F.I.R.E - Staking Strategy?

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26 Mar 2022
165

Passive income has long been the goal for people working towards F.I.R.E.

For those that don't know F.I.R.E stands for it means, Financial Independence, Retire Early. It follows a philosophy of making sacrifices on spending habits now, investing heavily and relying on passive income to cover expenses in early retirement.

These passive income strategies had long been directed at index funds, or ETFs that track a specific diversified market. Then receiving regular dividend payments from these investments to cover living expenses.

Given the recent rise of Staking cryptocurrencies and earning daily rewards for doing so. Is this something that could be considered as an additional investment strategy for passive income?

Crypto Volatility: Crypto is extremely volatile, therefore giving big price fluctuations. A "Blue chip" crypto like ETH may have less volatility than an Alt Coin like AXS.

The high rewards rates: Currently you can stake MATIC and earn 12%APY through Swyftx, with daily rewards received. This is a lot higher than some 3-4% dividend yields.

The Payout Frequency: Dividends often get paid out either quarterly, or bi-annually in Australia. Whereas with Staking you get rewarded daily. This frequency may be more suitable for cash flow management.

While I really love what Crypto is doing, I certainly won't switch my entire portfolio to Crypto. However, staking is extremely valuable and something I have added to my portfolio and strategy. With the goal of this helping get to F.I.R.E a lot sooner.

Is Staking something you would consider on your F.I.R.E Journey? Let me know your thoughts below.

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6 Comments

B
MBA ChitChat
Cryto staking could be one of the investment options that people should consider when inflation is high. But volatility and security is still an issue for investment. People still worry about getting their return wiped out by a swift correction or storing the cryto safely.
Napes
Passive income is a great strategy and it is important to incorporate a persons risk appetite and tolerance to volatility. In retirement stability is key, as a persons ability to recover without a regular income is impacted
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