stuff

finance/plans for 2025.md

@@ -0,0 +1,64 @@
+# Plans for 2025
+
+I have some thoughts I want to dump, so I'm using 2025 as an excuse. I know I'm counting my chickens before they hatch, so I'm considering everything I'm writing here provisional and likely to change. It's just ideas, not a plan.
+
+The plan for 2024 stays as it is.
+
+## Investable universe
+
+The current investable assets are:
+- Equities
+- Bitcoin
+- Locally manageable real state, specially with black market renting opportunities
+
+## Personal cashflows
+
+- I expect to receive around 4,000€/month.
+- I expect my expenses to increase a bit due to our family growing. Let's say, my expenses land at 2,500€/month.
+- This means I'll have net earnings of 1,500€/month, totaling 18,000€ for the year.
+- I also set a target of having 400,000€ of lawful liquid assets bhy Feb 2028, ready to be potentially spent as a down payment in case we decide to go for a home purchase.
+
+
+## Target portfolio
+
+There are several dimensions to split across:
+
+- Asset allocation
+    - We switch from 50% BTC and 50% index funds to 75% BTC and 25% index funds. Fiat clown world is peaking, valuations are crazy, debt is going to be monetized. It makes sense to keep the 25% as a lifeline in case Bitcoin goes to serious shit.
+    - Once networth hits 2M €, it might make sense to allocate up to 10% into real state if good opportunities arise. Such real state opportunities should offer significant annualized returns in comparison to equity indices to justify the extra work and the lack of liquidity.
+- Lawful assets vs Black money
+    - Out of the available investment universe, only three elements can be traded beyond the state's reach: Bitcoin, physical cash and income from real state rented in black money.
+    - Significant amounts of cash are not desirable, even less so in black money which makes it illiquid in large amounts.
+    - Income in black money from real state rentals is not that easy to plan for due to it depending on opportunities for that arising.
+    - Thus, Bitcoin is the only asset that can easily and flexibily act as a lawful and black asset.
+    - Avoiding taxes is morally right, and it also leads to significant savings in the long run by letting bigger amounds compound. 
+    - Thus, the general policy is to minimize lawful assets whenever possible.
+    - The target of 400,000€ in lawful assets by Feb '28, places a minimum constraint on the lawful assets to be owned. The fact that the conversion rate across lawful and black assets is limited means that we need some early planning. Instead of just expecting a miracle in terms of turning water into wine, I need to run the numbers on what investments need to happen today so that I can reach the 400K.
+- Leverage levels
+    - There are two main ratios to monitor and play with: Debt-to-Equity (DE) and Payouts-to-Income (PI).
+    - Anything beyond 100% DE is completely out of the realm of the fucking possible, you degenerate gambler.
+    - Anything beyond 50% PI is completely out of the realm of the fucking possible, you degenerate gambler.
+    - Right now, I would personally feel comfortable with DE in the range of 50% to 25%, and PI of 33% at most.
+    - DE and PI can be raised through:
+        - Acquiring more debt. 
+        - They will also naturally increase if my assets lose value or my income decreases/disappears.
+    - DE and PI can be lowered through:
+        - Paying back debt on the planned schedules.
+        - Making early amortizations.
+        - They will also naturally decrease if my assets appreciate or my income increases.
+    - Running several leverage instruments over time with different maturities is also a reasonable way to proceed. This option allows for a more flexible management of DE and PI and provides over-time diversification of the gamble, minimizing the risk of bad entry points.
+    - The appetite for leverage will also depend highly on what's the considered hurdle rate. While the plan is to invest heavily in Bitcoin, and for as long as the appreciation of Bitcoin in euro terms behaves crazy high like it's been doing, the game is pretty much give-me-all-you-have in terms of debt. Once any of these assumptions fade or burns out, I'll have to reconsider my position on this area and probably tend back towards being more conservative.
+
+## Available leverage instruments
+
+There are currently three debt instruments available:
+- Personal loans from the usual banks.
+- Collateralized loans from Myinvestor.
+- Mortgages for real-state purchases.
+
+In a wild move, it's also possible that Eli would be willing to mortgage her apartment.
+
+Personal loans will be limited in amount. I don't think I can rack up more than 30-50K more without banks becoming stingy.
+
+Collateralized loans from Myinvestor will probably go way higher, specially if we are discussing 
+