Today I want to talk a bit about finances and in particular compound interest and how that takes place in crypto. I feel like no one really talks about it on the crypto side and instead mainly focuses on traditional finance. To me that's a HUGE mistake as crypto is still rather young and the possibilities are massive compared to transitional finance.

This article is for entertainment purposes only and is not finance advice.

The First 100k

I wrote a little about this in the last in my article titled The First Million Is The Hard Part In which I go over that first 100k and so on. But in this article I want to simply focus down on that first 100k as that's a goal I feel everyone should try to reach as soon as possible.

100k might seem like a lot of money but by keeping your expenses in check, investing or simply saving smartly including with our current high interest rates you'll quickly see how fast you can start socking it away.

In this graph you'll see with investing $10,000 a year and earning 7% you'd hit your first 100,000 in just under 8 years time. Now that's a hard thing for a lot of people to grasp and that's mainly because humans are in self preservation mode as much as possible. That means living in the now and trying to look at your future self 8 years from now seems like a complete stranger to a vast majority of people. Trust me I get it I was there.

Then I decided to just take the plunge and do it. I'll admit the first few years up until about year 5 was extremely hard. I struggled a few times with wanting to get something or go all in on another project. While sure some of those may have paid off well there are others looking back that could have also destroyed me.

By remaining and keeping focused I was able to save my first 100k just after 5 years by taking on some side hustles at the time and expanding the business. Since then I live well off of that. That 100k quickly started to balloon and I was no still saving up more than 10,000 a year.

That's the cool part about all of this. Let's say you take on a side hustle and you start to earn a small $10,000 a year more from it. That essentially means you could put $20,000 a year towards this goal instead of $10,000. Here's the result of that simple focused move.

$10,000 starting capital, with $10,000 added per year and a 7% return rate

After 20 years you would have a total of $448.651.77 in savings.

Now what if you put $20,000 down and $20,000 each year after that?

With that small change you just doubled your money and nearly hit 1 million dollars in the same amount of time. This is why getting a raise at your job, selling some more products or services or taking on a side hustle for even a short amount of time can quickly expand your growth.

Here's another way of looking at it.

It wasn't until I hit $100,000 in savings that it really started to click. Mainly mine was in divided stocks at the time paying around 5% APR but there was also a growth aspect to these stocks as well. It's a little harder to visualize that but let's attempt to.

$100,000 to 5% is $5,000 per year in income for doing nothing. That doesn't sound like a lot but if you start to break it down per day that's $13.69 a day. Expand that a bit further to $200,000 and that's now $27.39 a day. That's pretty much roughly 1 hour of work per day that you're now early passivly for doing nothing. On top of that it's also compounding each day to slowly start earning you more.

So you can see how after that 100k level things start to really come into picture and starts growing at a much more rapid rate for you.

Crypto

Now lets apply that to crypto. A area I personally feel so many people are missing out on. Let's for a moment take a look at HBD which is suppose to be a stable coin of Hive but it does have some small fluctuations in it. It currently pays out 20% (Or lately around 19% and most likely will only drop to around 10%-15%) In my opinion that's still a very high interest rate.

Now lets apply the same above to this and see where we end up. Let's say you earn $10,000 a year from curation, posting, commenting and playing games on hive. And you convert that into HBD and put it into savings.

Yep, that's 2.2 million but the crazy part is from the graph you can tell it only really starts to pop off around the 10 year mark which is when you hit $300,000. So yes that first 100k is important but after that as things start to snowball you need to become hyper focused on keeping up the pace if not increasing it.

This is just one of MANY opportunities for people now with cryptocurrency. While there is risk there is also such massive opportunity that people are now capitalizing on.

So what are you waiting for. Get out there and get serious about building your own wealth.