Investing in PASSIVE INCOME
I wanted to write about something that I see a lot of people are doing. They earn some money on crypto whether it be trading or staking or just HODLING, and then they go and spend it on random things, where as they could be setting themselves up for an easier life later on.
Let's say you earned 1000$ from a 100$ investment in crypto (hypothetically). Instead of going on and buying a PS5, or a new iPhone, why not take 200$ and spend them however you want (that's still double the money) and take if you want 100 and reinvest into crypto, and now you have 700$ that you can put towards passive investments. Those investments can make you a lot of money if you leave them alone for a long time.
Now let's see how much different investment's will earn us over 30 year period:
- Banks - Interest is ranging from negative to 0.1% usually. So using that, over 30 years, our 700$ will be 721.32$, so not even enough to beat inflation over that time.
- Index funds - Usually the safest option with solid returns, but averaging around 5%. That would give us 3,127.42$ at the end of our earning period, not bad, but not great either.
- Stocks - Now stocks can make great returns but carry moderate amounts of risk also, averaging 8% gain over one year, putting us at 7,655.01$ at the end, which is a nice return, and a pretty good investment, but what if we want a bit more.
- P2P platforms - This relatively new way of investing carries similar risk to stocks but offers ~12% APR. So if we invested our 700$ there for 30yrs we would get 29,192.98$. Now that is what I call a solid return. If you still want more there are the crypto options.
- Staking and DeFi - Staking coins and DeFi offer massive returns but are not something that can last for 30 years, if it did hypothetically, with returns ranging from 2% to 200%, you could get insane amount of money, with enormous amounts of risk that it carries, as DeFi is still often hacked, shut down, and sometimes simply looses money on price swings.
This series of posts will be covering my favorite investing methods, the P2P platforms and staking. I'll share my experiences, the platforms that I like and don't like and what returns I have realistically been getting. I'll also cover the safety and regulations of the platforms and to what extent your assets are protected.
Thank you for reading and if you want to help me make more of these articles tip me, it's free :)
Note: This is not financial advice. Always invest at you own risk.