E-6 with networth of over $1M

[leonsarahh]

Throwaway account for obvious reason. Excited seeing 7 digits in my NW & figure I shared it here. This is not to brag since I can't share it with people at work.

1. Checking: $2k
2. Wealthfront (5.5% APY): $40k emergency
3. TSP (Roth & Traditional): $25k (started late but stopped)
4. Roth IRA: $27k
5. Rental (Vegas): $450k value (average from Zillow/Red Fin)
6. Rental (Hawaii): $650k value
7. Bitcoin holding cold storage: 10 BTC ($400k)
8. Vegas' property mortgage: $60k
9. Hawaii's property mortgage: $450k
10. I also have a side business online bringing in $5-10k/yr.

I enlisted at 18 yo as an E-1 in the USAF. Now I'm at 18 years, E-6. Married, no kid. My networth is just over $1M. I didn't have any education or guidance in my early year in the service about saving. Started doing so at E-5 after 10 years in. About my Bitcoin, I got exposed on it in early 2015 but didn't pay much attention. During the boom in 2017, I started accumulate between $1k-$3k every few months, never sold. It's my retirement saving. There's a lot of technique in that & I won't bore you with the details.

I still put a small amount in Traditional TSP/IRA mainly for tax benefit as my rental income & side business income put me in higher tax bracket.

I plan on retire at 20 yrs mark even if I don't make E7. Do you think that's a wise choice?

 

[evanlooksuptothealmighty]

@leonsarahh Half your net worth in bitcoin? I'd hedge out of that a bit.

 

[leonsarahh]

@evanlooksuptothealmighty Probably not gonna do that.

 

[dropout_theologian]

@leonsarahh You… should.

 

[huntert98]

@dropout_theologian In a year, yes.

 

[wypimom2]

@leonsarahh Ide hedge more into it tbh, the way the dollar is going.

 

[redeemed234]

@leonsarahh Smart; to the moon!

 

[contemplatio]

@leonsarahh Fuck the downvotes.

Hodl the fuck out of that BTC. People don’t know the potential of mooning with ETF being approved and the halving.

 

[leonsarahh]

@contemplatio My fellow r/bitcoin comrade we're a rare breed in this sub lol.

 

[contemplatio]

@leonsarahh

 

[anga97]

@leonsarahh Just don't sell your BTC for like a decade. If it goes up a lot - take profits.

 

[leonsarahh]

@anga97 This is my plan as well. Takes small profit if it hits $100k then continue to hodl.

 

[missjenjen18]

@leonsarahh Man only 20k in TSP and 27k in an IRA for an 18 year career is rough. Not sure why you stopped though. Taking advantage of tax free havens is like the number one rule.

I’m also hard pressed to count unrealized value in a house towards net worth especially with how unstable the market is in the RE sector.

I just feel like so much of your net worth, between RE and Bitcoin, is in such risky places

 

[leonsarahh]

@missjenjen18 I forgot to mention, Bitcoin recently got approved by the SEC to be purchase as ETF. You can have exposure to Bitcoin in your IRA, allowing all the tax free benefit when withdraw later in life.

 

[missjenjen18]

@leonsarahh Right but it seems like you own bitcoin outright and don’t have any in your IRA. So you won’t be enjoying the tax free withdrawals unless you start contributing again

 

[leonsarahh]

@missjenjen18 I stopped them so I can put money in Bitcoin. Yes, I know, it's unorthodox but it's a best asset against inflation for long term saving. Bitcoin's gain is also tax free when borrow against it or when spending. Such as, I can buy another property with my Bitcoin or borrow $300k using it as collateral.

The house in Vegas is doing well. That market is really strong if you look at 10 year history. Same for Hawaii. There's no more land to build so they have to build up.

 

[missjenjen18]

@leonsarahh I mean that’s a pretty subjective take, hedging bitcoin against inflation. That’s easy to say until it drops from 65k to 15k in weeks. Yeah you can take the collateral deal, but what happens if the investment goes bad and bitcoin simultaneously falls? You’re absolutely screwed.

It just seems like 40k in a HYSA isn’t enough to cover the risk that you’re taking / potentially willing to take.

And with Hawaii, sure definitely locked in with rentals due to limited space, but wouldn’t count on Vegas. There’s a reason Phoenix RE is being put in the market. It’s way too hot.

And again, rentals are great until you have to cover the rent for 6 months because you can’t find anyone.

 

[leonsarahh]

@missjenjen18 Again, as I stated, Bitcoin is a very sensitive subject outside of /r/bitcoin. I have an app that tracks my Bitcoin portfolio when input when purchased. My portfolio is up $300k. I only put in ~$100k since 2017 (deployment extra, 10% per paycheck , living furgally, side hustles). That's a 300% profit. I can sell them all now & have liquid cash (minus 10% long term federal tax rate). TSP/IRA average 8-10% in return since 1970.

I have a long term tenants in Vegas since 2020. They plan to stay there for 5+ year. Rent is locked in & increases annually in small amount to keep up with the rising property tax in Vegas. It's located in a good area that I won't have problem finding renters. Many Californian are escaping to Nevada for tax benefit so my bet is Vegas will hold its strength against the trend.

 

[missjenjen18]

@leonsarahh I’m not indifferent to bitcoin, I have some in my portfolio. I’m merely stating that having it be near half your net worth as you approach 40 and having it be your “retirement savings” as you state is a terrible idea.

It’s subject heavily to regulation influence and thoughts of legitimacy by the government, despite the decentralized goal of it.

As you get closer to retirement, and half your net worth is in bitcoin and then one day it crashes because of regulation policy, you’re fucked.

You assess your own risk, absolutely. It just seems to me you’re not taking the risk very seriously.

 

[leonsarahh]

@missjenjen18 I completely understand your thought process & explaination. No risk, no reward, right? If I'm wrong and Bitcoin goes to $0 (extremely unlikely), I still have 2 properties to sell for $500k+ cash after pay off mortgage, my E6 retirement, my VA disability pension & probably my income earned after military retirement.