Hello all you wonderful, smart, and super cool hivers,
Ever heard the phrase 'work smarter, not harder'? or how about the power of compounding..
I read that Albert Einstein once said that there is no more powerful force, than compounding. (probably not his exact words, but that's how I remember it)
If I were to try and explain compounding (here, as it applies to money.. compounding interest) I would explain it as..
Investing in something that gives interest, then as that interest is paid to you, re-investing, or adding that money, back into the original amount you invested in.. and so you now get even more interest, that you again add to the original amount, and so on and so on.. :)
I'm sure there are much better definitions to be found, but that's it as I know it. Here's a real world example,
The best example might just be HBD. It currently gives a outstanding APR (annual percentage rate) of 20%. Say a hiver starts with 100 HBD in their savings. In 1 year it has turned into 120 HBD.. the original 100 HBD + 20 HBD paid as interest for the year. This is where the power of compound interest comes in.. during the 2nd year, 20% APR is again given, but now there is 120HBD in the savings, so at the end of year two, twenty-four HBD (120 x 20% = 24), for a total of 144 HBD is now in that savings. and it just gets more and more powerful as time goes on.
Another big factor to compounding is the timeframe in which that interest is given, then added back to the investment amount. In the previous example, the period used was 1 year. (APR) Most accounts that are considered 'investment' accounts, are offered interest as APR. Some examples of this are bank accounts, money market accounts, even HIVE and HBD has an APR!
Since being on hive, I've learned of quite a few things to invest in, but one of the big ones is LEO. (a token that trades and is an amount of HIVE) There are many many smart (much smarter than me) hivers that are already invested in LEO. All hivers are allowed to delegate HP to leo.voter, which pays an amount of LEO to all that delegate. This amount is paid each day and the LEO is deposited into the wallet at leofinance.io
(Don't be silly like me and waste time trying to find the LEO wallet in your peakd (or any other frontend's wallet)) Only look for and manage your LEO in your LEO wallet found on leofinance.io (login with hive info.. I use hive keychian)
Now, since I have started my investment in LEO 2 days ago with just 10 HP delegated to leo.voter,
I have 2.171 LEO in my wallet. (leofinance also pays in LEO, for doing things on their platform, such as making posts and commenting other leofinance posts, etc.
Now, if a hiver were just to collect the daily LEO rewards, based on just this 1 day's payment, a very nice APR is already assured. (0.035 x 365 = 12.775 LEO (currently it's about 4 LEO to 1 HIVE, so a gain of 3 HIVE on my 10 HP delegation is 30%? is that right??) (I think this result varies some with the fluctuating prices.. leo.voter says it's 16% APR, which is still already very awesome!)
But I want to add the power of compounding now by taking my LEO and powering it up into LP, (just like how you power up HIVE into HP) then I will turn around a delegate that again to leo.voter. I plan to do this every day. This should really get things boosted!
