TIME TO READ: 5 MINUTES

Hi Friend,

Most people hear "borrow against your Bitcoin" and immediately ask: "But how do I make the monthly payments?"

That's the wrong question.

The right question is: "How do I engineer the debt so it services itself?"

Because here's the thing… wealthy people don't make payments from their paycheck. They design the loan structure upfront so the payments are built in, automatic, and funded by the asset itself.

This is called an Interest Reserve Account, and it's the secret to perpetual cash flow without selling a single satoshi.

I learned this the hard way. In 2007, I used leverage without rules and lost everything in the 2008 crash. But in 2016, I rebuilt, this time with a system. Let me show you how it works...

MAIN FEATURE

HOW TO  ENGINEER PERPETUAL CASHFLOW

Let's say you want $140,000 in tax-free spending money. You don't borrow $140,000. You borrow $150,000.

Here's where it goes:

• $10,000 → goes into an Interest Reserve Account (makes your monthly payments for 12 months)

• $140,000 → goes to you as tax-free liquidity

The lender holds the $10,000 in a separate account. Every month, they automatically deduct your payment from that reserve. You never touch it. You never think about it. It just handles itself.

For 12 months, you have zero payment obligations. The debt services itself.

Now, this isn't some exotic strategy. This is standard practice in hard money lending, real estate financing, and commercial credit. When I was doing creative financing and purchase order financing in California, every hard money lender required this.

If I wanted $1 million to build a property, they'd charge 10% interest. $100,000 per year. So they'd loan me $1.1 million, hold $100,000 in an interest reserve, and make the payments for me automatically.

It removes the entire mental burden of "how do I make the payment?"

Because you don't. The structure makes it for you.

The Rolling Debt Strategy: Infinite Runway

Okay, but what happens after 12 months when the interest reserve runs out?

This is where it gets really interesting.

You don't pay off the debt. You roll it forward.

Here's how it works over time:

Year 1: You borrow $150,000.

• $10K interest reserve (covers Year 1 payments)

• $140K spending money

• You owe $150,000

Year 2: Bitcoin appreciates. Your collateral is now worth more. You borrow $300,000.

• Pay off the original $150K

• $10K new interest reserve (covers Year 2 payments)

• $140K new spending money

• You owe $300,000

Year 3: Bitcoin appreciates again. You borrow $450,000.

• Pay off the $300K

• $10K new interest reserve

• $140K new spending money

• You owe $450,000

Year 4: You borrow $600,000. Pay off $450K. Keep $150K.

Do you see the pattern?

Your debt is growing, but your collateral is growing faster. As long as Bitcoin appreciates faster than your debt accumulates, you have infinite runway.

You never make a payment out of pocket. You never sell Bitcoin. You never trigger capital gains.

The asset funds the lifestyle. Forever.

When to NEVER Pay Off Debt

Here's the rule: As long as asset appreciation exceeds debt cost, never pay off the debt.

If Bitcoin grows 30% per year and your borrowing cost is 5%, you're capturing a 25% spread. Why would you ever pay that off?

You wouldn't.

You'd keep rolling it forward, compounding the asset, and living off the liquidity.

This is what Michael Saylor does at Strategy. This is what treasury operations are built on. This is what generational wealth looks like.

Your grandkids don't inherit $300 million that they're tempted to sell. They inherit $300 million in Bitcoin with $30 million in manageable debt (10:1 ratio), and they continue the cycle.

They borrow. They never sell. They pass it down again.

That's how wealth compounds across generations.

Why This Removes the Biggest Mental Block

Most people don't use leverage because they're afraid of the payment.

But the payment isn't the problem. The payment is a design variable.

You design where it comes from:

• Interest reserve account (pre-funded)

• Asset cash flow (real estate, miners, dividends)

• Rolling refinance (borrow more, pay off old debt)

• Layer Two liquidity (cash equivalents, lines of credit)

Once you understand this, leverage isn't scary. It's a tool.

It's like jumping in a pool. If you don't know how to swim, it's terrifying. But if you know how to swim, it's not scary at all.

I was scared of leverage in 2007 because I didn't structure it properly. By 2016, I understood the rules. And once I did, it wasn't scary anymore.

TODAY'S CHART

MY 3 NON-NEGOTIABLE DEBT RULES

So in 2016, I had to rebuild my relationship with credit. But this time, with rules.

I started small. Got credit cards first. Built my credit score back up from nothing. Then financed a car. Then another. Then bought a house with a mortgage. Then started buying apartments. But only with the right rules.

These became my Treasury Doctrine: Leverage with rules.

RULE 1: Never take on debt I can't afford to pay, even if the asset value drops to zero.

RULE 2: Never buy an asset that can't cover its own monthly payment from income. 

RULE 3: Only buy assets I'm willing to hold for 10+ years. I don't care if the value drops for a few years, as long as it's producing income.

And here's the thing.

I'd been scared of leverage because I didn't understand it properly, even though I'd made millions with it before. Once I understood it better, I wasn't afraid.

These are the guardrails that keep leverage safe.

THOUGHT OF THE DAY

THE BALANCE SHEET VS INCOME STATEMENT SHIFT

Here's the thing most people miss.

Poor people optimize their monthly income. Middle class optimizes annual income. Wealthy people optimize their balance sheet.

Your balance sheet is: Assets minus Liabilities.

Most people focus on increasing income. Get a raise. Get a promotion. Get a side hustle.

But wealthy people focus on engineering the balance sheet: acquiring assets, managing liabilities, structuring debt, and compounding collateral.

Because here's the truth: Your life improves when your balance sheet improves, not when your W-2 improves.

A $200,000 salary sounds great… until you pay $80,000 in taxes and realize you're still trading time for money.

But $2 million in Bitcoin collateral with $200,000 in debt? That's a balance sheet that works for you. That's optionality. That's sovereignty.

Exercise for You

Write down your net worth today. All assets (Bitcoin, real estate, stocks, cash) minus all liabilities (mortgage, credit cards, loans).

Now write what you want your net worth to be in 5 years.

The gap between those two numbers? That's your engineering problem.

Tomorrow I'm going to show you the exact 5-part Treasury Operating System I use to engineer balance sheet growth 3-5X faster than income growth alone.

This isn't about working harder. It's about designing the system that works while you sleep.

WRAPPING UP

So here's the bottom line.

The Interest Reserve Account removes the #1 objection to leverage: "How do I make the payment?"

You don't. You engineer the debt upfront to service itself.

You borrow more than you need. You pre-fund 12 months of payments. You roll the debt forward every year as your collateral appreciates.

Your grandkids inherit $300 million in assets with $30 million in manageable debt, and they continue the cycle.

This is how treasury operations work. This is how the wealthy compound across generations.

To your wealth,