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We Received Our Stimulus Payment

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@travelwritemoney
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Mrs. TWM and I have received our stimulus payment in the mail. It is more than $5000. As we don't account for windfalls in our budget. We had discussed roughly what to do with it should it arrive. However, we never settled on a definite plan. Now that it is in our hands, we need to decide what to do with it.

As mentioned in my last post, we had to do a credit card balance transfer to help us stop a collections lawsuit. That transfer was for $2800, of which we already paid off $800. So, we are thinking of eliminating the remaining $2000 balance. Fortunately, the balance transfer was 0% interest for 18 months.

The remainder, we had discussed putting into crypto. Mrs TWM has warmed up to the idea of investing in cryptocurrencies. She has slowly watched my efforts bloom from a few hundred dollars to what we have today, which I haven't sat down to calculate just yet. However, it's more than we have ever saved in our lives. Even Hive and LEO, have blossomed into considerable numbers. Our vision to one day travel the world and earn an income from blogging is becoming more real.

In that respect, investing in crypto, we have two ways we can go. We can actively use the cash to generate more cash using the Core Number Compounding method I have written about. Or, we can take a more passive approach by buying some currency and depositing it to earn interest.

The Core Number Compounding approach has some advantage. The stimulus money would help us increase our positions in BTC and CRO to amplify the amount of cash we can extract from market movements. In other words, adding more cash to CNC would amplify our income. Just to recap, a 1% move on $1000 is $10. A 1% move on $5000 is $50. Therefore, if BTC or CRO increase by 1%, we can extract more nominal cash. Of course, the opposite is also true. A drop of 4% on $1000 is $40. A drop of 4% on $5000 is $200. There is some risk in this method.

Depositing for interest income is reasonable and relatively safe. Interest rates are currently high relative to what the traditional financial markets are offering. We can set and forget. If we need cash, we can collateralize our crypto deposits for loans. This is not a bad way to go. Even if Bitcoin, for example, sits without earning any interest whatsoever, it stands to gain more in value than what any stock can offer. The fact that it earns interest is icing on the glorious cake that Bitcoin is.

That brings us to another possibility. We can continue to pay off the credit card with cash flow. And, we can put the full stimulus into crypto. We potentially stand to gain more in capital gains and interest that what we would lose in interest to the credit card. Or, we would have more cash from Core Number Compounding to pay off the card AND keep the asset too. This option would take some convincing.

If this were a bear market, our options might be different. I certainly would feel differently around October 2021 knowing that the halving bull cycle would be near its end. I'd be more inclined to pay off the debt and save the remainder. However, as there are a few months left in the halving bull cycle, I think it is reasonable to attempt to cash in while the opportunity exists.

We shall deposit the money and discuss our options. Fortunately, we do not have any urgency to our decision. As far as our choices go, they're all good choices that would benefit us in the long term. I suppose the struggle is figuring out what decision fits our family's money philosophy the best. So, perhaps we should clarify what our philosophy is and go from there.

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