How to Compound Steem Power and See It Grow Without Doing a Thing!
steem·@gmichelbkk·
0.000 HBDHow to Compound Steem Power and See It Grow Without Doing a Thing!
Would you like to know how you can double your *Steem Power* in three years without lifting a finger because this might be useful if you are tired of writing posts that get very little rewards?  In this post, I am going to show you how compounding interests works for *Steem Power* and show you figures that I hope will encourage you to study the possibility more. This is not financial advice, just a fun method to see your *Steem Power* double in three years. ## How to Compound Steem Power and See It Grow Without Doing a Thing! You have certainly heard about compounding interests and how it works in the world of finance. Basically, you invest *$20* per month at a *8%* rate in a bank at the age of *20 years old,* and at the age of *65,* you are a millionaire, if you are still alive. Compounding is the process of reinvesting the interests you earn so you can earn interests on the principal plus the interests. This usually starts slowly and with time, a lot of time, this can grow very fast and make you rich. If you are late starting this, then you will earn much less, unless the interest rate is much higher. We can apply the same thing to *Steem Power* and I wanted to do some calculations to see how much *Steem Power* could be grown by itself without doing a thing and on what duration. The first thing is that *Steem Power* holders are receiving *15% of annual Steem tokens inflation* automatically and this is the first thing that will grow your *Steem Power* as I explained in this post: *[Know Who your Upvoters Are!](https://steemit.com/steemit/@gmichelbkk/know-who-your-upvoters-are)*  I am not taking this into account for what I am going to show you today, which is how to grow your *Steem Power* delegating to bid bots and compounding interests or payouts. I am also not taking into account other *Steem Power* that you may buy or earn as rewards when writing posts. Let's say that you have *10,000 SP* to delegate for this purpose and that you delegate to a bot with *25% APR,* which is a good average with possible ups and downs. As I have shown in my recent case study, most of the bots return more than *25% APR*, but I don't want to take any bot as example in this post. You may want to read my case study: *[Case Study: Which Top Upvoting Bots to Delegate to for the Highest Daily Payout?](https://steemit.com/steemit/@gmichelbkk/case-study-which-top-upvoting-bots-to-delegate-to-for-the-highest-daily-payout)* I made a spreadsheet with some calculations as you see below.  On *row 2* we have the *"Principal (SP),"* which is *10,000 SP.* On *row 3* we have the *"Annual Interest Rate"* or *"Annual Percentage Rate,"* which is *25%.* On *row 4* we have the *"Compounding Periods Per Year,"* and in the *B column* we have *1 time* per year, in the *D column* we have *12 times* per year *(1 time per month),* in the *F column* we have *52 times* per year *(1 time per week),* in the *H column* we have *365 times* per year *(1 time per day).* On *row 5* we have the number of years, which is *1.* Finally, on *row 7* we have the *"Amount earned (SP)."* You may want to see the formula so you can do that yourself in a spreadsheet.  This is the formula for the first block: ```=B2*(1+B3/B4)^(B4*B5) ```  This is the formula for the second block: ```=D2*(1+D3/D4)^(D4*D5)``` I trust you doing the formulas with all the other blocks. Let's look at the results for one year and the effect of compounding interests:  If we compound only once a year, which means we wait the end of the first year and re-invest our interests for the second year, we would have earned an additional *2,500 SP,* and have a total of now *12,500 SP.* If we waited the end of each month to re-invest, at the end of the first year we would have a total of *12,807 SP* and now I believe that you can see the advantage of compounding more frequently. When I say compounding, this means keeping your daily rewards in *Steem* and *SBD* that you earn from the bot, wait the end of the month, change the *SBD* in *SP,* and then delegate the additional *SP* to the bot for the second month. This means, if you earned *200 SP* in the first month in daily payouts, when the second month starts you make a new delegation of *10,200 SP,* and so on every month. When you compound every week, the total amount is then *12,833 SP,* which is still a bit more. When you compound every day, the total amount is then *12,839 SP,* which is I think to negligible to bother doing it every day. I believe doing it every week is the best option. Now let's see how it is after 3 years.  We started with *10,000 SP* and just compounding once a year, we have now *19,531 SP.* This is a very low maintenance method, if you don't use *Steem* and just want to log in once a year to delegate what was earned. If we do it once a month, in *3 years* we have *21,007 SP* and you can see that it's a significant increase compared to once a year. If we do it once a week, then we have *21,132 SP,* which is a bit more. Doing it every day, is not really worth it. When we look at this data, if we delegate *10,000 SP* to a bot now and delegate the additional payouts earned for *3 years,* then we can double our *SP,* just like that, doing nothing, writing no posts. You may want to see a breakdown of this with compounding every week. First we have to set the multiplier: *25% divided by 52 is 0.48% per week.* These are the numbers.  We can see that after 26 weeks we already have *11,325 SP* working for us.  We are now on the second year with *12,950 SP.*  One year and *30* weeks and we have *14,809 SP.*  Two years and six weeks and we have *16,933 SP.*  Two years and 38 weeks and we have nearly doubled with *19,738 SP.*  Three years are completed and we now have *21,106 SP.* We know the value of *STEEM* today, but we don't know how much it will be in *3* years. If it stays the same, we will have doubled our money. If it is half what it is now, we still would have the same. That's two options that you may consider. If we want to be positive and think that the value of *STEEM* will be at least double, then we would have quadrupled our money. I think you get the point. If we really want to be optimistic and think that the *Steem* blockchain will be alive long enough, then we can look at the following tables. This also assumes that we still have voting bots that we can delegate to and earn payouts from. This is for 5 years.  Let's say we are still compounding weekly and the total we have now is *34,799 SP.* This is then ten years later, and hopefully *STEEM* has survived every crash.  We compounded weekly all this time and the total value is now *121,097 SP.* I will let you imagine what the value of *STEEM* would be in ten years, but if it was only a dollar, I would be pretty happy. I hope that this is useful for you to see that compounding *SP* can be very rewarding with you not having to lift a finger, except for a renewed increased delegation once a week. Would you upvote this post and follow me for more because this will encourage me to write more posts about *Steem* economics like this one? I have categorized my posts on *Steemit* for easy access: [Steemit tools](https://raindrop.io/collection/4857738) | [Steemit strategies](https://raindrop.io/collection/4857844) | [Steem economics](https://raindrop.io/collection/4870575) | [Steem on WordPress](https://raindrop.io/collection/4870580) | [Blogging on Steemit](https://raindrop.io/collection/4873660) | [Steemit posts I curated](https://raindrop.io/collection/4857838) | [Cryptocurrency](https://raindrop.io/collection/4873784) | [Cryptocurrency trading](https://raindrop.io/collection/4873804) | [Mac computer tutorials](https://raindrop.io/collection/4857742) | [WordPress & online marketing](https://raindrop.io/collection/4873821) | [Self-development & motivation](https://raindrop.io/collection/4873597) | [Travel in Thailand](https://raindrop.io/collection/4873537) | [Travel in Japan](https://raindrop.io/collection/4857847) | [Travel in France](https://raindrop.io/collection/4857739) | [Life in Thailand](https://raindrop.io/collection/4857740) | [Fitness challenge](https://raindrop.io/collection/4857846) | [Fruit-veggie juices & smoothies](https://raindrop.io/collection/4857842) | [Education](https://raindrop.io/collection/4857840) | [My answers on Quora](https://raindrop.io/collection/4857727) | [Fundition tutorials & projects](https://raindrop.io/collection/4858284) | [Miscellaneous writing](https://raindrop.io/collection/4873819) You may prefer to go to my [Steemit Posts Directory](http://www.michelgerardonline.com/steemit-posts-directory/). Would you please help _[@jerrybanfield](https://steemit.com/@jerrybanfield)_ become a top _10 Witness_ because he is in my opinion the witness who gives the most back to the community? [Vote for _jerrybanfield_ as a witness](https://steemconnect.com/sign/account-witness-vote?witness=jerrybanfield&approve=1) or [set _jerrybanfield_ as a proxy](https://steemconnect.com/sign/account-witness-proxy?proxy=jerrybanfield&approve=1) to handle all witness votes at [https://steemit.com/~witnesses](https://steemit.com/~witnesses). Read the _[5 reasons why I'm voting for Jerry Banfield as a witness](https://steemit.com/witness/@gmichelbkk/5-reasons-why-i-m-voting-for-jerry-banfield-as-a-witness)_ and how to vote in my post. You may be interested to read: *[What is a Steem Witness, How to Vote and Why?](https://steemit.com/steemit/@gmichelbkk/what-is-a-steem-witness-how-to-vote-and-why)* **Michel Gerard** [www.michelgerardonline.com](http://www.michelgerardonline.com/)
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