I've been thinking about stacking HBD as part of my retirement fund recently.
It's been nice over the last several months to see my HBD stack increase and to see those interest payments increase as a result.
ATM we get a tasty 20% APR, but I've based my future modelling on a 10% APR on the basis that literally every stable coin project offering a 20% return as collapsed, so it's probably not sustainable.
10% just sounds much more realistic in the long run.
NB compound interest makes A LOT of difference!
$500 a month plus compound @ 10% chart...
I've started the stack @$10K (not sure why but there you go)....
If you're adding in $500 of yer own money per month then the increase with compound interest @10% reaches $50K after only 56 months, that's just shy of 5 years...
The magic of compound interest over time...
Obvs that'll be a bit slower if you have to stack that initial 10K... you'll be looking at another 18 months roughly, it is a slow start early on with much lower interest!
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But by the time you're 4 years in....
The compounding really kicks up to $400 a month once you're into the the high $40Ks....
And then to skimming...?
I'm not sure what I'll do when I get to my $50K target... the option is to skim $400 a month, or $500 a year, assuming the 10% rate is still good. Or just to keep on stacking!
$400 a month isn't a massive amount of money, but as part of a broader portfolio, it's not insignificant, and it's around one third of what you need to meet yer basic needs in the UK post housing costs. Not beer and coffee needs, but food and bills.
Probably more like 20% of a reasonable income in retirement, but it's something AND a realistic goal too...
Not financial advice, and this is only a tiny part of my retirement portfolio....
Obvs this is not financial advice, do not on any account take this post as advice it is purely for entertainment purposes only.
And for me this crypto malarchy is only part of a wider retirement portfolio consisting of more standard Vests. You simply have to assume that the whole of the cryptosphere could just disappear into a 0 value blackhole at any time!
But it's nice to dream!
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Conservatively planning on 10% is a good idea. While the interest rate is high, it will only get you to your goal that much faster. Like you, I won't count on the interest rate to always be 20%. As we have seen recently, it is subject to change.
However, I wouldn't put too much thought into how sustainable 20% vs 10% is. If there is something fundamentally wrong that Hive can't maintain 20% with as few users as we are, then even 10% is a stretch. Reports from @dalz show how flat the debt ratio has been despite the 20% interest. If people were mortgaging their homes and selling off family members to get into HBD Savings, I might be convinced to worry about sustaining 20% interest with a constantly redlining debt ratio. Hive has protections in place to prevent collapse.
A more serious threat, in my opinion, is the lack of offramps for HBD. It's great to have the income. But if you can't withdraw it without converting to HIVE, it undermines the debt ratio.
The way you lay this out, it's like an annuity that pays out for the rest of your life. I have also given it thought. I'm still some years away from retirement. Each year that Hive celebrates another birthday, the long-term outlook improves. I can see myself contributing more to HBD savings to keep it growing, even in retirement. One of the advantages of whole life insurance, another form of annuity, is that the cash value increases annually. So, I would be well-served to continue to grow HBD Savings even while retired. This can be done out of pocket or by more blogging. At some point, I could see myself powering down a significant portion of my HP and converting to HBD. The goal is to grow interest income faster than the rate of inflation so that I don't spend my dotage in poverty.
I'm not worried about 20% ATM, I was really just being a realist say 5-10 years down the line!
It's a good vehicle for retirement, as a supplement.
VERY fair point about lack of off-ramps. You used to be able to send HBD to Bittrex, back in the day, but that's gone now!
You said yourself at the start, and I'm playing Devils Advocate here, that all stable coins that gave 20% have collapsed. You have assumed the rate will pull back to 10% as being viable, but what if the coin collapses ?
I'll confess , I don't know HBD other than by name. What is generating the 20% return ?, what is maintaining the peg to $1 ?. Excuse my laziness, I could go away and dig for the answers, but maybe you can provide a shortcut ;-p
I'm also doing a £500/mth strategy, but into an ISA , with my focus on Apple, Google, Microsoft and a few UK listed companies. I've had some dogs over the years, and I must stop selling my winners, but I feel that risk of going to zero is too high with anything on Hive to warrant such a significant monthly commitment.
I like the idea of crypto for outsized gains from a small outlay, I think now is a good time to make that outlay, I'm just not sure about a long term hold in crypto , outside of BTC maybe.
But hey!, I've not exactly knocked anything out of the park, so, my opinion is just that, an opinion and worth about as much as anyone else's , they are after all ten a penny !
It is high risk for sure, my main pension is already sorted, so this is on top. If HBD goes below $1, Hive gets converted or sold to bring it up to the $1 peg!
Thanks for the info, another bit added to my Hive learning.
I'm going to put my annual bonus into crypto this year, 40% BTC, 25% SOL, 25% ADA and 10% ImmutableX. I've been faffing about with crypto for a while now and aside from Splinterlands , I've not been consistent.
Time to get on the bus for the next bull run I think, now this time I'm not going to sell too soon ( repeats mantra .... not going to sell too soon). I feel like I can play a bit of a riskier game with bonus money, after all, it is exactly that, money I don't account for in my day to day world
I'll steadily build up my Hive assets with Hive ecosystem earnings, funnelling them into HP and some HBD
Last cycle I sold my Dodge at 7c and saw it 10X, sold my ADA at 80c and missed out there too. I took a profit each time, but after weathering the previous bear, I pulled the trigger too soon, can't go broke taking a profit, but meh !, definitely sold too soon.
Good luck with your plans !
Timing the market is tricky I prefer to DCA in and then DCA out but I am pretty cautious!
10% is close to curation as well isn't it? I guess there are some earning $500 a month (although maybe not staking!) who are sorta doing the same thing, without the $500 from 'the outside' each month.
A 20% table/chart as well would have been nice, just you know, in case interest stays at 20% and the cryptosphere doesn't go to 0!
There aren't too many earning that, maybe a couple of dozen at a guess, I know there are charts published somewhere.
If it stays at 20% that'd be bonkers. It's something of a luxury of course feeling like one has enough funny money to be able to stack a stable at this point!
A luxury indeed with the markets as they are right now. That could all change tomorrow though, but the magic of CI continues :)
I was already aware of the power of compound interest, but your article inspired me to focus more on HBD as a retirement vehicle. You can't beat 20% interest (and even if it changes to 10% at some point in the future, as it is in your calculations, that's still great).
If it stays at 20% it'd be great, but I dunno the trend seems to be signalling for less...
I don't have spare 500 $ a month, but still those numbers are beautiful!
Like you say:
Cheers! You just have to stack what you can I guess!
I like the idea but I like to raise a question.
Let's think one has 120000 HBD staked. He would get monthly 2000 to live his life in happyness. How do you get this to your credit card, your back account or to your landlord to pay the rent.
It's a fair point, it's why I don't rely on crypto for my retirement, in ten years it may not be possible to get it out. ATM it's easy to go via an exchange to bank or crypto credit card, which may not be possible by 2030.
On the other hand we might have more integrated payments by then - Hive to PayPal.
Whatever is the case I'd fully expect it to have to be declared and tax paid!
Interest is taxable yearly, so does that knock 20 odd % each year off the CI added to stack?
If it were real money then I guess so but we're only talking about hypothetical fantasy tokens here!
It's a good idea to project at 10%. I think a 10 is a solid number and if HBD's 20% APR persist it'll would become a pleasant surprise and you will achieve your goals in less time.
Yes 20% would be even better! Maybe I'll thread it!
!LUV the compounding effect. I am just starting to see my pension fund or superannuation as we call it out here kick in with some bigger compounding gains, unfortunately I cant touch it for another 2 and half years. I plan to stack as much hive, HBD and second layer tokens as possible in all the different areas to try and help supplement an early retirement from my tradie career.
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For me the crypto is very much supplemental! I think there are some on here who rely on it for income, that's stressful, and I don't vote for anyone cashing out unless they are truly exceptional!
Would you consider keeping the main pension in for a bit longer because of that compounding effect? Or just cash in while the going's good?!?
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Cryptocurrencies rise in bull markets and fall in bear markets. HBD increases by percentage every month. You made a good decision.