If you are a new investor, you probably don’t have a lot of money to spare. That’s the way most (almost all) of us start. We have a very finite amount of financial resources which we want to grow. But we’re not able to allow ourselves many failures. If we mess up big even once, it could be the difference between a career in investment and a lifetime in debt. Them’s the stakes, and it’s important to understand them before embarking upon a career as an investor. But by selecting sensible first investments, you can allay most of this risk and add decades to the lifespan of your investing career. Here’s how I would recommend doing it.
Start Small. CMC Markets CFD Brokerage is probably the best way to start. I think this for a variety of reasons. 1) CFD allows you to focus on a single product, not super-complex markets which exceed anyone’s comprehension. 2) CFD allows you to open a free demo account, in order to make real investment decisions without actually risking money. 3) CFD is fast. It’s a form of day trading, and you can complete many individual investments in a day. This way it’s quick to learn, and you benefit from intense trial and error. This, combined with the free demo account, makes it perfect way to learn important skills, which will continue to be important no matter what kind of investing you are doing in the future.
Invest in Your Lifestyle. Here, I’m not talking about buying a car or going on vacation. I’m talking about canceling your debt. If you can get rid of your debt, using earnings you got through investing as above, you’ll start to be able to make money a lot faster. It’ll be like swimming with the current instead of against it. I recommend doing things like creating an emergency savings fund, buying your house if possible, and increasing your knowledge of personal finance and investment. This will prepare you for the next step.
Invest in the Future. CFD trading is focused on investing for today and tomorrow. Though you can easily earn money which can be saved for later, it’s important for any well-diversified investor to create investments which will pay off at all stages of life. This includes when your children need to go to college and when you need to retire. Investing further in real estate, as well as ETFs and index mutual funds, will prepare you for the long term. Maximizing 401(k) and IRA contributions are a very important part of this process.
As you can see, this maps out steps to build a solid investment portfolio from scratch. By using the low barrier for entry to get into CFD you’ll be able to learn the basics of investment, while hopefully saving your dividends. Then you’ll change your lifestyle to accommodate a higher rate of saving and investing. Then you’ll set yourself up for success in the very long term. It’s a proven strategy that works.