The art of taking profits on Hive
There are many ways to make money online but there are not many ecosystems like hive. On hive you can earn with your work (blogging, commenting, curating, gaming,...) but also with your wealth. The same ecosystem allows you to invest your tokens so that they earn a return (staking, delegating, liquidity pools, game staking,...). I think that Hive is quite unique in this respect. While swimming through these endless possibilities, it becomes important to take profits regularly to build your wealth. But before doing that, you need to know what you actually want...
The first step towards taking profits is to set your goals
I have been active on Hive/Steem for almost 5 years (58 months to be precise). For a very long time, I just wrote some posts and built my stakes without any kind of plan. Things changed when I started to set goals for myself. The most important aspect of that was that I now had a token or a series of token that I wanted to prioritise above all the others. In the past, I just staked everything everywhere and I didn't get far like that.
When you set goals for yourself, you know what tokens you really want.
There are so many tokens, NFT's and other shiny things out there and it becomes difficult to focus. You simply can't buy them all and it's important to set priorities. That's where setting goals makes a big difference. In December 2021, I set my goals that I want to reach by the end of 2022 for Hive Power and HBD. Thanks to that, I will always try to get these tokens before I try to collect others.
Defining which tokens you want is the basis to build your fortune.
Over the years, my goals have become more and more precise and the number of tokens I seek is getting smaller. The more I focus my efforts, the better my results.
Setting goals is only useful when you keep them present
Another thing I have realised is that when you set goals, you need to come back to them on a regular basis to check your progress. I've decided to do that every first of a month and I always write a post about it. I have divided the time period between the moment I set my goals and the moment I want to reach my goals. I then check every month the percentage of days that have passed of this time period. This is my benchmark and I compare my progress in tokens to it. Like that, I can always see where I stand.
Taking profits.. what does it mean
As I said before, when you take profits you need to be able to identify what a profit is. Let's say your target is to change crypto into fiat for your living costs. Then your goal should be to increase the amount of crypto that you can change over time. Your profit is the money that you exchange. All your actions should aim to increase this amount.
If you want to build a big stake in Hive, all your actions should go towards doing that. Your profit will be the amount of Hive that you can stake.
It seems quite obvious that the profit will not be the same for all of us. That's why you need to define it through your goals.
Growing and taking profits
The problem is to find a balance between taking profits and growing your income. Let's say you get a nice return by staking a tribe token. It wouldn't make much sense to sell all your income from there to increase your profit. However, if you reinvest 100% of what you make there, it won't contribute towards your goals either.
The 10% rule
Whatever I do, from all the money I generate, I take a 10% cut that I use to reach my goals. Let's take the example above. I make a nice return with this tribe token and whenever I get this token, I stake 90% to increase my tribe token power and I take 10% and exchange it for one of the goal tokens. By doing that, I continue to grow my income potential but at the same time, I also work towards my goals.
I also do that for games. Whenever I earn money with games, I reinvest 90% and I take 10% out and use it to grow my goals.
I like this 90/10 ratio because it allows me to grow everywhere and still reach my goals. Of course your ratio might look differently.
Not taking profits might end up badly
In the past I was simply staking all the tokens I received. Plenty of these tokens have since lost close to 100% of their value. If I had sold 10% of them at the time, this would have helped me much more. You never know how a token, a project or a game evolves. If it moons, you still have all the money you reinvested into it. If it collapses, at least you have taken out the 10% share and it allowed you to get closer to your goals.
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