You see that "save money so you can jump on investments"? It's easy to talk about it, and even start saving with this goal in mind. Until it's time to remove the saving and finally invest in a project you are enthusiastic about. Your heart will be thudding even with all the low risk that is involved. They call it loss aversion. Even when you know the money is still yours, your heart still shatters.
Right now, that's the way I am feeling. In the last few days, I have been reading about the pHBD-USDC pair that is aimed at providing liquidity for HBD. And I had been battling between choosing stability by allowing my HBD to stay in my savings and removing them to jump on the LP train.
The thing is I am aware that there is stability with leaving my HBD in savings because I'll be entitled to a 20% APY and that's a sweet interest rate compared to other financial institutions that I am aware of. But you know why the new investment is juicy? because the interest earned is higher. I guess a higher interest is often pegged to such an investment portfolio because of the risk involved.
You should know that the risk associated with the pHBD-USDC pair isn't that high in my opinion. Since pHBD is backed by our trusted HBD, this should be considered low risk, or I'm I wrong?
Trust me I have been dragging the thoughts of moving my HBD out of savings and joining the LP, not basically because of the interest but because for the first time I'll be living on Hive, the second lesson I learned in personal finance. The first lesson had been to keep a certain percentage of my earnings as payment to myself. On this chain, I started by always leaving 10% of my earned HBD and trying as much as possible to live off the rest. Until, taskmaster, advised that I should increase it to 20% so it could compound quickly. I did that and the results were massive. I have always been grateful to him for that advice.
Right now, I am moving into the second lesson which had been to take the saved funds, and invest them so it can produce more children. Before today, I had been trying to understand if leaving HBD in savings was a good call. Every day when I learned about my finances, I keep hearing no one gets rich through savings alone. And that one needs to move from saving to other investment portfolios.
The witnesses must have been reading my mind when they moved the interest rate from 12%-20%. This movement solidified my decision to keep my HBD right where it was. As it stands, I guess I have to retrace my steps and move up the ladder of those financial lessons. This means I'll be moving my HBD out of savings in a bit to get into pHBD.
In my heart of heart, I know my HBD is safe as pHBD because I can always wrap and unwrap depending on the situation. What I am saying is that I can always redeem the pHBD to HBD whenever I want. I am currently experiencing a loss aversion dilemma. But with all the security that has been taken into cognizant by the Leofinance team, my risk aversion dilemma is gradually reducing.
Do you know the juiciest part? It's that high risks equals high-interest rates as a rewards scenario. How? Converting my HBD to pHBD means I'll be getting more than the 20% APY offered if I save. Instead, I'll be getting a 45.82% APR (compounded = 58% APY - or nearly 3x what I can earn on-chain), according to the team.
Right now, you can pool your pHBD-USDC and earn a 45.82% APR (compounded = 58% APY - or nearly 3x what you can earn on-chain). pHBD is 1:1 Backed with HBD On the Hive Blockchain | Mechanics Deep Dive
From here, I'll continue moving my 20% earned HBD to Hive savings to build another buffer. Who knows in the near future, there will be other projects I can jump on. By then, I would have accumulated lots of interest to play the investment game. Wish me luck.
Are you experiencing loss aversion too? I think you should snap out of it. You should be worried about your fiat currency which is not backed by a substantial amount of Gold as speculated instead of worrying about pHBD which is backed by our trusted HBD. Be a part of this financial learning curve and experience. Get in today.