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What's the difference between Investing and Trading?
- Differences of investments and independent trading
- Which “Investment” suits you?
- Would you rather Investment or Independent Trading?
- How to properly manage your savings?
- Start your online investment today
Differences of investments and independent trading
After getting acquainted with Forex and other financial markets, many people get the idea to simply run trading activities or invest in certain products themselves.
This is an interesting and complex question with a much debated answer.
In this article, we are going to explain all the ways in which you can increase your capital within the scope of two groups: investments and independent trading.
See the list of Forex and CFD brokers
Which “Ideal Investment” suits you?
The first group is quite broad and includes many different options.
So, how can you determine which one is suitable for you?
The answer lies in the following:
- Your financial capabilities
- The amount of time you can devote to our financial activity
- Your experience and expertise in the world of finance
- Your character, life values and principles
These four components form our individual opinion on “ideal” investments.
Let’s take a look at the first option.
1. Investments in gold and precious coins
Precious and investment coins, as well as gold bullion, will always be of value.
Precisely for that reason, investing in precious metals is one of the most popular types of investments.
It is important to keep in mind however, that coins and bullion is long-term investments.
Their value grows slowly and steadily.
The shortest position on the market is from one to three years.
Consequently, these types of investments are suitable for those who like to develop long-term strategies and invest in the future.
Investment coins are manufactured from precious metals and issued by the banks.
There are different types: gold, silver, platinum, palladium.
Their main difference from collection coins is in the number of copies issued (more investment coins are issued than collection coins).
They are not classified as goods; thus, you can conduct all transactions with them tax free.
Finally, another reason why investment in coins and gold bullion is beneficial lies in the fact that your investments are insured against inflation.
Furthermore, coins and bullion are easy to store and transport.
In order to receive a decent yield, you will have to be patient and wait for the right opportunity to present itself.
How to invest in Gold and Silver online?
Now let us consider other interesting options.
2. Investment in real estate
Investment in real estate is a great alternative to any other type of investment.
It is one of the most reliable, proven, and profitable types of capital investments.
While we consider it to be long-term, it is important to note that you can easily return your invested savings by leasing the real estate or by reselling it.
3. Trusts
The Forex market can be rather cruel and unforgiving of mistakes.
According to statistics, eight out of ten traders leave the market empty-handed.
For this reason this market does not tolerate a frivolous approach.
While there are some professional traders who are offer their services as money managers, it is important for you to remember that there is the downside that you will have to share your profit with the manager.
One of the examples of a trust is a PAMM (Percentage Allocation Management Module) account.
PAMM allows a trader to manage several investors’ funds using a single account.
All profits and losses are allocated between the managed accounts proportionally, according to the offer.
Profit is allocated on the completion of the trading interval, which is also specified in the offer.
As a rule, any investment has a waiting period.
Similar to the case of gold bars, the waiting period can last anything from one month to decades.
However, this may suit you if you like to calculate your moves in advance and if you are looking into long-term investments.
So now that you are more familiar with investments, let’s explore how you can set up your independent trading.
See the list of Forex and CFD brokers
4. Foreign Exchange
Trading in Forex is probably one of the best examples of independent trading.
The only things you can’t do without, if you want to be a successful trader, are basic trading knowledge and methods to plan your financial operations.
There are many variations of technical analysis; however it’s also important to see the big picture.
5. Derivatives market
It is a well-known fact that Forex works only with a few dozen currency pairs, whereas the derivatives market (which includes futures and options contracts) lists over 500 different contracts.
The main advantages of the derivatives market include low broker and deposit fees.
In other words, in this market you can start with a smaller investment than in the securities market.
It also needs to be pointed out that this market is controlled by the government and other institutions which ensures transparency.
What’s the difference of Futures and Forex?
Would you rather Investment or Independent Trading?
To summarize, there are two distinct ways of growing your capital:
- Investment
- Independent trading
The main conclusion to draw is that the first option suits people who routinely make long-term plans, while Forex is more appropriate for fast and dynamic people who want substantial returns in a short period of time.
Now it’s up to you to figure out which options suit you the best.
In time, you’ll find your own way of doings things and achieve the results that you could never have imagined were possible such as doubling or tripling your investments in a relatively short period of time.
Nonetheless you cannot ignore the risks.
This market is as attractive as it can be unforgiving.
Any mistake, however small, can result in the loss of your funds.
This is why traders require patience, intuition and the ability to be in control their emotions.
See the list of Forex and CFD brokers
How to properly manage your savings?
There are lots of ways to earn money in the modern world.
Some people work a day job, others have inherited fortunes from their parents.
Then there are entrepreneurs, Forex traders, and even lottery winners.
However, when it comes to growing your wealth – it’s not that simple. Why?
Because only a few people know how to properly manage their funds.
The knowledge of making your money work for you is not intrinsic, however that doesn’t mean it can’t be mastered.
The secret lies in an thriftier approach to life and being smart with your needs and wants.
In this article, we’re also going to talk about the proper way of managing your savings.
Why people are saving money first of all?
Saving up is akin to being on a diet – not everyone can pull it off, but once it’s a part of your lifestyle, you can enjoy so many benefits.
People often think, “Why would I want to save up? Life is too short, why not live it today!”.
In order to answer this question, let’s take a look at the most common reasons why people do save up.
1. Saving for the rough times
This type of saving is particularly common with Russian expatriates, which can be quite understandable considering their Soviet Union background.
Retirees also tend to keep certain savings.
In case of unexpected financial problems, it would help them stay afloat.
Thus, we see that there is a group of people who save up to insure their well-being against unforeseen situations.
There is also a view that one should not save up for a rainy day because negative thoughts often grow into negative events.
In other words, focusing on the problems causes them to manifest into real life.
2. Goal-oriented saving
This type of saving appears in a variety of ways.
A good example can be saving up for a specific goal such as paying for college tuition, purchasing real estate, vacationing overseas, etc.
In this case you know what you want and you’re going to do whatever it takes to get it.
It may seem strange but the very thought of setting your money aside on a project may cause resentment.
Usually the more savings you have, the more difficult it is to suppress it.
However, you must remember that you are not just cutting yourself short on cash but rather placing the groundwork for your future prosperity.
How to invest your savings smartly
So we’ve gone over the reasons why people like to save up.
Now let’s review the actual methods that they use.
1. Divvy it out
Some are of the opinion that it is a lot easier to manage their finances when their cash is budgeted.
This way you surely know where your expenses go. Some of the common budgeting categories include utility bills, car gasoline, food, etc.
It is easy to determine the average amount you spend on these items.
This allows you to leave a certain amount for entertainment, vacation, or shopping.
2. 10% periodic allocations
This is a very common method all throughout the world.
All you need to do is take 10% of your income and save it, for example, by depositing it into your bank account.
See the list of Forex and CFD brokers
Start your online investment today
Remember that it doesn’t matter how rich you are – you still need to be responsible with your money and keep track of your expenses.
That doesn’t mean becoming a wealthy scrooge who counts every penny, but you have to have a clear view of where your finances go.
There are a lot of applications for cell phones and computers that will help with managing your money.
However, we can’t stress enough that the really important thing is to keep a close eye on your expenses.
That’s why Hercules.Finance company introduces professional money management services to its clients, such as portfolio management, trust management, long-term investments, etc.
You don’t want to let your money sit idly when we can make it work for you.
Don’t miss your chance to set up a flow of passive income, and don’t limit yourself to the traditional approach to saving up.
Let yourself have a new standard of life because you deserve it.
