# 12% What does that really mean?

#### The Power of 12

12%. That doesn't seem like a very big a number. I mean, if you get 12% of a !PIZZA, you get one piece. Twelve percent of a can of soda would get you an ounce and a half. 12% on a math test? Yikes!

But when it comes to money, 12% can be HUGE. I'm talking like ridiculous. And if you're putting that return on a stable asset? It's almost too good to be true. Wall Street would kill for consistent returns like these.

Did you know that earning 12% a year on something will compound to doubling the underlying asset in just 6 years? In other words, if you put \$1000 aside earning 12%, you would have \$2000 6 years later. And 6 years after that it would be worth \$4000. Then \$8k, then \$16k, I think you get the point. In 30 years, doing absolutely nothing, you can make 32 times your money. And if you want to add another 6 years? \$64,000 from a \$1000 investment. THIS is the power of compounding.

Now some of us may not have 30 years left on this planet, but for those who do, this is a massive opportunity to build major wealth over your lifetimes.

#### HBD

Of course I'm talking about the Hive-Backed Dollar (#HBD). The witnesses recently raised the interest rate to 12% from 10% (already a great number), and the opportunity just seems too good not to talk about.

Consider this, if you could get \$10,000 into HBD over the next couple years, in 30 years it would be worth \$320,000. Obviously 12% a year works out to 1% a month. 1% of \$320,000 is \$3200 per month in interest. That's \$3200 per month you could get into your account without having to do a thing. Just sit back and collect. Now who knows how far that purchasing power will go in 30 years with the way our governments are running our economies, but regardless, having an extra \$3200/mo certainly wouldn't be a bad thing, would it?

Playing around with these numbers is fun, but it is something everyone should look at very, very seriously. We have an opportunity to get going early on something that should be safe, secure, and right here at home on HIVE. It doesn't get any easier than that.

Think if you could get \$25k salted away. 50, 100, 200, 400, 800k in 30 years. Could you live on \$8 grand a month? \$1M makes it an even \$10,000 a month. These are real numbers and they are very, VERY attainable with a little discipline and time.

#### What could 12 do for you?

I just wrote another post about goals and what I want to accomplish in the next year. Seriously, take some time and do your own math. How much time do you have? What would you like to live on monthly? (don't forget the taxes) And then do the math and figure out what you need to do to get there. Start small if you want, but START!! It all adds up and it gets easier once you actually begin. You will begin to see ways you can increase your savings if it's something on which you've already put some focus.

Maybe you can take some earnings from these coins and start salting it away in HBD. Maybe you're getting an inheritance that you can put in there. Maybe you can take a little out of your check each month. Or maybe, if and when some of these HIVE tokens go up, you can add to HBD when you cash a little out. There are lots of ways to add to it. Hell, sell a couple lucky pulls on #Splinterlands cards and put the cash in HBD rather than spending it on new cards. Be creative. Everyone has a way to do it. You just have to figure out the best way for you. Make a plan and stick to it. It just works.

And do you know the crazy thing? 12% may not even end up being the highest this rate goes. It's quite possible we see this rate go to 15% or even higher over the next couple years if the HIVE ecosystem really needs to expand the pool. That takes 6 years to double down to 5. 20% takes it to less than 4. Crazy I know, but this is crypto and we all happen to be in the right place at the right time. Take advantage of it. I know I plan to.

Thanks for reading! As always, comments and questions are welcomed and appreciated. Let me know your thoughts below.

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This is the kind of post that I absolutely love and find fascinating.

What better to do with your active income from posting, curating and gaming than to put away an amount that will turn into an amazing and stable passive income?

Quick question then for you: that 12% is that on HBD savings that are locked and not liquid.

I put 3 HBD in savings some time ago and it went up to 3.067 HBD, but I have not seen it rise from there. When should expect to see it go up? Monthly?

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Quick question then for you: that 12% is that on HBD savings that are locked and not liquid.

Yes, you have to move it to savings. There's a 3-day lock on it once there so it would take 3 days to get it back out.

When should expect to see it go up? Monthly?

You can collect the interest once every 30 days. It will just accumulate until those 30 days are up and then you can either click on a button (in PeakD) or I think if you change the balance in any way (i.e. you add some more in or take some out) it will automatically give you the interest if you haven't collected it for 30 days or more.

The PeakD front-end has a really good wallet. Even if you like using one of the other front-ends, I find it very helpful for the wallet alone.

What better to do with your active income from posting, curating and gaming than to put away an amount that will turn into an amazing and stable passive income?

I agree. If you talk to any financial planner they'll tell you that you need to have a certain percentage of your assets in safe, secure investments. For them that usually means bonds making 2-5%. Why even take on that risk when you can get 12% in a savings account?!? This really is a no-brainer.

Thanks for the comment. Good luck saving!

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Another key point is how HBD is a low risk option. There is some risk but other than the value of HIVE going to zero or the blockchain stops working, there is almost nothing. Since both of those will not happen, it is near risk free.

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Awesome. Thank you. I found the button on peakd! I generally use #ecency to post from but use peakd.com for some of its other services.

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And to be clear, the way that you do it, you claim and compound that interest every month do you not? :D

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Yes you claim it every 30 days and that compounds the return even more.

You get paid interest on the newly claimed HBD.

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Indeed... and so my tiny snowball begins... may it reach epic proportions!

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That is a great way to look at it.

Get the snowball rolling and watch it grow. Of course, your activity will help greatly.

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Well I plan on getting extremely active!

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Is this right then? Based on 10k HBD.

January 10,000
February 10100
March 10201
April 10303.01
May 10406.0401
June 10510.1005
July 10615.20151
August 10721.35352
September 10828.56706
October 10936.85273
November 11046.22125
December 11156.68347
January 11268.2503

So instead of straight up 1200 added, the compounding takes us \$68 further!

That's... really great...

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Yes, so you're actually getting 12.68% for the year by compounding monthly rather than yearly.

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Assuming your math above is correct, that is. I didn't check it. lol

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Lol. I did the math on excel on my phone and copied it over.

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This was the idea behind Hive Bonds and the Hive Certificate of Deposits (they both go together really). Providing the use case for HBD is amazing. Plus, as you stated, from a personal standpoint, the returns can be amazing over the long term.

The Hive Backed Dollar is truly an overlooked feature on Hive. This is one of this things that can truly lift the entire ecosystem to much greater heights.

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Totally agree. In this crazy, volatile world of crypto, HBD should become a pillar of peoples' accounts. It's a place you can put money and forget about it. It's the perfect place to park some money while waiting for opportunities or just to permanently lock in gains (and make 12% on top of them.

I've know about the great rate for a while now. 10% is still a crazy good rate, especially on a stable asset. For some reason, as I was writing my goals post, it finally clicked just how good it actually is.

I'm a little older so I need to try and start with a bigger number to reach my monthly interest/income goals, but it's definitely attainable. Just gotta keep you head down and keep stashing it away. I just got my first \$1000 in there. Only \$24k more to go this year. lol

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LOL well I am a lot older so I need to keep flowing money in there.

However, think about it from a younger person's standpoint. What a great retirement fund? Earning 12% when throwing a few grand in a year and one will be in tremendous position.

This article stipulates how this ends up.

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Yeah, it really is amazing. I've got to get an account set up for my daughter and throw some in there. I mean, she's 12. \$1000 is over \$1M in 60 years. And that's only \$1000! It really does just make "cents". :-)

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12% is already what most offerings I've seen in DeFi with stablecoins. Only thing missing here is lack of marketing. Hive should seriously fund some marketing initiatives.
!PIZZA

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The stablecoin needs to be more stable. There is still work that needs to be done with it.

We also need a lot more HBD out there. For this reason, we need to get people on Hive involved with it. Last I saw there was only a couple million HBD in savings.

This is a number that has to get to 10 million before we can have enough on the market for people. It is something that is going to take place in stages unfortunately.

A few sinks will really help also.

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12% on HBD is definitely a steal and the process of getting involved is easy. You get HBD from just posting or commenting on HIVE so it is just a button of a button away.

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A lot easier than digging ditches.

We provide the HBD to people and then they move it to savings and earn a percentage that would make Wall Street very happy.

All with very low risk. How awesome is that?

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I've already got the feeling that this 12% will be bumped up again.

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I agree. If the Hive ecosystem keeps expanding at the rate we're going, there is just flat-out going to be more of it out there.

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12% looks like nothing in isolation, but look at the power of compounding!

Not to mention Hive Backed Dollars is a stablecoin, so you also have the bare minimum of risk on the underlying asset.

So powerful.

PS. Loving your return to blogging lately, keep up the excellent work :)

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Yes, 12% on a stable asset is crazy. And as I said in the article, I'm not sure it's not going to go higher. That's why I'm trying to focus on getting a solid chunk in there over the next 12 months. If it does go to something crazy like 20%, I want to make sure I have enough in there to fully take advantage of it.

PS. I'm trying. The last 3 weeks of Covid were not fun. If I'm going to reach my goals of 50k LEO and 50K Hive this year, I'm going to need all the help I can get. lol

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12% is quite incredible and even more so when you compare it to the traditional yield that is offered by the traditional economy.

And speaking of !PIZZA, have a slice!

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Yes, I realized last week while writing my goals post just how big of a number that actually is. And it's right here on Hive. Super easy. We're supposed to "be our own banks". Well HBD is a pretty good vault to store some money in.

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It blows away most of the traditional realm.

This is why DeFi especially on Hive is incredible.

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how do we know that 12% will always be the rate? Could it go up or down depending on how the Witnesses vote or does that stay the rate from now on?

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We don't. But as the Hive ecosystem grows, it will need more and more HBD out there to be used. One way to incentivize the creation of that HBD is to pay higher interest rates. Personally, I don't think we're done going up with the rate and I'm very confident we're not going down any time soon.

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12% is more than any other kind of savings account ever. For HBD to be a true stable coin, it needs to be increased quite a bit in my opinion to get more HBD into the market.

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It is a catch-22. We need to see some use cases for HBD showing up. The idea of creating more HBD without use cases is tough.

We are going to need a lot more HBD in the future. It will take a bit of time for us to reach that end. In the meantime, we just need to keep adding more into HBD on a regular basis. The more of that we do, the more of the process that is starting.

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Very true. There need to be more HBD sinks.

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That is so true, the future can be uncertain, but right now cryptocurrency is the biggest opportunity on the horizon. The elite rich that have previously been critical of cryptocurrency has started to buy in big.
New York and Miami have created their own NYC and MIAMI coins, that in and of itself tells you that there is a massive opportunity :-D

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I agree. I think it's starting to hit critical mass for the government curtailing it. This time next year, I don't think there's any way of stopping it. But there's still less than 1% of the population in crypto so the growth opportunity going forward is massive. We're only just getting started....

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"We're only just getting started...." that is a great quote and the perfect headline to announce it.

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