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How to Start Trading Stocks And Be Successful

How to Start Trading Stocks And Be Successful

If you want to start trading stocks, reading this post will help you not to make some mistakes that are very common. And once those mistakes are made, your portfolio is at risk.

As the economy is going down, a stock trader’s life is getting harder. However, a great stock trader will always find a way to make money through stock trading. How could this be even possible? Like in everything else, knowledge is power. The more you know about the trading market, the easier it gets for you to make money from it.

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That’s why even when the economy is not doing so well, a great stock trader will always know what to do, and will also make sure that he’s, or she’s, making profits on his or her invested money. To become a successful stock trader, there are several factors that you’ll need to take into consideration. Until you do so, you could be putting yourself into a lot of trouble.

When you’re trading stocks, you’re investing your money into the companies. In fact, it means that you own a tiny portion of those companies in which you’ve invested your money. When those companies make profits, you do too, but when losses occur, you lose as well.

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However, your losses and the companies losses are somewhat different. When a company loses, that money is gone right away. But in your case as an investor, your money is not lost until you decide to sell your shares. It’ll always be up to you to know whether or not to sell. Some people will hold on and pray that the losing trend reverses and start gaining some of their losses back, while many others would just accept the loss and sell the rest of their shares. It’s a decision you’ll always have to make on your own if you ever get caught up in a situation like that.

How to start trading stocks 

To be able to start trading stocks, you’ll first have to open a brokerage account. It’s through this broker that you’ll be able to execute your transactions. Whether it’s to buy or to sell your shares, your broker will be the middle man. The requirements are not much; you’ll have to be at least 18 or 21 years of age depending on the state where you live, and you’ll also need to have a social security number which will be used as your ID number and for tax purposes.

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You may find it a little difficult to pick a broker because there are many of them. It’s extremely important that you pick the right one for your trading habit. All brokers are not created equal; they have their individual characteristics. When it comes to fee per transaction, it varies from broker to broker and those fees can significantly affect your portfolio.

Once you’ve been registered with your broker, you can then fund your account to be able to start trading. There are different paths through which you can send money to your brokerage account. The fastest routes are via electronic transfer and wire fund transfer. Electronic transfer is free of charge; it’s just like a bank-to-bank transfer that you can do on your own. However, a wire fund transfer will cost you a fee – some banks will charge you a fee of $25, but this fee varies depending on the bank. If you aren’t in a hurry, you can mail in your check or do a money order which won’t cost you any more than your mailing fee.

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What should you do next to make sure you’ll be making a profit?

If you don’t know anything about stock trading, the best thing to do is to sit down in front of your computer and start researching. Not conducting any research is one factor that’s causing so many traders to lose their hard earned money. You don’t want to be part of this group of people. For this reason, you’ve got to conduct your research before you buy any stock.

It’s not difficult at all if you know what to look for. But if you don’t know anything about the market, I’d suggest that you start by doing paper trading instead. Once you feel that you’re ready for the real thing, you can move on and start using real money. There are many websites out there providing free paper trading platforms; they’re very helpful if you’re looking to learn the tricks. Wall Street Survivor is the one I used to utilize; it’s very easy to navigate through. You can take a look at it to see if you like it, if not, you can always find many others on Google.

If you do so, you should be able to perform better than many stock traders out there who are trading on luck. You may need a little luck sometimes, but your education is the secret to becoming successful trading stocks. You may have heard of several individuals who become millionaires from the stock market. If you take your time to read their stories, you’ll see how much time they’ve spent on their education before they were able to attain such a goal.

Educate yourself, don’t rush to trade just because you want to. The more you know about the market, the better it is for you. One day, you will also be successful from stock trading.

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Last Updated on June 6, 2019

The Average Retirement Savings and How to Save Wisely

The Average Retirement Savings and How to Save Wisely

Are you on track for retirement?

If not, don’t worry, I’m not sure either. I save each month and hope for the best.

Fortunately, I’m at an age where most people don’t save so I’m ahead of the curve.

But, what if you aren’t in your 20s? What if you’re near retirement and are looking to gauge where you stand?

If so, keep reading. Here’s how to prepare for retirement and save wisely during the process.

What Does the Average American Have Saved for Retirement?

Saving for retirement is tricky.

Tell someone straight out of college to save $10k a year for retirement and it’ll be next to impossible.

Make the same request to someone decades older and they’d be more likely to be able to save this amount. But, a 20-year old college student can be “financially ahead” of someone saving more than them. Why?

Age matters in your financial journey. The younger you are, the more time you have to save and put compound interest to work. As you get older and have more saving power, you’d have less time to put compound interest to work.

Here are the average savings Americans hold by age bracket:

20’s – $16,000

During this stage, most people are paying loans and moving up the corporate ladder. Your best bet during this stage is to focus on eliminating debt and increasing your income. Don’t focus only on getting a high-paying job neither.

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Instead, focus on learning via Podcasts, reading books, and taking specialized courses. Doing this will make you more valuable and give you more career options.

30’s – $45,000

At this stage, you’ve hopefully escaped your entry-level salary and work at a career you enjoy. Your earning power has increased but you now have more obligations. For example, marriage, kids, and a mortgage.

Set a plan to pay off all your debt and focus on eliminating unnecessary expenses. Leverage financial tools like Personal Capital to ensure you’re on track for retirement.

40’s – $63,000

This is the stage where you’re at the prime of your career. Top financial institutions recommend you have at least 2 to 4 times your salary saved up. If you’re falling behind, start maxing out your 401K and Roth IRA accounts.

50’s – $115,000

During your fifties, you’re close to retirement but still, have time to save. You may be helping your kids pay college tuition and other expenses. Since you’re at the peak of your earning power, max out all your retirement accounts.

60’s – $172,000

By this point, you should have about eight times your salary saved up. If not, you’ll depend primarily on social security benefits averaging $1400 per month. Max out all your retirement options as much as possible before retiring.

Ways to Save Money on a Tight Budget

The sad reality is that most Americans aren’t saving enough for retirement.

Even high-earning power isn’t enough to secure one’s financial future. You need to have the discipline to save for retirement while time is in your favor. Don’t wait for you to have a high salary to save, start with having a small budget.

First, get a clear picture of where you stand. Write down a list of “needs” and “wants.” For example, Netflix and Amazon Prime are “wants” and a “cell-phone” is a need.

Use tools like Personal Capital to analyze your spending patterns. Personal Capital allows you to add all your financial data in one place–making it a powerful option to gauge where you stand.

Once you know all your expenses, organize them from highest to lowest expense. When you can’t cut more expenses, call your service providers to negotiate a lower price. If you’re not good at negotiating, use services like Trimm to lower your monthly expenses.

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How to Save Money Each Month

By this point, you know the average amount of money you should have saved for retirement based on your age.

But, breaking this down into monthly goals can be challenging. Here are some rule of thumbs to follow:

Aim to contribute 10%–15% of your salary each paycheck. Review your progress each week.

Why so often? The reality is that life gets in our way and you will have many financial setbacks. Your goal isn’t to be perfect but to get back on track instead.

Reviewing your finances weekly lets you know where you stand with your retirement. This doesn’t have to be a long process either. All it takes is login in Personal Capital to view your net worth and check how much you have saved for retirement.

Turn saving into a game and aim to save more each month. It will get challenging but you’ll get creative and find more ways to save.

Top Money Saving Challenge Tips

To prepare for your financial future and not be another statistic you need to be different.

How?

By adopting new habits that’ll help you become a saving machine. Here are some ways you can save more:

Automatically Contribute Towards Retirement

If you’re working for a company, you can automatically contribute towards your 401k. If you’re not currently contributing more than 10%, make this your goal. Contribute 1% more today and automatically increase this amount a year from now.

Odds are that you’re not going to be negatively affected by contributing 1% more. Many times we spend our money on things we don’t need. Contributing more towards retirement is a great way to secure your financial future.

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Use the Right Tools to Know Where You Stand

Once you’re contributing more towards your retirement accounts, gauge your progress. Make use of finance tracking apps to help you view the big picture of your retirement.

When I’d first signed up for the app Personal Capital, I didn’t know I had a negative net worth. Despite saving thousands of dollars, my debt brought my net worth to the negative. Knowing this motivated me to save more and spend less.

Now, I have a positive net worth. But, it was because I was able to view the big picture using the app. Find out what your net worth is using a finance tracking app and you may surprise yourself.

Bring in Experts to View Your Blind Spots

If you have too little or too much money saved, you should consider hiring financial experts.

Why?

You may need someone to hold you accountable to help you reach your financial goals. Or, you may need help managing your money as effective as possible.

Regardless of the reason, getting help may help improve your financial situation.

Before you hire an expert, find out which areas you need help the most. For example, if you’re constantly overspending, find a debt counselor. If you’re struggling with choosing the best investment options, hire a financial advisor.

Speed up Your Retirement Contribution

After learning how to manage your money well, the next best thing is to earn a higher income.

You’re capped at how much you can save but not much you can earn. Even if your employer isn’t giving you a promotion, you can still take charge of your financial future. How?

By starting a side-business.

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This will be something you’d work on after you’ve finished your day job. Once you start earning income from your side-business, you’ll be financially better off.

The best part is the more work you put into your side-business,[1] the more potential it has to earn more money.

So start a side-business in an area you’re familiar with. For example, if you enjoy writing, do freelance writing for small e-commerce businesses.

Once you’re earning a higher income, you can contribute more towards your retirement. Don’t wait for the right opportunity to secure your financial future, create one.

Reach Financial Freedom with Confidence

What if you were able to retire tomorrow with no problem, all because you’d have enough money saved up and little to no debt left to pay off? How would you feel?

My guess is that you’d feel happy and relieved.

Most Americans are falling behind their retirement goals for many reasons. They’re not prepared, they carry bad money-habits and are thinking short-term.

For you to retire successfully, you need to work backward and adopt better habits. Contribute more towards your 401K and focus on growing your income.

If you do, you’ll save money and pay debt faster.

Don’t beat yourself up if you’re behind your retirement goals. Take the first step today towards a brighter financial future. Isn’t retirement worth the hard work and sacrifice to be at peace?

Featured photo credit: Huy Phan via unsplash.com

Reference

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