In this episode, Stephan Livera interviews Trey Sellers about Bitcoin and FIRE (Financial Independence, Retire Early). They explore how Bitcoin can accelerate FIRE, different strategies for retirement, and practical tools like the FIRE BTC calculator. A must-listen for Bitcoiners interested in personal finance and early retirement strategies.
Takeaways:
🔸Bitcoin’s role in FIRE and personal finance
🔸The FIRE BTC Compass and its features
🔸’Buy, Borrow, Die’ with Bitcoin
🔸Different levels of FIRE and lifestyle planning
Timestamps:
(00:00) – Intro
(01:15) – Bitcoin in FIRE community
(4:12) – TradFi FIRE vs Bitcoin FIRE
(07:31) – Can using Bitcoin accelerate financial independence?
(10:35) – How to use FIRE BTC Compass
(14:35) – Different levels of FIRE
(19:23) – Strategies for retirement drawdown
(30:34) – Can you ‘Buy, Borrow, Die’ with Bitcoin?
(36:23) – Sovereignty aspect of Bitcoin
(38:19) – Dynamic life phases & intentional financial planning
(43:52) – Why is there no ‘Dave Ramsey of Bitcoin’ show?
Links:
Stephan Livera links:
- Follow me on X: @stephanlivera
- Subscribe to the podcast
- Subscribe to Substack
Transcript:
Stephan Livera (00:00)
Hi everyone and welcome back to Stephan Livera podcast. Today we’re talking about Bitcoin and FIRE, financial independence, retire early, or maybe just financial independence for some people that are only interested in one aspect of that. Obviously this has been kind of a thing for a while. ⁓ And I know Trey Sellers joining me on the show today has also been interested in this and has been talking about it for a while. Trey is also working at Unchained as a VP, believe, VP, I’m not sure what your title is, but we’ll get that soon.
Trey Sellers (00:26)
I’ve
in the sales organization for about four years over there.
Stephan Livera (00:30)
Right, VP
of Sales at Unchained and of course the author of FireBTC.io which is ⁓ a newsletter and of course the creator of the FireBTC calculator. So we’re going to get into all these things today but first of all welcome to the show Trey.
Trey Sellers (00:45)
Yeah, thanks. Really excited to be here, Stephan. I’ve been a long time listener of yours and I know we’ve connected a few times at different conferences and that kind of thing. So, happy to be here.
Stephan Livera (00:55)
Excellent. so, yeah, look, let’s just talk about, obviously, the big topic for you is Bitcoin and FIRE. ⁓ Now, people who’ve been around a while, you might have heard this term, FIRE, Financial Independence, Retire Early. Generally, people think of like, okay, the 4 % rule. And I guess there’s maybe this intersection of Bitcoin and FIRE. Now, ironically, some of the FIRE people don’t actually like Bitcoin that much, right? And they’ve kind of famously been against Bitcoin. But I know you’re trying to do your part to try to, let’s say,
Trey Sellers (01:16)
know.
Stephan Livera (01:23)
Bitcoin either into that community or just generally. So what has your experience been like interacting with the FIRE community from a Bitcoin perspective?
Trey Sellers (01:33)
I don’t really try to interact with them too often, actually. I don’t think it’s really that fruitful to try to inject Bitcoin into the fire movement. ⁓ I certainly write in a way that is accessible to the traditional fire movement, but I found it’s a little bit like pushing on a string, right? And that’s generally the case for Bitcoin is that people are ready for it when they’re ready for it. There’s something that happens in their life or they come into the thread ⁓ or…
Stephan Livera (01:51)
Yeah. They’re just not into it, you know?
Trey Sellers (02:02)
their timeline puts Bitcoin in front of them in a way that actually resonates at some point in their life. And then they start getting curious. And I think that’s true for people of all different contingents. So what I primarily focus on though is helping Bitcoiners see this ⁓ view of personal finance in a way that’s very structured and that can actually put together a plan for
getting to a place where you are intentional about reaching financial independence and framing that in a way where you can maximize your sat stacking, where you can put yourself in a position of, ⁓ you know, really being in good control of your expenses and just thinking about things from different angles there that I think a lot of Bitcoiners don’t think about. There are a lot of people that I’ve come across where it’s like, okay, I understand Bitcoin and I know I want to stack as much as possible.
⁓ But they haven’t really thought about that in terms of like a comprehensive view of their personal finances and how they should think about their spending, what kind of timelines they should be thinking about, what does an actual withdrawal process or withdrawal rates look like, how much Bitcoin do you actually need to get to some certain level of enough? We always say like Bitcoin, you can never own enough Bitcoin, but that’s like not technically true. It all depends on your goals and what you’re trying to achieve.
And so I just try to frame things in different ways that will allow Bitcoiners to put a more structured and intentional view on their personal finances for their families, for their kids. ⁓ And so they can get to a place where they feel like they’ve got control over this and they’re not just stacking ⁓ stats with no end goal in mind.
Stephan Livera (03:46)
Right, like the idea is to have a holistic plan around your SAT stacking and not just kind of sort of this willy-nilly ad hoc process, but actually, no, you’ve got actually a plan to this. So can you, if you were talking to somebody and trying to contrast, let’s say just traditional, know, TradFi Fire versus let’s say a Bitcoin aware Fire approach, how would you, let’s say contrast those two approaches? Like, can you just quickly explain what’s the TradFi version of Fire and what’s the Bitcoin version of Fire?
Trey Sellers (04:14)
The TradFi version of FIRE is simply ⁓ trying to maximize your savings rate and take the in that extra capital that you’ve got of your income relative to your expenses and shoving it typically into the stock market, broad market index funds that will you’re not trying to like beat the market. You’re just trying to ⁓ create some real savings, ⁓ know, savings above and beyond the inflation rate that will allow you to compound
a portfolio of assets ⁓ in such a way that you can cover all of the expenses that you have. it’s, and the way that I talk about this for Bitcoiners is really the same approach. It’s just using Bitcoin as the primary savings vehicle instead of using stocks or sometimes real estate. Some people do use bonds as part of that portfolio. ⁓ There’s this idea of the 4 % rule where you are looking to ⁓ save enough where you can draw down
4 % of your portfolio in any given year to cover all of your expenses and that will in in most historical cases ⁓ Looking back at historical stock and bond market returns It will cover your expenses over the course of 30 years or much longer in most cases You actually end up with much more money than you started with even after 30 years because of that power of compounding And then you’re able to continue to draw either 4 % or less just whatever you need
to actually cover those expenses. The traditional way that people think about this is that the stock market is compounding at call it 8 to 10 % per year, you’ve got maybe like 2 to 4 % inflation rates. And so your real return there is the difference between those two things. Now, as we all know, as Bitcoiners, we’ve studied this, everybody’s got their own view of expenses, their own costs that they need to account for. And so this isn’t like a one size fits all.
⁓ exact formula, it’s more of a guideline to say, hey, for most people and most parts of the world, you can think of this as a guidepost, a way to ⁓ have a goal in mind for reaching a portfolio that is able to cover the expenses that you’ve got in the lifestyle that you are currently living, that you want to extend. Or, you you can think of it as, what’s my ideal lifestyle? What are my expenses going to be in that ideal lifestyle? And then I can do a little bit of math to figure out
how much I need to save going forward to reach a portfolio size that will cover those expenses. And just to wrap that up, the math that that 4 % rule implies is that you need 25 times the amount of your annual expenses in order to be able to withdraw 4 % per year and have that cover your expenses into perpetuity. So if you…
⁓ have expenses of $100,000 per year, then you need to save $2.5 million in the traditional fire sense in order to cover those expenses on a year to year basis. And then that compounding just takes care of the rest.
Stephan Livera (07:20)
So the obvious follow-up from a Bitcoin perspective is, using Bitcoin as part of your FHIR approach, can Bitcoin accelerate your retirement or independence point?
Trey Sellers (07:32)
Yeah, I think it can. I think we all expect that it can. And that acceleration comes from a higher growth rate than stocks, typically speaking. Bitcoin is a fixed supply asset. It’s in this adoption phase right now. And so we all kind of expect that the value of Bitcoin is going to grow much, ⁓ much faster than the stock market will. ⁓ There’s obviously a question of, well, exactly what is that growth rate going to be?
I tend to be very conservative when I’m doing the modeling out and when we talk about the compass tool, this calculator that I’ve built, I’m using a conservative, what I think is a conservative 25 % per year over a very long time horizon, as opposed to some of the historical returns that we’ve seen in Bitcoin, which are upward of 50 % or 75 % in some cases.
If you can expect that the value of your portfolio is going to grow at a much faster rate than what the traditional fire approach looks at, which is that eight to 10 % in nominal terms, then you can actually ⁓ get to that fire level much more quickly, or you can look at it in an inverted way, which is that you just need a whole lot less saved in order to get to that retirement standpoint or that financial independence standpoint. And the way that I’ve kind of
talked about this is let’s be even more conservative than the 25 % and then the 4 % rule and just double it. Bitcoin should be able to outperform traditional stock markets by at least twice over a long period of time. And so if you think about an 8 % withdrawal rate, which sounds kind of crazy, you’re going to be selling down potentially 8 % of your Bitcoin stack.
But it really is just math, right? If at the end of the day, that is the performance that you are getting from Bitcoin, then that 8 % withdrawal rate will actually work for you. And it works for you quite well relative to the stock market. Now, most people own stocks and Bitcoin. They own other assets like real estate, bonds, whatever they have in their portfolio.
And so the way that I’m calculating all this when I’m doing a lot of the examples that I have in my newsletter or in the calculator tool, this FireBTC Compass tool is kind of a blend of that. saying, okay, how much stock do you have? We’re going to assume a 4 % withdrawal rate there. How much Bitcoin do you have? We’re going to assume an 8 % withdrawal rate there. And then you can get to some kind of blended number that will allow you to
⁓ see what is your BTC adjusted number, right? What is your BTC adjusted timeline for reaching financial independence? And you can start making decisions around how you are living your lifestyle based off of that. Yeah.
Stephan Livera (10:07)
Yeah. So while we’re here, let’s talk about the calculator. it’s calc.firebtc.io.
And as I read it, it’s like a dashboard. You punch in your numbers. kind of give us a bit of an overview. How should listeners use the calculator?
Trey Sellers (10:14)
Yep, that’s right.
Yeah, so when I started my fire journey back in like 2019 is when I was like really hardcore. Okay, I didn’t love my job and I wanted to just get out of there. And so was like, okay, I found the fire movement. also found Bitcoin around the similar time in terms of like really being convicted in it. ⁓ And I started keeping track of all my finances, all my expenses, my portfolio values, everything in this spreadsheet that I had built.
and it had some macros in it and it’s got some really cool charts and all this stuff. And I’ve been keeping that spreadsheet since 2019. Well, that obviously ⁓ applies to me in my particular ⁓ situation, but it doesn’t really translate to a tool that other people could use. So the idea behind the FireBTC Compass tool is that it’s something that’s web hosted that you can ⁓ keep all of your data private. So everything is stored in the browser locally there. Nothing is sent to any type of server.
⁓ But you can start to enter in all of the information that you’ve got about your finances, whether it’s your expenses, whether it’s your portfolio values, the amount of Bitcoin that you own. And then there’s going to be some calculation and some historical tracking ⁓ in that tool that allows you to see how you’re progressing toward your FIRE goals. ⁓ It’s pretty rudimentary at this point, like launched it with some kind of basic functionality. And I’m already working on building some new features in terms of like projecting, ⁓ you know, different scenarios.
Like right now I’m working on a bear market survival feature that will go in that projections tab if anybody goes to the tool and it’s looking at historical bear markets. Could my portfolio based on everything that we know have survived that drawdown of 75 or 80 % in 2021 or 2017, 2018? And these are just really cool visualizations and tools that will allow you to gain comfort in this approach.
to reaching financial independence and feeling like, hey, if I retired at the tip top of the bull market and started drawing down based off of this number, would my portfolio actually survive? And would I be able to last for the full 30 years? Which is a question that we all have and there’s obviously no one answer for everybody, but this helps to kind of guide your thinking in terms of that process and give you some visualizations and some tracking.
over time so you can continue to feel motivated and use that to your advantage.
Stephan Livera (12:50)
Yeah, a few kind of directions we can talk about. Now, you mentioned one concept of your…
Bitcoin fire rate might actually be higher than your TradFi fire withdrawal rate. That’s one idea. Or, said another way, maybe you hit retirement earlier, or financial independence, depending on if you’re actually trying to retire or you just want to have the feeling of having independence. ⁓ And then, of course, ⁓ on the calculator, there’s the point about which projections are you looking at. As an example, I’m a fan of power law, so I’d love to see that built in as a projection. think that’s probably a good
Trey Sellers (13:03)
Hmm.
Stephan Livera (13:28)
⁓ sort of baseline of where things are going. Of course there are times where above and below the line or the trend or whatever but I think that’s an interesting one and yeah. ⁓
Trey Sellers (13:37)
Yeah, for anybody who’s listening, if you go to the tool
and start playing around with it and you have any, you know, suggestions or questions or you see any bugs, please reach out to me. You can either do that, you know, via X DMs or whatever, or there’s a little spot at the bottom to just email me and tell me what you’re thinking. the, the other day somebody asked, Hey, can I see this in a UD? Cause I’m in Australia. said, sure. And I just kind of quickly, you know, built up a little, ⁓ you know, conversion, ⁓ or toggle where you can select.
any one of the top seven fiat currencies and see everything in, you know, denominated in those terms instead of in dollars. So yeah, happy to implement any of those types of changes.
Stephan Livera (14:20)
The other topic I know you’ve spoken about and written about is this concept of the different levels of fire. So I think in your post you talk about nine levels. Do you want to just overview a little bit what are some of these different levels of fire?
Trey Sellers (14:33)
Yeah. The traditional financial independence retire early community thinks about different lifestyles and they give them these names. So there’s this name of lean fire and a lot of the people that I’ve seen stories talking about, they are reaching lean fire and then they’re done. They just retire basically means you’re just living off of like the very bare minimum of expenses. Maybe you’re like living out of an RV and you’re just traveling around and you’ve, know, you don’t
like have a car, it’s just like very lean amount of expenses so that you could retire. Maybe you’re only spending $20,000 a year. And so you could retire very with a much smaller portfolio because you just don’t have this kind of ⁓ more luxurious or extravagant lifestyle that you need to fund. so lean fire is one flavor of this. Fat fire is kind of the exact opposite of that where it’s like, ⁓ you’re spending a whole lot.
right? And you need a much bigger portfolio in order to fund that lifestyle. There’s this concept of barista fire where you you decide, okay, well, I don’t mind working a little bit. ⁓ I want my portfolio to cover call it 60 % of the expenses that I’ve got. But I’m going to work at the coffee shop or I’m going to work at the you know, some just have some kind of like local job just to keep me busy and engaged in the community and that kind of thing. And that’s going to cover the rest of the expenses. That’s where the term
barista comes from. ⁓ There’s this idea of coast fire. And coast fire is where you get to a certain point where if you add no more to your savings, ⁓ you will eventually reach financial independence. ⁓ I think of this as like a five year period, like I’ve saved up enough where in the next five years, assuming the normal compounding rates, I’m going to reach that full fire 25 times my expenses number. And so I can just kind of coast from here on out.
I can start spending more on my lifestyle right now because I don’t need to be saving anymore and adding to my investment portfolio. So all of these are like different ways of thinking about ⁓ what the lifestyle of your financial independence, retire early process might look like. ⁓ I’m much more of a kind of structured linear thinker in these types of things. I like like a system. And so what I decided to do was put together a framework
for a progression from basically where you’re starting at zero all the way up to fat fire. And it’s based off of the amount of your portfolio saved versus your expenses, that multiple that you have. 25 times your expenses is the full fire standpoint. ⁓ If you get to 40 times your expenses plus, I’m considering that fat fire. And then there’s a whole bunch of other levels in between.
And what this does is it allows you to kind of think of this as a progression. You can think about the different lifestyle amenities, so to speak, or opportunities that open up to you as you go along this journey. And I think a lot of people think about reaching financial independence as like a light switch. You either are financially independent or you’re not. And what this allows you to do is think about it more like a spectrum, more like a journey, instead of this on off switch that I think people sometimes get hung up on.
And that helps you to maintain motivation as you’re going through this, right? It’s not like something that you’re doing for a couple of weeks or a couple of months, right? ⁓ Building towards financial independence takes years. It takes dedication. It takes intention. And you want to use some kind of tricks to keep you motivated along that journey. That’s what this whole framework and it’s built into the Compass tool. ⁓ That’s what it’s intended to do.
Stephan Livera (18:23)
When it comes to actually doing the drawdown, can you talk us through some of your thoughts there? Because I understand there are different, especially in Bitcoin land, there are different approaches you hear people talk about. One is…
obviously borrowing against your stack. you’re at Unchained, obviously Unchained does loans, so that’s kind of an obvious one. Although I believe you guys have commercial loans only, but nevertheless it’s an option for some people. Some people might just sell 4 % a year, right? Like just sell that amount a year, that’s how much you can spend. And then maybe nowadays, this new era, there’s stretch, STRC and SATA, which are like Bitcoin flavored forms of…
Trey Sellers (18:35)
Mm-hmm.
Stephan Livera (18:57)
income, right? It’s like 11 or 12%. And then it for an American, after taxes like this ROIC concept, it might actually be even more than that. So when you blend all these different ideas together, where does it come out for you? How do you think about actually doing the you know, if you’re in the retirement phase, how do you think about doing the actual drawdown?
Trey Sellers (19:05)
Mm-hmm.
Yeah, I was just at the strategy conference in Las Vegas last week and STRC and Seda were very big part of that in terms of the topics that people were covering. They’re really great tools. So the way that I think about this is ⁓ you do have all of those options at your disposal. I think the cleanest way to do this is to actually draw down. We say as Bitcoiners like never sell your Bitcoin. ⁓
I don’t really think about it like that. That’s a great meme and it’s true in a lot of respects. It’s like this is the thing that you want to sell last. But ultimately Bitcoin is a tool, right? It’s money. ⁓ We’re saving it for a particular purpose and that is to fund our lifestyle, to be able to give charitably, to pass down wealth to future generations and all that. So we shouldn’t have this kind of… ⁓
strict rule about okay, I’m never ever gonna sell my Bitcoin under any circumstances. ⁓ We need to create some type of income in retirement. But I think the way that a lot of people think about income is like, okay, well, I need to create some passive income stream, which means I need to own a business or I need dividend stocks, or I need, you know, real estate that is is bringing in rents. And that’s how I’m going to create income for my retirement.
And then I’ll just have this nest egg over here. I think about it a little bit differently, that the traditional FIRE approach here is to create income by drawing down on your portfolio. And that’s okay. We should be okay with that. ⁓ You’re creating income actually in a fairly tax efficient way. ⁓ The long-term ⁓ capital gains tax in the US at least is lower than short-term capital gains ⁓ and lower than ordinary income tax.
And so especially if your expenses are, you know, quite large and you’re in that like, coast fire to fat fire range and you’re wanting to live well in your retirement, you’re probably going to have larger expenses, which means you’re probably going to need more income. And if you’re, if you’re earning that through ordinary income or through dividends, which are taxed at ordinary income rates, then you’re probably going to pay more taxes. If you are instead selling down your portfolio, you’re paying a lower tax rate to fund that lifestyle.
⁓ The effect is essentially the same and so I think of this as still actually probably the best and simplest tool out there is just sell down your portfolio Trust the math trust the process that this is what’s gonna work for you when we think about loans loans are a great way to Fund your lifestyle as long as you understand it
⁓ There are a ton of risks. I’ve written about this in the newsletter in the past, a couple of different articles on how I think about Bitcoin back lending and how I would approach it. But you need to be very aware of how that collateral process works. The volatility of Bitcoin makes this a little bit tricky. And over time, from like a nominal and dollar standpoint, you’re probably going to pay more than if you’re just selling down your Bitcoin in terms of like the actual nominal cost of doing this.
The trade off is that you still have the Bitcoin. It can grow hopefully faster than what you’re paying an interest rate. And so there’s a nice arbitrage there. I am totally on board with ⁓ using the Fiat financial tools that we have in order to fund our lifestyle. I write a lot about mortgages and how those are really great tools because they’re not actually tying up your Bitcoin as collateral for the loan. They’re typically low interest rate and they’re long duration.
So like all of those are tools that we should consider ⁓ to make sure that we’ve got a really great solid approach to maximizing the approach that we’ve got toward reaching financial independence and then funding ourselves in retirement. And then the last question that you have here is around like something like STRC, something like SATA. ⁓ These are really great new tools. I will emphasize that they are new. And so the
time testedness of them is still kind of out there. Like I think there’s still a valid question there. ⁓ I that the ⁓ return of capital ⁓ stature of that actually you’re right, like makes them more attractive because your ⁓ your actual return if you are not having to pay taxes on that income is very much
⁓ amplified by the fact that this is return of capital. I you do end up having to pay taxes at some point, but it’s deferred. ⁓ The way that I typically think about like dividend investing versus just buying Bitcoin is that anytime you are investing for dividends, you are giving up longer term total return for the sake of income in the here and now. If you don’t have to pay taxes on that in the in the here and now then that
absolutely makes things a lot more attractive to pursue income ⁓ generating assets like dividends or real estate ⁓ versus ⁓ things that you do have to pay taxes on, but you are still giving up this longer term total return profile. And me and the way that I approach it is that I would much rather have more wealth ⁓ over a longer period of time than less wealth.
and sacrificing that longer term wealth for income in the here and now. I’d rather have a larger portfolio and draw down on it than ⁓ not have that larger portfolio but still have this income. People think about this differently though, right? Like everybody’s got different emotional triggers and ways that they want to do this. So we should be pulling from all of these different tools.
Stephan Livera (25:07)
Yeah, I think, as you said, there is kind of the the maths of it of just like maximize your Bitcoin hodling and just minimize the fee up hodling whatsoever. ⁓ And then maybe there’s a psychological component for some people like they just psychologically feel better just having, you know, a small amount of income coming in because then they feel and I think some of that is you know, especially if you’re like a diehard longtime hodler, you sort of feel this
Trey Sellers (25:19)
Absolutely.
Stephan Livera (25:33)
Like you really don’t want to give up your stats, right? And hey, all of us as Bitcoiners, we’ve all been there, right? Like we’ve all at least, whether you’re a first cycle or you’ve been around for ages, many of us feel that kind of, I really don’t want to sell this coin. I’d really rather, it hurts. And so maybe there’s like a psychological sort of crutch element to it, or maybe there’s ways to kind of put it somewhere in the middle. Like as an example, let’s say you sell, let’s say you’re doing your 4 % rule, you sell,
Trey Sellers (25:35)
No.
it hurts, man. It hurts.
Stephan Livera (26:03)
percent for a year and then the amount that you’re not spending right now you could keep that amount in like a stretch or a SATA or something like that and so that way you’ve sort of got most of it in the Bitcoin but you’re kind of keeping a little bit in straight USD and some of that in stretch or SATA or something like that maybe that’s an approach people would employ so I think it’s just kind of there’s psychology that we have to sort of get over but as you said you could just say look just trust the process like just four percent a rule four percent a year like that’s just you’ve done the maths you’ve saved up enough let’s say
For example, say, you’re going…
Trey Sellers (26:34)
And trusting the process is much easier when you see the value of Bitcoin going up or the value of your stock portfolio going up. It’s harder in the bear market to say, just trust the process, right? Because, and that’s just how we are emotionally wired. So ⁓ what I would say is like being directionally correct and not fully optimized is way better than, ⁓ you know, doing that extra little 10%. Like make sure that you can actually sustain this journey over the long time period so that you can
Stephan Livera (26:43)
Right.
Trey Sellers (27:04)
can reach that goal. And even if it takes you an extra year ⁓ to actually reach that goal, because you’re not like fully optimized for that total return and getting to that number, at least you’re getting there with your sanity intact. So now I will say, look, I’m still working. I, you know, make it make a good income. I’ve got this portfolio of assets that I’ve built up. I’m like, basically there at that, ⁓ you know, financial independence, you know, area. But ⁓
But I have not started drawing down on my Bitcoin yet because I haven’t needed to. I understand that pull. What I will say is that my business does run on a Bitcoin standard. And so I have started to develop the muscles for selling Bitcoin a little bit more to actually cover the expenses for that business. And that hurts at first. I didn’t like doing that. But over the long term, I’m trusting the math that if you’re holding 100 % of your assets,
In Bitcoin, over time, Bitcoin goes up on average. So any short-term losses that you might have ⁓ will be offset by those short-term and longer-term gains as you build that treasury.
Stephan Livera (28:18)
Yeah, and I think it’s just, I mean, it’s so relevant, especially the comment around bear markets, right? now, we, for listeners, as we speak, the price is $73,000 per BTC. It’s the 4th of March, 2026.
Trey Sellers (28:28)
Nice little pump today.
Stephan Livera (28:30)
Right? And so yeah, we’ve had a bit of a pump today, but so maybe people are feeling good now. I mean, who knows, maybe there’ll be a pullback or whatever. I’m not a short-term market timing guy. But I think for most people, hanging in their mind is like, oh, just recently we were at like 125K or whatever. And then, you know, we had the big crash down to like, who knows, maybe 60K was the bottom. None of us knows. But that feeling of like, after you’ve just copped a 50 % drawdown,
It’s kind of hard to be like, yeah, I’m trusting the math. As long as you, now of course, you’ve done your sums, if you’ve got, or even if you’ve built in enough of a cushion, right? Like maybe you’re not actually living at 4%, you’re living at even less than that, just to kind of be conservative and be safe about it. Like maybe your actual expenses are 2 % or 3%, something like that. So you kind of, okay, I’ve got a bit of buffer in case Bitcoin drops, this kind of thing. But nevertheless, the psychology, yeah.
Trey Sellers (29:18)
And that’s why I tend to
approach these things in a very conservative manner. I think 25 % over a long time horizon, especially over the next call it 10 to 20 years, is pretty conservative. People might bite my head off for saying that, just given the fact that we’ve had this 50 % drawdown. But I’ve lived through many of these. I know you have too.
And I know that it will like ultimately come back and then we’re going to be wowed by the, you know, by the bull, the next bull market and how quickly it’s appreciating value. And then that’s going to balance out relative to the drawdown that we just had. So I trust that process and I trust the math with it. ⁓ you know, there there’s just something to be said for making sure that you maintain this understanding of the long-term and zooming out.
and that you are putting these structures in place and this approach of intentionality around your spending and around your saving with this framework in mind. So you’re not just flying by the seat of your pants and being like whipped around by the market because the market has a tendency to do that.
Stephan Livera (30:20)
Yeah. One other topic now, obviously you’re at Unchained, you have loans as a product there on that side.
The other big concept, know, it’s kind of a very sexy or hot topic people talk about is buy, borrow, die, right? Like that’s a big thing of like that’s, you that you see all these videos and people talking about like, that’s what the rich people do. You should do that. Like that’s the efficient way you should just never sell and just borrow. now to be clear listeners, your big boys and girls, please be conservative, you know, run your own spreadsheets and analysis. Don’t just go crazy with this, obviously. But how do you analyze this kind of buy, borrow, die question?
Trey Sellers (30:33)
Mm.
Stephan Livera (30:57)
What kind of numbers can it even make sense to do that? Like is that only at like very large stack sizes that it’s like you can do it conservatively or how would you explain this buy borrow die concept in Bitcoin?
Trey Sellers (31:11)
Yeah, so ⁓ I, like I said before, I’m definitely a fan of using the different fiat tools that are out there in order to maximize your wealth and maximize the ability to stack stats and hold on to those things. We should use the fiat finance. I call this Aikido finance, right? If you’re familiar with Aikido, it’s like using your opponent’s weight and momentum against them, right? ⁓ That’s what the speculative attack is ⁓ that Pierre Richard.
Kind of coined, know back in the day and that we talk about a lot in the Bitcoin world and so like The the fact that we have these tools available to us is is great. It’s it’s you know, we My view is that like down the line as Bitcoin becomes ⁓ More and more of a constraint on the fiat financial system that will That may not always be the case, but for the time being you should take advantage of it the
Idea of buy, borrow, die is great as long as you are approaching it in a conservative manner. ⁓ You should never be like borrowing against your entire stack because then you can’t actually defend that position ⁓ unless you’ve got some other type of windfall coming in from like the fiat side or ⁓ you’ve got other assets that you can sell to defend it, which is really stressful and you may not be able to react that quickly. ⁓ So if you’re going to borrow against your stack,
Make sure that it’s a very small portion of that and then be able to react in the moment as this volatility comes to bear on the market and you need to be in a position to recollateralize the loan or pay it down or what have you. ⁓ The way that I would approach this question is I want to exhaust all of the fiat financing mechanisms that I have before I encumber my Bitcoin because the Bitcoin acts like a
Stephan Livera (33:04)
So you’d rather use like a fiat mortgage
or a fiat loan before you’re doing Bitcoin collateral loans because of the obvious liquidation risks and so on
Trey Sellers (33:09)
Right, exactly. Because you’re going to be borrowing at lower
rates. a mortgage, again, is a perfect example of this. If you can borrow against your house at 6%, 7%, ⁓ you’re getting this ⁓ rate on the fiat money at much lower than what you can currently do ⁓ with Bitcoin back loans. And it’s not callable relative to your house, right? Like those mortgages typically ⁓ don’t
can’t be called away from underneath you unless of course you’re missing your payments and that kind of thing. So it’s much easier to bear. There is no volatility in the underlying asset that is backing those loans. Now, of course, you have income and that kind of thing that is actually used to underwrite the loans. But look, if you’re taking those dollars that you’re borrowing against your house and you’re buying Bitcoin with it or you’re buying stocks with it or what have you,
Now you have this other asset that’s running in parallel to your house, which is also going up by a few percent every year. And if you need to, you can always sell down those assets to continue to cover that mortgage. ⁓ That’s the way that I think about it. And over the long term, you’re going to end up with a lot more in terms of your total wealth. If you are using this Aikido finance principle in order to maximize the amount of sats that you’re able to stack. Again, this is not for everybody. Some people do, you know,
or totally anathema to any kind of debt. But I think it’s a very important tool in the toolbox and you should be thinking about how you can benefit from it, even if you’re not maximizing that part out.
Stephan Livera (34:42)
Yeah, of course.
I mean, obviously there’s no one size fits all here because some people have income, some people have other assets and different skill sets, different age, different family size, different living expenses and so on. So it’s just, there’s no one size fits all. I guess the appeal with the buy, borrow, die for a lot of people is this, know, because it’s selling people this idea of, you know, and maybe for some people they’re stuck in like, you know, just like a job they hate and it’s kind of, it’s giving them this kind of escapism. And so it’s important to kind of understand, are you just engaging in escapism or are you really like, have you actually
done a spreadsheet, calculated this out and sort of thought about the risk in a deep way so that you are covered in a downside scenario or if the interest rates rise or if various things happen. But it’s an evolving space too because even in Bitcoin land, interest rates, ideally, they will come down over time and the loan terms will expand out too. It won’t just be one year loan terms. So it is gonna expand out over time.
Trey Sellers (35:31)
Yeah, they already have been.
Yeah, absolutely. The banks are coming for lending against Bitcoin. I’m still I still don’t know exactly how that’s going to look. I find it hard to believe that like the major commercial banks are going to be lending against Bitcoin in the way that Unchained or some of the other players in the in the space are doing ⁓ to like their retail clients. It’s probably going to start in their private wealth practices and you know for institutions and that kind of thing.
But over time, that could be the case. ⁓ You know, one of the big things that I think Bitcoin provides to ⁓ people who hold it that the traditional financial independence retire early community does not get is this like sovereignty aspect of it. If you are actually holding your own Bitcoin, you’re holding your own keys, you’re doing that in a self sovereign way. You not only get financial independence, but you also get this sovereignty aspect overlaid on
If you are just in the traditional financial independence, retire early movement, you’ve got a portfolio full of stocks and it may be worth $2 million or whatever. There are scenarios where you lose access to all of that money because you’ve got this counterparty risk. You’ve got this systemic risk built into ⁓ this ⁓ approach that you’re taking. Hopefully, that’s never a problem for you, but it is a problem for some people.
just having a bag of Bitcoin that you control ⁓ yourself, even if you’re not like totally all in like a lot of us are, ⁓ is a really important hedge against potentially losing access to all of the wealth that you’ve accumulated over the years of working. So that’s another important aspect of this is like, how do you create resiliency not only of like, against losing your job or wanting to reach for this aspirational financial independence framework.
But how do you actually create resiliency in the assets that you own and control? Well, Bitcoin is a really, really important tool for being able to do that. I write quite a bit about that particular aspect of it as well.
Stephan Livera (37:43)
Yeah, I see. ⁓ Yeah, it’s about, I guess, finding the right balance of how much Bitcoin you hold and what financial tools you are using, if any, or you’re just kind of doing the straight sell down a portion, a small portion every year. And I guess…
putting it into, let’s say, American, I guess the other aspect I wanted to talk about is it matters what life phase you’re in, right? Because people often will run the numbers for their current phase of life, or they might buy a home thinking, oh, whatever, they’re a single person, or they’re married but no children, then having children, and then, I mean, you and I are in that phase, but then later, once you become a so-called empty nester, that’s like another phase of life. You have to think about what’s your need going to be then? you have to really
know, plan for some of those unknown scenarios, right? So there are scenarios where people have thought, just go retire somewhere in some cheap country, but then sort of not have enough to come back, you know, or like the cost rises there, you know, there’s just all these different…
different contingencies or different situations that come up just because of the phase of life that we are in and that could change, right? You could get married, you could have a child, you could then have that, it really changes the way you do things, it changes your costs, all these things.
Trey Sellers (39:03)
Yeah, the intentionality behind all of this approach is really important to think about. ⁓ On the one hand, like the FIRE approach is super simple. It’s like, I’m going to save as much as I can, and I’m going to invest the excess, and then I’m just going to get to a number, and then I’m good to go. On the other side of it, it’s like, you probably do want to be much more intentional about making sure that the money that you’re spending today, one, is
actually adding value to your life and if there’s any froth or excess in there that could be cut, well, that can actually have a very large amplification ⁓ effect on the ability to reach that timeline much more quickly. But then you also need to think about it, not just in the here and now but like what is actually the lifestyle that you want to maintain when you reach financial independence? What’s your aspirational lifestyle? And maybe it makes sense in order to think about your fire number. ⁓
based off of your current spending, well, what is that aspirational lifestyle spending actually gonna be? Do I wanna have a golf membership that’s gonna cost me $10,000 a year that I don’t have now? Well, if that’s part of your goal, then you should build that into the expense structure that you’re using to calculate that FIRE goal for. And so I’ve thought a lot about like this for my own personal stuff and I’ll probably be building a lot of these different tools into the FIRE BTC Compass Tool.
so that people can play around with like their different perspectives. Some people are like, I love my lifestyle right now. I can’t imagine it changing. There’s no reason that it would. And so I can just base my fire number based on my current expenses. And some people are like, well, you know, the whole point of this is to be able to retire in luxury and go play golf and travel the world and do all these really cool, amazing things. Well, if that’s the case, and it’s that’s very different from your current lifestyle, you should probably be thinking about.
what exactly that looks like and what is it going to cost for you to do that? ⁓ So there is a lot of thinking that goes into this, but it’s a lot of fun thinking, right? It’s like, how can I like really craft this story and this journey in a way that’s going to get me to a place where I’m loving where I’m going. And you know, mentioned escape lifestyle design exactly. Yeah, you were mentioning escapism. Like when I started this, like I absolutely wanted to escape.
Stephan Livera (41:15)
Right, it’s like a lifestyle design kind of question. Yeah, go on, the escapism, yeah.
Trey Sellers (41:24)
But now I’m in a job that I love. I get to talk to people like you all the time and go to conferences and do all this stuff. Like I don’t need to retire anymore. ⁓ Even though I’ve kind of reached that level of financial independence. And so like it’s important to just think about like the way that your life can dynamically change over time, exactly how you’re saying. And then think about things from a point of flexibility, right? ⁓ If you decide that you’re going to retire because you’ve reached that fire number,
and then something happens, you know, a year later, the market has tanked and you’re just feeling nervous about it. Not a big deal. Like go do some extra work and bring in some extra income. we, I think a lot of people get wrapped around the axle ⁓ when they think about these big plans as if like, okay, I’ve thought about this and I put a plan in place and that’s the plan and it can never change. Well, that’s just not how life works. Right. And so
I think the perspective of being flexible is actually really important as part of this process as well. If you retire, you don’t want go back to work, you don’t want to go sit in a corporate office, but you like to travel, well, maybe one way to deal with a bear market is to ⁓ rent your house out and go move somewhere cheaper around the world ⁓ for a year so that your expenses drop. And now all of a sudden you’re in a much better place. Maybe you can’t do that with kids. And so you’ve got to think about that.
⁓ It’s all dynamic and flexible, but the key point here is be very intentional about it. Think it through. ⁓ Think of this as like a fun thought process and lifestyle design, like you’re saying, ⁓ and then use this as like a really great framework to be able to set a path forward for yourself. That is a rule of thumb. It’s a guideline. It’s something to shoot for. It gives you progress markers along the way.
But there’s no hard and fast rule for exactly, you know, what you need to get to versus Stephan versus like anybody else on the planet.
Stephan Livera (43:24)
Yeah, I think a lot of good advice in there. So the last topic that I want to touch on, a bit of a fun one is, and we were touching on this before, think we kind of exchanged a little bit on X, I think a little while back. Why is, and I will credit American HODL for this initial idea where he said, why is there no Dave Ramsey of Bitcoin show? Now, in modern days today, there’s this guy, Caleb Hammer, I think it’s called Financial Audit. Basically, he gets like random people and he’ll just kind of grill them about their bank statement and be like, hey, why aren’t you saving?
wasting all this money there. So my question to you Trey is why is there no Caleb Hammer of Bitcoin show?
Trey Sellers (44:01)
well, think the main reason is because nobody’s done it yet. I would be happy to do that. I, I, I launched a podcast fairly recently. I had Joe Burnett on as the first guest, and this is a pretty, nonchalant type of approach to podcasting, like not doing it regular shows. but I’d be happy to do that if people are willing to actually talk about their, their numbers and what they’re holding in kind of that public forum. Yeah.
Stephan Livera (44:26)
their finances, yeah. Well, I Caleb manages to do it somehow. So maybe, cause
that’s the other thing. Like I’ve seen like maybe a few clips. I haven’t like watched a lot of it, but he managed to get some really like, you know, just out there people. And now of course it’s for content, right? So he must have good ways of sourcing these people, right? Because they’re willing to obviously be remarkably open, you know?
Trey Sellers (44:41)
Yeah.
Look, if there are any Bitcoiners out there who, yeah,
if there are any Bitcoiners out there who want to have that conversation or willing to share their stack size and, you know, provide this like public open conversation around this, I would love to do that. It would be absolutely awesome. The way that I’ve thought about the podcast for the fire BTC podcast is, hey, let’s have general conversations with Bitcoiners about how they actually approach personal finance and how they answer some of these questions. ⁓
Stephan Livera (44:54)
Ha ha!
Yeah.
Trey Sellers (45:13)
You’ve done a great job and there’s so many other people who do like kind of a general Bitcoin podcast out there. Like I don’t think I can add any value to that as launching a podcast. But for the niche that I’ve got here with FireBTC, I think a lot of people would like hearing those conversations from real people talking about their real situations, maybe not with exact numbers and everything. But like, how are you thinking about this from the place in the world that you’re coming from? Joe, know, people should go check out that episode with Joe Burnett.
He’s a young guy. He kind of came out of college and went to ⁓ a big four firm, but then immediately pivoted to working in Bitcoin. And now he’s getting married, right? Like these are all interesting dynamics of a Bitcoiner who’s young, getting ready to get married. And like, how is he thinking about all of these, these questions that I’m writing about from a totally different perspective, which is I’m 41. I’m married with two kids. I’m kind of settled down. I’ve already got the house and everything. I also work in Bitcoin.
⁓ But I’ve also taken this financial independence retire early approach and that’s put me in a particular situation, right? So ⁓ these like bespoke stories I think are really, really interesting and something that will resonate with a lot of people.
Stephan Livera (46:22)
Yeah.
So maybe these, and there’ll be a range, right? So maybe your story might be seen at like a bit more aspirational, right? For someone who’s already, who’s not yet financially independent. And there’ll be others who are kind of like, they can resonate with that person because they’re on the same, they’re at a similar level in their life. Now, to be fair, I think the whole Caleb Hammer thing, I think part of what drives some of the virality is he just gets some like really, people who are just like spending on all kinds of crazy. So I guess the virality component of that, probably have to find a
Trey Sellers (46:41)
Right, exactly.
Crazy people. Yeah, yeah, yeah.
Stephan Livera (46:55)
like a no-coiner and like get them on and not like somebody who’s already a bitcoiner so maybe that’s like you’d have to find a few people who can come you know to the table with a know a tradfier perspective
Trey Sellers (47:01)
Yeah.
I’ll give it some
thought for better or worse. I’m not as flamboyant as some of these people who are just crushing it on these social media platforms. So, ⁓ you know, pretty straight and narrow when it comes to that kind of thing.
Stephan Livera (47:18)
So yeah, so we’ll have
to see, but I look forward to it. I think it would be a fantastic show. anyway, we’ll leave it there. Listeners, make sure you share this episode if you’re interested about Bitcoin and Fyre. Check out Trey’s work. The website is firebtc.io ⁓ and Trey is on X as TS underscore Hoddle. Trey, thanks for joining me today.
Trey Sellers (47:41)
Thanks so much, enjoyed it.