Teeth Bear-ed
Over the last few days, I decided to double-down on my SPS investment and buy some more, adding another 100K to my stake to take it to just shy of 750K. At 15% APR on SPS stake, this yields around 112,500 SPS p/y, or approximately 2350 dollar. That translates to 26 cents an hour.
Not a very good salary.
However, since this job is working 168 hours in a week, it translates into $45 a week in value gain at current prices. Around this neck of the woods, that isn't very much either, and is essentially a couple hours work at McDonald's. However, that yearly total works out to about a month worth of a low salary, which means it is an 8% payrise. However, I earn more than a low salary, so it is a smaller increase for me.
Maybe this is an interesting way to look at it, because the investment is currently valued at 15,500, which means that it is over 6 months of that low monthly salary, meaning that to get the value back, it will take 6.5 years at this rate. However, because of the APR of 15% getting rolled back into the stake, that would shorten the time to under 5 years. Which isn't a bad time for a break even on the investment, if the investment survives for that long. Of course, this is an "all things remaining equal" scenario and the hope is that at some point, SPS will increase in value as the Splinterlands economy shifts under the weight of the many variables that impact price.
But, because I am also playing the game and stake affects battle earnings, there is also some indeterminable (due to the many factors that affect outcomes) multiplier that means I will earn from the stake through APR, battle earnings and whatever else might be tied to it (like airdrops of some kind) in the future. It is hard to calculate what these things are worth, but if anything arrives on top, it is a bonus.
We all want a raise on our salary, but for most, the workplace isn't going to necessarily provide enough over the inflation rate, with most going well under at the moment. So, the increase has to come through personal investments and the percentage amount is determined by the willingness to expose ourselves to risk, speculating on the cost versus return. And, while it might not seem like it, essentially, this passive income is also work, because the capital that is invested was earned somewhere, by doing something.
If the investment fails, that work in the past was done for nothing. No benefit. This is why a lot of people don't want to invest and would rather spend, because at least then they get something out of the work they have performed, whether it be on living costs, entertainment, travel or drugs - at least there is something purchased. Whilst most people understand that an investment isn't throwing money down the drain, it doesn't come with the same dopamine kick of purchasing an item, making it harder to justify.
However, if we were to look at living off our investments, we'd have to consider what we needed to earn to cover costs without it eating into our capital. We'd also have to consider when we needed to earn, because for most, it isn't going to work to just take profits at the top of the bull, then wait five years for the next to come and do it again. There has to be a steady stream of income and there has to be some room and mechanisms in place to cover low periods also, as calculating income in the highs is not going to work out well in the lows, as we have seen many times over with people who choose to live off crypto.
Knowing our "floor" needs allows us to calculate how much we need to have incoming at the worst economic times, but at the best times of the economy, what provides the floor can provide far, far more. For instance, if SPS was to move to 10 cents in the bull market, the earnings shift to $1.30 p/h, $218 p/w and $11,300 p/y. At that point, the ROI is supercharged, with a capital payback period on todays prices at about 8 months.
Working out how much income you want is difficult, but working out how much you need is easy, as there is a floor value. Calculating all of those daily costs, monthly costs and covering for the extras should quickly find a baseline. From there, working out what kinds of capital are needed and where it needs to go in order to earn that amount is relatively easy, if understanding the risk and reward dynamics.
What makes it difficult however is that most of us will never have that lumpsum lottery win amount to invest, so we have to consistently not only save money, but be willing to spend money on investments. And this is hard because we don't get something directly for it, the return is in an unknown future and, there is a high risk for loss.
I know I might lose my investments in crypto and it would be very painful. However it also provides an opportunity to empower my family that I don't believe I have through traditional mechanisms. This is actually quite sad, because I am skilled and I do work hard, yet feel that I will never get rewarded adequately for it and will forever be tied to proving myself daily, never being able to find a balance point to rest. It is not a sign of a healthy economy when those who work hard, don't get rewarded, whilst some who do barely anything, get overrewarded.
This is not a complaint, it is actually the opposite. If we want to have a healthy economy, we have to build a healthy economy and that comes through supporting what we want, rather than what we don't. An economy that rewards positive activity is better than one that rewards negative activity or passivity. An economy that encourages broad ownership is better for all, than one that drives for monopoly. But, it is up to individuals to take ownership, which always comes with responsibility and risk.
One day, I hope I have enough capital investment returns to cover my needs in the bears. And enough understanding of what I need to do when the bull comes knocking, which is not what I have done in the past.
As it always does, Time will tell.
Taraz
[ Gen1: Hive ]
Posted Using LeoFinance Alpha
I do get these feelings from time to time but again I will try to look on the bright side and know that there are far more people that would die to be in the position I am today, doing what I do and earning what I earn.
I'm getting the first part right but having so much trouble with the second part. Not sure why, might be the upbringing in my family, but I'm very hesitant to part with the hard-earned money be it with investments or anything else 😖
This is true! There are also people who want the results, but don't want to do the work :)
I struggle to save. It is strange at times, as I know better, but my habits are not "naturally" geared for good financial health. Legacy of my parents I guess.
But you're doing it right by investing in the future!
Time will tell 😁
With risk comes potential for rewards. More risk, more potential usually. All the best and in the meantime, enjoy the game!
It seems that some people take a lot of risk, for very little reward these days.
Interesting, I admire your persistence. Perhaps in the next bull market SPS will reach 1 dollar, and then you will have the choice of cashing out or enjoying continued high APR yields of a highly priced token.
If it hit 1 dollar, I'd be ecstatic, but I would be if it hit 20 cents too :)
I believe this is a long run, the same as anything else in life.
You need to focus on the final date and make sure you can deal with the daily ups and downs as with anything else. There is no direct path, no straight line, there are cliffs, loses, gains, and sometimes some hard scams you may get involved with but learning and experiencing are part of the game and you have to reach your equilibrium to feel comfortable with your risk/reward, and of course, always know you can lose it all.
We never think of it but an aircraft pilot, has to go to school and take flying classes, there are times when he/she faces storms or problems with the equipment and in some fatal times the plane may crash and he might die. This is the path to experienced pilots, those who do not feel comfortable with the path have to choose a different career, but the risk is always gonna be there, is just the experience that makes us deal with it.
If this wasn't the case, it wouldn't have value, right? All of life is transitory.
It is strange to think that people are scared of flying, yet pilots aren't scared of crashing 300 people into the ground.
SPS is an interesting investment and it's good the team's focused on raising or at least maintaining its price. Even after the changes, I still think there's too much supply and too little demand.
Hopefully DEC will move toward peg with land requirements and maybe SPS will start burning to make up for the scarcity.
We all want raise on our salary here especially for two years. However, the raise we get is always below the so-called inflation rate. The gap has been widening, we have been in a vicious cycle. You can't fight against inflation in this way.
Definitely not, so it has to be fought from another direction. Raises (for most people) will never be enough.
Amen to that!
The bears will always affect those who are in crypto, whether they have thousands invested or even millions. But, we all hope that one day we'll have the knowledge and the capability to minimize the affect that the bear market has on us.
21 months in crypto and Hive, and I've learned a ton, lost a lot too; yet, I've also minimized a lot of risk. The coming bull will be my first bull run, because in 2021 I didn't have anything, nor did I understand any of it lol. So, this coming bull will be my first proper bull run.
So far I've traded, invested, lost, and won too, but the real game is in the waiting game. For now it's a test of patience, and when the bull comes it will be all about timing; hurry in to sell and you may lose game changing profits, act too greedy and wait, then you may just be back to square one.
What will we end up doing? I really don't know. All I've learned so far is that, you just can't time the market. Just when you think that you've got it, the market decides to make an u-turn lol.
A few more years to go I guess. We'll find out then.
Like you said...
As it always does, Time will tell.
Get ready for when it arrives - it is an experience!
The last bull I lost tens of thousands on a single coin... sold too soon.
Yep. Timing the market is a lot of luck. However, what is possible to improve is our own attitude toward the ups and downs. Don't get too excited, too greedy, or too patient.
I've been ready for quite a while now. 😂
I think the only solution to that is slowly selling of a certain percentage, with every considerable pump.
End of the day that's the only solution I'd say, balance is needed. It's either that or a ton of f*cking luck.
Important topic to discuss.
Thing I like about staking is that it works without you. All you have to do is put on efforts to add the bigger stake. And once that is done it keeps moving.
By the way Have you reached the stage on Splinterlands where it does not excite you or surprise you much as so? As most of the games give me that vibe.
I was, but it was more the frustration from the bots. The last few weeks without as many of them has made me like it again and, I think it could get more interesting with the coming changes in the next couple weeks. What I like about it is the gameplay, combined with the investment strategy.
And imagine that in 5 years time, sps token value has ×10. That will really turn out to be huge investment
0.26$/hour are great, especially if they are automatic and do not require active work. So if on average you are making 10$/h on your job, that is a 2.6% yield on top of your salary. For actions that sometimes may be even performed during traditional work that would increase even more the real yield: not under a numerical perspective but rather under a realistic perspective.
Besides I see a lot of you guys talking about this Splinterlands game so I think I will get started too to see the yield for me. Where would you suggest me to start from?
This is what people need to look at. Though, I earn more hourly than that, however it is only a 40 hour week. A constant 1% payrise that compounds isn't bad though :)
For the investment part, I don't even know! THere are so many sides to it. However, just start at splinterlands.com and see where it leads. You can always ask questions here and I or someone can help out.
Wow, that is some next level stuff there! I thought I was doing pretty good with what I have staked, but it is clear I am in a whole different class than a lot of people! It seems I am the perpetual minnow in many cases! With the current prices I can't say buying more SPS is a bad investment.
I moved over some value from a largely and unfortunately deadish project. I had 10x more value there at one point and I just held while I got milked. Though, may as well take what remains and get something I use with it....
Understood! I have some projects like that myself!
I think the hardest part might be selling a lot when it pumps. It's so easy to overthink it, and wait too long to sell...
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I have held far too many times. And sold early far too many times too. It is hard!
Nobody is perfect, we can just settle for what we think is a good price...
!PIZZA
I actually feel bad when someone is working hard and the person is earning a lower salary. This is also what I'm going through at the moment but I know this phase shall pass
Out of the little salary, you're still able to make an investment
That's so brilliant of you
Keep it up!
I feel that no matter what we earn, we have to learn how to take even a small amount of that and invest it into something that has some potential for return. It might no be much, but building the habit and making it consistent can completely change outcomes in ten years.
It's tough to balance and every investment comes with some risks. I don't know what is the best way to go forward either. I think you are doing pretty good in regards to your investment and my own income isn't anywhere close to the amount you are earning. There are just too many factors and I think people just need to do the research and invest in something they believe in. Learn from it if it fails and try to find the best investment vehicles but that requires work.
Exactly. Something they actually use. This latest investment into SPS came from a project I lost faith in, so decided to pull out. Should have pulled out much earlier....
There might not be a lot of eggs in that basket but count all those baskets together 🥚😏
Yes! Building multiple revenue streams, even if trickles, may add up to a river one day.
$PIZZA slices delivered:
@wrestlingdesires(2/15) tipped @tarazkp
This is a very prudent investment, and I like how you broke down all the different angles that an increased SPS stake can help your bottom line ROI. I wish I had the capital right now to buy cheap SPS, but for now I'm still on the job hunt and renting SPS from Vugtis. I only need about 200K more to hit my goal of 400K.