Simplifying Hive Bookkeeping
I have decided to cash out some of my crypto holdings. Mrs. TWM and I are in the process of buying a house. We think that there will be unexpected expenses. We also need to strengthen our financial position in case 2020 isn't satisfied with the destruction it has wrought on the world thus far.
I won't be cashing out everything. There are some holdings that aren't convenient to cash out, like Hive. It takes 13 weeks to get the money out and it isn't like I have a large stake, even adding up my accounts.
MCO is also not convenient. It is currently staked for another three months for the Royal Indigo MCO Visa card. I hesitate to cash that out because I got a very good price. Hence, there will be tax consequences if I liquidate. However, it's not completely out of the question if the numbers make sense.
I likely won't cash out everything right away. I sold all my LTC this morning. Remaining are XRP, ETH, and BTC. I'm going to keep my MCO Visa card topped up to a certain dollar amount. Between my budgeted deposits from my paychecks and liquidated crypto, I should be able to spread it out for a few months. The remaining cryptos are also deposited to earn interest. Their terms are expiring soon.
I'll continue buying Hive and one ETF share every week. Hive continues to generate earnings. The ETF I own pays dividends. They are worth buying more of them.
Alternatively, rather than liquidate my crypto holdings, I could choose to pay the minimums on my credit cards and use the excess cash to get us through the home purchase. However, I think we would be better served clearing out the credit cards and other debts. Our interest cost is higher than I would like. I'd like to recapture as much of that cash flow as possible.
One common rule of personal finance is to pay yourself first. Typically, it is suggested one save 10% of income. We were. This is where the crypto holdings came from. Thus, it's why the crypto is fair game to raid.
More than that, having the credit cards cleared out would enable us to deal with sudden emergencies. So, by paying off the credit cards rather than socking away cash, we are building up reserves of a sort. The only risk to this is that the credit cards can choose to lower our credit limits, which a couple have already. My Exxon gas card outright canceled me. We have shed the American Express charge cards with their high fees. Yes, once upon a time TravelWriteMoney paid more than $700 in annual fees for the AMEX Platinum card and another $250 for each of the three AMEX Gold Cards. The remaining credit cards should be zeroed out by September on cash flow alone.
The crypto liquidation comes into the picture by keeping us from having to resort to the credit cards for unexpected expenses. This way we can stay on schedule. Alternatively, we could dump the liquidated proceeds into the cards and move up the schedule, leaving us with free cash flow from our paychecks a little sooner.
The house payment will not factor too much because our payment will be about the same as what we are paying for rent. We are using a 401K loan to buy the house, which we can pay off in 10 years or less, especially with the freed up payments. Borrowing from the 401K made sense because it removes the money from the market. Thus, it's a hedge to help keep as much of the retirement money as possible in case there is some market dumping.
Another risk is if our household succumbs to COVID-19 complications. Our family has generally been robust of health with the exception of allergies. We have government jobs with good health insurance and sick leave options. It is probable we would be ill a few days and recover. However, if any of us are severely impacted, it would throw off the debt pay down schedule. Of greater concern is losing one of our parents as they are at the high risk age with underlying conditions.
When It's Over
We expect to be able to start saving again in 2021. Most likely, we will use crypto again for our savings. This time, we will likely build up with stablecoins first before speculating on BTC and altcoins. Stablecoins are offering better interest rates than you can get at any bank for fiat.
Posted Using LeoFinance