset, so I still don’t see how it’s leveraged.



Can you not see that the end result is exactly the same? 

If someone has mortgage debt while they have stock market investments, then they are borrowing to invest in the stockmarket, which is not clever, if the figures are material.

Brendan


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## landlord

Brendan Burgess said:


> That would surprise me - I thought you were all Bitcoin millionaires. Sure €5k is hardly covering the time you have spent studying it.



The 5k relates more to what the average investor may have initially invested recently, not its current worth.


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## BreadKettle

Talk of remortgaging your home is being overly dramatic, you could say that about any investment.

Would you remortgage your home to buy a €25 prize bond? Because that's what youre doing when you buy one while maintaining a mortgage. etc.


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## Brendan Burgess

landlord said:


> The 5k relates more to what the average investor may have initially invested recently, not its current worth.



I am close to giving up. 

It does not matter what the initial value was. If you invested €5k and it's now worth €500,000, then you use the €500,000 figure. 

History is not important. 

That is like saying "Well I inherited my €100k of  Bitcoin from my aunt, so I am taking no risk by holding onto it."

Brendan


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## landlord

Brendan Burgess said:


> If someone has mortgage debt while they have stock market investments, then they are borrowing to invest in the stockmarket, which is not clever, if the figures are material.



Once again I feel you are taking an a one sided view black or white without looking for any grey. 

I have ECB trackers at 0.75% above ECB base rate. Would you not normally recommend to someone like me to invest at least a chunk of my excess funds in equities considering a 10-15 year goal? 
Or is this NEVER “CLEVER”?


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## Sarenco

BreadKettle said:


> Would you remortgage your home to buy a €25 prize bond? Because that's what youre doing when you buy one while maintaining a mortgage. etc.


Absolutely correct.  

It's hardly an earth shattering revelation but it's amazing how many people don't seem to understand this simple reality.


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## BreadKettle

Sarenco said:


> Absolutely correct.
> 
> It's hardly an earth shattering revelation but it's amazing how many people don't seem to understand this simple reality.



It's because wording it in that way tries to imply that the person is risking the home by making the investment, which isn't the case.


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## Sarenco

landlord said:


> Once again I feel you are taking an a one sided view black or white without looking for any grey.


But landlord there is no grey!

Investing while carrying a mortgage is leveraged investing.  That's all we're saying.

I regularly advise people to max out their tax advantaged pension contributions before paying down mortgage debt ahead of schedule.  I think that's appropriate financial planning but I don't fool myself into thinking that I'm not therefore advising people to make leveraged investments.


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## TheBigShort

Sarenco said:


> Absolutely correct.
> 
> It's hardly an earth shattering revelation but it's amazing how many people don't seem to understand this simple reality.



Of course the original question was;




Brendan Burgess said:


> Would you remortgage your _*home*_ to buy €200k worth of Bitcoin?


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## Sarenco

BreadKettle said:


> It's because wording it in that way tries to imply that the person is risking the home by making the investment, which isn't the case.



No that's not the implication - you simply chose to read it that way.


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## Sarenco

TheBigShort said:


> Of course the original question was;


A home loan is debt like any other.  

That doesn't change the simple point that is being made.

I know you think it does - but it doesn't.


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## BreadKettle

Sarenco said:


> No that's not the implication - you simply chose to read it that way.



It very clearly is the implication of this - "Would you remortgage your _home_ to buy €200k worth of Bitcoin?"

How else would you read that? It's clearing trying to convey whether or not someone will gamble their home for Bitcoin, as if some sort of madness is about to take hold and we'll all end up homeless.


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## Sarenco

BreadKettle said:


> It very clearly is the implication of this - "Would you remortgage your _home_ to buy €200k worth of Bitcoin?"


No BreadKettle, it wasn't.

The point is really very, very simple. 

Investing while carrying a mortgage on a property is exactly the same thing as remortgaging that property for the purposes of making the same investment.

That should be really obvious.


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## BreadKettle

Sarenco said:


> No BreadKettle, it wasn't.
> 
> The point is really very, very simple.
> 
> Investing while carrying a mortgage on a property is exactly the same thing as remortgaging that property for the purposes of making the same investment.
> 
> That should be really obvious.



I understand completely the point, you don't need to repeat it.

You're in denial if you won't admit that the wording is very purposely overly dramatic. That should be really obvious.


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## TheBigShort

Ok my bad, reading brendans post in full, (which was admittedly, advised by brendan) I instead responded in haste. 

But its all whataboutery. The implied assumption is that money to buy bitcoin is being borrowed. 
There is no sense of reality here,  that if someone has €200k in their bank account, with a €200k outstanding mortgage on family home, that should someone spend their bank account on a Ferrari, a Monet, or bitcoin. 
When in reality, if we apply general financial assumptions, the money I have in my bank account (despite my existing mortgage obligations) is actually my disposable income.
If that is not accepted, then every mortgage holder who buys a latte, goes to cinema, buys nice shoes, upgrades car, goes on holiday is also 're-mortgaging' their home. 
In which case, no big deal, we all do it every day to lesser or greater degrees.


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## landlord

Whether you consider this bitcoin investment leveraged or not is irrelevant to me, since these allocated funds (for high risk investments) were never destined to pay off my mortgage and instead of squandering them on depreciating or worthless assets such as the latest I phone or 172 reg new Car, I have instead invested in what I consider to be an appreciating asset.


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## Fella

landlord said:


> I understand that my net assets do not change.
> A more realistic example for an average crypto investor would be
> Family home: €500k
> Mortgage: (€200k)
> Investment properties: €400k
> Mortgages: (€200k)
> Gold: €5k
> Bitcoin: €5k



I think this is important , I was under the impression that most people had around 10 Bitcoins minimum so they are sitting on 200k worth of value.
Surely the minimum anyone can have is 1 Bitcoin? or can you buy less than 1 coin? If the above was someone's assets I wouldn't even bother trying to convince them to sell up that it's a bubble it's a tiny % of there portfolio and an amount they can easily speculate and afford to lose. 

I think both myself and probably Brendan and others from reading posts probably wrongly assumed that most of the Bitcoin investors here had about 200k+ worth of Bitcoin , that was my thinking anyway that maybe most of you's had 5-10 Bitcoin with an odd person having 20+. If in fact people are only holding 5k worth of Bitcoin then go for it ride the wave and see how you get on.


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## Fella

I once bought 1k worth of euromillions tickets because it was +EV for one draw , but I could easily afford to lose that money (which i did).
But if you have a mortgage of 200k and 200k in Bitcoin it's a head scratcher!


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## Sarenco

BreadKettle said:


> You're in denial if you won't admit that the wording is very purposely overly dramatic. That should be really obvious.


What is dramatic about the word remortgage?

It just means taking out a new mortgage on a property that is already or was previously mortgaged.  

That's no more dramatic than taking out a first mortgage on a property.


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## landlord

Sarenco said:


> But landlord there is no grey!
> 
> Investing while carrying a mortgage is leveraged investing. That's all we're saying.
> 
> I regularly advise people to max out their tax advantaged pension contributions before paying down mortgage debt ahead of schedule. I think that's appropriate financial planning but I don't fool myself into thinking that I'm not therefore advising people to make leveraged investments.



You say their is no grey area....
But for someone who has maxed out on their pension has a relatively small capital and interst mortgage on the best possible tracker tracker rate and is overpaying their mortgage payments as I do and is interested in allocating a small amount of monthly income to equities, have you not ever advised in the financial makeover threads that this is a reasonable strategy. Sorry I don’t have time to go through them, so I will just trust you will respond honestly.


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## Dan Murray

Sarenco said:


> Leverage always increases risk - it amplifies gains and losses.



I am happy that Sarenco has entered the Bitcoin arena (ok, there may have been some tentative posts earlier by him!)

IMEO, Sarenco is one of AAM's brightest - not a false flattery, just a pretty obvious statement of fact.

This quote, however, is more symptomatic of AAM's founder - there are, for sure, elements of truth but it's just too black and white. Sarenco, himself, will appreciate more the most that risk takes many forms! Just my $0.02


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## TheBigShort

Sarenco said:


> What is dramatic about the word remortgage?



Nothing much, but remortgaging your _home _implies a sense of risk taking, the consequences of which, can go far beyond  financial loss or gain.


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## ant dee

Fella said:


> Surely the minimum anyone can have is 1 Bitcoin? or can you buy less than 1 coin?


Indeed you can buy / have as low as 0.00000001 btc. Divisible 100 million times or up to 8 decimal points.
There is talk to change the basic unit of account to micro-bitcoins, μBTC, called 'bits' as we are more used to dealing with large numbers than we are dealing with 0.00xx.
https://en.bitcoin.it/wiki/Units


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## BreadKettle

TheBigShort said:


> Nothing much, but remortgaging your _home _implies a sense of risk taking, the consequences of which, can go far beyond  financial loss or gain.



He knows well, sure that is the whole point of Brendan wording it like that in the first place.


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## BreadKettle

I reached a position of being able to pay off my mortgage some time ago from cryptocurrency (majority was not BTC). I do not immediately intend to do so. I have cashed out periodically after a pre-defined target was reached.

I am actually waiting for a large correction in BTC and will re-invest slowly as I try to judge the bottom, in the hopes of catching the next wave again.


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## landlord

2 friends 
Both have identical jobs, pay and Pension. 
Both have maxed out their pension, have a relatively small capital and interst mortgage on the best possible tracker tracker rate and are both overpaying their mortgage payments. 

One allocates 5% of his salary to crypto investments, the other to gym membership. 

Would you say to the guy with gym membership, I would think twice about that subscription as it will involve risky leveraging and you will see no financial return from your health conscious decision. Instead divert those funds to paying off your mortgage!!
One friend stands to loose financially from this decision the other might potentially gain something. 

Hell I am going to tell the other half that dinner tonight in her favorite restaurant is called off because it involves too much financial leveraging and instead we should use the money to pay off the mortgage. 

Where do you draw the line as to how you class the the allocation of your EXCESS funds?


----------



## TheBigShort

We have had;

The criminal underworld,
The dark web,
The North Koreans,
The family home,
Being robbed at gunpoint,
Losing your wallet...

....all as reasons not to buy bitcoin. There hasnt been one validated reason offered as to _why _it is apparently worthless and will return to zero.


----------



## landlord

TheBigShort said:


> We have had;
> 
> The criminal underworld,
> The dark web,
> The North Koreans,
> The family home,
> Being robbed at gunpoint,
> Losing your wallet...
> 
> ....all as reasons not to buy bitcoin. There hasnt been one validated reason offered as to _why _it is apparently worthless and will return to zero.



“The family home”
Ha ha brilliant I love it!!


----------



## Dan Murray

landlord said:


> “The family home”
> Ha ha brilliant I love it!!



Lads,

Please be careful - reading this post is not without risk.

I can't figure how the Big Short missed the killer, mortal sin here? I'm beginning to wonder whether he even watched the bloody movie, let alone read the book.

The real enemy, as we all know now, is LEVERAGE

[And if leverage doesn't kill you, your coins will probably be hacked. Oh, if neither of those prove fatal, nay worry, as has been said many times, (without equivocation, definitely without equivocation) the coins are worth bugger all anyways!]


----------



## Brendan Burgess

I have used this approach to explain to people with mortgages why they should not buy shares. 

People engage in silo accounting. Over here I have a house worth €300k with a mortgage "against" the house of €200k. Over here, I have €200k cash. Where should I invest it? 

So I ask them "If you had a house worth €300k with no mortgage, would you take out a mortgage of €200k to buy shares?"

The almost always answer that of course they wouldn't. 

It's very clear that there is no difference between remortgaging your home to buy Bitcoin and buying Bitcoin when you have a mortgage. 

But your faith makes you blind.  What's worse it will cause you lose your wealth.  

Brendan


----------



## Brendan Burgess

landlord said:


> I have ECB trackers at 0.75% above ECB base rate. Would you not normally recommend to someone like me to invest at least a chunk of my excess funds in equities considering a 10-15 year goal?
> Or is this NEVER “CLEVER”?



This is a tough one.  If one has a tracker at 0.75% above ECB and €100k should one buy a portfolio of equities or should one reduce the mortgage?

Of course, if one has a €200k mortgage on an investment property at 4.5%, then it's clear that the investment property mortgage should be paid off first.

To answer the equities question, I would look at the overall picture more carefully. The level of borrowings compared to the value of the property and the person's income.

But I would not necessarily disagree with a sophisticated investor buying a portfolio of equities with a 10 year goal. 

But even if you were offered an interest-free loan,  you should not accept it to buy Bitcoin. Even those of you who argue that it has value, accept that it is very risky.  A portfolio of shares held for 10 years may well be a fair balance between risk and reward.

Buying Bitcoin at any price above $1 is crazy.

Borrowing to buy Bitcoin is just crazy squared. 

That is what you are doing. Even if you silo accounting does not allow you to see it that way.

Brendan


----------



## Sarenco

TheBigShort said:


> Nothing much, but remortgaging your _home _implies a sense of risk taking, the consequences of which, can go far beyond  financial loss or gain.


Any more than mortgaging your home in the first place?  

Is there any difference between somebody investing while carrying a €200k mortgage on a €400k house and somebody that takes out a €200k mortgage on a €400k house that they own free and clear to make the same investment?


----------



## BreadKettle

Brendan Burgess said:


> But your faith makes you blind.  What's worse it will cause you lose your wealth.



Faith in what, any purchase at all while you hold a mortgage? You said you usually use this approach for people buying shares, are they all blind also?



Brendan Burgess said:


> if one has a €200k mortgage on an investment property at 4.5%, then it's clear that the investment property mortgage should be paid off first.



Debatable, with mortgage interest relief of 75% and rental yields absolutely rocketing through the stratosphere.



Brendan Burgess said:


> I would not necessarily disagree with a sophisticated investor buying a portfolio of equities with a 10 year goal.



Are bitcoin buyers just not sophisticated enough for you Brendan?



Brendan Burgess said:


> A portfolio of shares held for 10 years may well be a fair balance between risk and reward.



In this risk and reward analysis you seem to have completely ignored the 'reward' part of investing in cryptocurrency. A relatively small stake of between $5k - $10k at this time last year would have netted in the region of $150k by now depending on which of the top 3 you invested in. If people can handle the potential loss of $5 or $10k I think many of them would find the risk and reward of cryptocurrency much more favourable.


----------



## Sarenco

landlord said:


> Whether you consider this bitcoin investment leveraged or not is irrelevant to me, since these allocated funds (for high risk investments) were never destined to pay off my mortgage and instead of squandering them on depreciating or worthless assets such as the latest I phone or 172 reg new Car, I have instead invested in what I consider to be an appreciating asset.


That is an excellent example of the bias known as mental accounting.  

Your accounts (mortgage, pension, brokerage, etc.) are entirely fungible.  You can allocate or categorise a portion of your wealth for whatever investment or speculative purpose you like but if you are carrying debt then you are still making a leveraged punt.  

If you are comfortable with that, well, that's obviously fine.  But if you would baulk at the idea of borrowing the money afresh to make exactly the same investment, I think you should ask yourself why that is the case.


----------



## landlord

Brendan Burgess said:


> I am close to giving up



AGREED.... I really don't think I will ever get an honest unbiased critique of my crypto investment/exit strategy from someone who believes that the asset class is worthless. After all that was the purpose of this thread.


----------



## landlord

Brendan Burgess said:


> But, in the absence of these, I will take the very risky step of selling short. So I will agree today to sell 1 Bitcoin for $20,000 in March 2018. If Bitcoin has risen to $30,000 by then, I will lose $10,000. If Bitcoin has collapsed to zero, I will gain $20,000.



I see this as an extremely risky bet as well, considering bitcoin has crashed by over 80% many times in the past and then recovered.
Please keep us all updated regarding your progress in setting this up.
If nothing else we will respect you for "putting your money where your mouth is".


----------



## TheBigShort

Sarenco said:


> Is there any difference between somebody investing while carrying a €200k mortgage on a €400k house and somebody that takes out a €200k mortgage on a €400k house that they own free and clear to make the same investment?



Yes there is. While carrying a €200k mortgage on a €400k house you can invest any additional _income you earn _in other investments.
If you _borrow _funds to invest, that is a different kettle of fish. To suggest there is no difference is to suggest that all other investments is a re-mortgaging of the home.

In any case, the scenario as presented by Brendan is a fallacy



Brendan Burgess said:


> Let's say your balance sheet is something like this:
> 
> Family home: €500k
> Mortgage: (€200k)
> Investment properties: €400k
> Mortgages: (€200k)
> Gold: €100k
> Bitcoin: €200k
> 
> Total assets: €1.2m
> Total borrowings: 0.4k
> Net assets: €800k
> 
> 
> Brendan



This is the balance sheet as first presented by Brendan. At no point is it suggested that any of the Total borrowings of €0.4k were borrowed to buy bitcoin. In fact, its plausible to assume that the €0.4k was borrowed to buy an investment property and the family home. End of.
The bitcoin could represent €200,000 positiive equity. It may have been Cash in hand just a few days earlier. Just as the gold may represent €100k positive equity.

Therein the question is equally, would you re-mortgage your bitcoin to invest in property?

The second scenario suggests using that €200k positive equity of bitcoin to cancel out outstanding mortgage obligations on the family home. This is not unreasonable.
Or you could hold off. Either way it does not represent a re-mortgaging of the family home to invest in bitcoin.


----------



## Brendan Burgess

landlord said:


> I have ECB trackers at 0.75% above ECB base rate. Would you not normally recommend to someone like me to invest at least a chunk of my excess funds in equities considering a 10-15 year goal?
> Or is this NEVER “CLEVER”?



Hi Landlord

I was thinking a bit more of this.  This thread may be helpful to you as it removes the emotion attached to Bitcoin. What would you advise the OP to do in this thread? 

*€300k shares in Kerry plc. Should I sell some to pay off tracker?*

The OP has made loads of money on Kerry plc and so does not want to sell them.  But they form a significant part of his assets and so he is very vulnerable to a price fall.

Everyone who has responded has agreed that he should sell off 90% of his shares. Most think he should pay off his mortgage. As I said in the thread:



> The decision to pay off the mortgage or not is very close. But the decision to sell off most of your shares is not.



So for the blind faithful like yourself with a material tracker mortgage, the correct decision is to sell off Bitcoin down to a low level. That is the big decision.  Get that one right and what you do with the proceeds is less important.  Paying off your cheap tracker will never be far wrong. Buying a diverse range of assets (but not other cryptocurrencies) might be worth taking the risk depending on how much the amount is as a part of your overall wealth.

Brendan


----------



## Dan Murray

Hi Brendan,

I actually admire your resilience. Just like to revisit an earlier post on this thread.



Brendan Burgess said:


> My investment recommendations have been pretty much the same over the years and they have turned out to be broadly right
> 
> Buy your own home and get the mortgage down to a comfortable level
> 
> When you are investing buy a broad portfolio of directly owned shares
> 
> A portfolio of shares will generally do better than  property and is less risky


All these points are debatable - i.e. not black and white.



Brendan Burgess said:


> I have made few forecasts as I don't believe markets can be timed



If you believe you can't time the market, why are you spending so much time debating on the mechanics of how to time the market? This seems like a contradiction to me.



Brendan Burgess said:


> I am determined to make money out of the Bitcoin bubble, if I can do so without excessive risk.



"Determined" to make money out of a "bubble" seems like a pretty risky strategy to me. As I have said many times, you have written absolutely nothing that suggests to me that you would not have engaged the same strategy back in February 2015. Believing you are right and the collective wisdom of the market is wrong is a risky business. Remember our ol' pal, Keynes. You may be lucky, you may not - you certainly will be taking risks.


----------



## Firefly

Brendan Burgess said:


> I couldn't figure out a way to exploit the dot.com bubble but I am determined to make money out of the Bitcoin bubble, if I can do so without excessive risk.
> Brendan



Hi Brendan, 

Once you have figured out a way to do this I would love to hear how. Perhaps you could do up a post on this?

Thanks,
Firefly.


----------



## Firefly

landlord said:


> 2 friends
> Both have identical jobs, pay and Pension.
> Both have maxed out their pension, have a relatively small capital and interst mortgage on the best possible tracker tracker rate and are both overpaying their mortgage payments.
> 
> One allocates 5% of his salary to crypto investments, the other to gym membership.
> 
> Would you say to the guy with gym membership, I would think twice about that subscription as it will involve risky leveraging and you will see no financial return from your health conscious decision. Instead divert those funds to paying off your mortgage!!



Hi landlord,

Gym membership is consumption and therefore there is no expectation of making a financial return.

 "Investing" in crypto is done with the expectation of a return and therefore the opportunity cost of this investment versus paying down existing debt should be considered.

Firefly.


----------



## Sarenco

TheBigShort said:


> Yes there is. While carrying a €200k mortgage on a €400k house you can invest any additional _income you earn _in other investments.
> If you _borrow _funds to invest, that is a different kettle of fish.


I'm genuinely surprised that you still cannot see why that is not the case.

A mortgage is a debt, which is the opposite of an asset.  In financial terms, it's akin to a "negative bond" (i.e. it's money you owe, with interest).  As you pay down the mortgage principal, you are making it less negative, which has the same effect as investing in bonds (or placing it on deposit with a bank).

It really doesn't matter whether you issue your "negative bond" when you purchase the house or at a later stage – you are still carrying the debt until it's paid off.

It obviously doesn't make sense to borrow at X% interest and then invest that sum in bonds at X-Y%.  Right?

However, I would (and do) argue that it makes sense to contribute to a pension before your mortgage is paid off.  Why?  Because I take the view that investing money in equities, etc. in a tax-advantaged vehicle has a higher expected return than paying off my "negative bond".

I don't have any view on the correct value to place on Bitcoin.  I'm not equipped to formulate any opinion on its correct value so I will simply steer clear.

However, it is self-evidently the case that investing in Bitcoin while carrying a mortgage is taking a leveraged punt on a highly speculative asset class.  No law against that but I do think that Bitcoin punters should at least acknowledge that fact to themselves.


----------



## Brendan Burgess

Firefly said:


> Once you have figured out a way to do this I would love to hear how. Perhaps you could do up a post on this?
> 
> .



Hi Firefly 

I have discussed it in these two threads - it doesn't look possible other than a few small bets on Paddy Power and Betfair.

Brendan 

*Shorting Bitcoin*


* CME, the largest futures exchange, starts Bitcoin futures today*


----------



## Dan Murray

Sarenco said:


> I don't have any view on the correct value to place on Bitcoin.  I'm not equipped to formulate any opinion on its correct value so I will simply steer clear.



There can be little doubt that Sarenco sits at the very top table of commentators on AAM.

I think that his acknowledgement above is admirable, refreshing and revealing.

It is, not at all, clear to me that those who purport to be certain about Bitcoin's fate have any expertise or knowledge that Sarenco does not possess.


----------



## Dan Murray

Brendan,

I am going to give up now.

Debating with you and one of your lieutenants is like debating with the Coen brothers. Life is too short.


----------



## cremeegg

Sarenco has received great praise for the value of his contributions.


He, or she, certainly offers clear posts based on an orthodox view of the world. (His knowledge of the law in regard to property rental is also impressive.)

This is certainly valuable for people who may not have received any formal financial education.

It is often surprising how many posters who appear relatively aware of financial issues in general have gaps in their knowledge. Bizarrely personal finance is not taught in Irish schools.

However there are limits to the orthodox view. (in property rental as well as investing)

Remortgaging is not the same as taking out a first mortgage, you are older for a start. A first mortgage is on a home you hope to have, a remortgage is on a home you live in. A mortgage on an investment property is not as risky as a mortgage on an investment property, because an Irish court will not order a repossession on your home on the same basis as on an investment property.

The "reductio ad absurdum" of the Sarenco view is of course this question.



TheBigShort said:


> Therein the question is equally, would you re-mortgage your bitcoin to invest in property?


----------



## TheBigShort

cremeegg said:


> The "reductio ad absurdum" of the Sarenco view is of course this question.



It is absurd, to emphasis the point that, given brendans original balance sheet as outlined, that holding bitcoin qualifies as 're-mortgaging your home'. Here is another balance sheet;

Family home: €500k
Mortgage: (€200k)
Investment properties: €400k
Mortgages: (€200k)
Gold: €100k
Cash on deposit : €200k

Total assets: €1.2m
Total borrowings: 0.4k
Net assets: €800k

Am I  're-mortgaging my home'?


----------



## ant dee

TheBigShort said:


> Total borrowings: *0.4k*


Damn this line bothers me more than it should


----------



## Brendan Burgess

OK, let's make this very simple and remove Bitcoin from the picture. 

Please tell me the difference between the following: 
*
Joe*
Family home worth €500k 
Mortgage: €300k  @ 3.5% variable interest rate 
Diversified portfolio of shares: €300k 

*Mary *
Family home worth €500k 
Mortgage: €300k  @ 3.5% variable interest rate 
Diversified portfolio of shares: €300k

Brendan


----------



## TheBigShort

Brendan Burgess said:


> OK, let's make this very simple and remove Bitcoin from the picture.
> 
> Please tell me the difference between the following:
> *
> Joe*
> Family home worth €500k
> Mortgage: €300k  @ 3.5% variable interest rate
> Diversified portfolio of shares: €300k
> 
> *Mary *
> Family home worth €500k
> Mortgage: €300k  @ 3.5% variable interest rate
> Diversified portfolio of shares: €300k
> 
> Brendan



I cant see any difference other than one is a boy, the other a girl.


----------



## cremeegg

Brendan,

As I tried to point out above, though I think the point has been lost. The bank will not loan you money to invest in shares. 

The difference between Joe and Mary is this. 

Last week Joe had €100k cask and €200k shares. He used his cash to buy shares. 

Last week Mary had €200k mortgage and €200k shares. She remortgaged to buy another €100k shares. 

The Joe situation is possible but no bank would allow Mary to remortgage like that.


----------



## Brendan Burgess

Thanks Shortie 

Yesterday Joe had a house worth €500k and a mortgage of €300k and no shares. 
Yesterday Mary had a house worth €500k with no mortgage and no shares. 

Today, Joe inherited €300k worth of shares from his father. 
Today Mary remortgaged her home for €300k to buy shares. 

Are you still happy with this comment? 



TheBigShort said:


> I cant see any difference other than one is a boy, the other a girl.



Brendan


----------



## TheBigShort

Brendan Burgess said:


> Yesterday Joe had a house worth €500k and a mortgage of €300k and no shares.
> Yesterday Mary had a house worth €500k with no mortgage and no shares.
> 
> Today, Joe inherited €300k worth of shares from his father.
> Today Mary remortgaged her home for €300k to buy shares.



Thanks Brendan, there is a bit more detail here. I think that the previous post there was a typo?

Regardless of re-mortgaging to invest shares not being allowed, your initial balance with €200k bitcoin failed to emphasis that any of the €400k in borrowings were for bitcoin.

So to put this to bed, if I have an existing mortgage, and I _borrow _to buy bitcoin (or any other thing, like a yacht for example, or a Ferrari) I am effectively re-mortgaging my home.

But if I have an existing mortgage and _earn additional income _and subsequently buy, invest, gamble in anything I want, bitcoin, gold, art, antiques etc...I am not re-mortgaging my home.


----------



## Sarenco

TheBigShort said:


> I think that the previous post there was a typo?


Read the posts again BS - Brendan played a little trick on you.

Joe and Mary are in precisely the same financial position - you acknowledged that yourself!

The only difference is that you were subsequently told that Mary remortgaged her home to purchase the shares whereas Joe already had a mortgage outstanding in the same amount. 

But there is no difference in their financial position, which was the original point that you disputed.


----------



## fpalb

I would say the only reason ever to use money to invest instead of paying off existing debt (mortgage or otherwise) is that you expect the return on investment to be greater than the cost of the debt. Usually you can estimate the cost of the debt more accurately than the return on the investment so investing is the riskier option.

Probably the only other consideration is that investing versus paying off debt may mean you have more options in terms getting quick cash in hand should you need it depending on how liquid the investment is versus the difficulty of taking out further debt at your original rate.

EDIT: Personally, I am debt-averse and never intend on taking a loan. Is there some less-dramatic way to phrase "debt is slavery"?


----------



## TheBigShort

Sarenco said:


> Read the posts again BS - Brendan played a little trick on you.



Oh please, this is getting absurd. Yes, their financial positions are now the same. But by no stretch of the imagination could you class Joe's €300k inheritance in shares as 're-mortgaging his home'.


----------



## TheBigShort

Sarenco said:


> The only difference is that you were subsequently told that Mary remortgaged her home to purchase the shares whereas Joe already had a mortgage outstanding in the same amount.



Could you not bring yourself to say the same for Joe?


----------



## Sarenco

TheBigShort said:


> Oh please, this is getting absurd. Yes, their financial positions are now the same. But by no stretch of the imagination could you class Joe's €300k inheritance in shares as 're-mortgaging his home'.


Nobody suggested that Joe remortgaged his home.

The point that we have been making - and you have been disputing - is that investing while carrying mortgage debt is no different financially to remortgaging a property to make those investments. 

Surely you can see that now?


----------



## TheBigShort

Sarenco said:


> Nobody suggested that Joe remortgaged his home.
> 
> The point that we have been making - and you have been disputing - is that investing while carrying mortgage debt is no different financially to remortgaging a property to make those investments.
> 
> Surely you can see that now?



But Joe didnt invest - he _inherited._ He didnt even borrow to invest! 
Yesterday, Joe had a net worth of €200k. Today he has €500k!!

Yesterday Mary had a net worth of €500k, today, no dfference.

Joe's net worth increased by €300k. Marys didnt change at all!!


----------



## Sarenco

TheBigShort said:


> But Joe didnt invest - he _inherited._


So you are now arguing that if you continue to hold a portfolio of shares that you inherited you are not invested in that share portfolio.  Really?!

You (unwittingly) agreed that Joe and Mary were in precisely the same financial position even though Joe already had a mortgage whereas Mary remortgaged her home. 

That's the simple point you were disputing and I'm surprised you can't acknowledge that you were wrong.  Oh, well.


----------



## TheBigShort

Sarenco said:


> You (unwittingly) agreed that Joe and Mary were in precisely the same financial position even though Joe already had a mortgage whereas Mary remortgaged her home.



When did I ever disagree? 
You cannot accept the material difference of €300k?


----------



## Sarenco

TheBigShort said:


> When did I ever disagree?



BS - please look back at the exchanges from the second page of this thread onwards.

There is no difference (material or otherwise) in the respective financial positions of Joe and Mary in Brendan's example - you said so yourself in so many words.

Mary remortgaged her property to make her investments.  Meanwhile, Joe already had a mortgage but chose to retain his inherited investments rather than paying off his mortgage.  The net result is the same.


----------



## TheBigShort

Sarenco said:


> So you are now arguing that if you continue to hold a portfolio of shares that you inherited you are not invested in that share portfolio. Really



No, not at all. Im saying that by being invested in a portfolio of shares that you inherited, does not constitute in any way shape or form, a re-mortgaging of your home.
If you believe it does, why dont you just say it out straight.


----------



## TheBigShort

Sarenco said:


> There is no difference (material or otherwise) in the respective financial
> positions of Joe and Mary in Brendan's example - you said so yourself in so many words.



Yes I did. Because those were the facts as presented. So what?


----------



## Sarenco

TheBigShort said:


> No, not at all. Im saying that by being invested in a portfolio of shares that you inherited, does not constitute in any way shape or form, a re-mortgaging of your home.


How would holding a portfolio of shares "constitute a re-mortgaging of my home"?  Frankly, I don't know what that even means.

Again, the simple point that we have been making is that investing while carrying mortgage debt is no different financially to remortgaging a property to make those investments.

I suspect that you can see that now but are reluctant to acknowledge your mistake.  That's obviously fine.


----------



## Firefly

Sarenco said:


> I suspect that you can see that now but are reluctant to acknowledge your mistake.


Better luck squeezing water!!!!


----------



## TheBigShort

Sarenco said:


> How would holding a portfolio of shares "constitute a re-mortgaging of my home"? Frankly, I don't know what that even means.



I dont know how could it? This is what I said

"





TheBigShort said:


> Im saying that by being invested in a portfolio of shares that you inherited, does *not* constitute in any way shape or form



So, using the example provided;



Sarenco said:


> Mary *remortgaged* her property to make her investments.


 with no additional net benefit or loss.

Joe is a net beneficiary to the tune of €300k in inherited shares. If you believe he has effectively re-mortgaged his property just say it out straight.


----------



## Sarenco

Sorry BS but I don't understand how holding a portfolio of shares could (or could not) "constitute a re-mortgaging of [my] home".  The phrase is meaningless.

Again BS, nobody suggested that Joe re-mortgaged his property (this is really starting to get very repetitive). 

Mary re-mortgaged her property to buy a portfolio of shares.  Joe, on the other hand, already had a mortgage and retained his inherited shares rather than paying off his mortgage.  

Joe and Mary are in precisely the same position because there is no financial difference between investing while carrying mortgage debt and re-mortgaging a property to make those investments.  

Or to put it another way, they are effectively the same thing from a financial perspective.

I'm afraid I can't offer you any further assistance if you genuinely can't grasp the concept.


----------



## Brendan Burgess

Sarenco - tag 

This issue started with: 



landlord said:


> When you talk about the percentage of crypto as an asset in your overall portfolio, do you calculate it considering your property equity or property total value?



Then I asked 


Brendan Burgess said:


> Let's say your balance sheet is something like this:
> 
> Family home: €500k
> Mortgage: (€200k)
> Investment properties: €400k
> Mortgages: (€200k)
> Gold: €100k
> Bitcoin: €200k
> 
> Total assets: €1.2m
> Total borrowings: 0.4k
> Net assets: €800k
> 
> Is your question - should I have 10% of €1.2m or of €800k in Bitcoin or Gold?



When he confirmed that it was, I asked



Brendan Burgess said:


> OK, let me rephrase the question, which might help you answer it
> 
> Let's say your balance sheet is something like this:
> 
> Family home: €500k
> Mortgage: nil
> Investment properties: €400k
> Mortgages: (€200k)
> Gold: €100k
> 
> 
> Total assets: €1.0m
> Total borrowings: €0.2k
> Net assets: €800k
> 
> Your net assets are the same.
> 
> Would you remortgage your home to buy €200k worth of Bitcoin?



To which I got the reply: 


landlord said:


> No



Sarenco and I have pointed out that he is in the same position.  Remortgaging your home to buy €200k of Bitcoin puts you in the same position as someone who has €200k of Bitcoin and a mortgage. 

So landlord won't remortgage his home to buy Bitcoin, but if he is in the same result, he won't unmortgage his home, if it means selling Bitcoin. 

This is a very common error and not at all an attack on Bitcoin.


----------



## fpalb

I bet this cognitive bias has a name, and it's probably in the list here: https://en.wikipedia.org/wiki/List_of_cognitive_biases


----------



## Sarenco

I think it was simply a case of mental accounting but I suppose you could describe it as the framing effect.

Of course, it's possible that BS simply didn't understand the point being made but I very much doubt that was the case.


----------



## fpalb

I was thinking something more like https://en.wikipedia.org/wiki/Endowment_effect but it's not a perfect fit


----------



## TheBigShort

Sarenco said:


> I think it was simply a case of mental accounting but I suppose you could describe it as the framing effect.
> 
> Of course, it's possible that BS simply didn't understand the point being made but I very much doubt that was the case.



Well, can we put the Joe and Mary situation, or at least, what we know about them to the otest?



Brendan Burgess said:


> Yesterday Joe had a house worth €500k and a mortgage of €300k and no shares.
> Yesterday Mary had a house worth €500k with no mortgage and no shares.
> 
> Today, Joe inherited €300k worth of shares from his father.
> Today Mary remortgaged her home for €300k to buy shares.



Sarenco, if you were advising Joe, who has a house worth €500k and a mortgage of €300k to accept his inheritance of €300k, increasing his net worth from €200k to €500k?

Would you advise Mary to re-mortgage her €500k home to the tune of €300k to buy shares, leaving her with zero benefit/loss to her net worth of €500k?

Both Joe and Mary will be in the exact same financial position after your advice. Except if they follow your advice Joe could be €300k net better off.
Mary on the otherhand will have no financial gain or loss.

For the record, even though they would end up in the same financial position, I would advise Joe to avail of the opportunity to increase his net worth by €300k, but advise against Mary re-mortgaging her home to invest in €300k of shares.

So on the one hand, Joe, with mortgage debit of €300k, I would advise to become an investor in shares. On the other hand, Mary, I would advise against becoming an investor in shares if it means re-mortgaging her home.

But thats just me, seeing as I have difficulty understanding these things it would be interesting to see what advice the pros would give.


----------



## Sarenco

TheBigShort said:


> Both Joe and Mary will be in the exact same financial position after your advice. Except if they follow your advice Joe could be €300k net better off.


Does...not...compute...

I tried to give you the benefit of the doubt but it seems you genuinely can't see the contradiction in what you're saying.

I give up.


----------



## TheBigShort

If someone inherits €300k, they are €300k better off. 
I think you know that much. 
Slán


----------



## Sarenco

How could they be in the same position financially while at the same time one of them is better off?  That makes zero sense.

Joe had already inherited the share portfolio in Brendan's example.

This is starting to get irritating.


----------



## Dan Murray

What I find interesting but not at all surprising is that Brendan has not replied to:


Dan Murray said:


> If you believe you can't time the market, why are you spending so much time debating on the mechanics of how to time the market? This seems like a contradiction to me.



and


Dan Murray said:


> It is, not at all, clear to me that those who purport to be certain about Bitcoin's fate have any expertise or knowledge that Sarenco does not possess.



See full original posts for context.


----------



## TheBigShort

Sarenco said:


> How could they be in the same position financially while at the same time one of them is better off?  That makes zero sense.
> 
> Joe had already inherited the share portfolio in Brendan's example.
> 
> This is starting to get irritating.



To answer your question directly, if someone has a net worth of €200k and another has net worth of €500k, and the person with €200k inherits €300k, then that person is better off while both persons are in the same position financially i.e net worth €500k.

But if it's starting to irritate you then best leave it so. If you want, perhaps you could explain what advice you would offer to Joe and Mary (if you have any advice at all), based not on what anything I've said but on what Brendan has outlined.
As for me, that's my last word on the topic.


----------



## Sarenco

TheBigShort said:


> To answer your question directly, if someone has a net worth of €200k and another has net worth of €500k, and the person with €200k inherits €300k, then that person is better off while both persons are in the same position financially i.e net worth €500k.


Of course. 

But, as you well know, that's not what we were talking about.

Please stop blatantly changing the conversation to save your blushes.  At this stage, you are just embarrassing yourself.

Once again - there is no financial difference between investing while in debt and taking on new debt to make the same investments.

Once again - I'm pretty sure that you now realise that's the case but you just can't bring yourself to admit that you made a mistake.


----------



## TheBigShort

Sarenco said:


> Once again - there is no financial difference between investing while in debt _*and taking on new debt*_ to make the same investments.



I wholeheartedly agree. I have been saying it all along. If you have mortgage debt and _borrow _further to invest, that is effectively re-mortgaging. But if you _earn additional income  ( or in Joes case, acquire additional income) _and subsequently invest it, that is NOT that same as effectively re-mortgaging.

I wasn't going to say anything else but your comment above sums it up...

So, genius, which part of Joe's €300k inheritance represents new debt? 

I appreciate this requires you to actually answer directly, so perhaps you could actually answer the question directly?


----------



## Sarenco

Once again, for at least the third time, Joe already had a mortgage when he received his inheritance. 

No part of his inheritance "represents new debt" (how can somebody inherit debt?). 

You have asked the same nonsensical question three times now and I have given you the same direct answer on each occasion.  No part of his investment/inheritance represents new debt/a re-mortgage. 

He didn't take on any new debt when he received his inheritance - he just didn't pay off his existing debt.

The net result is precisely the same as Mary's financial position who had no debt but remortgaged her property to make the same investment.

it's really very, very simple.  Even a complete idiot would follow the point.


----------



## TheBigShort

Sarenco said:


> No part of his inheritance "represents new debt" (how can somebody inherit debt?).



Yes, I agree, he hasn't taken on any new debt, great...I think we are almost done.



Sarenco said:


> The net result is precisely the same as Mary's financial position who had no debt but remortgaged her property to make the same investment.



Does Mary's re-mortgage represent new debt?

It does of course. And to save you the bother, that is the difference which you well know. Despite exactly the same net financial positions, the difference is Mary has taken on new debt (through re-mortgaging) and Joe has not.
And if you can't understand that, then I would suggest you seek financial advice.


----------



## Sarenco

Huh?

Mary has taken on new debt.  Joe hasn't.  But they are in the same financial position.

That's the point that I've been making - and you have been disputing - all day.

Of course I understand the point - I've been trying to get that through to you all day!

Sheesh.  

You really are frustrating.


----------



## TheBigShort

You keep believing


----------



## Sarenco

Keep believing what BS?


----------



## TheBigShort

Ok, you want to do the full 12 rounds? Fair enough.

Its simple,
[broken link removed]

There are plenty examples there to show that leverage is the strategy of using _borrowed _money in order to invest.
The more you borrow against your assets, the higher the leverage.
If you acquire _additional _income and subsequently invest that income in a bank deposit, in shares, in bitcoin, in antiques etc you are _decreasing _your leverage ratio, that is the amount outstanding on your debt (mortgage) to the value of assets you hold.
This is a basic investing concept which you cannot seem to grasp.
Taking brendans example where he holds €1.2m assets €400k in debt. That represents a leverage ratio of 3:1 assets to liabilities. 
He then asks the question "would you re-mortgage...?"
Re-mortgaging, or re-financing in the ordinary parlance of finance, means to acquire _more _debt, in turn reducing the asset to liability ratio (taking on more risk).
Instead brendan then continues,  using €200k in bitcoin to pay down debt, which is deleveraging the debt (reducing risk ratios, not increasing them as re-mortgaging would do). 
Similarly with Joe and Mary. Joe had assets of €500k / mortgage €300k 5:3. On acquiring inheritance his assets to liabilities increased to 8:3, he effectively reduced his risk, not increased it as re-mortgaging would do. 
Mary on the other hand had no risk. She did then re-mortgage, and as could be expected, her risk ratio increased. 
Regardless of the net € positions being the same (which I have never disputed), if you remortgage (borrow more) your risk ratio of assets to liabilites reduces, not increases as both you and brendan have tried to pawn off. 

I think that is where you go wrong, in not being able to apply the correct terminology in the appropriate manner. If the net position is the overriding factor for you, what was the point of asking the question "would you remortgage your home...."in the first place? 
The clear implication is that you would increase your borrowings, not pay them down.


----------



## TheBigShort

Sarenco said:


> I regularly advise people to max out their tax advantaged pension contributions before paying down mortgage debt ahead of schedule. I think that's appropriate financial planning but I don't fool myself into thinking that I'm not therefore advising people to make leveraged investments.



Here is another example of how you do not grasp the concept. If you are advising people to max out their tax advantaged contributions (im assuming you are not advising them to _borrow _to this? That they are using their _additional earned income?) , _instead of paying down mortgage, you are not advising them to make leveraged investments. The pension contributions are a growing asset, the more they contribute the greater the asset. This is deleveraging!


----------



## Brendan Burgess

Hi Shortie 

May I interrupt this discussion to ask you a question: 

Mary has a home worth €500k and no mortgage. Would you think she would be wise to remortgage her home at 3.5% variable to buy a €300k portfolio of shares? 

Brendan


----------



## TheBigShort

Brendan
To answer the question directly, no I would not think she would be wise to borrow against her home (at any interest rate) for the purposes of investing €300k in a diversified portfolio of shares.
If I was giving advice, and Mary wanted to invested in shares, I would advise any _additional earned (or acquired) income _to invest. 
The reasons for this is simple, borrowing against your home puts a risk on your home that may emerge should Marys ability to repay her new loan come into question. 
You may consider a house, an asset or a commodity. A _home _is neither, it is a social necessity, for everyone. 

Same question to you, and considering Joe and Mary end up in the exact same net financial position, would you advise Joe, to avail of his €300k inheritance of a diversified share portfolio?


----------



## Duke of Marmalade

TheBigShort said:


> *Re-mortgaging*, or re-financing in the ordinary parlance of finance, means to acquire _more _debt, in turn *reducing* the asset to liability ratio (taking on more risk).
> Instead brendan then continues,  using €200k in bitcoin to pay down debt, which is deleveraging the debt (reducing risk ratios, not *increasing* them as* re-mortgaging* would do).


Which is it?  It is of corse the former.  Your confusion arises because by your definition of risk ratio risk reduces as the risk ratio increases.

We are not supposed to speculate on identities but are you sure you are not a bot?  You appear to operate 24/7


----------



## TheBigShort

Duke of Marmalade said:


> Which is it?  It is of corse the former.  Your confusion arises because by your definition of risk ratio risk reduces as the risk ratio increases.
> 
> We are not supposed to speculate on identities but are you sure you are not a bot?  You appear to operate 24/7



Remortgaging, *reduces *the risk ratio of assets to liabilities. Another way of looking at it, if you need this level of help, is it *increases *the risk ration of liabilities to assets.



Duke of Marmalade said:


> We are not supposed to speculate on identities but are you sure you are not a bot? You appear to operate 24/7



Yeh, late one last night. An organised 24 hr fast and outdoor sleep to raise money for needy charities. Have until 10am, then off for proper breakfast and proper sleep. 
Thank God for late night trollers on AAM to help past the time. 
It was fun.


----------



## Duke of Marmalade

TheBigShort said:


> Yeh, late one last night. An organised 24 hr fast and outdoor sleep to raise money for needy charities.


Water and black tea, I useta luv her  If you collected any bitcoin cash them in fast - _ant_ _dee_ gives best rates


----------



## Duke of Marmalade

TheBigShort said:


> Mary on the other hand had no risk. She did then *re-mortgage*, and as could be expected, her *risk ratio* increased.
> Regardless of the net € positions being the same (which I have never disputed), if you *remortgage *(borrow more) your *risk ratio* of assets to liabilites *reduces*, not increases as both you and brendan have tried to pawn off.


You must admit it is a bit confusing.  But I suppose it does sort of hang together if you let the term "risk ratio" flip flop betwen Assets/Liabilities and Liabilities/Assets.


----------



## Sarenco

BS

It is bizarre to argue that leveraging a portfolio increases the "risk ratio" (to use your made up term) without also accepting that deleveraging the portfolio would decrease its "risk ratio".  They are two sides of the one coin.

Joe and Mary have precisely the same "risk ratio".  Mary leveraged her portfolio whereas Joe failed to deleverage his by the same amount.  It gets you to exactly the same place.


----------



## TheBigShort

Duke of Marmalade said:


> You must admit it is a bit confusing.  But I suppose it does sort of hang together if you let the term "risk ratio" flip flop betwen Assets/Liabilities and Liabilities/Assets.



I do admit, writing these things off the cuff in the early am, can sometimes be conveyed in a confusing manner, my bad on this occasion. But considering re-mortgaging your home to take on new additional debt is being flip-flopped with using existing assets to pay down existing debt to apparently mean the same thing, it appears that is the level we are at.


----------



## TheBigShort

Sarenco said:


> the "risk ratio" (to use your made up term)




I mean seriously, a "made up term"!!! Do we need to get the Ladybird version of Investing for Dummies?

https://www.investopedia.com/terms/t/totaldebttototalassets.asp

*What is 'Total Debt to Total Assets'*
Total debt to total assets is a leverage ratio that defines the total amount of debt relative to assets. This metric enables comparisons of leverage to be made across different companies. The *higher* the ratio, the higher *the degree of leverage* (DoL) and, consequently, financial* risk*.

Cant you understand that? 

Cant you understand that if I have €1.2m worth of assets, €400k of liabilities that I have a net worth of €800k and a risk ratio (oh apologies, in case you are still taking it in I should refer to its full and complete title 'Total Debt to Total Assets') of 1:3.

If I pay down some of that debt, or deleverage, using existing assets, as per Brendans example with €200K bitcoin, my net worth worth remains exactly the same at €800K but my 'Total Debt to Total Assets has decreased to 1:4 (thus I consider myself to have _less _risk). This is not the same as 'effectively re-mortgaging'.

Or if I re-mortgage, as per Brendans question, without any hesitation my 'Total Debt to Total Assets' ratio increases (thus I consider myself to have _more_ risk).

Time for my zzzzzzzz's


----------



## Sarenco

TheBigShort said:


> I do admit, writing these things off the cuff in the early am, can sometimes be conveyed in a confusing manner, my bad on this occasion. But considering re-mortgaging your home to take on new additional debt is being flip-flopped with using existing assets to pay down existing debt to apparently mean the same thing, it appears that is the level we are at.


Yes BS, it really is very, very simple. 

Investing while carrying debt is the same thing financially as taking on new debt to make the same investments.  It's no more complicated than that.


TheBigShort said:


> If I pay down some of that debt, or deleverage, using existing assets, as per Brendans example with €200K bitcoin, my net worth worth remains exactly the same at €800K but my 'Total Debt to Total Assets has decreased to 1:4 (thus I consider myself to have _less _risk). This is not the same as 'effectively re-mortgaging'.


Of course not.  How could deleveraging a position be the same thing as leveraging a position?

You're tying yourself up in linguistic knots but you're getting nowhere.  It's just getting increasingly ridiculous.


TheBigShort said:


> I mean seriously, a "made up term"!!!


Sorry BS but the term "risk ratio" is not used in finance to describe a leverage ratio. 

A "risk ratio" is a statistical term that is used to describe the ratio of probability of an event occurring (for example, developing a disease) in an exposed group to the probability of the event occurring in a comparison, non-exposed group.

So, yes, it was a made up term in the context in which you used it.


----------



## Brendan Burgess

TheBigShort said:


> To answer the question directly, no I would not think she would be wise to borrow against her home (at any interest rate) for the purposes of investing €300k in a diversified portfolio of shares.



Thanks Shortie 

Now, Joe has a family home worth €500k and a €300k mortgage at 3.5%.
He also has a diversified portfolio of shares worth €300k. 

Do you think he should sell those shares and pay off his mortgage? 

Brendan


----------



## Brendan Burgess

TheBigShort said:


> Same question to you, and considering Joe and Mary end up in the exact same net financial position, would you advise Joe, to avail of his €300k inheritance of a diversified share portfolio?



Hi Shortie 

You seem to be asking me whether someone who is left €300k should accept it or not? 

Yes, they should. 

Brendan


----------



## TheBigShort

Brendan Burgess said:


> Thanks Shortie
> 
> Now, Joe has a family home worth €500k and a €300k mortgage at 3.5%.
> He also has a diversified portfolio of shares worth €300k.
> 
> Do you think he should sell those shares and pay off his mortgage?
> 
> Brendan



Thanks Brendan. 

Yes I think he should.


----------



## Brendan Burgess

OK

Thanks for clearing that up. 

Mary with a home worth €500k should not remortgage it to buy shares.
Joe with a home worth €500k with a mortgage of €300k and a portfolio worth €300k, should sell those shares and so would end up with a home worth €500k and no mortgage.

So now back to landlord's original question. 

What should the exit strategy be for someone who has Bitcoin and a mortgage? 

They should sell the Bitcoin and pay off the mortgage. 

I think that this even applies if the mortgage is a cheap tracker.  Despite the extraordinary potential of Bitcoin, we are nearly all agreed that it is very risky. I presume that you would agree that it's much riskier than a balanced portfolio of equities?  So the correct exit strategy is to sell off the Bitcoin. 

In other words, it's not a good idea to borrow money to buy Bitcoin. And it's not a good idea to buy Bitcoin while you have borrowings which you could have paid off with that money.

Brendan


----------



## Firefly

Duke of Marmalade said:


> We are not supposed to speculate on identities but are you sure you are not a bot?  You appear to operate 24/7



If I spent as much time on AAM / Boards, I would not be able to function in my day job


----------



## TheBigShort

Brendan Burgess said:


> In other words, it's not a good idea to borrow money to buy Bitcoin.



I agree, its not a good idea to borrow for bitcoin.
I have bitcoin, I also have a mortgage repayments due to expire on 31.12.2027 as agreed under the terms of the loan.
Since I have being buying bitcoin, there has been no material alteration to my mortgage, nor have I any other ourstanding loans.

if bitcoin crashes to zero, there will be no material difference to my mortgage. It will still be due to expire on 31.12.2027, requiring the exact same amount of payments.


I am no more re-mortgaging my home, or 'effectively' re-mortgaging my home as the term is commonly understood to mean (outside AAM) anymore than if I were to start a stamp collection.

remortgage
riːˈmɔːɡɪdʒ/
_verb_

*1*.
take out another or a different kind of mortgage on (a property).
"he remortgaged their home to help meet the growing bills"
_noun_

*1*.
a different or additional mortgage.
"a remortgage is one of the cheapest ways of borrowing money"

I am doing none of these things. Landlord is doing none of these things. Joe didnt do any of these things.

Mary did.

But to call this to a halt, you wont convince me otherwise, and I wont convince you otherwise.


----------



## Sarenco

Sigh.

Once again, nobody ever suggested that you re-mortgaged your home when you bought Bitcoin.

What we repeatedly said was that there was no financial difference between re-mortgaging your home to make the investment and maintaining an existing mortgage, in the same amount, while holding the investment.  The net position is the same.

Why do you feel the need to constantly and repeatedly attack points that nobody ever raised?

Also, you do realise that you would advise Joe to do the direct opposite of what you are doing yourself?  Don't you?


----------



## Brendan Burgess

TheBigShort said:


> I agree, its not a good idea to borrow for bitcoin.
> I have bitcoin, I also have a mortgage repayments due to expire on 31.12.2027 as agreed under the terms of the loan.



Hi BS

I thought we had made some progress.  

There is no difference between Joe and Mary.
Mary should not remortgage to buy shares, Joe should sell his shares to pay off his mortgage. 

If you or the OP has a material amount of Bitcoin, you should sell it and pay down your mortgage. 

Mary could easily argue in her defence of taking out a mortgage to buy shares:

"if shares crashes to zero, there will be no material difference to my mortgage. It will still be due to expire on 31.12.2027, requiring the exact same amount of payments." 

Brendan


----------



## fpalb

Attempting a 24 hour fast is no mean feat.
Attempting to comprehend and contribute to this thread appears to be equally challenging. 
Attempting to do both simultaneously is quite ambitious! Well done B/S


----------



## TheBigShort

fpalb said:


> Attempting a 24 hour fast is no mean feat.
> Attempting to comprehend and contribute to this thread appears to be equally challenging.
> Attempting to do both simultaneously is quite ambitious! Well done B/S



It would be disengenuous of me to take such credit. The 'fast' event was for 24hrs. But due to logistics (family commiitments etc) the event was broken into shifts. I put in ten hours, some of the younger ones were more dedicated.


----------



## Duke of Marmalade

landlord said:


> I put my faith in the more technologically savvy Bill Gates and Richard Branson, who I believe would have a much better understanding of the crypto blockchain technology than a 90+ year old equity picking veteran.


This thread is about BTC as an investment not as a technology.  This is a question for economists and others well versed in the workings of our monetary system.  Nobody is questioning that the BTC technology does what its fans say it does.

Bill and Dick will have interesting thoughts on Quantitative Easing, The Gold Standard,  Ricardo's theory, Keynes' theory etc.  But they are not omniscient, there is no reason to put faith in them in areas outside their area of expertise just because they are successful billionaires.  Same goes for Donald Trump.

Economists and investment professionals are overwhelmingly dismissive of BTC having any long term economic value.  A few hedge fund guys see it as a punt for a small part of their portfolio, not based on any faith in its value, but simply based on the fact that currently it can be bought and sold and it is non correlated (for sure) with any other asset.

Any way as I have explained elsewhere Bill and Dick aren't overly convinced in BTC.


----------



## jman0war

There does appear to be an association though.
Investors that are comfortable within the technology sector like James Altucher are bullish on bitcoin.
While investors that appear to be total technophobes stay clear.

It is rumored that Warren Buffett does not even have a cell phone.


----------



## landlord

Firefly said:


> If I spent as much time on AAM / Boards, I would not be able to function in my day job



Seriously lads Winston Churchill phoned me last night and told me....

*Never before in the field of askaboutmoney.com were so many Bitcoin threads posted by so few!!!*


----------



## TheBigShort

Brendan Burgess said:


> Would you remortgage your home to buy €200k worth of Bitcoin?





landlord said:


> No





Sarenco said:


> Why not?
> 
> That's effectively what you're doing by investing in Bitcoin while carrying mortgage debt.





Sarenco said:


> investing while carrying debt is leveraged investing.





Sarenco said:


> don't fool yourself into thinking that investing while carrying mortgage debt is somehow different to remortgaging a property to make those investments.





BreadKettle said:


> Would you remortgage your home to buy a €25 prize bond?



Nobody in their right mind would ever consider buying €25 prize bond to be a re-mortgage of the home. Until now, that is;



Sarenco said:


> Absolutely correct.





Sarenco said:


> I regularly advise people to max out their tax advantaged pension contributions before paying down mortgage debt ahead of schedule. I think that's appropriate financial planning but I don't fool myself into thinking that I'm not therefore advising people to make leveraged investments.



So you would advise others to make leveraged investments, just not Joe and Mary - how convenient.



Sarenco said:


> Investing while carrying a mortgage on a property is exactly the same thing as remortgaging that property for the purposes of making the same investment.





Sarenco said:


> What is dramatic about the word remortgage?
> 
> _*It just means taking out a new mortgage on a property that is already or was previously mortgaged*_.



And thats all it means, and nothing else. If I buy a €5 lotto ticket whilst carrying mortgage debt im not re-mortgaging!!
If I buy €5 bitcoin im not re-mortgaging my home _unless _I borrow the money against a property.





Sarenco said:


> However, I would (and do) argue that it makes sense to contribute to a pension before your mortgage is paid off. Why? Because I take the view that investing money in equities, etc. in a tax-advantaged vehicle has a higher expected return than paying off my "negative bond".



But should you be advising this while people are carrying mortgage debt?



Sarenco said:


> nobody ever suggested that you re-mortgaged your home when you bought Bitcoin.



[/QUOTE]


----------



## TheBigShort

Thats me done with topic. 

If Brendan wishes he can delete my last post if it provokes a reaction from Sacreno.


----------



## joe sod

TheBigShort said:


> It would be disengenuous of me to take such credit. The 'fast' event was for 24hrs. But due to logistics (family commiitments etc) the event was broken into shifts. I put in ten hours, some of the younger ones were more dedicated.



i think I know what type of person you are (probably good fun ) but likes to be seen as virtuous hence the fast, also the personality that would latch onto something like bitcoin. I on the other hand not really virtuous ,would not have done the fast unless it was some cause that personally affected me, (probably not good fun) and not a bitcoin investor. I think there is definitely a personality trait that goes for something like bitcoin


----------



## Sarenco

TheBigShort said:


> If I buy €5 bitcoin im not re-mortgaging my home _unless _I borrow the money against a property.


Nobody said otherwise BS.

I've already pointed that out to you repeatedly while repeating the very simple point that you don't seem to be able to understand.

It's boing at this stage.


----------



## Duke of Marmalade

jman0war said:


> There does appear to be an association though.
> Investors that are comfortable within the technology sector like James Altucher are bullish on bitcoin.
> While investors that appear to be total technophobes stay clear.
> 
> It is rumored that Warren Buffett does not even have a cell phone.


I looked up this Altucher guy.  The more I research these BTC supporters the more I am convinced that the mainstream economic thinkers are not all wrong - bitcoin is a nonsense.  Altucher detects some mega historic process - theism to humanism to dataism.  Givus a break

He sees the main virtue of BTC is that it is volatile.  Sorry, but if BTC is to become a mainstream currency it had better shed its volatility.  And then in that classic pose at being objective it concedes that the vast majority of cryptos are scams, but not BTC.

Then I see the reaction to his post, all adulatory praise.  How long will this insanity last?


----------



## jman0war

Alan Greenspan gave his opinion. He liked bitcoin to Continental Currency of 1775:
_
“I would use the analogy of Continental currency. Continental currency in 1775 was issued with no backing, and it sold at par in the marketplace for quite a while until they started to build up more and more printing of continentals,” explains Greenspan on the news broadcast."
_
A bizarre comparison since bitcoin's issuance is capped by it's programmatic code.
Who advises this guy?
(does he know how to work a cell phone?)


----------



## Brendan Burgess

jman0war said:


> A bizarre comparison since bitcoin's issuance is capped by it's programmatic code.



Correct. And as we all know, Bitcoin has a monopoly on cryptocurrencies. No one else is allowed to create a new one in case it increases the supply. 

Brendan


----------



## Firefly

landlord said:


> Seriously lads Winston Churchill phoned me last night and told me....
> 
> *Never before in the field of askaboutmoney.com were so many Bitcoin threads posted by so few!!!*



We have:

Respected financial advisors declaring Bitcoin useless
A socialist investing in the most libertarian financial experiment I can think of
The likes of me who freely admits to not understanding the workings of block-chain but is sceptical all the same.
And a bunch of fanbois who can't get enough of the stuff

Sure isn't it great?


----------



## Duke of Marmalade

Brendan Burgess said:


> Correct. And as we all know, Bitcoin has a monopoly on cryptocurrencies. No one else is allowed to create a new one in case it increases the supply.
> 
> Brendan


And now we learn that Bitcoin herself is like a mother spider, capable of breeding clones all with their own "limited" supply varying so far from 21M to 84M each.

The Bitcoin family now includes:
Cash
Gold
Diamond
United
X (?? somewhat lacking in imagination)
Super

I wonder does Satoshi's humour extend to launching Bitcoin Tulip


----------



## Brendan Burgess

Duke of Marmalade said:


> Bitcoin Tulip



Copyright that one quickly. 

I see the .com web address is already gone.

Brendan


----------



## BreadKettle

It's not surprising to see people that haven't a clue about Bitcoin.

What is slightly surprising, is people that haven't a clue about Bitcoin talking about it as if they do, and cheering each other on.

Hey lads, look at what Google has gone and done - www.yahoo.com - sure it's like a mother spider?!  Those silly shareholders in google, don't they get that the amount of shares has changed now?

What do you mean yahoo isn't google - you tulip obsessed blind fool!

Various good or bad separate chains should not have any real impact on BTC. It is annoying that anyone can hi-jack a name, but it's not a company with a registered trademark so what are you gonna do. You could understand this of course, or not..


----------



## jman0war

Duke of Marmalade said:


> And now we learn that Bitcoin herself is like a mother spider, capable of breeding clones all with their own "limited" supply varying so far from 21M to 84M each.
> 
> The Bitcoin family now includes:
> Cash
> Gold
> Diamond
> United
> X (?? somewhat lacking in imagination)
> Super


Bitcoin is an open source project, so yes people can copy and paste the code, make their own tweaks and call it whatever they want.
In this case they are doing that and bootstrapping their project by 1) retaining the name / brand recognition 2) leveraging all the previous developer work so they don't have to start coding from scratch 3) pitching to an existing market of investors.

It doesn't change that bitcoin is bitcoin.
The rules that make bitcoin bitcoin, are determined by the participants, the nodes that validate transactions and miners that create blocks.
It isn't possible to include a Bitcoin Gold transaction inside a Bitcoin (BTC) block.


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