Student loans continue to problems with millions of Americans, with a total of $ 1.77 trillion already owed. This crisis has been a major political issue for a while, especially after the former president Biden promised to wipe out all student loans and ended up only fulfilling half the promise. These billions of dollars are not just numbers on a spreadsheet; They represent people who repay their debt, every month, years in and year out. While the standard payment plan spans 10 years, the reality is far more daunting: the average borrower takes 20-30 years to repay their loans.
There are over two million new students each year, and on average they graduate with $ 29,400 in debt. Some, as a medical student, surpass $ 250,000 in debt-one mortgage size. Nearly $ 100 billion in new debt is created every year, stacked on the already unsustainable student’s debt pile. Similar to how we (have not) treated public pensions, instead of running a failed system, we feed the machine and crush people’s lives and dreams under its weight. But maybe there is a way for future generations to avoid this terrible fate – by borrowing new ideas from similar fields.
Real estate: The Value Store (Sleep) Since Nixon
The real estate market is another system that is greatly dependent on debt to continue working, and like student loans, it doesn’t work too well.
Real estate is a market where it is perfectly normal to walk 10x geared long on a single asset while putting all your savings into it. Talk about idiosyncratic risk. The entire market has been in deep pain around the world, not necessarily because of the debt, but because of how the Fiat system has transformed real estate into an investment and savings mechanism. On the other hand, the big investment in a generation becomes the insurmountable housing for the next. But a subgroup of the population has the divestment from the asset in favor of a better savings vehicle: Bitcoin.
Part of their dissertation in disposing of real estate and moving to Bitcoin is that they predict that Bitcoin’s superior sleep function will increase the prices of real estate and create destruction on a fragile and overpriced asset class. This makes a great deal of sense, especially for the people who invested in real estate in search of these SOV -Earlies in the first place; They now have to fight with increasing risk all over the world and put a danger to what was once a “sure sleep” asset class. From fires everywhere to floods, expropriations, new taxes and wars that break out in places that were previously unimaginable, some investors are just tired.
But housing is still needed and we still have to build a huge amount of new houses. In almost all major cities in the world, there is a housing crisis that is largely driven by deficiency. This is due to defective housing buildings after the large financial crisis in 2008, driven directly by housing debt. Even if all property owners put all their warehouse of housing on the market, we would still have to develop and construct new ones. But it’s hard to convince real estate developers to do so when you also tell them that the houses they build, in Bitcoin terms, will be less worthwhile when selling them.
Bitcoin replaces real estate
This is where a German Bitcoiner and real estate developer named Leon Wankum steps in and transforms the problem into a solution. You can even say he used Financial Jiu-Jitsu because his idea is to bundle new, debt-heavy real estate projects with a Bitcoin fund. In this way, a $ 10 million-dollar-ware project would be a small percentage of funding for Bitcoin to uncover the depreciation and devaluation of the main asset, thereby taking advantage of the valuation of Bitcoin. In this way, real estate developers can utilize the debt-heavy nature of the real estate market to cover the demand for housing and at the same time uncover from any sleep risk that Bitcoin can pose to this asset.
This seemed like a crazy idea. Bitcoin and real estate: A super-conservative mainstream infrastructure investment combined with a hyper-volatile digital savings vehicle-an unlikely marriage. Still, polar contradictions attract and an idea is only crazy until someone repeats it and makes it work.
To everyone’s surprise, it was exactly what happened last year when Andrew Hohns from Newmarket Capital went on TV to announce that they had started using Wankum’s model to offer a loan to a real estate developer. They had provided funding for a real estate project with a few special conditions:
- The developer had to use a small proportion to buy Bitcoin placed in Escrow.
- Bitcoin is inextricably tied with the property asset.
- And Bitcoin must be kept for four years minimum.
The experiment was on its way to the races. If the past acts as a guide, this new investment structure will reduce the loan’s burden.
Bitcoin and student debt that saves the next generation
At this point the parallels to student loans must be beautiful clear. When 18-year-olds take out a mortgage-size loan to focus on their education, their future human capital becomes effective real estate (security) that backs the debt. Their ability to earn extra income from the knowledge and certificates they have acquired by debt will help them pay it (given that everything is going well). Investment margins become very sensitive and the risk increases tremendously when huge amounts of gearing are added to any investment – be it trading holdings, real estate or your future. Your room for maneuvering falls and you get caught in the path you choose.
Thus, if you become real estate that secures this student’s debt size, you may also be able to secure this loan and reduce the burden of the main asset (you) by integrating Bitcoin into the mixture. This can have great advantages for all parties involved: reduce the risk of the lender and increase peace of mind and the possibilities of the borrower (you, the student).
One of the greatest benefits of adding bitcoin to your student’s debt structure is that there is now thaw Assets that row against the financial repayment stream: yourself and Bitcoin. By going to university, learning new skills and getting certificates, you open the way to better paid jobs and higher earnings potentials, also called higher wages. The more exciting component is Bitcoin tied to your student’s debt. As a teenager himself, Bitcoin has had an incredible Cagr over his lifetime. Even conservative numbers indicate that Bitcoin will return approx. 60% annually in the foreseeable future. Compared to 10-15%usually provided by the S&P 500, Bitcoin looks like a Ferrari competing against horses.
The other benefit is one that frustrates most students and it has to do with acquiring Bitcoin when they understand it. Unlike most adults, the undergrades have hardly had any time to build savings and is therefore unable to exchange much Fiat for Hard Bitcoin. This can be incredibly frustrating, especially because you know that if you were a decade older, you could have aped in Bitcoin and withdrew the entire bloodline. But now you are stuck by being 16, saving ears and sacrificing your younger years for tricky amounts of bitcoin that will not make a difference in your lifetime. So close, yet so far away.
But what is debt if not a way to bring future purchasing power into the present? Debt is a time -traveling machine that allows people to buy assets by utilizing their future earnings, revenue or wages. And fortunately, the current system is created so that the moment you can legally go to jail or go to war, you can also apply yourself to your eyeballs with the promise of future salary as a doctor, engineer, lawyer or other profession.
Funny enough, Bitcoin’s recommended minimum attitude time is also the number of years for an average college degree – four years. This means that as long as you create a similar structure as the one suggested by Newmarket Capital, where Bitcoin has a four-year possession period, you use financial jiu-jitsu. However, the four -year possession period does not mean that the student needs to sell at that time. The question of how to manage your finances between repaying the student loans, selling Bitcoin or acquiring more is a more complex and personal problem. Whatever every student does, with this hybrid method, student debt can help young Bitcoiners jump forward instead of taking a step back.
With this new method, students – and their families – now have another thing to celebrate when they go into the graduation stage. And if you drop out of school, for any set of reasons why life can hit you with, your student loan is now coming with a miscontracting method that ensures that you are not forever loaded by it. Students now need to find ways to apply this method, either with collaboration between their loan providers or in a permission -free way – Bitcoin method. If other students can gamble their student loans at Wallstreetbets, the future generation of Bitcoiners must be able to secure their future with a secure effort: Bitcoin.