Making Crypto Your 13th Cheque

Hey Jessavers

The idea of earning crypto is prevalent among those who are new in crypto. Those who have been here a bit longer realise the savings technology of Bitcoin and the speculation of alts and are all too happy to invest like mavericks. I can understand the appeal earning crypto, you're not risking capital, and all you're doing is trading your time for crypto.

The vast majority of crypto earning opportunities are micropayments, so it takes quite some time to earn an amount that's worth something, and in many cases, it's not! The good old days of earning 0.5 BTC in a faucet are long gone, and altcoins have their own distribution methods.

There are plenty of ways to earn crypto from microtasks to freelancing, but there are very few who can completely live off crypto earnings.

A trend I do see changing as more capital flows into the market.

My journey into earning crypto has brought me to all sorts of opportunities. I've invested in DE-FI, CE-FI, Staking, Blogging and more as I started to create more of thee micro-income channels and tracking them every month. I concluded that crypto could supplement my income.

The 13th cheque

Since I've never worked in another country, I don't know if this concept is as popular as in South Africa. The 13th cheque is something all South Africans are familiar with, its the end of year bonus you don't account for, but really we all hope to get.

In some companies like the ones I worked at, you could guarantee you're 13th cheque with a clause in your contract, to split your salary over 13 payments instead of 12 per year.

This option gets you used to a certain salary throughout the year allows you to live leaner while saving you a lump sum you can use at the end of the year.

Securing a "middle class" income

I picked the middle class because it just seems like something most people find as comfortable living and its seen as the standard. Naturally, that definition changes from country to country, based on your wealth distribution, your currency strength and cost of living.

I saw someone post this graph on LinkedIn about South African income and I found it pretty interesting, so I'm going to run with the South African classification of the middle class.

To be ranked in the middle class of our income distribution, you need to earn around R23 000 at a current exchange rate with USD around $1540 per month.

That roughly works out to around 4.21 USD per day. A rate I feel is pretty achievable in one year in crypto.

Putting too much pressure on crypto

In the earning crypto game, I see so many people trying to trade the volatility, some win, many lose. I see people trying to secure crypto via micro-tasks only to sell it as soon as it hits their wallets with no time preference or price preference.

This is by no means inherently wrong; we need weaker hands to provide liquidity and allow stronger hands to consolidate, that's just the nature of the game.

However, you're selling your labour in the cheap, but again, everyone is to decide what they do with their money. There is no right or wrong way; I am just focusing on using crypto in this example to secure a 13th salary payment.

Crypto is a game of accumulation

To make this easier to understand, I am going with a simple example. The average return in lending markets at the moment is 6% on BTC.

To secure that $1540 for the year, you need to own around $25 700 in BTC or 0.71565815 BTC (at the price of $35 911).

I realise that's a massive chunk of BTC to be risking in the lending market for most of us, but here's the kicker.

Let's say the lower bound for BTC is $30 000 as the new floor, for argument's sake. That means you need around 0.0514 sats to hit that 13th cheque.

However, the higher the price goes, the fewer sats you need to earn. BTC increases at an insane rate each year when you annualise performance; the previous 52-week increase is +288.49%.

Yes it does lower each year, so you'll need to collect more sats as the purchasing power of the asset increases, but lets factor that into the equation.

Running the numbers

It's January 2020, and you want $1540 in Bitcoin by the end of the year, how much would you need to invest using the previous year's data.

Jan 2020 - BTC price: $8 879
Dec 2020 - BTC price: $29 024

$1530 at the end of December would be 0.0531 in BTC

If we reduce those sats by 6% for the yearly income, you could have netted for the 12 months that would leave you with 0.0499

Buying 0.0499 BTC in January would cost you $443.

Isn't that crazy? For a simple $443 investment in Bitcoin, leading it out for a year at the average of 6% would net you an extra months salary in purchasing power.

Real crypto investments aren't that straightforward

This is just a simple calculation, naturally, you can offset with better returns using other coins, you could reduce this by earning Bitcoin with your labour like blogging or freelancing and bring down that initial capital cost every month.

My current set up is far from a simple example it comprises of:

A liquidity pool provider
Staking coins
DE-FI lending
CE-FI lending
Blogging
Gaming

All these sinks drip an income into my wallet at different interest rates, at different prices, so it gets messy, but the theory to me is sound.

Thankfully I don't have to sell it to use it, and I am still able to buy more each month to compound and continue my experimentation.

Bull runs can surely change your life, many people have made fortunes on one trade, but they are in the minority, the rest of us have to play it closer to the chest if they want to secure the bag.

Instead of trying to generate a monthly income or a yearly income quickly and put so much pressure on one income stream. Having an income stream that ads an additional month to your income can make all the difference especially if you can reinvest it each year and compound over time.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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