20% Returns Can Make You Rich

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We all get caught up in the insane rates paid in cryptocurrency. Everyone is looking for the moon. It appears that common sense wealth building has been cast aside. For that reason, let us take a look at what things really look like.

How often do we look at a project in cryptocurrency and say "that is only paying 40% return"? The yield farming projects really tilted our view of things. Everyone wants to be a millionaire overnight, with little to no effort. While we are seeing abundance created, time is still a factor in most cases.

With a project like @lbi-token, the idea is to Get Rich Slowly. Of course, since it is all relative, slowly in the crypto world is much accelerated.

Nevertheless, for our purposes, we will us a rather slow growth rate for crypto yet one that would make traditional money managers drool.

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The World With 20% Returns

In cryptocurrency, 40% sounds awful. That means a 20% return is downright unacceptable.

But is it?

Let us do some simple calculations to see where this can get us.

An annual 20 percent return looks like this:

Year 1 1.20
Year 2 1.32
Year 3 1.58
Year 4 1.90
Year 5 2.28

Year 6 2.73
Year 7 3.28 (we already tripled our money)
Year 8 3.94
Year 9 4.73
Year 10 5.67

Year 11 6.80
Year 12 8.16 (we now make more in a year than our original investment)
Year 13 9.80
Year 14 11.75
Year 15 14.10

Year 16 16.92
Year 17 20.30
Year 18 24.36
Year 19 29.32
Year 20 35.07

Look at that. An unacceptable 20 year rate of 20% equates to a 35x on one's money. Would you like your money to grow 35 times by 2042?

This is the power of compounding which requires the time element. Get Rich Slowly can make one very rich.

Let us add another decade to the mix. For those in their 50s, this might not be for you. However, anyone who is 40 or under, embrace this concept fully.

Year 21 42.08
Year 22 50.50
Year 23 60.60
Year 24 72.72
Year 25 87.26

Compounding another 5 years puts our money at an 87x. That extra time really made a huge difference in our returns.

Let us go the last 5 years.

Year 26 104.71
Year 27 125.65
Year 28 150.78
Year 29 180.94
Year 30 217.13

There you have it. The measly return, by cryptocurrency standards, provides a 200x over 30 years. Here again, how would you like to 200x your money by 2052? For those who are younger, this is a concept that should certainly be thought about.

Why 20%?

The reason this is being pointed out is because this is the target return for LBI. We seek to generate a boring 20% return each year. Of course, in the first year we far exceeded that level, providing up with a much higher level for the second year.

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There you have it. We record a 63% profit 1 year from launch on token value.

Source

This does not include dividends that started to be distributed part way through the year. Hence, the first year numbers are higher than that. Nevertheless, the key here is year 2 is now starting at 1.63% versus the 1.20 on the table shown above.

According to that calculations, we did on one year what would have normally taken 3.

How does this alter things. Instead of ending the first year at 1.2, if we plug in 1.63, after 30 years, the number would be 386.92. That is much higher than the 217.13.

Could we have some down years? Surely that is possible. However, we are already ahead of the rate to achieve a 200x on the value of the LBI holdings.

This is how 20% returns can make one rich. It is only a matter of time.

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41 comments
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In your articles you've always stressed the Importance of getting rich slowly, its not like many people do not know or understand the Importance of getting rich slowly, it's just that many are impatient. There's an aspect of Mental accounting where people equate time to the value they get and sometimes many do not monitor or take effort to compound, they just want it to happen on a platter without taking any risk.

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This article shows getting rich is not a rocket science.
Time to get rich when you see the guy next to you riding a lambo, that is the squirrel in the picture, robing your future self of that lambo one day.
I need to understand that 20% much better.
The analogy of getting rich slow is humanly possible.

!BEER

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No it is not brain surgery. It is rather simple. However, it does take consistency and activity. We need to keep pushing things forward over a long period of time if we want things to get on this path.

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You're definitiely correct, it's actually something that any one can set their mind to building and all that. Im all for building wealth Slowly, infact my whole crypto story has always been about building slowly for the past 5 years actually. It's not just possible, it's totally achievable

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Look at the numbers. The first 5 years do not show much difference. Yet as you move along the table, you can see how the growth really does grow a great deal.

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Yeah, I noticed the table, it's going to take a whole lot of patience and determination for some people to even get past that 5 years of building

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Yes but that is where the real fun starts.

And it is probably why many do not become wealthy. It takes patience to get there.

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Indeed it is only a matter of time.
Discipline and focus are the attribute to get there.
Well demonstrated

!BEER

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hopefully Leo stops scraping the bottom in the near future so the returns in dollar value can also be worth shouting about :)

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Werent you miserable last year because of the price of HIVE?

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a bit yes, and now I'm enjoying every second of it. I hope you don't have any illusions this price will last in the long term

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I dont worry about price. Personally I dont use the market to validate my decisions.

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I like things that validate my decision to not remain a pleb :P

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That is pretty awesome. I guess I do have one question. That return is on the holdings of the project right? It has nothing to do with the dividends that are being paid? I am sorry, I am struggling to find the best way to phrase my question.

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The 63% did not factor in the dividends. I have not seen if SSUK did a chart on that. Since his hard drive crashed, I am going to surmise he doesnt have the data.

So yes the rate of return was actually a bit higher than the 63%.

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But that is all a gain on the back end right? What I mean to ask is that is 63% on my held LBI since I am not reinvesting my personal dividends? Because even though I am not reinvesting the project is right?

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As the first year was definitely better than the 20%, I think we can get another good year in terms of return. The token can grow, under the given conditions, at least 30%, which is not bad.

We will hit the 200x in 10 years. Trust me on this. :)

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I agree with you. @spinvest saw a number of years over the 20%. In fact, it is something we can keep adding to with more projects and people involved.

But yes a 30% year 2 growth rate should be very easy to hit. We just need to keep feeding more LEO into the project.

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Yes, we will definitely hit, even the value is dropping because of some sale off. We need to feed Leo as a whole so that the whole universe is growing. The dev team of leofinance is doing a pretty good job, but it is also our duty to bring value.
LBI has a natural growth value, which I think will only accelerate if the team and holders stick to it.

Thank you for the post and the reminder behind the values.

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Yes the development is crucial and feeds into the exceptional growth that we will see over the next few years. The book that Khal wrote spells out how far things came in terms of development.

Of course, we need to keep in mind that was only the foundation and more is going to be built on top of it.

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30 years seems so far out to me that I can't imagine it. However if I just hold onto my LBI, I should reach there eventually. It's tempting me to buy some more LBI.

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LOL try being my age and projecting out. For me, it is a coin toss if I will even see 30 years.

Hopefully some of the longevity research starts to yield results. I am going to need some to make it another 30 years.

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I think you will live to that age because technology is improving. So long as you are still actively exercising and you are healthy, I think you will be fine.

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I can relate being 51 myself and looking at 52, 30 years not hardly so I am just planning 5 years ahead as not to get too far ahead of myself.
Here is to not getting hit by a bus before we retire lol

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I hear what you are saying when I was a young Marine those old crusty Master & 1st Sargents always seemed so old and in a blink of an eye 16 years just flew by and I had to make a choice take an early buyout or sign up for another 20 years and retire with all kinds of benefits.
I was so short-sighted back then, so I took the buyout forgoing lifetime payments and benefits.
Now that I am in my 50s I feel embarrassed by such short-sightedness.

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Sounds like HBD needs to be 20%

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That is why I proposed the Certificate of Deposit at 20% for 1 year lock up.

We can even add more layers from there if we want. Try to capture the long-term focused people with growth rates that is astonishing.

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That's nice! But the question is: do you really need that immense amount of money at the end of your life?

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That is up to each person and where they live.

Also it depends upon where one is starting with. If one only has $100, that is $20K in 30 years. That isnt going to get one very far.

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Yeah, it is up to each person.

But, what I wanted to say is that he mentioned Warren Buffett with his billions. And to be honest, I prefer to have a decent life now (to have a small and neat family house, to be able to pay for the bills, etc) instead of having billions at the end of my life.

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I believe getting rich slowly is the best way. Many often want the fast way. This way right here makes the value of a project sustainable

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There will be times when outside returns show up. We have to also expect there might be some down years. However, the basic system of what LBI is built around is very healthy.

Through activity, we have the means to keep the returns flowing so that we do not get hit with too much of a loss.

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5000 LBI => LEO millionaire in 30 years => LEO at 50$ => that's a damn ton of money :D

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As a math teacher, I love being on the right side of an exponential function. Start early, live long, and the math does the work for you. !BEER

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This is a great post for our community as @jongolson is always saying slow and steady wins the race. Using Warren Buffet is always my goto example :-D

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