How to become Rich: Retirement

Riches in retirement


If this is the first article that you're reading in the How to become Rich series then I encourage you to go back and read The Basics first.

This is the final part of the series How to become Rich. If you aren't a multimillionaire by this time or you're already in retirement and have just found this article, never fear. All is not lost! I can't promise that you're going to start making your millions but there are certainly things you can do to improve your finances. Plus, 60 is the new 40, right?!

I would note that if you're very comfortable in the lifestyle that you lead now then go ahead and carry on enjoying it! However, if you'd like to have more income, or grow more wealth for whatever personal reasons you may have then you may want to read on.

Part time job


You may consider yourself well enough to work. If so, why not get a part time job? If you don't need to depend on the income then why not try something that you enjoy doing. Give it a real go and put all your passion into it. For example, you may have had an idea for a business. Now is the time to try it! Using the internet, nowadays businesses can be started with fairly little money. Simply by creating a little traffic on a site can generate advertising revenues.


Financially proactive


As the section title suggests, if you aren't happy with what you have and want to generate more wealth then you're going to have to put in some effort, go out there and work at something.

Once retired, with more time available, utilize it, be proactive and create something, whether it be a business, art, developing a hobby.


Do you like what you've read? Tell your friends by sharing it with one of the buttons below. Please post this to Facebook or Tweet it to help your friends and family. Feel free to send me an email (mrmoneybanks<at>multimillionaireroad<dot>com), find me on twitter @millionairer0ad or comment. Whether good or bad, I want to hear from you all.

How to become Rich: Reaching retirement

Build wealth in retirement?


If this is the first article that you're reading in the How to become Rich series then I encourage you to go back and read The Basics first.

The person that fits into this category has few or no dependants, is earning the most that they will earn in their lifetime, has paid or is nearing finishing paying their mortgage. This is a crucial time when you should be very concerned with how you are going to fund your lifestyle once you've  ceased working.

Pension key


If you are at this stage and haven't yet thought about how or when you are going to retire then I really hope this article gets you to take some decisive action. It is clear that the UK, as is the same with most countries in the developed world is facing a serious pension crisis. The demographics of these countries are top heavy with more and more people reaching retirement age but with a birthrate declining such that the number of retirees is outstripping the number if those who can care for them. Nowadays you cannot retire and expect to rely on the state. It is time to start to take some control over your future finances. Starting a pension is your first point of call. Since you are middle aged and not too far from retirement thus you may find that you will need to put in large amounts. 

How much should I put in my pension?


This is a common question when the subject of pensions arises. The simple (and annoying) answer is that it all depends in your individual needs. How much would you like you pension to pay per annum? 

The amount your annuity pays depends on all sorts of factors but as a rough rule of thumb, for every. £100,000 in your pension you should be able to receive about £6,000 per annum. You must work backwards. If you have calculated that when you retire you will probably spend the following:

£3,000 food
£2,000 going out
£2,000 repairs and maintenance
£2,500 travel costs
£2,500 bills, TV and Internet
£3,000 holidays
£2,000 entertainment
£4,000 shopping
£3,000 miscellaneous costs/ emergencies

In total this person will probably need about £24,000 in income. As such, they will need to save over £400,000 in a pension. If you would like any specific advice on saving for your pension then please feel free to get in touch. Please note that I am not a qualified professional advisor, nor legal professional. However, I may be able to point you in the right direction if you have any specific questions.


I don't have many years left until retirement so what do I do?


Let us say that you only have 10 years until retirement and that your pension pot is currently zero. There are a number of options open to you :
1) you must transfer as much money into your pension pot as possible
2) remember that currently your state pension is about £6,000 per annum and as such you may not need to save as much as you originally thought
3) do you have savings that you can transfer into your pension as a lump sum? Remember that the maximum you can put into a pension each year is the lower of your annual income and £50,000
4) can you earn money now, elsewhere, so that you can put more in a pension? 
5) does your employer have a pension scheme whereby they match your contribution? You should be utilizing this facility as much as you can
6) could you downsize now, placing the excess profits into your pension?
7) you may have to face up to the fact that you're going to have to work for longer than you intended

Remember that retirement is all about planning. Whatever age you are (even if you've just left school) you cannot bury your head in the sand. You need to be putting money away now for your retirement.

Do not expect to rely on anybody else. Rely on yourself!

Do you like what you've read? Tell your friends by sharing it with one of the buttons below. Please post this to Facebook or Tweet it to help your friends and family. Feel free to send me an email (mrmoneybanks<at>multimillionaireroad<dot>com), find me on twitter @millionairer0ad or comment. Whether good or bad, I want to hear from you all.

What to Keep in Mind as a First Time Buyer

Tips for first time property buyers


Buying a property is one of the biggest transactions that you will probably ever do in your lifetime. This is the subject of the following guest post from a financial writer looking to offer their insight into the often confusing world of Buying a home.

A person of any age can be a first time buyer, and regardless of how old you are, nobody can take away the excitement and anticipation of purchasing your first property. Whether you’re looking for a city centre apartment or a countryside retreat, your home will be yours to do with as you please. So if you have dreams of pretty pink walls or doing an attic conversion, you’ll finally be free of your letting agent stopping you from doing renovations to your heart’s content! There are some more practical things to keep in mind as a first time buyer though, so if you’re thinking about getting yourself on the property ladder, you might want to read on...


New build or existing property?


You’ll need to think about the type of property you want to buy, and its age. There are many new build developments in the UK that can be a good option if you want somewhere that nobody else has touched. You may also be eligible for a low deposit scheme depending on the property developer. If you crave more character, you might want to look at a slightly older property which may also offer you larger room dimensions. You’ll know what’s right for you in terms of car parking, inside space, a garden or balcony, available storage, and the likely cost of renovation work.

Location, location, location


Once you’ve decided which type of property you would like to buy, you’ll need to think about where you’ll find it. There are of course plenty of apartments to be found in a city, but you might dream of living further outside the hustle and bustle to commute to work instead. When you are looking for properties, keep in mind nearby transportation hubs and motorways, as well as the proximity to amenities such as supermarkets and local services. If you want to buy a property with a view, make sure to find out whether land nearby is likely to be used for development as it could affect the price of your property when you come to selling in the future.

Mortgages


Now you have a better idea of what you want and where you want it, you will be in a position to convert your deposit into a mortgage. It can be a pretty confusing process which is why a solicitor and an advisor in bank can be essential. Yorkshire based QualitySolicitors are one such company you may want to get in touch with when it’s time and they’ll also be able to offer other property advice such as conveyancing and planning laws.

Removals



Moving day has finally arrived! Once you get the keys to a property it’s time to move all of your belongings from one place to another and this can be a bit easier said than done. Do some research to find a removals company who are able to fit in with your schedule, as well as putting plenty of care into the job. It can be distressing if items are broken or lost during transit so this is important for making the whole experience a success.

Interested in guest posting or writing a sponsored post? Feel free to send me an email (mrmoneybanks<at>multimillionaireroad<dot>com), find me on twitter @millionairer0ad or comment.

How to become Rich: Debt Ridden

Growing wealth out of a debt ridden starting point


If this is the first article that you're reading in the How to become Rich series then I encourage you to go back and read The Basics first.

The Debt Situation


You have dreams of becoming a multimillionaire. Unfortunately, for whatever reason, you have found yourself mired in debt. Perhaps it was due to a payday or personal loan. Perhaps you spent money that you didn't have and built up credit card debt or went into your overdraft. Or perhaps you too a student loan to go to University and earn a degree. Or perhaps you simply have mortgage debt in a property that you (part) own.

This short article aims to outline some basic strategies for planning to build wealth where the starting point is someone who is in debt.

Don't Save! Pay it off!


Shock! Horror! You read that correctly. I'm advising you NOT to save. If you have any debt I actively discourage you from saving anything. More than that, if you have some savings, use it to pay down any debt, making sure you have a few grand kept in reserve for emergencies (e.g. You lose your job).


Debt, savings and Interest


The logic for advocating using savings to reduce debt is fairly straightforward. Let us say that you have £5,000 of credit card debt that charges you 10% APR (highly unrealistic!in interest. You also have £10,000 in a savings account earning a fantastic 5% per annum. You are currently trying to build up a deposit on a house. Each month you pay the minimum required on your credit card but  manage to add £100 to your savings. This is a highly inefficient use of £100.

Let's consider what we are doing when we put away £100. Try to think of the £100, not as money but as a unit of assets. We are giving the bank 100 units of assets and they pay you (5%) £5 for the privilege (in interest). But you could have paid off £100 of credit card debt. Think of it as reducing your liabilities (that are harmful to your wealth) by 100 units. This would have saved you (10%) £10 in interest over the year. Now if I was to ask you would you rather have your income increase by £5 this year or for things to be cheaper by £10? Not sure? Let's increase the numbers: would you rather have £5,000 or would you rather have your next £10,000 worth of spending to be free? Obviously, the later is better! The same is true when the numbers are smaller.

It is better to pay off the credit card debt than to build up your savings so long as the interest on your debt is higher than the return you get on your savings (which it nearly always is). More than that, you should use any savings that you can spare (after you have built an emergency fund of about 3 months wages) in order to pay down debt. It is much better for cash flow and long term wealth building.

Debt and no savings!


Let's say that you have no savings but have got plenty of debt. Here are a couple of rules to live by:

1. Don't save! Pay off the debt as quickly as possible
2. Analyse what you can cut down on in terms of your monthly spending to free up more cash flow to pay off our debt quicker
3. If you owe money to several different creditors pay off the debt with the largest interest first regardless of the size of the actual debt
4. Sell things you don't need to pay off more debt
5. Consolidate your debt if possible to pay an overall lower rate
6. Remember that for every second you waste not paying of your debt, money is leaking from your pockets into somebody else's
7. If you are in real financial difficulties seek out the Government's debt advice scheme or the Civil Advice Bureau.
8. Know that you cannot even consider building your wealth until you eliminate all your "bad" debt. Bad debt reduces your monthly cash flow. Good debt increases your monthly cash flow. I will post a future article making the distinction clearer.


Do you like what you've read? Tell your friends by sharing it with one of the buttons below. Please post this to Facebook or Tweet it to help your friends and family. Feel free to send me an email (mrmoneybanks<at>multimillionaireroad<dot>com), find me on twitter @millionairer0ad or comment. Whether good or bad, I want to hear from you all.

Spread Betting, Margin Calls & Other Horrors

My spread betting experiment failure


This is a guest post from Richard who blogs about personal finance at www.RichardPF.co.uk. Richard chose to provide us with a personal story reminiscent of My CFD Experiment Failure. It too should act as a warning to others of the perils of getting involved in financial products that you don't fully understand.

Recently, I found myself with plenty of time on my hands and little money coming in (or what others like to call unemployment). I was thinking of ways that I could make a little extra money whilst not working. However, I needed something a bit more fast paced, sexy and racy; what I needed was spread betting. As it turned out, I needed spread betting like a hole in the head.

Playing at Spread Betting


I set up a free account with one of the many spread betting Companies and downloaded the free software to be able to practice spread betting without losing any money.

The Java software was a bit slow and clunky on my (somewhat antiquated) PC. I soon got the hang of how to bid, go short (hoping the price will go down) and go long (hoping the price will go up).

I graduated tot he full spread betting account and funded my account with £500 which I thought would be enough to have a little 'play'. What you must realise about spread betting is that it's highly leveraged, you can bet £10 per point, with only £10 in your spread account.

Margin Call


When the market moves against you, a very polite broker phones to tell you that there's a margin call. A margin call means that you need to refund your account, i.e. transfer more money into your account as your balance has dropped to below zero.

I followed a few companies that I thought would be ideal as their price would often move up and down on the latest company announcements and I thought I had a good handle at 'guessing' these small daily movements as the latest company figures or deal was announced.

It's also worth noting that your 'winnings' are tax free as the government regard it as betting rather than investing. This should have been telling in itself, as indeed I found out, to my peril!

Going Short!


I was following the share price of a 'Tech' Company. The news suggested that the Company was having a tough time of it and just as I thought, investor sentiment started to drive the share price down.

Acting quickly, I thought I would jump in on this movement and 'go short', expecting to see a nice, healthy return from a few hours 'work'.

Tracking the share price on the exchange I could see the price falling and I was set make some good money, but looking at the spread betting software the share price was moving upwards, not downwards. This didn't seem right. Why was this? Was my clunky old computer that slow?

I scanned the spread betting pages and realised that I was 'off exchange'.

I hadn't really thought about that statement, just some new financial mumbo jumbo to get used to, now that I was a 'day trader'. The spread betting share price either climbed or stayed where it was throughout the day, whilst the actual share price continued to fall. I soon realised what 'off exchange' meant.

Off Exchange


'Off Exchange' meant that the spread betting Company did not have to follow the market at all and if they wanted to squeeze all the day traders and hold the 'off exchange' market price or even go up when the actual share goes down when they can.

The Computer algorithms would work out which way to move the share price to maximise the revenue for spread betting Company and whilst I was thinking all this the friendly broker rang again, " Margin Call", £3,000 needed to refund the account. This was an expensive introduction to spread betting and I quickly learned not to bet again!


Have you tried spread betting yourself?


You can read about Richard's review of the terms and conditions spread betting companies use, which are well worth a read before you open an account at www.richardpf.co.uk/post-19/city-index-spread-betting.


Interested in guest posting or writing a sponsored post? Feel free to send me an email (mrmoneybanks<at>multimillionaireroad<dot>com), find me on twitter @millionairer0ad or comment.

How to become Rich: Children left home/ no children

If this is the first article that you're reading in the How to become Rich series then I encourage you to go back and read The Basics first.


Don't want/ Can't have children but want to become rich


So you chose not to have any children? Here is a brilliant truth: you've just saved yourself about £220,000 per child that you would have / could have had. You really have no excuse but to save a lot more of your income sooner and let compound interest work it's magic!

Children have left home and finances


The typical scenario is that a couple are in their 50s to 60s when their children have left home. This tends to coincide with largest income that the couple will ever earn in their lifetime. Furthermore, having to pay for children and all the added sundry costs, the couple may have found that they did not have a lot of money saved up for retirement. As such, it is time to start seriously saving for your pension. Ideally you need to try to maximise your pension contributions as much as you can. In the UK you are legally allowed to contribute up to 100% of your gross annual salary, up to a maximum of £50,000, into your pension. The tax benefits and potential employer contributions should be enough to encourage you that investing in a pension is critical to your financial freedom when you come to retirement.


Other considerations when building wealth


Living in a large house with a mortgage paid/ soon to be paid off, with no children leads many people to eventually consider downsizing to a smaller property. Here are some alternative solutions:

1. You could take I a lodger or two. The UK Government allows £4,250 tax free income from a lodger per year.
2. You could pay off the mortgage as quickly as possible and then aim to downsize in retirement
3. You could try to build a deposit and aim to downsize without selling your current property. Given that your current property is nearly/ already paid off, any rental income should help to pay for mortgage payments on the new house.

Hopefully this has given you some ideas as to how to adjust your finances once your children have left home.


Do you like what you've read? Tell your friends by sharing it with one of the buttons below. Please post this to Facebook or Tweet it to help your friends and family. Feel free to send me an email (mrmoneybanks<at>multimillionaireroad<dot>com), find me on twitter @millionairer0ad or comment. Whether good or bad, I want to hear from you all.

Re-Mortgaging 101: A 5 Step Guide

Re-Mortgaging is the subject of the following guest post from a financial writer looking to offer their insight into the often confusing world of  re-mortgaging.


Remortgaging the hows and why?


Are you looking for a way to consolidate your debts and start fresh? Do smaller mortgage payments appeal to you? Are the low interest rates making you want to re-mortgage your home? If you’ve answered yes to any of these questions, you may want to consider a re-mortgage. As of October, 2013, British lenders approved more mortgages than they have in the past five years, according to the daily commuter paper, City A.M. With borrowing costs at their lowest, one might think it’s also a perfect time to re-mortgage. However, before you take this big step, here are a few tips to help you make a sound and financially stable decision.

1. Inquire about Early Repayment Fees - When you got your first mortgage, did the lender indicate there would be an early repayment charge or an early redemption charge? If so, how much will you be required to pay? If the amount is too high, you may be better off staying right where you’re at. The purpose of getting a re-mortgage, like one of the deals from
Clydesdale Bank, is to save you money not cost you more.

2. What Kind of Fees are Involved? While it’s nice to think a re-mortgage will not have additional fees, this is not always the case. There may be exit fees, arrangement fees or closing fees. Before you consider signing on the dotted line, find out how much you’ll be paying in fees outside of the actual mortgage amount.

3. What is the True Rate? Generally, one of the first thing homeowners look for is low interest rates. However, make sure you know what the true rate is going to be over the life of your mortgage. Find out what kind of a standard variable rate (SVR) the lender is offering. Also, is it just an initial low SVR that will increase to a much higher SVR in the future? If this is the case, you may want to reconsider re-mortgaging or find a different lender.

4. Is Consolidating Debts Saving You Money? Many people use a re-mortgage as a way to consolidate other debts such as consumer loans or credit cards. Although rates are lower on mortgages than on other debts, make sure you’re really saving in the long run. While small debts have high interest rates, they’re also paid off within a couple years, unlike mortgages which typically go up to 25 years. If you have a lot of other debts, you may be paying more over 25 years. Do your math first.

5. Shop Around - If you were purchasing a car, you’d probably shop around for the best deal. Do the same with a re-mortgage. Check out as many British lenders as you can to find out who’s willing to give you the best deal. After all, the whole purpose of a re-mortgage is to save you money.

Interested in guest posting or writing a sponsored post? Feel free to send me an email (mrmoneybanks<at>multimillionaireroad<dot>com), find me on twitter @millionairer0ad or comment.

Multi-millionaire Road Plan Review (6)

Blueprints:

This post details my financial progress as of the end of October 2013. All posts of a similar title to this one are written to demonstrate how all prior published articles interlink to form my plan to become a Multimillionaire. Think of these posts as a self-review of my progress and the blueprints to my Multi-Millionaire Road Plan. I encourage my readers to add comments on these posts. Feel free to compare to my previous report:



Multi-Millionaire Road End of October 2013 Report:


As always I'd like to offer a huge thank you to all my readers. Without your readership, comments, tweets and following I would not find the motivation to keep posting. I hope you will continue to find this site interesting. 

In particular, I would like to thank all those readers who have recommended any of their friends to start to follow this site.

Website Progress

As you may have noticed, I am not hugely tech-savvy and in terms of a technologically impressive website it is definitely lacking. I have always felt that the pull of my site should be its content of which I am working constantly to improve. If any of you have any suggestions to improve the site then please feel free to email me at mrmoneybanks@multimillionaireroad.com. 

Recent statistics show that the site attracts on average between 150-200 readers per day. I am extremely happy with this level of readership but would always welcome more. If anyone invites a friend or family to read an article that i have written, or shares one of my posts, just let me know and I will personally get in touch to say thank you.

Get Rich Plan Update

Picture from freedigitalphotos
I am 14 months into working life and I am now still able to save roughly 20% of my monthly net (income after tax and pensions comes out of my pay package) income. I have very recently received a modest pay rise and as such my net income after pension contributions and tax is just over £1,707 per month. This means that I am now saving about £341 per month. £135.75 goes into a Company pension scheme each month andis matched by my employer. Furthermore, I benefit from tax savings from this contribution.

The income set aside for savings is taken directly from my current account into an esavings account with virtually no interest. From there, I can transfer the money either into a stocks and shares ISA or into a cash ISA depending on how much of my allowance I've used. I aim to split all savings 50:50 between, cash and bonds and in stocks and shares. Some of my coworkers (on the same wage) are surprised that I am able to save this much considering almost  44% of my net income goes on rent and bills. I put this down to my budgeting technique and method of automating my savings. When making investment I aim to buy undervalued and dividend paying stocks (assuming there are any!).

My current share portfolio is performing strongly. With an overall performance net of any tax and charges of 18% over the last 2 and a half years. The FTSE100, for example currently sits at about 6700 points. When last I wrote it was at 6500. Although it is folly and fairly meaningless to make a prediction on the stockmarket I shall do so anyway: It will go up or down or stay the same, but regardless of the movement I will look to improve my research in the hunt for undervalued shares.

If you take a look back at an article back in March 2012, I gave my original financial breakdown. I now wish to update my current asset holdings:
  • £685 - Sits in cash as a deposit for the flat I currently rent.
  • £949.86 - Current Account. This is obviously before any spending has occurred for the month of November.
  • £684.52 - Everyday Savings Account
  • £11,585.26 - Loyalty Reward ISA
  • £100 - UK Premium Bonds
  • £13,842.21 - Online Shares
  • £2,056.52 - Funding Circle Investment
  • £300 - sitting as capital in a business account 
  • Total Accessible Assets: £29,518.85 (July 2013: £28,192.94)
This represents a growth in Total Accessible Assets of £1,325.91 (4.7%)
  • £3,950.97 - Friend's Life Pension (contributions since October 2012)
Total Assets £33,469.82  (July 2013 £31,157.83 - an 7.4% growth)

I am very pleased with my progress over the three months. In March 2012 I began recording my tangible wealth. Back then it was £22,970. I have grown my net total accessible wealth by about 28.5% and my total wealth (including my pension) by 45.7% in 23 months. My original plan was to grow my wealth over the year by about £4000 from September 2012 until September 2013 which (if you prorate my progress) means that I have almost reached this goal in terms of total accessible assets and more than passed it if you include my pension. Arguably, it should be acceptable to include the value of my pension as this will form part of my assets in later life.

Originally I wrote a post on a Get Rich Plan and am currently in the middle of implementation. Whilst I have a long way to go, I am currently laying the foundations of this plan. I will now go through each section, briefly:

  1. Frugality - I believe that life should be lived whilst preparing for the future. As such I don't buy into the argument that you should count every penny. Instead, you should get the fundamental decisions right. for example, to automate your savings and commit a certain amount to savings each month.
  2. Budgeting - all going according to plan. My method allows me to ascertain where I may be spending too much. In October 2013 this was clearly the case as I had to incur some extra charges putting a strain on my finances for that month. I aim to adjust my spending in the coming months to try to rectify my cash position.
  3. Saving - I am still trying to save 20% of my monthly net income. I am now making better utilisation of my cash, channeling more into cash ISAs, so much so that I have maxed out my limit for the current financial year.
  4. Debt - Although I have two credit cards, I have no debt. I pay them off in full each month. I have one credit card which gives 3% cashback (up to a maximum of £100 a year) and another that gives 0.5% cashback. Read my article to explain how to maximise the cashback on credit cards.
  5. Housing - My rent currently costs about £750 with bills. This is an improvement on the £800 I was paying previously. For more information on my ideas on Housing read my article: Renting Vs Buying.
  6. Investing - after all taxes and expenses my portfolio has increase by about 18% since it's inception  two and a half years ago.
  7. Tax - I have topped up my tax free ISAs. It is now maxed out. I am now starting to utilize my investment ISA with an ISA stocks and shares trading account.
  8. Job - My base salary is £27,650. In November I will receive my bonus of £1,000 (gross) for passing my exams. The majority of this will go towards savings to help to build wealth. Living as a young professional living in London has huge opportunities for networking but of course is highly expensive. I must remind myself that this is (hopefully) the lowest wage I will have for the rest of my life so things are looking good into the future.
  9. Time and Patience - Slowly but surely, year by year, the seeds which I am planting will grow into trees.
  10. Self-belief - check.
As you can see, on the whole things are looking good. There is much work to be done but at 24, I have time on my side.

I would encourage all of you to update your financial position. Feel free to use my post as a template. It helps you clarify what you have to do and where you are going.


What's going on in your personal financial review?


Do you like what you've read? Tell your friends by sharing it with one of the buttons below. Please post this to Facebook or Tweet it to help your friends and family. Feel free to send me an email (mrmoneybanks<at>multimillionaireroad<dot>com), find me on twitter @millionairer0ad or comment. Whether good or bad, I want to hear from you all.

Guidelines for Foreign Exchange Trading

Foreign Exchange Trading is the subject of the following guest post from a financial writer looking to offer their insight into the often confusing world of FOREX.


Anyone who is thinking of starting a career in Foreign Exchange Trading (FOREX) should have certain personality traits, otherwise they could lose a lot of money.


Vital attributes of FX trading


You have to be decisive, have a certain amount of capital that you can afford to lose, and you have to enjoy working with figures that are constantly changing. Someone who can carry out quick calculations, read the market and be able to act on information is likely to succeed in this environment. If you are hesitant and impatient for quick results this mightn't be the right business for you.


Demo foreign exchange trade accounts


The easiest way to assess your Forex talents is to carry out research and then go online and choose a broker. Remember, though Forex is the largest speculative market in the world and currency fluctuations happen on a second by second basis. You will need to make sure that the broker you select uses the best Forex trading platform for your purposes. Some companies use spread betting, whereas others will only deal in local currencies rather than global currencies. Once you feel confident that you have made the right selection, contact your broker and ask if you can set up a demo account. A demo account acts as a type of practice run; you’ll be dealing in Monopoly type money rather than the real thing, though you will be using live information to make your trading decisions.

Never chase your losses when trading foreign exchange


If you start to panic and then chase your losses once you’re trading live, you’re in danger. It’s better to stop trading and reassess your position, rather than keep on losing. If you’re a novice, only trade in small amounts. Always research, the ubiquitous man in the pub may have some wonderful tips but it’s your money you’re risking, not his. It’s far better to take a daily financial newspaper and one of the many opinion magazines that will give you information about companies as well as the markets. The trade press is also useful. Specialists write these publications and they can lead you to look at trade developments that may have a bearing on future currency fluctuations, or at least you’ll get a better understanding of global finance and the global economy.

Keep alert when trading


Some people start to trade obsessively, and try to operate for long hours at a time. This can lead to some dangerous risk taking. Just because the currency markets are open 24/7 doesn't mean that you can’t take a back step for a while and reassess your strategy. Some experts recommend that a change of strategy can help a Forex trader.

Learn your trading lessons well


Every business has its own terminology and this is usually bewildering for a new trader. If you want to succeed and earn money you’ll have to learn the jargon. For example a ‘yard’ is a billion units, not an extension to a house. Forex trading can be exciting, nerve wracking and has ruined many people financially. If you’re prepared to learn the trade and all about the markets you stand a good chance of success, just try not to be greedy and also expect the unexpected and leave yourself some funds in reserve in order to deal with market crashes and other unforeseen circumstances.


Interested in guest posting or writing a sponsored post? Feel free to send me an email (mrmoneybanks<at>multimillionaireroad<dot>com), find me on twitter @millionairer0ad or comment.

Disclaimer

Information on this site is not appropriate for the purposes of making a decision for carrying out a transaction or trade nor does it provide any form of advice (investment, tax or legal) amounting to investment advice, or make any recommendations regarding particular financial instruments, investments, or products.
Always seek advice of a competent financial advisor with any questions you may have regarding a financial matter