Can Leasing SP Make Me Money?
I get a lot of questions about whether or not leasing SP is good for building your Steemit account. I get the same question about whether they should delegate their SP to various groups, bid-bots, etc. There seems to be a ton of enthusiasm for the whole delegation thing, but surprisingly many people (even those involved in SP delegation and leasing) don't understand the numbers involved in what they are doing. It reminds me of when my mother invested in company because Uncle Darrel said it was great. She didn't know a damn thing about the company, what she might see in returns, etc. But Uncle Darrel said...
You know you can always count on me to tell you what I think even when you don't like it. So today and tomorrow I am going to post on SP Delegation. Today, we will talk about Leasing SP and tomorrow about Delegating Your SP. The following day I will do a post on how to actually go about doing both which will include a video walking you through the process.
Let's get BUSY! (shameless plug for my friends at busy.org - thanks for the upvotes folks)
Deciding if Leasing SP is Best for You
I lease SP. I have been doing it for just over a month now and I'm very excited about the results. If you look at my account (completely transparent Steemit), you will notice that I lease nearly 4500 SP. However, the month before I had delegated nearly all my SP. I wanted to see which method would generate the best results and, to be honest, at the time I didn't know what the hell I was doing. I was just so excited that I had enough SP to delegate! I wanted to try it out. Now I have seen the positives and negatives of both leasing and delegating SP.
Before you decide to do either, you need to understand what you're goals are here on Steemit and understand your level of commitment to managing your account. If you are unclear, then don't do either until you get clear. Otherwise, you might just be wasting your time, energy, money, investment or all of these.
Reasons to Lease SP
- Better (easier) ability to split your voting power if you are above 500 SP (slider bar).
- More voting power means you are more influential in the circles that you travel in or want to travel in.
- Ability to support more projects/communities that you are a member of or a fan of.
- More powerful upvote for your posts and comments.
- Better rewards for those that visit, comment and upvote your posts.
- Leveraging your Steem for all these things now instead of later.
- You believe that the market price for Steem is going to increase.
- Significant potential in building your Steemit account.
NOTE - If ANY of These 8 Things Appeal to YOU, Then You Should Look into Leasing SP
People Who Should Not Lease SP
- You believe that the market price of Steem will go in the shitter.
- You don't post at least 5 times a week.
- You don't comment at least 45 times a week.
- You don't get on Steem everyday for at least an hour.
- You don't have any Steem or money to buy Steem.
- You don't believe in upvoting your own posts and comments.
NOTE - If ANY of these 6 Situations Apply to You, then DON'T Lease any SP
How to Calculate the Benefits of Leasing SP
I'm going to use myself as an example because I can show you some marked improvement in my account over the last 30 days since I started leasing SP. Now keep in mind that a portion of that improvement can be attributed to other factors as well so I will give you some hard numbers that you can use in making a decision about leasing. This will be very honest, straight up, and unambiguous unlike many things on the Steemit platform.
Here goes. I leased over 4,000 SP a little over a month ago. At the time, the "vests" were valued less and the price of Steem was less than $3.00 USD, so I got a great bargain because all my upvotes were worth more during the last couple weeks than in the first couple weeks. Good news is that the price of Steem will likely stay about where it is or go up from here, so you didn't miss the boat.
It cost me 125 Steem roughly to renew those leases this week. My cost in USD was about $500.00.
The price for leasing steem for 4 weeks is about 36 SP per Steem. This number goes up and down slightly. Example - Jimbo wants to lease 500 SP, it will cost him 500 divided by 36 which equals approximately 14 Steem. Current price of Steem is about $4.00 USD so that is about $48 (let's say 50 to be safe). So you invest $50, you get to use the SP for 4 weeks. Then it goes away unless you want to renew that lease. Back to my story.
My cost - $500 USD
My leased SP - 4482.111 (you can verify this on Steemworld, my Steemit wallet will show 300 less because I delegate that to Qurator)
Current voting power of that SP is 1.12 STU at 100% voting.
In the slide below, I show the difference between spending my $500 USD on Steem and Powering Up versus Using my Steem to Lease SP. Take a look. Afterwards I will explain the numbers.
First, I show the value of my Voting Power (VP) by adding Steem to my SP by Powering Up and then the VP of leasing the SP with that Steem. Next, I show how much in STU I will get by self-voting 45 times each week for a month (about 60% of the time). For the Power Up scenario, this is 5.40 STU. For Leasing it is 201.60 STU. Then I breakdown the reward payouts for each in SBD and SP. Lastly, I convert the SBD and SP to a US dollar figure based on a Steem price of $4.00 and an SBD price of $3.5. What you see is that I nearly breakeven by leasing, but I DO lose money (about $22 USD).
So Jerry, why would I lease SP if I will lose money? Good question. The answer is that you won't lose money because none of this accounts for the compounding effect of your SP rewards or what you do with your SBD during the month like using upvoting services or bots, both of which I use. Every day, starting from 1 week after the lease, I started receiving that extra SP and SBD in payouts, I then use the SBD to buy more votes and my increased SP is added to my self votes. In the end of this last month, I was significantly ahead on my investment - At least 15% and probably more.
Keep in mind that I didn't even use 100% of the added SP to upvote my posts and comments. Had I used it ONLY to upvote myself the end result would have been - 313.6 STU for a month. That breaks down into 145.8 SBD and 39.2 SP for a total value in USD of $705.6, which is a 40% return on investment.
So before anyone starts screaming about how greedy I am by self-voting 60% (it was actually 51% because I got real generous at the end of the month), think about the fact that my $500 investment provided me an equal return plus some and it also financed upvotes for others especially #payitforward, 
Yes, like I've been saying to everyone since I started these series on Steemit Essentials and Steemit Strategies, helping yourself puts you in a position to help others. Therefore, I highly recommend leasing SP if you meet the above criteria. By leveraging my investment up front, I was able to increase my engagement with more people, upvote more content, explore more posts and authors, make more friends AND make a bigger impact on the communities that I'm involved with. The results are well worth my $500 and more.
But Jerry, I don't have $500. I totally understand, but can you invest $50 to lease 500 SP? If you can, you should do it now at least if you're really serious about building your Steemit account and making a serious go of this platform.
Additionally, the more people that buy Steem and invest in the platform, the more value that Steem has meaning your SP becomes more valuable down the road. Invest in the platform and invest in yourself. Then help others become successful on the platform so that we can all reap the benefits.
See you tomorrow.
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