Earning more than a million

I have spent the last few hours readjusting some of the positions of my shitcoins alts , as I still felt I had too much sitting on Binance and didn't want it trapped there when the staggered rollout to the lower withdrawal amount hits my account. It takes so long to do much of this that it feels like a job, but since I figure that the potential return on it could very well outpace my jobs, it is definitely worth spending the time.

I adjusted a few things and decided to increase some of my pooled tokens into Cub Finance, as well as add some extras, including ADA for a small APR of 5%, but at least it keeps it off an exchange. It is funny that 5% sounds like a very low amount, but this morning a friend was saying that on their 10,000 in a bank savings account, they received 0.01% - a hundredth of a percent.

Back in the day when I was around 13 or 14 years of age, it would have been possible to have 1 million in the bank and earn 9% on it per year. After paying taxes, it would have amounted to about 60,000 dollars, which at the time, was almost 2x a teachers salary. In fact, it was my math teacher that went through this scenario on the board and discussed how this is what he was working toward by the time he was 45. I am not sure if he got there, but I hope he did.

The problem is of course, that "living off the interest" requires the interest on savings to be adequate enough to do so. For him at that time, he would have likely been able to live off half the interest rate at about 4.5% and clear around 30K a year, but now, that is impossible. The largest bank in Australia offers a max of 0.5%, which means in order to get that minimum, he would have had to have 9 million dollars saved. But that is not all, as times have changed. Back then a teachers salary was about 30K, but now it is over 2x that at 70K a year. That means that he would have to have around 18 million dollars in the bank right now to be able to clear a teacher's salary.

This is of course maintaining the capital investment at 18 million. However, using 70,000 dollars a year of it without having it in the bank would mean it would last for 257 years. Even with inflation, that is enough for a lifetime - perhaps.

It is amazing how quickly our wealth is being eroded, yet very few people seem to care, since they are getting more fiat shitcoins each year. But, the purchasing power of our salaries is decreasing, meaning that the payrises we are getting, don't cover the same standard of living the did earlier. And on top of this, due to the way society, culture and technology has changed, we are spending on things that we weren't before, with people dropping thousands of dollars on an iPhone, while spending hundreds of dollars on digital subscriptions of various kinds per month, plus the in-app purchases.

Sure, no one needs to spend on entertainment and many can't afford it anyway, but it means going without what is common in the community, which can feel oppressive in the same way that there is variation in the quality of food people can afford to eat.

While that same bank mentioned above just recorded record profits and paid dividends out to shareholders that were 17% higher than last year, the customers of that bank are becoming incrementally worse off. I think that this is where the DeFi space is going to have a major impact, as it allows normal people to become owners and benefit in the same way the financial institutions and their investors do, by cutting out the middlemen.

However, this doesn't stop the people who are currently investing into financial institutions from investing into AMM liquidity pools and benefiting too. It is no wonder that there is going to be pushback and a raising of the hurdles in the financial sector to try and cut out average people from being their own bank, because it threatens to compete in two key ways. Firstly, customers have the potential to go elsewhere for their financial services and secondly, the investors will go where there is a higher return. While there is instability and volatility now, the more people leverage DeFi pools both as investors and customers, the more stable it becomes, without the overheads or premiums that the banks charge for services that can now be delivered for free.

For example, there is no excuse for a 13% transfer tax on shipping money across the globe when it is already automated and no one has to see, stamp or verify anything. There is no excuse for it to take days to clear either. Both of these things are not only already possible to do freely and quickly, there is no middleman needed at all, other than the nodes that verify the transactions, or the witnesses on Hive.

For decades, we the average population have been the cashcow of the financial institutions because we couldn't do what they did effectively. But with the advent of the internet and then blockchain technology, we are very quickly learning how we can organize so that we can provide the same and more for ourselves. The competitive competence of the banking industry is being quickly eroded away, which is why they are trying to grab as much ownership as they can now, before they lose complete access to their cow.

However, because of tokenization, not only can we organize ourselves in regards to the required transactions for an economy, we can also build systems that indicate the value of what is meaningful to us in a way that requires activity to own. Just imagine, if from now on, when a investment management company wanted to buy into a new startup, the owners required them to pay in Bitcoin, instead of dollars. The investors will still benefit from the success of the business, but so will millions of other normal people from the sale of that business to them. It makes for a very interesting future economy.

I don't think there are many people at this time that are able to live off the interest on their savings, which is kind of funny, as for a fraction of what they have in the bank, they could probably live off DeFi comfortably. Even Hive offers 10% a year, which means that as interest rates dropped, my math teach could have moved fiat across into Hive and started hedging against the inevitable. It is risky of course, but so is living off the interest, as the capital doesn't grow, which means as inflation increases, the value of the money collecting interest is continually decreasing.

A million dollars doesn't buy what it used to.

A million dollars in the bank earns about 5000 dollars a year in interest.
How does that compare with your crypto investments?

Taraz [ Gen1: Hive ]