Only when life is secured can you 'gamble fearlessly in the crypto casino.'

Written by: Route 2 FI

Translated by: Luffy, Foresight News

If you have unrealized profits that can change your life, hear me out: you need to sell it. This isn’t just a suggestion; it’s a lesson I learned from painful experience. Early in my career, I hesitated to cash in on profits, and I regretted every moment of indecision. Nominal wealth may fluctuate throughout our trading journey, but the fundamental principles remain unchanged.

One thing I gradually came to understand is that selling when it’s life-changing will provide you with a benefit that can’t be measured in money: a permanent improvement in your life and the lives of those around you. Imagine being able to click 'sell' and immediately improve your life circumstances. It’s wonderful! If you have that opportunity, I strongly suggest you seize it.

I know how tempting it is to wait for the perfect selling opportunity: believing that if you just hold on a little longer, you’ll gain more profit. But the truth is: the perfect timing is just an illusion. The most successful traders I know didn’t achieve their current success by perfectly timing every peak; they succeeded by consistently profiting and maintaining liquidity. They understood early on that selling for cash is a necessary condition for survival in this game.

One of the most liberating realizations I've had is that there are always opportunities. This mindset helps alleviate the fear of missing out that traders often feel when considering selling. Yes, letting go of a well-performing position can feel tough, but remember: holding it out of FOMO will cost you more in the long run.

I often contemplate what reaching 'escape velocity' means: that your financial situation allows you to take planned risks without jeopardizing your life stability. Once you reach that level, then you can truly begin to play the game and go all in.

How much is enough to retire?

As someone who has always considered retirement, I often wonder: how much is enough? While the media often boasts that it requires an astronomical figure, I believe that for many of us, 1 to 2 million dollars might be the best choice. Here’s why; let’s first look at it from the perspective of TradFi.

In 2022, the average retirement account balance for those aged 65 and older was only $232,710. So, suddenly having 1 to 2 million dollars isn’t that uncommon, is it? In fact, only about 3.2% of retirees have savings exceeding 1 million dollars.

Okay, I get it, the likelihood that you reading this are over 65 is low; you want to retire before age 65. I was shocked when I first heard that Americans believe they need 1.46 million dollars to retire comfortably. But then I realized a crucial thing: this number is an average. Everyone's needs can vary greatly.

Let's consider the 4% rule, which is a common guideline for retirement planning. If you've saved 2 million dollars, you can withdraw 80,000 dollars per year. For many, this is enough to live comfortably. Your retirement needs largely depend on the lifestyle you want. Do you plan to travel the world, or are you content with simpler pleasures? The Bureau of Labor Statistics reports that in 2021, the average annual expenditure for those aged 65 and older was 52,141 dollars. Savings of 1 to 2 million dollars can easily cover this expense.

Choosing where to live after retirement can greatly affect how you utilize your wealth. 1 million dollars in retirement funds may feel tight in New York City, but can provide a luxurious lifestyle in a small town or abroad.

Psychological factors

Knowing that you have 1 to 2 million dollars in savings can alleviate a lot of financial pressure and allow you to truly enjoy retirement.

Ultimately, whether 1 to 2 million dollars is enough to retire depends on your personal situation. For many of us, this isn’t just enough money; it’s more than we ever dreamed of. The key is to start saving early, live within your means, and focus on what truly brings joy to your life. Remember, retirement isn’t just about money; it’s about creating a life you love, regardless of whether there are millions in the bank.

I understand what Fiskantes said above. Once you have life-changing money saved in the bank or invested in real estate, you can easily participate in the market.

What do I mean by easily? Well, I’m not saying it's easier to make money; I mean your mindset is more relaxed. You can make better decisions calmly, allowing trades to come to you. And even if you lose, at least you won’t lose everything because you already have security.

As Fiskantes said, 'The real fun starts here.' In this sense, this cycle is more interesting for me. If everything goes to zero, at least I have a safe fallback. That said, some people perform better under more pressure, but I don’t think that’s true for most people.