Are you looking forward to becoming an investor? Do you think you need an extra stream of income and that your regular job just does not cut it? If that’s the case, you are not the only one. Millions of people around the world feel that way every single day. They want to believe in their talent and skills to start investing in stocks, currencies, commodities, real estate, etc. and earn an easy livelihood that keeps them afloat even after their retirements. In most cases, regular jobs are only enough for people to make ends meet.
When it comes to enjoying even the most basic luxuries of life, they just cannot seem to do it in the amount of money they make every month. There is a reason why pre-owned and used stuff makes up such a huge market. People would not buy used stuff if they were all filthy rich. Now, if you have made up your mind to become an investor, you have to pay attention to a lot of things. Let’s start with the basic idea of why you need to invest in XTRgate.net. After that, we will transition into different types of investments and the many misconceptions associated with them.
Why Investing Is Important
There are many reasons for someone to invest their money. Some of the most common motives behind money investment are as follows.
● Making a Lot of Money
One of the first wishes that almost every human has is that he/she wants to make a lot of money. When you have money, you can afford a lot of things that make your life seem complete and comfortable. It is wrong to say that money cannot buy happiness. Yes, you can definitely say that money cannot buy all types of happiness, but in many cases, money can buy happiness. Think about buying your first house or gifting one to your parents? Think about taking your wife to an exotic destination to spend a few weeks together. All of these things can only be afforded when you have money.
In a similar manner, you can only help your society, community, country, and humanity when you have a lot of money. If you want to help the poor, you have to have money to spend on them, which you don’t have when you are hardly making your both ends meet.
● Living a Comfortable Post-retirement Life
In some cases, people think about investing their money quite late in life. When you are young and free, you can’t seem to be bothered about thinking about stuff like retirement and savings. You think life is pretty comfortable already and the thoughts of not spending money only to save it for later do not make sense to you. However, most people learn it the hard way. They only realize the importance of savings when they are close to their retirements. At that time, they have to look for some way to invest their money. They know that savings are not enough.
Savings are usually not enough because that’s just money you are saving. It is not increasing by any means. While it sits there in your savings account, inflation continues to eat it away. By the time you withdraw your life’s savings, the value of the saved money has diminished significantly. The only way to multiply the money you already have is an investment.
● A Test of Potential
Believe it or not, some people invest money only to see their potential. They already have a lot of money that they have made through other means. Perhaps, they had inherited a business from their fathers or in other cases, they were just too good with saving money and shrinking expenses. However, they invest their money because they want to see how much potential they have in them of making more money. There are many ways for them to invest their hard earned cash. They can either start their own venture or invest money in other ventures started by other passionate entrepreneurs.
Different Markets to Invest In
When you have made up your mind about investing your money, you have to look at the many different types of markets that are available. You have to pick the market that best resonates with your interests. If stocks do not make sense to you, there is no need to invest your money in stocks. If forex currency pairs have always fascinated you and you understand a bit, there is no reason why you should hold yourself back from investing money in forex. Let’s take a look at some financial markets that you can invest your money in.
● Real Estate
This is one of the most lucrative markets out there for any type of investor. All the homes, buildings, and land you see around you is a part of this industry. Real estate involves the buying and purchasing of lands, plots, commercial buildings, residential buildings, homes, rental apartments, etc. for the purpose of making money. As a real estate investor, you have many ways to invest your money. You can buy a piece of land and wait for commercial or residential buyers. You can buy a house and rent it out of rental income. You can buy a house in poor condition, fix it within a few months, and sell it for profit. This type of investment is called property flipping.
You do have to keep in mind that investing in real estate does not always mean that you will be the sole owner of a particular property. There are other types of investments as well. For example, you can consider investing through REITs. Think of them as companies that take care of various real estate properties. These real estate properties can be commercial or residential in nature. The company generates a lot of income from these properties in a variety of ways. Since you are investing in REITs, you get a part of what the company makes. In short, you earn dividends when you invest in real estate in this manner.
You can also consider real estate mutual funds, which are quite similar to what REITs are but different in the way that there are not companies involved. Many investors will gather in one place, collect money in an account and appoint a manager who will take care of the investments for them. Just so you know, you can also invest in real estate without buying any properties i.e. you should consider ETFs that centered around real estate investment trusts.
Forex stands for foreign exchange. This is perhaps the most straightforward way of investing your money, but it does require some training and learning. Do not listen to the people who make it seem as though forex investments are the easiest forms of investments and require no efforts. While it might be an easy way to invest money, it is not as easy as you think. Not to mention, there are many different ways for you to invest in foreign exchange. First of all, you have to know the concept of this type of trading.
Forex trading is all about trading one currency for another currency. You expect the value of a particular currency to move in a particular direction. You enter the trade based on that prediction and make money from that. You can invest in currency pairs through CFDs as well. In addition to that, you have options trading, wherein you simply predict the price of a particular currency. You will be surprised to know that in this type of trading, you do not even have to buy a particular currency pair. You just have to predict the price of a currency pair and wait for it to move in that direction.
● Stock Trading
This is probably the most traditional form of trading methods available in the world today. Stocks have been traded for several years and they are also quite straightforward. However, you have to realize that people have been trading different types of stocks for decades, and so they understand this market more than you. If you are just jumping in this market, you should wait for some time, sign up with an online broker, go through proper training, and then start trading. You will even get demonstration accounts, in which you can learn trading with dummy money.
Stocks are the shares of companies from around the world. These companies issue their shares to the public and the value of the shares continue to move up and down based on economic conditions, political scenarios, and the performance of the company. You have more than one way available to you for trading stocks. In the traditional method of trading, you have to own the stock to trade it. You either have to buy the stock or sell the one you have when the date of your trade expires. There is long and short term stock trading as well depending on the duration for which you continue to hold on to the stocks you have purchased.
Now, some other ways of investing in stocks are ETF trading, CFD trading, etc. Take the example of CFD trading in which you only trade the value of the stock through a contract. You purchase and sell this contract to make money in the form of profits. However, you never own the stock in whose name you are buying and selling the contract. In this form of trading, you can also enjoy leverages from the broker you have signed up with. Leverage is the contribution that comes from your broker, usually in the form of a ratio. For example, you will see that your broker is offering you leverage of 1:50, which means the broker will invest $50 for every $1 you invest in a trade.
● Cryptocurrency Trading
This is the latest form of trading but works a lot like forex and stock trading. There are two ways for you to invest in cryptocurrencies. You can decide the route based on the amount of money you have. Keep in mind that cryptocurrencies have huge values. You cannot purchase them with your fiat currency if you are not a millionaire already. Keep in mind that at the time of writing this, one Bitcoin is equal to more than 7500 USD. You can imagine the amount of money you will have to spend if you wish to trade bitcoin or any other cryptocurrency that has a high value.
Now, you can trade cryptocurrencies in the form of CFDs as well, so you do not have to own the currency but only trade a contract that carries its value. This type of trading is very famous these days and you will find hundreds of online brokers that are specifically allowing cryptocurrency trading to traders from around the world. The other method of trading is you visiting an online exchange, spending your fiat currency, and getting a cryptocurrency in return. As time passes, more and more options are being introduced for you to buy cryptocurrencies. Just two years back, you could not have thought of buying Bitcoin or any other cryptocurrency with credit cards.
Things have changed quite a lot these days. You can now use your credit card to buy cryptocurrencies. Do keep in mind that the exchange you are buying the money from will keep a small amount of money in the form of spread or a commission when you trade.
Different Ways of Investing Money
There are different ways for you to invest your money. In every method, you enjoy a different level of control over your investments. Let’s take a look at the basics of a few methods.
● Buy a Tangible Asset to Sell Later
You can invest your money in buying a tangible asset to sell it later. Of course, you are going to buy an asset whose price you are expecting to increase in the coming days. The most basic form of this type of investment is people buying gold. Gold remains a very strong contender in financial markets. You buy it today, and sell it a few years later for profit. You can do the same for a house or a piece of land. You are doing the same in traditional stock trading as well.
● Buy an Asset to Rent Out
You can buy an asset to rent it out for someone else to use. You can do it with residential properties and commercial buildings. You can even rent your land to a business and never sell it. Or, you can build a huge complex with lots of apartments and rent them out to tenants.
● Let Someone Else Manage Your Investment
You can let someone else manage your investments for you. In this type of investment, the person either does not have time to be busy in learning various assets and how they work, or does not find interest in learning all of that. For example, when you trade with online brokers, you can choose from investment accounts as well, in which you let the broker manage your investments. You can do the same with real estate as well. In this model, you hire a property management company to do all the property management for you.
This is a new form of investment and works for just about any type of market today. You can buy real estate properties through crowdfunding. There are many online websites that let you invest based on this model. You can even invest in new businesses through crowdfunding for small profits.
Misconceptions about Investing
There are certain misconceptions about investments that you have to keep at bay if you want to be a successful investor.
- Some people believe that you need a lot of money to be an investor. You will be surprised to know that this statement is completely false. In fact, you can start your trading account with an online forex broker or a cryptocurrency broker with as little as $250. In a similar way, you can start your dropshipping business from the comfort of your home without spending more than a $1000.
- Another misconception is that experienced investors who are already trading in markets will never let you make any place. Well, are these people implying that these experienced investors came into the world as experienced investors? Of course, these experienced individuals, too, must have started fresh at some point. Not to mention, you can let online brokers take control of your trades for you. In that case, you invest the money, and an expert does the job for you.
- You will find a lot of people who tell you that investing money is a complicated game. They will try to show you difficult equations and formulas just to prove their point. Well, the reality is quite the opposite. There is no doubt that some forms of investments are very complicated, but you don’t have to go for them. You can invest your money in a small business in your locality. Or, you could buy a few crypto coins today and hold on to them for future use. Imagine if you had bought only 2 or 3 bitcoins when its price was less than a dollar’s price, you would be sitting on thousands of dollars.
- Volatility is often the monster that people try to scare you with when you try to invest in cryptocurrency markets. Believe it or not, volatility is your enemy only when you don’t pay attention to details. If you have done proper analyses, you can make more money in a day from a volatile market that you can’t in a week with a non-volatile market.
Things to Avoid as a New Investor
Here are some things you have to avoid as a new investor.
● Letting Your Emotions Control You
The biggest mistake you can ever make as an investor is letting your emotions control you. Your emotions will push you to the wrong side. They will either make you spend too much money or stop you from spending at all. If emotions are often your enemy, let someone else manage your trades for you. Do not ever trade out of emotions.
● Cryptocurrency Trading Scams
This needs to be brought in your knowledge because if you are a fresh investor in 2020, you will definitely come across these scammers. They are everywhere on the internet. They tell you that you can sign up with an automated bot by spending just $250 and make thousands of dollars every day. They usually ask you to sit back and relax while the bot trades for you. These are lies that you must not believe in.
● Going in Alone
Why do you have to go alone on a journey when there are so many people who can join you? Believe it or not, even if you have the most unique idea of a business in your mind, there are thousands of other people on the other side of the world thinking of the same idea. You just have to find a way to connect with the right people who not only share your vision and idea, but also share your passion for something.
● Putting All Your Eggs in One Basket
When you are a new investor, you do not know a lot about how markets work. You understand a particular type of investment, and that’s when you think it is okay to keep investing in that market. That’s a wrong move. You must always find a way to diversify your investments. Invest in a variety of ventures so you do not lose all your money when one goes down. For this particular reason, a lot of people opt for CFD trading because this type of trading allows them to invest in many different types of asset classes from the same platform.
The most important thing you have to know about investment is that it requires a bit heart and the will to take risk. You can never be a great investor if you don’t know how to take risks. The only key to be a successful investor is to face those risks while taking every measure to minimize them. In a nutshell, investment is all about minimizing your risks and maximizing your profits.