On using Hive as a Retirement Fund...
Everyone can do what they like with the Hive they earn, but I'm personally always a little dismayed that the majority of people posting choose to just cash out.
The main reason for this is if you're doing so then you're clearly not interested in contributing to Hive security and governance by holding a decent amount of stake, which is just irrational when it's the system you depend on for a portion of your income.
But a further reason is that you're probably missing out on greater future gains down the road given the compounding power of Hive.
Half of your Hive earnings are Powered Up and if you just leave it that way you get a just < 10% APR in curation, and you get to give back to others.
The other half is in liquid HBDs and you could put these in savings for a current 15% return.
If you saved your earnings over 10 years....
If we assume $300 worth of earnings a month, OK that is quite high and assumes a payout of $20 per post (posting daily) then this is the calculation:
NB I put in 10% a year to future proof this....
After just 10 years those earnings compounded have earned you $60K compared to the $36K you would have cashed out as you go...
Furthermore, the chances are you'd earn more on your posts going forwards if you did Power Up more, I've got 120K HP and almost none of that votes on people who cash out on a regular basis - nearly all of it, probably around 95% goes on longer term Vesters, and I know of people who control a few million Hive between them who have the same policy.
NB I'm not saying you can't cash everything out now, but being patient and letting your Hive/ HBDs accumulate for the longer term will earn you more!
My own plans....
Looking at that potential (conservative) $60K gain over 10 years, that means that with that yielding at 10% I could, after 10 years, just skim $6000 a year and hold my HP/ HBds level.
Something else I can do is the old sell Hive high and buy HBDs low, trading in and out is another option.
Or I just keep all my earnings Powered Up/ stacked as HBDs and just keep on keeping on.
Whatever I choose to so I'm certainly not planning on ever having < 100K HP again!
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I meantion it in my every post about HIVE, users on HIVE should stake HIVE up to a certain amount. It can be 5000, 7500 at least, depending on the price of HIVE.
Well you know me, big believer in that!
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I agree with your sentiments on this, and certainly think that cashing out is crazy.
I've done the reverse and bought in. Probably too much, since nearly three years of Hive/HBD earnings on top of the HIVE I've bought & staked is still slightly less than the fiat I've invested. I'm hopefully that will change over time.
But the main caveat I have is purely down to risk aversion. Hive is a fabulous place to invest, but like everything crypto it could all go up or down or even (in a worst case scenario) totally disappear in the blink of an eye.
So it's just a case of following those old adages of never invest more than you can afford to lose, and keep a diverse portfolio so you're not putting all your eggs in one basket.
Agree with this, risk management is the main reason to cash out for me! But I still try to maintain a roughly 6k stake.
I was buying in back in 2017-2020, now I'm just stacking, cashing out a little, I know what you mean about the whole cryptosphere possibly just crashing! But I'm willing to take the risk for a while longer!
Yep! So let's all just keep on building via staking.
It's the way to go for sure!
Agreed!
Very good insight about holding, and thanks for sharing the projected growth accurately.
I'm also taking both options, 50/50; I'm keeping HP rewards while selling the HBD for Hive (kept in another wallet) in preparation for when Hive hits above or close to $1. Then I'll sell Hive to HBD and park it in savings for a 15% APR. Isn't a 2-token system like Hive & HBD awesome? I think it is if you realize the potential in each opportunity within every cycle.
Hopefully, more people will see things clearly before they decide to fully cash out all their earnings.
It's a great thing to be able to trade between the two so easily, especially (only) with relatively small amounts, it's the perfect side hustle IMO! It just requires a little effort and commitment!
I been here since 2017. So far I have not cashed out anything. I only powered down a little to buy cards/ packs in splinterlands. Seeing my HP and HBD grow brings me joy. I intend to stay here for many more years so cashing out now and losing all that insane potential would seem like the height of stupidity.
It is part of my life too, just steadily growing, it's great! Once you get over that 100K mark everything just seems so much more rapid too!
Not enough people think of the long term gain. If there was less sell pressure on the token and more being staked we might see the price rising higher.
You can say what you like about marketing but in crypto price is the only indicator for people to sit up and take notice. At $2 this place gets a hell of a lot busier and helps the whole eco-system as well as the holders.
I'd take $0.50 ATM, not that that's my sell point, but any upside would be desirable. I think we just need BTC to move TBH!
If hive goes to 3$ and above, I am going to convert to HBD and earn interest as it will be kind of guaranteed.
It's a good plan!
and old post, but relevant.
https://peakd.com/@yabapmatt/a-guide-to-investing-in-steem-through-your-ira
That is interesting, could well be a strategy worth exploring!
Perfect and very useful analysis!
Like you, I don't take anything out of Hive and in fact I have invested in games and also in second level Tokens.
I have some proxies and everything returns percentages that we could define as "dividends".
However, I believe that a lot depends on the approach you have with Hive and not only; I am currently investing here but also in other crypto projects and classic stocks, I simply accumulate and monthly I try to add as much as possible, then letting the compound interest do its magic.
Of course it is a magic that also requires time but ultimately you invest seriously over long time periods, the earnings made in the short and very short term are the result of speculation and not investments.
This is my idea anyway, I also agree that everyone is free to do what they want with their money but in any case I tend to prefer to support those who care about the ecosystem; then I believe in life we need balance but, in any case, as far as I'm concerned at least half of what has been earned over time must be in HP.
Sorry for the very long reply and thank you for this nice post, your analyses are always helpful and a source of reflections.
I hug you!
Interesting to hear, pretty much the same as me, that 50% keep in Hive is a golden ratio, I think. And it is a longer term thing, as in I'm thinking at least 5 years and often longer... 10, 20 down the line!
Compounding is a beautiful thing, for sure!
Let's say that my time frame is at least 10 years, when I started this was the time frame I had given myself... 2 have passed so there are 8 to go even if then when the time comes I will reevaluate the situation a bit.
In 8 years all in all I will still be young enough to be able to grant myself another 5/10 years of waiting, eh eh!
Let's say that 50% is the perfect percentage in my opinion, considering however that I invest the other 50 in other projects always in the Hive ecosystem; if there were no interesting secondary projects and that I believe can give me something back I would leave 100% in Hive.
I pretty much run my account to compound as much as possible with a few caveats.
I'm pretty much growing my account until it produces at least enough monthly that it can replace my current income. It's a long way off with where the price is at the moment be eh.. All in due time.
Right now I'm actually building a small savings of HIVE as an pool of near liquid hive to do stuff when it makes sense to do so. other than that it's growth growth growth.
I'm also dismayed when I see people cashout EVERYTHING.. I mean sure you need the money.. but my god.. think of the bigger picture.. The future.. Missing out on so much potential.
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That goal of replacing yr monthly income with Hive - it's the dream, personally I'm not hoping for that, something like 25% would be nice, so a substantial side-hustle.
But in the meantime, yes just keep stacking! It'd be nice to get to 1M HP, maybe by the time I'm 80!
Oh very much agree, it's the dream/perfect outcome kinda thing, the true endgame if you will. I'd be more than happy with 25-50%.
Think right now my earnings are at about 4.46% of my monthly income.
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I get that some people are desperate for money now, but if they can keep a stake then it can earn for them. I won't be powering down until the price goes up a lot more and will try to maintain a decent stake. I don't check on everyone I vote for, but it's quality content that matters.
That's a really clear explanation. Do you think the reason is that many people are just not comfortable with the complexity of the Hive or just money management basics?
I think it's probably the complexity and the amount of time it takes to get anywhere with Hive, also risk management - I can see why you might cash out as you go along, it's a risk keeping the money in seeing as that the whole crypto sphere is so volatile.