Looking at returns for HBD.

niallon11 in LeoFinance • 2 years ago

Is it a good option?

12% is a very nice return on a savings account. If my bank offered it to me I would be ecstatic. It is not where I would put the majority of my money as there are far higher payouts but it is a good option for a portion of it.

I sold my house before the xmas and the balance from that is sitting in my bank account right now. It's a significant amount and it earning the grand total of 0.55% APR for my troubles. That is pathethic and it is on my list to find a better option for that money.

I would jump at the thought of a 12% return for that money. It would be amazing. I know that i could move some of that money into crypto but to be honest, I have enough of my finances tied up in the game and don't want everything in the system.

It's good to have a spread for your funds. That money is for the next house in a few years and needs to be kept in the right place to be flexible but not raise any red flags.

HBD is going to be another part of that spread. My end goal is to have 250K in savings for a guaranteed return that would be enough to live on. A lot of crypto is very volatile so it's good to have some stable returns as well.

Printing money or no?

It is and it isn't. While 12% is a good return it is somewhat toned down by inflation. You need about 6% APR to beat the rate of inflation so 12% at least means that you are staying ahead of the curve.

HBD savings are not printing money but they are making you a profit. It's still a lot better than keeping the money in a bank where it earns nothing in return and loses value as it does so.

Money sitting there is money wasted. HBD is a safe way build a savings account with very little risk. As long as HIVE stays going and growing then you will be earning an interest payment every month. The risk is always there that the system will fold but every year makes this less and less likely.

Compounding the HBD interest.

Since I want this account to grow, I won't be removing anything from savings for the near future and instead will let the monthly interest payments add up and keep growing.

Taking all of my earned HBD and putting it into savings gives me on average $10 per day going into the account.

My starting balance as of today is $2500 so lets see where that leaves us.

How long would it take to reach that 250K at my current trajectory?

$2500 with $300 added monthly and compounding monthly at 12% APR.

Year 1. $6621
Year 2. $11266
Year 5. $29042
Year 10. $77262
Year 15. $164863
Year 18. $248804

Now I can't wait 18 years to reach my goal so I'm hoping to see Hive have a few moonshots between now and then to speed things up but at least there is a pathway to reach my goal. Regardless of how long it takes.

Meanwhile, the money in my bank account will still be worth almost exactly the same in 18 years as it does today if not invested.

12% is looking pretty good right now.

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2 years ago in LeoFinance by niallon11

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forexbrokr 2 years ago (edited)

Ah, the power of compound interest :)

Compare a 12% return over 20 years in an algorithmic stablecoin like Hive Backed Dollars to say someone's retirement fund invested in volatile assets like equities.

A fund that will take huge rusk to receive a much lower return than 12% anyway.

The opportunity we have here on Hive thanks to HBD is criminally underrated.

It's truly like nothing else :)

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niallon11 2 years ago

I have a pension through work and it was only losing money for the first few years after the fees were taken out.

A fund that crashed to almost nothing during the last economic bear market. My dad lost almost half his retirement fund in one year.

The opportunity here is amazing if i was to put the same amount of money into it monthly for the next 30 years. Plenty to retire on without the risk from the markets.

That's why it is a big focus now that the return is 12%.

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dadspardan 2 years ago

The thing you also have to remember is the interest rate can change at a moment due to demands so it can go back down with any crypto. that being saided it one of the better saving options i can find as most long term savers offer between 2-9% for most cryptos so i do believe HBD saving is an unique saving goal to say the least

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niallon11 2 years ago

It might not stay at that level forever but while it is I'm going to take full advantage.

Most of the stables that i have seen are less than 6% so this is a great opportunity to save while the going is good.

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bitcoinflood 2 years ago

Compound the F out of it! At some point I imagine that 12% will have to get cut but right now the amount of HBD that's actully in savings is still crazy low.

You'd also need about $300,000 in HBD to earn an ok livable wage here in the US so long way to go! Nice thing about it however is there's limited risk compared to something like defi.

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niallon11 2 years ago

At some point I imagine that 12% will have to get cut but right now the amount of HBD that's actually in savings is still crazy low.

Probably, but it's amazing for now and leofinance were on about a farm for HBD that would be closer to 50% APR or higher.

Either way it good to have some savings against the next bear market and earn a little extra interest.

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jfang003 2 years ago

12% is amazing and I think the only other platform that might give you something better is Terra (LUNA). I have seen quite a few posts about their algorithmic stable coin but I still prefer HBD because it's easy to do here on HIVE. The banks can't really give you anything good in interest and that is why most people just throw it into the stock market instead.

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mintfinch 2 years ago

12% compared to nothing is a steal. The road map to achieving your goals and spreading of investments, is a good approach. Not financial advice but sound financial principals In this post

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niallon11 2 years ago

I don't do financial advice but these are my crypto principles which i lay out so that others can see.

Money sitting there earning nothing is just a waste when there are better options out there like HBD at 12%. It's a no brainer.

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toofasteddie 2 years ago

It’s amazing but let me tell you that I think you have missed anything in your calculations. The results I got are higher than the ones you get

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niallon11 2 years ago

I don't think so but i can double check. Either way i'm happy with these numbers so if they are on the low end then that is even better.

We will see how it plays out over time.

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poshtoken 2 years ago

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