Five bullet Friday - Issue #59

Dear Partners,

I have been receiving a lot of questions about what we are going to do with retained earnings (aka Toll-booth fees) we collect in the form of new tokens. All of these tokens will be sold and converted into fiat currency, like US Dollars and sent as dividends to the partners in the fund. I want all the partners in the fund to see this as an emerging asset class in the long-term, which I define as a minimum of 3 years to a reasonable period is 5 years. I want to encourage investors with a long-term horizon to be in the fund. I will also actively discourage short-term focused investors from joining the fund and lead them quickly to exit the fund. 

1. Our dividend policy is as follows.

        A. My goal is to provide 15% per year dividend to all the investors in perpetuity.

        B. Any investor who completes 3 years in the fund will get his dividend increased to 45% per year starting from 3rd year, payable monthly.

        C. Any investor who withdraws his capital before the first 3 years, will not be eligible to get 45% per year dividend.

2. I recommend all investors to take dividends monthly. This way you start with a big exposure to the crypto market in the beginning. Your risk slowly tapers off with time, as capital is sent back. Based on the dividend policy in the first 3 years, at an yearly rate of 15%, you would have received 45% of your capital in the first 3 years. After that in the fourth year, you will receive another 45% of your capital, leading to 90% of your capital being returned. Therefore, after 4 years and 3 months in the fund, 100% of invested capital was returned to the investors. This will help you sleep better as you have no money at risk. You just let your profits ride in the fund and collect dividends at a rate of 45% of the original capital contributions.

3. The rule C is added to actively discourage short-term oriented investors. If an investor starts with $100k and 1.5 years later, let us say his Net Asset Value is $300,000. If he executes a redemption, and withdraws $100k and leaves a balance of $200k in the fund. He will continue to receive his 15% dividend as long as he is in the fund. But after 1.5 years from that point, when he completes his 3 year mark, he is not eligible to receive the 45% dividend. After the 3 year mark, he continues to receive 15% per year.

4. If an investor's time horizon is less than 3 years, investing in RCIF is a bad choice. Warren Buffet once said, " you should not be in the stock market for 10 mins, if you are not ready to be in it for 10 years".  If a long-term investor starts with $100k and continues in the fund for 4 years. By that time he would have received 90% of his capital back in dividends. Let us say his Net Asset Value is $300,000 after 4 years.  If he withdraws $150k after the 4th year, then the balance $150k continues to grow in the fund. His dividend after the withdrawal will drop to 15%. I hope to have a big pool of retained earnings to pay these long-term oriented investors. 

 
5. We are generating good income from our dark nodes running for REN protocol on the cloud platform of Digital Ocean. This week we collected $ 1148.77( per node $164.11) in new tokens as our toll-booth fees. The full report can be seen here:https://docs.google.com/spreadsheets/d/1QU47tR4eK0fD2ySaP88LM9U46vD7p6mt80KSfqu00DI/edit#gid=982608609. REN protocol had close to zero transaction volume on June 1st. Today it is close to $935 million. I am impressed with their growth and it still has a long way to go. So far there are exactly 1197 such dark nodes collecting transaction fees. I am currently working with www.lukka.tech to get individual login access to your portfolios. Their software is currently being upgraded and will be available towards the end of this month. I will keep you posted when these logins become available.

After the recent dip in the market, I am very bullish for the crypto market. I see a number of catalysts in the next 2 months that can boost our portfolio value. This is a great time to add money, if you have money earning 0.02% interest in the banks.

Have a wonderful weekend!