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The Maths of Realism: How Smart Investment Can Multiply Your Income

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We all want to earn more money. If we haven’t got much, we want more. Even if we have plenty, the more money we have coming in the more options we have in life. It is this desire for more cash that get rich quick schemes exploit.

You’re never going to have to look far for systems and programs offering you the chance to “make $$$ in a hurry.” The fact that they are using dollar signs can usually be enough to make you doubt their claims. But more than that, anything that suggests a “get rich quick” avenue can usually be ignored. If it was that easy, who would bother leaving their home and family each day to go to work?

There are opportunities to make more money. There are options that do not require taking a second job and killing more of your time. It’s just not necessarily going to be “quick” and it’s not going to be easy. But if you learn to invest your money smartly, then you can multiply your income rather than just adding to it incrementally.

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Investing In The Stock Market

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You don’t have to spend too long reading the financial section of a newspaper to find out about people who have made millions on the stock market. Never mind millions, there are some people making billions. So, the question has to be “why aren’t we all giving that a go?”, right? Well…

 

The truth is, as with anything financial, it’s really not as simple as we’d like it to be. We’d all like a list of instructions, 1-2-3, which if we followed it correctly led to success. Then you look at the stock information in the newspaper, and it isn’t simple. Incomprehensible lists of letters and numbers that could mean anything, to the novice.

 

And then there are those line graphs. All those rises and falls. It looks like a cross-section of a hazardous mountain range. It’s dizzying enough looking at it when you don’t have money on the line. Why would anyone want to put their own money on something so uncertain?

 

The answer brings us back to the whole idea of “getting rich quick”. Unless you have some uncanny insight into what’s going to happen to a stock, you’re not going to make a lot in a quick hit. Not if you’re not going to get into insider trading, which is illegal.

 

But if you play it calm, buy when a stock is down and then sell when you’ve got some profit, you can make a steady income. Especially if you diversify your stock and reinvest when that fall seems to have bottomed out.

 

The key to stock market investment is simply not to see it as a short game. Look at it in the context of years, even decades. You can’t react to every fall in your stock portfolio as though it’s Armageddon. Stocks will rise and fall in the short term. Over the long, though, they generally grow.

 

So what’s the difference between investing in stocks, and just putting that money in a high-interest account? Remember when I mentioned selling when it’s high and buying again when it’s low? If you time that right, you’ll make a great deal of money. You just need to remember to keep a keen eye on the markets. Don’t treat it as passive income. You’ll get used to the rhythm of things in good time.

 

Forex Investment (or FX for short)

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Forex, or foreign exchange, is a common way to invest that is becoming more popular among home traders. The simplest definition is that you use one currency (usually, in your case, dollars. Not “$$$”!) to “buy” another. When the currency you have bought reaches a high level, you sell for a profit.

 

One reason that Forex is more popular with part-time investors is that it’s relatively simple. Dozens of factors can affect the share price of a stock, and you need to be well-informed on the industry to make it work. Once you’ve chosen your Forex broker, you just need to pay attention to the currency you’ve bought.

 

The main thing that you need to be aware of is the politics and the economies of various countries. So if you’ve used your dollars to buy South Korean won, for example, follow Korean politics closely. When are they having an election? How do the polls affect the strength of the won? What’s going on in surrounding countries?

 

Now, as much as Forex is – generally – a simpler thing, we’re not living in simple times. It is being argued that we are living in politically tumultuous times. This will be a pivotal year in deciding the future path of much of our planet. That doesn’t mean don’t get into Forex this year, but it does mean “get all the information you can”.

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Another piece of advice often given to Forex beginners is that you should always put a “stop loss” in your trades. When you first set a trade, you know the value can go up as well as down. With a stop loss, if it goes beyond a certain point, you can automatically come out of the trade. It stops you wasting more money chasing a failing trade.

 

Setting a stop loss is always important for beginners, who are more at risk from letting their emotions cloud judgment. It is all the more important during a time in which, as we have seen, the world is in a period of uncertainty. Markets can drop very quickly off the back of an unexpected election result or a terrorist attack.

 

You don’t need to be a city banker or a hedge fund manager to make money on the markets. They trade millions of dollars often in the space of a minute, can win or lose big every day. You ought to have more modest goals to begin with. But if you can get on top of your trading strategy, then you may well find a way of not just adding to your earnings, but multiplying them.

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