Retirement: Active Income from SteemIt
As I near retirement I have been setting up passive and active income stream. SteemIt satisfies both criteria. The inflation rate of STEEM provides a passive income stream and the earning from posts and curating provides an active income stream.
This is an update to my 2016 post Everlasting STEEM Power; Why you should Power Up! which was generated under very different parameters for the STEEM system.
Created Using ClipArt in MS PowerPoint
I follow several high earners on SteemIt and noticed that their STEEM Power balance was low and that they were powering down. It occurred to me that they were using SteemIt to produce an active income.
Perpetual Power Down
For the past two weeks I have been experimenting with Powering Down my STEEM Power but maintaining my number of VESTs.
Simply put VESTs are a measure your share of the STEEM system. The amount to STEEM Power you have determines your numbers of VESTs.
Maintaining my number of VESTs (54 MVESTs) through banking STEEM Power is important for maintaining the impact of my upvotes.
STEEM Inflation
The current inflation rate of STEEM is around 9.5%. The inflation rate is set to decrease to 1% over the next 18 years. (See Source on Steem Inflation)
To maintain my number of VESTs I need to increase the amount of STEEM Power in my wallet by at least the inflation rate of STEEM.
Calculating the Amount of STEEM Power to Hold
The easiest way to calculate the amount of STEEM Power to hold is to only withdraw the STEEM Power that you earn being an author and curator for the week.
That being to easy for me, I went through the calculation to determine my own inflation rate. I start with the 9.5% annual rate and end with the weekly rate (0.17%).
To round up to keep up with inflation and save a little STEEM Power each week, I will increase my STEEM Power holdings in my wallet by 0.2% each week.
Powering Down
The Power Down function on SteemIt takes 13 weeks to completely payout the STEEM Power you have at the time of initiating the STEEM Power. I had approximately 26,000 STEEM Power at the time I initiated the Power Down. The Power Down deposits 2,000 STEEM into my wallet each week. At the end of 13 weeks, I will initiate another Power Down to maintain my active income from SteemIt.
Amount to Hold in STEEM Power
My initial balance was 26,000 STEEM Power. After the first Power Down, I had 2,000 STEEM from the Power Down. I multiplied 26,000 STEEM Power by 0.2% to get 52 and added it to my initial balance to get 26,052 STEEM Power I need to hold.
Powering Up
To convert the STEEM (from the Power Down) into the STEEM Power I need to hold, I Powered Up the amount of STEEM to reach 26,052 STEEM Power. The 26,052 STEEM Power becomes the basis for the next Power Down.
Active Income
My post use the 50/50 payout option. This gives me STEEM Based Dollars (SBD) and STEEM Power as rewards. I use the SBD for rewarding select followers (Every 100 new followers, I reward the 100th new follower) and selling the SBD when the price goes over $1 USD.
The remaining STEEM in my account is sold via Blocktrades into BTC, LTC, of ETH. From either of those cryptocurrencies I can convert them to fiat or invest in other cryptocurrencies.
And that is how I intend to use SteemIt for an active income during retirement.
Sources
Putting the Steem inflation into perspective
Thank You!
Thank you!
Thanks, this makes sense!
But aren't there disadvantages in the powering down mode?
While I have been powering down for this active income stream method for two weeks and I have powered down for separate weeks before that, I have not encountered any negative effects.
Having said that there is one negative effect that I know of, if you do not immediately Power Up the STEEM you are not withdrawing, then you lose a little on the compounding interest the STEEM inflation rate gives you on your STEEM Power balance.
For this reason, I chose a power down time that allows me to immediately perform the rebalance (Power Up the STEEM I am not withdrawing).
Have a great week!
Steem on,
Mike
This seems extremely complicated. Could you say a word about resteeming? I tried to resteem once and the system asked me whether I'm sure I want to do that. Why, does it cost me SBD or reputation or something to resteem ?
And what about reputation how does reputation work and what good it is ?
And the August 2017 whitepaper mentions the ability to vote down an article but I don't see how that could be done ...
So many questions ...
Resteeming
Resteeming a post puts the post in your blog and makes it available to everyone following you, just as though you posted it yourself.
It used to be that you were only allowed so many blog posts a day before they were demonitized. That is no longer the case.
Now, resteeming a blog post simply gives the blog post more exposure on SteemIt and if you curated the post, it increases the potential curation reward.
Reputation
You earn reputation by having steemians with a higher reputation score upvoting your posts.
At one time it was proposed that the reputation system would be used to parse out advertisements. Those with a higher reputation score would be more sought after by advertisers. I'm not sure where that idea has gone. I have not heard anything about advertisements on SteemIt in a long time. I think that is why a lot of people associate affiliation links in their blog post when appropriate.
Today there are people who filter by reputation score and only upvote those people with high reputations. These are usually voting bots. The bots upvote blog posts by people with high reputation scores because they typically earns a higher payout that than those with less reputation.
Down Voting
This is a touchy topic. Next to each post is [-] symbol. Click on this to down vote a post. However, you must be ready for retaliation.
Most people will down vote a post then not leave a reason why they down voted the post. This can be frustrating to the author. Because down voting reduces the overall payout for the post (for the author and curators) and lowers the author's reputation score.
I very, very, rarely down vote a post. But when I do, I always leave a reason why I down voted the post in a comment.
I hope that answers your questions.
I am thinking about writing an update to this blog post after I work out a new Power Down system that gives me an active income and steadily increases my STEEM Power.
Have a great weekend!
Steem on,
Mike
Thank you! You seem very knowledgeable so please excuse me for not letting you go so easily :)
First, I'm not sure I understand the concept of "curation". It's being used in the whitepaper as well. What do you mean by "you curated the post"? What does it imply: voting, commenting, both (with AND), something else?
I hope they don't bring advertisments on Steemit, it would ruin it for me
Down voting: I don't see no [-] sign next to a post ... when there is one (next to comments) hovering the mouse above it says "Collapse/Expand". I do see a "flag" sign though - maybe that is the downvoting? Flagging content as inappropriate ?
Thanks
P.S. Would it be too much asking that you read one of my articles, see if you like it, maybe ? I did work to write them and I am pretty proud of them and a bit frustrated that nobody seems to care ... :)
Curating
Depending on the amount of STEEM Power you have, you do not want to upvote a post before it is at least 30 minutes old. (This rule may change to 15 minutes with the next STEEM blockchain hard fork.)
The rewards you see on a post is split 75/25 between the author and curators.
Curation also depends on your voting power. I do not generally let it fall below 90%.
You can monitor that from the following tool:
https://www.steemworld.org/@sorin.cristescu
Curators of a post share in the curation reward (25% of the payout) based on voting power and STEEM Power at the time of the upvote.
Down votes do not earn anything for the curator.
Down Voting Flag
You are correct. The flag is for down voting.
I have seen flagging (or down voting) used when a person uses inappropriate tags on their post. For example, an author sees that posts using the #photography tag get high payouts on average. So the author uses the #photography tag on a post that has nothing to do with photography. Flagging the post and letting the author know that use of the photography tag was not correct for the post is an appropriate use of down voting. Please note, this was only an example.
I have a bit of voting power to spare right now, so I will take a look at your blog.
Steem on,
Mike
Ok, I thought all of the current revenues are interrupted while powering down... So I'm wrong, for good 😉
Great man!
Thankyou for sharing @etcmike
Thanks for breaking this down, that was useful to read. I didn't think about accounting for inflation when calculating Steem Power and planning for the future - I'll have to start doing that.
Thanks for such informative article. It's very useful.
I have upvoted and have followed you)
You have done a really great planning for your retirement. I also started powering down and now focusing to buy some other cryptocurrencies with it. Is this the wise decision?
My recent power downs have gone into other cryptocurrencies like BTC, LTC, and ETH.
I did cash out some cryptocurrencies to pay for replacing my window (broken by a golf ball) and to buy a new computer (that I setup over the weekend).
I used my ETH to buy some tokens. Earlier this morning I bought into another ICO using my ETH.
Lots of opportunities out there. And it all started for me by investing in STEEM Power. SteemIt has be very good for me. And I will continue to look for ways to support the SteemIt community.
Have a great week!
Steem on,
Mike
As I am very new to this ICOs thing but I am doing mining with genesis since last three years and it has been nice. I read your blogs very frequently to increase my knowledge about these thing. Thanx a lot buddy for guiding me. You are helping a lot of people here.
Thank you! I enjoy helping people.
Have a great week!
Steem on,
Mike
You are welcome dear. Do not forget to check my latest posts as always you do. Take care of you buddy. My positive vibrations are with you.
looking at your analysis of the future of steemit, I am very confident and hope to make a positive contribution to this Steemit Community. Thank you master @etcmike.
Looking for positive ways to contribute to people (the SteemIt community) is always a worthwhile pursuit.
Thank you for your continued support!!!
Have a great week!
Steem on,
Mike
wow nice post I like it, I will support you,upvoted
Very good planning for retirement friend a big thumbs up from my side
Thank you!
Have a great week!
Steem on,
Mike
You are welcome friend
This article very useful for me as newcomer in steemit. Thanks sir @etcmike
Permit, Resteem your article.