Are you a an active trader for money? In other words do you do your trading with stocks and bonds are have you moved on to the Forex market. If you are making money trading money or are interested in doing so watch the following video on Forex Trading and leave your comments after the article regarding some good tips when looking to get into the Forex market.
Hope you enjoy this article about the money you can make trading Forex. I encourage you to leave your comments at the end.
If you find that after you have read the following article pertaining to tips to help you start your investment now, that you have something to contribute. Please share your thoughts with a comment at the end.
You want to start investing but you cannot find time for analysis and education about investing. If you want to start with investing you should certainly find some time, but in the mean time, here is what you could do right now.
1. Eliminate your debt
Eliminating debt is not a classic example of investing. But I think that should look on paying credit card debts as a kind of investment. The reason for that is the fact that average credit rates is 14% annually. You will have to try really hard to beat 14%, and not to mention that it can be much higher, up to 20 or more percent. Keep in mind that average return rate on US stock market is about 10.5%. Therefore, if you have $100 in your pocket, and you don’t need that money too much, go right now and payout your debt even if it is a small part.
If you have several credit cards, than you should pay out the one with the greatest rate. For example, let’s say that you have three credit cards: the Credit card A with $1000 of debt and 15% rate, the Credit card B with $3000 of debt and 16% rate and the Credit card C with $200 of debt and 18% rate. You should payout the debt on the Credit card C first, and then start paying out debt on the Credit card B.
There is another hint that is general in life: Simplify. That means that you should tend to eliminate number of credit cards in the game. The reason is that you cannot maintain a long list of credit cards. If you have ten credit cards, than there is 10 different debts, 10 different rates and each factor that could be specific is multiplied by 10. Therefore to track what is going on with your credit cards you should check at least 30 and more parameters. It takes time to find all necessary data. Also, if something is too complicated that would lead you not to do it. And not tracking your credit cards is very dangerous.
Does it mean that you should not have any credit card? Yes, almost any credit card generates some expenses even if you don’t have any debt on it. It is much better to have cash instead of debt. On the other hand, life is full of unexpected events, so some kind of cushion in the case of emergency is certainly necessary. So what should you do? Eliminate all your credit cards and take one with the smallest rate and smallest yearly fee. And don’t use it.
2. Quit with smoking and junk food
What does smoking have in common with investing? First of all smoking costs you. You can calculate how much money do you smoke each year relatively easy. Determine how many packs do you smoke each month, multiply that with 12 and with the price of a single pack. And that is not all. If you smoke there is a greater probability that you contract some kind of disease in life, and any disease, even not so dangerous will pull money out of your pockets in the form of medications and in the form of smaller income. And there is more. If you want to buy some insurance, smokers usually pay more for it.
What does junk food have in common with investing? More than you think. Junk food is almost as dangerous as smoking. Eating a lot of junk food leads to poor health and the same problem with money as smoking.
3. Track your expenses
Use your favorite spreadsheet program and start tracking your expenses. Keep it simple in order to be able to do it regularly. Amount, date, and category is enough for the start. The category is your classification of expenses. For example, gas, tires, broken windshield you could put in the car category. One category could be junk food, or eating out or something like that. For some time don’t do anything, just track expenses. After several month you will notice if you need some more categories or to tune your system up. Anyway after several month you could begin with analysis of tracked expenses, i.e. to sum them using your categories. Then you could act on it. For example you could change your car as it might be cheaper than to use existing one.
4. Find a blue chips that allows drip investing
What is he talking about? First of all, blue chips are very large and stable companies. Drip investing is a kind of investing where one could invest a small amount of money regularly. For example you could invest in Coca Cola as low as $10 per month. Ten bucks per month is certainly feasible for anyone. You don’t like Coca Cola? Try Pepsi! Or try Google with “drip stock list”.
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With so many options out there for the individual investor, it is sometimes difficult to determine which investments are right for you. The key to having a long-term, stable and profitable portfolio is to diversify your investments. For many investors the process of diversification includes investing in both mutual funds and stocks. The best course is to learn all you can about both types of investments and find your ideal balance between the two.
Mutual funds are open-end funds that are not listed for trading on a stock exchange. They are created by companies who use their capital to invest in other companies. Mutual funds will sell their own new shares to investors. Capitalization is not fixed and normally shares are issued as people want them.
Mutual funds have many appealing characteristics for investors. Mutual funds are professionally managed. The mutual funds employ professional managers to operate all investing. These professional managers bring with them many years of experience. They are experts in selecting and evaluating investments for the fund. The managers make all of the buying decisions and selling decisions which relieves the individual investors from that responsibility.
Another advantage of mutual funds is that most of their portfolios are highly diversified. This means that the mutual fund is invested in a wide variety of stocks. The advantage of diversification is that if a few stocks drop in price the entire fund will not be dramatically affected.
Diversification occurs by investing in many different companies. It can also be accomplished by investing in several different industries. The advantage of diversifying through mutual funds is that the funds can reach a wider diversification than can be reached by individual investors.
There are thousands of mutual funds to choose from. Depending on your preferences, you can choose to invest with a mutual fund that covers the whole market or with a fund that focuses on one or two industries. There are even mutual funds available that invest only in foreign markets. Mutual funds can be very convenient for the investor since the fund does all the record keeping. Your mutual fund will provide you with all the forms you need to file your taxes.
Additionally, many may offer perks such as the ability to write checks against the money market fund.
On the other hand, purchasing individual stocks has attractive features as well. After the brokerage fee is paid, there is no ongoing fee associate with owning individual stocks. This is in contrast to mutual funds which charge a participation fee. Mutual fund fees can totally negate the mutual fund return that you are expecting.
With investing in individual stocks, an investor has the ability to be very flexible with their investing and move with market if they so desire. Mutual funds are very stable but this also keeps them slow. Individual stock investments can be traded quickly if need be, and purchased just as quickly if the investor finds an undervalued stock.
With individual stock investing, an investor has a greater level of control over their investing. Although brokerage firms are involved there is the opportunity to be more hands on with the stock purchases. This level of involvement is impossible with mutual funds. Many investors like to know exactly where their money is going and this can be hard with a mutual fund that holds shares in 50 or more companies.
Investing in individual stocks allows the investor to have a larger relationship with the company they are investing in. This can create a sense of comfort for the investor because they know where their money is being used. They can track the activities of the company they have invested in and feel like a true part of that company.
Investing a mixture of mutual funds and individual stocks seems to the best method for a majority of investors. Those who do not want to take the time to research their stocks and would rather let an expert handle things are more comfortable with mutual funds. On the other end of the spectrum, those who want a greater level of participation with their investments will find individual stock investing attractive. As part of a long-term diversification strategy it may be best to look into both in the ratio that you are comfortable with.
About the Author
Randy G. Hutchings is an Online Marketer that been given reviews and written many articles about Online Scams in the Stock business and Online Mutual Funds. Know the Truth about Stock Trading and NOT the HYPE! http://www.blogging-things.com/online-stock-trading/
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