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@ r2b
2025-01-10 10:38:57We've all heard the classic investment advice at family gatherings: "Don't wait to buy real estate. Buy real estate and wait." (well in my family I hear all the time). This saying typically surfaces during those moments when family members, perhaps loosened up by a few drinks, discuss inflation and rising costs. While real estate discussions are met with approving nods, mentioning Bitcoin often draws skeptical looks. However, in today's financial landscape, I'd like to propose a modern equivalent: "Don't wait to buy Bitcoin. Buy Bitcoin and have a low time preference."
This perspective came up during a recent conversation with a family member (let's call him Joe), who's considering buying a $1.4 million home in Hawaii. His plan is to use the property as both a family residence and an investment. While Hawaii is undeniably a paradise for raising a family, I couldn't help but share why I believe Bitcoin offers superior long-term value and the potential for generational wealth. This is dedicated to Joe—and to my kids, who overhear our family discussions. I'm not stacking property or metal rocks. I'm stacking sats, building a legacy of generational wealth.
The Hawaiian Dream: A Reality Check
Hawaii represents the quintessential paradise lifestyle. With its pristine beaches, breathtaking sunsets, and strong sense of community (ohana), it offers an idyllic environment for raising a family. The lifestyle naturally encourages outdoor activities and overall well-being, providing countless opportunities for meaningful family experiences.
However, the financial reality of Hawaiian homeownership presents significant challenges:
The Numbers Don't Lie
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Housing Costs: As of 2024, Hawaii's median home price stands at $850,343, with properties in desirable areas like Oahu and Maui frequently exceeding $1.4 million.
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Income Reality: The average annual salary in Hawaii is approximately $52,828, creating a stark affordability gap. This disparity explains why multi-family living arrangements are common in single-family homes.
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True Cost of Ownership: For a $1.4 million home:
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Monthly mortgage: $7,000 ($84,000 annually)
- Property taxes and maintenance: $28,000 annually
- Total annual cost: $112,000
Understanding Real Estate Appreciation
Many homeowners, like Joe, often misunderstand why their properties increase in value over time. The common belief is that real estate inherently appreciates, making it an ideal store of wealth. However, this perspective overlooks a key factor: property values often rise primarily due to the dollar's decreasing purchasing power from inflation, rather than a true increase in real value. For example, I bought my home in 2012 for $500k. By 2025, its value is $1 million—but the house shows its age, needing a new paint job, and has defective galvanized metal foundation components that are now the subject of a pending lawsuit due to corrosion issues. Mass-produced track homes, built quickly with subpar materials, often fail to retain real value over time despite nominal price increases.
This phenomenon becomes crystal clear when viewing property values through the lens of Bitcoin (and most people don't have the right lens):
- 2016: Average home ($288,000) = 664 BTC
- 2020: Average home ($329,000) = 45 BTC
- 2024: Average home ($435,000) = 6.6 BTC
The Bitcoin Advantage
Bitcoin's fundamental strength lies in its fixed supply of 21 million coins. With nation-state adoption anticipated in 2025 and increasing capital flow from various asset classes into Bitcoin, the case for "stacking sats" becomes increasingly compelling.
A New Paradigm for Wealth Preservation
A New Paradigm for Wealth Preservation The traditional wisdom of real estate investment stems from an era of limited alternatives for wealth preservation. While real estate remains a valuable asset class, Bitcoin offers several distinct advantages:
Perfect Portability: Unlike real estate, Bitcoin can be transported instantly across borders without permission. You can move millions or billions in value with just a private key in your head, making it the ultimate portable store of value.
Minimal Carrying Costs: No maintenance fees, property taxes, or insurance required. While real estate continuously drains your resources through upkeep, property taxes, and insurance premiums, Bitcoin can be stored for free using self-custody solutions.
True Scarcity: While real estate is limited, new development is always possible (we can always build up, convert land use, or create artificial islands); Bitcoin's supply is mathematically fixed at 21 million coins. This immutable scarcity makes it the hardest form of money ever created.
Divisibility: You can invest any amount, rather than needing large down payments. Bitcoin can be divided into 100 million satoshis (sats), making it accessible to anyone, anywhere, at any income level. This perfect divisibility allows for microscopic transactions or massive transfers with equal ease.
Global Market: Not limited by local economic conditions or natural disasters. Bitcoin trades 24/7/365 on global markets, making it immune to localized risks that can devastate real estate values.
Supreme Liquidity: Bitcoin is arguably the most liquid asset in human history. You can:
- Convert billions to cash within minutes
- Trade across thousands of markets globally Access your wealth at any time without bank permission
- Never worry about "finding a buyer" like with real estate
\ Unconfiscatable: When properly stored, Bitcoin provides a level of security that physical assets can't match:
- Can't be seized without your private key Resistant to government confiscation Immune to civil asset forfeiture Protected from legal judgments if properly structured
- Programmable: Bitcoin's programmable nature enables:
- Automated inheritance planning Time-locked savings Multi-signature security Smart contract capabilities through Layer 2 solutions
- Energy Storing: Bitcoin effectively stores excess energy through mining:
- Monetizes stranded energy resources Incentivizes renewable energy development Creates energy buyers of last resort Helps balance power grids
\ Network Effect: Bitcoin's first-mover advantage and network effect continue to strengthen:
- Growing institutional adoption Increasing merchant acceptance
- Expanding Lightning Network capacity
- Strengthening security through hash rate growth
Conclusion
While the allure of Hawaiian real estate is undeniable, the financial reality demands careful consideration. Bitcoin represents a modern approach to wealth preservation that addresses many of real estate's limitations while offering potential for significant appreciation. The key is understanding that Bitcoin isn't just another investment vehicle – it's a paradigm shift in how we think about and store value.
For families like Joe's considering significant real estate investments, incorporating Bitcoin into their investment strategy might provide a more balanced and forward-thinking approach to building generational wealth. The plan is clear. Buy Bitcoin. Years from now, you'll have generational wealth.
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