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65 sats \ 3 replies \ @freetx 9 Jan \ on: Selling a property at her 70's and buying BTC bitcoin
I think the idea is good, but I think you are too low in USD allocation. She is 70....its quite possible you are going to have health cost and need things like sitters, etc in coming years. Maybe go 75/25?
This part confuses me a bit...do you mean you will actually go 100% USD and then buy in BTC over 2 years until you reach 83% of total? Or do you mean you will lump-sum buy 83% BTC and then add to it via DCA over next 2 years?
In general I think DCA only really makes sense when:
- You are using cash-flow to acquire bitcoin
- You are executing a DCA plan over a decade or so
I'm not sure DCA-ing makes any real sense over a 2 year period when you are already sitting on the cash.....the volatility is just too extreme over a 2 year period....if BTC runs to 200K during that time then you've cost yourself half your potential stack. If it trades sideways around 95K then it doesn't matter.
Sure if it falls to 30K over the 2 year period you will get a bigger stack, I just think that is not very likely given macro environment.
I would just lump sum buy.
I'm sure that lump sum purchase will outperform DCA on average if the asset is appreciating. Sometimes you might get a better return from DCA if the asset depreciates during the buying period, but more often than not the asset will appreciate (that's why you're buying it), so a lump sum is more likely to give a lower cost basis.
As you say, DCA makes sense if you're buying with cash flow because lump sum is not an option.
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Thanks for your feedback.
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