In this video, Jake Claver goes over some smart ways to leverage your crypto and actions to take if you've hit the jackpot in crypto.
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No information presented here on this channel or any platform listed above is financial, tax,, or legal advice. This content is for entertainment and educational purposes only. Always consult your financial advisor, CPA, or attorney before making any financial, tax, or legal decisions.
🖥Digital Ascension Group - https://www.digitalfamilyoffice.io
🖥Join my Mastermind Community at https://mastermind.beyondbroke.com
📱Official social media📱
Twitter/X - / beyond_broke
Instagram - / jakeclaverqfop
LinkedIn - / jacobclaver
TikTok - / jakeclaverqfop
Medium - / jake-claver
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📝Business inquiries 📝
info@beyondbroke.com
🚨***SEE DISCLAIMER BELOW***🚨
No information presented here on this channel or any platform listed above is financial, tax,, or legal advice. This content is for entertainment and educational purposes only. Always consult your financial advisor, CPA, or attorney before making any financial, tax, or legal decisions.
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LifestyleTranscript
00:00Today, I want to go over what you need to do if you have a liquidity event in crypto.
00:06And so this is going to be different for everybody based on their situation.
00:10What I want to give you is a rough outline of some of the things that you should be thinking about
00:15if you do come into a large sum of money from an investment.
00:20You know, there's people that have bought into like SHIB, a couple thousand bucks.
00:24Now they're a billionaire.
00:26Same thing with Doge, same thing with Bitcoin, same thing with a lot of these cryptocurrencies.
00:30Over the past decade, people have made a lot of money very quickly.
00:34And so in anticipation of that, hopefully that's you.
00:39That would be why you're watching this video, right?
00:40You believe that you're going to be wealthy because of an investment you've made.
00:44So let's get into what to do if that happens.
00:48First off, there's going to be taxable implications for you selling.
00:52So ideally, the best way to leverage a crypto asset with no tax implications would be to take loans against it or collateralized loans.
01:03There's some DeFi protocols that currently offer this with specific assets.
01:07There's also some C5 protocols, which aren't really protocols.
01:11They're a centralized exchange or somebody that will loan against your cryptocurrency.
01:14So some examples that I can think of for DeFi would be like Aave or Compound for Ethereum.
01:21Those that exist that are centralized or an exchange that will do that would be something like Nexo.
01:25And in these, they will give you up to a certain amount against the collateral that you post and then charge you a certain interest rate based on stipulations, right?
01:37So on Nexo, if you're not holding any of their tokens, then it's not the best interest rate.
01:44They incentivize people that loan on their platform to hold tokens so that they get a better interest rate.
01:49And it also props up their token, right?
01:52And you can also stake on their platform to earn yield.
01:55I currently don't do any of that just because of the volatility in the space until it's more established.
02:05You're going to see a lot of these people like Celsius and Luna.
02:08There's been a lot of things that have happened that would cause concern.
02:12And so for those reasons, I don't do those things.
02:14These things exist.
02:16So in the future, when you're watching this video, hopefully the space is a little more established and there are resources for you to do this.
02:23So you would then take your collateral from your cold wallet or wherever you're holding it, post it inside the DeFi protocol or with this entity,
02:32and then take a loan against it at a low interest rate.
02:34Ideally, something less than 4%.
02:37And hopefully, the asset that you're posting as collateral will continue to appreciate in value.
02:43And so it will basically pay the loan off itself.
02:47And the cool thing about collateralized loans, especially with these DeFi protocols, is the interest just runs until you repay the loan.
02:54And so there are no structured payments like you normally see with a vehicle or a home.
02:58The interest just continues to compound until it's paid back.
03:01But if the asset continues to appreciate, then you're looking at, okay, so as an example, let's say you posted $100,000 and they allowed you to take a 50% loan against it.
03:12So you've got a $50,000 loan at 4%.
03:15But the asset, let's say it took 10 of them to get to that.
03:21There were $10,000 a piece when Bitcoin was $10,000 a piece.
03:24And it then went to $50,000 a piece because Bitcoin did go to almost $70,000 in 2021.
03:31And so that would give you, it would only take, it went up five times.
03:39So one-fifth of the collateral to pay that loan off that it would have taken before.
03:43So only one Bitcoin would have paid off that entire loan in that situation.
03:48Now, obviously, interest would have accrued between the time when you took the loan and when you paid it off.
03:53But you get my point, right?
03:54So it takes less of the collateral that you posted to pay off the loan at a later date, as long as it continued to appreciate in price.
04:02People have been doing this for forever with their 401ks and their stocks.
04:06We even do it with whole life policies.
04:10You can pre-fund a whole life policy and then take a cash loan against it.
04:15Fidelity, Goldman Sachs will issue these loans at very low interest rates.
04:18And so they call that infinite banking because you continue to draw against it and you don't ever have to pay it back because the life insurance policy will pay it off on your death.
04:29So anyway, this would work similar, right?
04:32You post the collateral as long as it continues to appreciate in value over time.
04:36It would take less and less of the collateral posted to pay off the loan later.
04:41And you would get to leverage that and use the funds for whatever you wanted to in your lifetime.
04:45So that's the preferred way of leveraging an asset that's appreciated significantly in value.
04:52Now let's get to the part where, you know, maybe you can't do that.
04:56So, and I'm going to speak to tax laws here in the U.S. because that's my, where I'm domiciled.
05:04Other jurisdictions are going to have different tax laws.
05:06And this is no way, just as a disclaimer, I'll go ahead and get into this.
05:11This is not financial advice.
05:13This is for entertainment and educational purposes only make your own decisions, uh, to, to make educated and insightful decisions.
05:21You should consult with your CPA investment advisor, tax accountant, a financial advisor, whoever else you deem worthy, um, that is licensed.
05:31So not me.
05:33I'm just going to tell you what I would do in this situation.
05:37We'll do it that way.
05:38So if I came into, let's say $20 million off of a small modest investment, you know, maybe I invested $50,000 or $10,000 to get my 20 mil, um, which has happened in crypto.
05:49So hopefully again, that's you at this point, you know, maybe I want to cash out.
05:54I made to cash out.
05:54I don't have the option of taking loans against it.
05:56Uh, I would then have to do things to offset that income.
06:00Uh, and the first thing that I'm going to do is set up entities.
06:04So wealthy people have control of everything, but own nothing.
06:10And that does a few things.
06:11So you set up a trust and then you'll have some holding, a holding company underneath that trust that then has entities underneath that to set further separate, uh, or mitigate risk.
06:21So you'll get with a good attorney.
06:24Hopefully you find somebody in the digital asset space.
06:27If you don't have somebody, I have those people.
06:29I've been working to build a multifamily office that deals directly with digital asset liquidity events.
06:34Uh, if that's something you're interested in, you can reach out to me or you can look for these people yourself online.
06:39So I would, I would find those people.
06:40I would get entities set up.
06:41These cost anywhere between three to $20,000 depends on how complex the entity you want to set up is.
06:46Uh, if it's a foundation and these are each individual one.
06:50So you would have the trust costs some money, the holding company costs some money, each LLC that you're going to use to invest underneath that costs some money.
06:58And then those would hold your assets.
07:00Another fancy way that you could mitigate your tax liability.
07:04Uh, and if you're feeling, um, philanthropic, like you want to give back, right?
07:10You want to help other people.
07:11Uh, you could create a charity trust and donate your earnings.
07:15You don't even have to sell at this point, which is cool.
07:18Uh, you don't even have to sell your cryptocurrency.
07:19So you can donate it to the charity trust, uh, and then take that full amount and write it off to offset your income.
07:26If you did liquidate a portion.
07:27So maybe we'll, we'll do it this way.
07:29Uh, you sold a quarter of it and you donate the rest of it to, um, charity trust and you'd be able to write off what you liquidated.
07:37So there's a bunch of different ways to do this.
07:39Um, and again, just speaking to tax laws here in the U S depending on what jurisdiction you're in, things are definitely different.
07:45Uh, as I'm setting up this network of people across the globe to help facilitate a coming liquidity event that I'll be participating in.
07:53Uh, I've found out that things range wildly depending on where you are.
07:58So I would get with somebody in your area that's competent in tax law, CPA, or an accountant, uh, that deals with high net worth individuals, um, and consult with them, pay for their time.
08:09And see what they would do to help you in that situation, uh, prior to even selling, um, tell them, Hey, you know, I'll pay you.
08:16I'll liquidate enough to pay you.
08:17We need to figure out what I need to do to offset my taxes from this income.
08:21So that's another, another piece that I'm fortunate enough to have here in the U S I deal with some CFOs, CPAs, accountants, uh, that all deal with digital assets.
08:31Um, some of the managed DOWs.
08:33And so, uh, again, reach out to me if that's something that you're interested in.
08:37I'm happy to facilitate that for you.
08:40So once you have those two things in place, then you should be able to assign your cryptocurrency over to one of those entities that you've created with this attorney, uh, and structured it legally.
08:55Um, it's ideally filed in the right jurisdiction also because of certain implications as far as anonymity, um, and then tax implications, depending on what state you file in here in the U S.
09:06So, um, I overseas, it's the same way, depending on what jurisdiction you filed this entity in, there may be tax implications for transferring it there.
09:14And then also depending on what type of, of entity you've structured, it may be easier or more difficult for people to ascertain who you are, um, or even come after you and take those assets.
09:27So you definitely want to work with somebody that's, that's been doing this for a long time and understands these things specific to your jurisdiction and your location.
09:34But once you have that in place and you've transferred those items again, work with the CPA or somebody else, um, financial advisor, uh, accountant that is familiar with tax law in your area to hopefully, uh, do something with that revenue that you've generated to offset the capital gains that, uh, you're going to incur.
09:51From the appreciation in your investment, you're going to want to basically invest the money somewhere that it's going to continue to make money.
10:02So the way I look at things, I want to own assets that pay me cash.
10:06It'll pay for my liabilities.
10:07So as an example, that you might want to purchase a car wash, uh, as one of the LLCs underneath your holding company with the funds that you've donated or transferred there, um, that would then spit off cashflow to purchase whatever vehicle you want to purchase.
10:22Um, some people want fancy cars.
10:24Some people want just something to get them from point A to point B.
10:26But if you have a car wash spitting off anywhere between a thousand and $10,000 a month in revenue, that would easily pay for all the maintenance, the vehicle, the payment, the insurance, tax, title, license, all this stuff.
10:44And so that's kind of how I think about things.
10:46I would then use my money to start purchasing assets that spit off cashflow to pay for the liabilities and the lifestyle that I wanted to live.
10:52And so, um, that's all the time I have with you guys today.
10:57I hope you really enjoyed this and found it insightful, provided you guys some value.
11:00I know I'm going to continue to do these.
11:02I'll probably, you know, maybe I can set aside 20, 20 minutes a day to just go over some things that I'm thinking about on a daily basis or might be helpful to you.
11:11And I'll bring that to you through YouTube.
11:13And with that, we'll see you on the next one.