PoS chains have bigger possible growth for your funds. If you stake (in the case of Tezos, it’s called “Baking”, instead of staking), you fixate your coins in service of the blockchain and get rewards for doing so. In the case of Tezos, you can also “delegate” your coins. This means that someone else is doing the actual baking for you, and in return gets some % of your gains. The advantage is that you don’t need any equipment or skills, and your computer does not need to be turned on while you still earn extra gains: you don’t need to do any of the work. So for people holding coins in a PoS chain, the incentive to hold is bigger. Holding, means increasing your stack of coins. Look at PoW chains: miners want to pay the bills and thus will always be selling part of their gains. But for Tezos bakers, keeping new gains in your baking address will give you gains over your gains. So PoS = less selling pressure = bigger possible growth in value.

For Tezos the gains you make by delegating or baking is about 5.5% per year. So if you hold 1000 XTZ, in a year, that would be about 1055 XTZ. Since Tezos is expected to do well and gain in $ value, your future gains that you make by baking, or delegating your coins, are expected to be over 5.5% of what you invest today in $ value. As an example: investing $1000.- today, will get you about 775 XTZ. Baking or delegating that for a year, will get you about 43 XTZ. While the % of gains in your amount of XTZ will remain the same 5.5%, if XTZ gains in value, so will your % in $ value. If XTZ doubles in $ value, that 43 XTZ will be worth $110,- instead of $55,-, which means a return of 11% instead of 5.5%. Now compare that to other investments that give you a return besides the value increasement. Look at real estate. When real estate value rises, your return in rental income doesn’t increases with the same percentage. Investing in a successful PoS chain is more lucrative than investing in real estate.

Since baking is way more complicated than delegating, I’d advice to simply delegate your XTZ coins. In contrast to baking, you can still spent your delegated XTZ at any time without any limit. (Although your incentive to just hold is bigger then with PoW coins, since you will make these extra gains by simply holding.) Delegating is done in a matter of minutes.

If you want to delegate your XTZ, you need to create a KT1 address on your wallet and sent your XTZ to that address. Most wallets have an easy to follow tutorial. Personally I like Galleon, but there are several wallets obviously. Galleon wallet tutorial here. Once you have your kt1 address, you can keep adding XTZ to that address. Pay attention and check if your delegator still has capacity though, or your newly added XTZ won’t make any % (more about that later).

Before you delegate, you need to select a baker. Then you can go to https://mytezosbaker.com or https://baking-bad.org and selected a delegation service (baker). You want one that is efficient and asks a low fee.

A while later you can see on https://baking-bad.org that yout KT1 address is added to the info of the baker you chose.

Reviewing Bakers: On https://mytezosbaker.com you can easily see the Fee% any Baker will take. Also you can see the efficiency and capacity, which are all important factors to consider. Especially make sure your baker has enough capacity to take and bake your added funds. Their capacity is limited and they can't exceed that limit. So if you add your funds, but a baker can't use it, he won't be paying you any % for that surplus amount. (This will only affect you, the funds that is already delegated will be payed % as usual.) A good practice would be to contact the baker before you delegate. (Some have telegram or twitter) Sometimes the capacity of a baker that is shown at mytezosbaker.com isn’t 100% accurate.

As to when you start earning rewards: Based on the Tezos protocol’s current economic rules, newly made delegations take 7 cycles (~ 20 days) to start generating rewards. All rewards generated in a cycle are frozen for additional 5 cycles (~ 14 days). This means that first payments are made 12 cycles (~ 34 days) after you delegated.

You will need to wait that initial period to be able to see if your baker is giving you the correct amount of rewards and if he’s efficient enough.

Rewards for delegating:

The payout accuracy at https://baking-bad.org is set at 0.000001 xtz. If a baker pays you more or less or he's rounding the rewards payment then he won't have the awesome tag.

If you want to check your reward information directly on the blockchain, you can use tzscan.io and go under the reward tab of your KT address and the reward tab of your baker to see how much reward you will be getting.