The short life-span of annual fish is probably their biggest disadvantage, if you don't breed them, you soon won't have them! On the plus side the dry period the eggs go through allows their easy transportation around the world, and means (to a limited extent) you can hatch them when you want.
Even though many species of annual fish have predictable incubation periods, there can be wide variation, and the only way to be sure that your eggs are ready is to examine them. This is the egg of a Nothobranchius (in this case melanospilis, magnification 25x)- the eye can be clearly seen with its golden iris. This is the best sign that they are ready to hatch. Sometimes the eggs are not visible; in this case wetting the peat is the only way to find out whether the eggs are ready. On rare occasions the eggs can develop in only a few weeks; this often happens with newly collected species, but there have even been cases of fish that have been in the hobby for decades still producing a few eggs that develop very quickly.
When the eggs are ready to hatch place them with the peat into a container with a couple inches of water. It is important that this water has a high oxygen content, so keep it cool (16-20°c) and shallow to start with and add gentle aeration. A high level of oxygen will ensure that all fry are able to fill their swimbladders and maintain buoyancy. Fish that fail to do this are known as belly sliders.
After a day or two the fry can be moved to larger quarters, either by spooning them out, or sucking them up using a baster or large pipette. The fry can be raised most easily in a large tank, shallow at first, which is gradually topped up. Try and include a few snails, to eat up uneaten food, and a few plants to keep the water clean and encourage infusoria. This can be accomplished in several smaller tanks. Even with very frequent water changes it is very hard to raise more than a handful of these fish in a single small tank. As the fish grow the largest start to dominate and should be separated. these are generally males, and will out-compete some of the smaller (often female) fish. If well fed, many Nothobranchius will be fully coloured and breeding several weeks from hatching.