To understand some financial definitions or mechanisms, there is a great resource on Hive from LeoFinance LeoGlossary . Knowing how lazy we are, many people don't even go there to familiarize themselves with some of the terms that will help in understanding the markets, the country or our own wallet. It can also be difficult to get the gist of some of the terms or questions if you are new to the whole financial bacchanalia. For this reason, I decided to start writing about financial terms or issues in "simple words". I'm interested in figuring out new things, which I do on a regular basis. Let's see how useful and interesting it is to the rest of us. Let's go!
Compound Interest
LeoGlossary tells us that Compound Interest is "interest on one's interest" Actually, that is the perfect definition, but I would even add. It's interest on interest on interest on interest and so on. It all depends on the time you're willing to wait.
But what does that mean?
Suppose you have 1 grain, from which 2 grains grow at the end of each year. That is, each year the number of seeds will double. And since we originally had only one grain, the rest is a percentage of a percentage of a percentage of a percentage of a percentage and so on...
The conclusion is this: the more time you devote to investing in the projects you love, the more return you will get at the end. The hardest period is the first few months or years. That's probably why so many people give up so early and don't get good dividends for patience.
Compound Interest in Life
These are our loved ones, friends and relatives with whom we communicate every day or week. The more time given to communicating with your closest circle, the faster and clearer the world becomes around your conversations. The closest friends in their old age communicate already without words, just a glance is enough. But the first conversations with a new person are often the intersection of two different worlds, planets and even languages.
By investing your time in anything and reinvesting it constantly, you will eventually get your Compound Interest. But it's better to find something that you really enjoy and that inspires you every day. That way it will happen on its own, without any control. It will become a lifestyle.
Compound Interest on Hive
By saving HBD at 20% APR, put the interest you get each month in there, too. That way you'll get more than 20% at the end of the year.
If you play Splinterlands or Rising Star, as I do, invest some of your profits in cards. That way both your asset price and profits will go up every stretch of time. And over time, you'll be able to afford to buy any assets in the game that you want. It doesn't happen instantly, but it eventually does.
That's how I buy summoner cards in Splinterlands now, from rental cards I bought or won a year ago. It's also how I now buy Rising Star packs from earning those cards I got in a pack when I first got into the game.
Second layer Hive tokens also work by Compound Interest if you don't sell them on the market, but keep them and curate the right communities. That's how I'm growing naturally now with the ALIVE, CENT, CTP token. I'm still buying LEO, but I'm going to gain the necessary mass to grow just as naturally.
Compound Interest everywhere
As we look around, we notice that Compound Interest is everywhere. It's the golden ratio of finance that works everywhere. In reading the biographies of great people, I have traced their path in relation to their constant contributions to the cause they loved. And we all see more often than not the last steps or the final product. But we forget that all the while there was constant work being done on ourselves, on other people, on the world. It is that percentage that every day turns into Compound Interest with patience and love for their cause!
That's all for now!
Peace and Hive On!
