For most of the people ( almost 90 percent), the words – saving, trading, and investing really mean exactly the same thing,” says Dan Keady, CFP, and chief financial planning strategist at TIAA, a financial services organization.
Are you part of that 90 percent?
Let us explain further while we also explain how you’re losing out on money by not trading.
While these three instruments share some similarities, there are several differences too which make saving and trading different from each other.
To start with, both of these are very liquid places to park your money. While your traditional saving accounts and investments will give you nominal interest on your money; financial trading will make your money work to generate and even multiply your money.
Trading is a method where one holds stocks/commodities/forex for a short period of time. It could be for a week or more often a day! Whereas saving and investing is a method that involves parking your money at one place for longer periods of time. Investors invest their money for longer periods – years, decades. Short-term market fluctuations are insignificant in such investment.
While both of these involve risks, trading involves higher risks and hence higher potential returns. The prices of the commodities being traded can go high or low in a short time span. To put it with an example, trading is a one-day cricket match while saving and investment is a test series.
Traders outperform the market. They have the potential to earn up to 15-20% returns on their investments since they look for high return on their investments by buying at a low price and selling at a higher price. Once you learn and master the principles of trading the profits thus generated are more frequent and regular. Moreover, the profits are recurring since the profits earned can be reinvested in the market to buy more and hence make more money. So all of this money that potentially can be earned is being LOST by ignoring a very important financial tool – TRADING.
Now, you would ask, in this high-risk involved practice what is the guarantee that one will make money? Honestly, there’s no guarantee. But that’s true even for investments. However, with the right set of skill development and professional education about trading, you can benefit from highly profitable markets. Learn, understand, and then trade. Be a part of the right communities where the right information about global trades is discussed and shared.
To sum it up with an example – “ Imagine, today, you and your friend bought an equal amount of seeds to sow in your fields. You sold them to someone in a day because you could earn a profit. And your friend sowed the seeds and let them grow for a few years till they gave new seeds. He sowed a part of the new seeds, sold a part to make profits and continued this for years, and sold a lot more seeds eventually than were bought. In doing so he earned more profits on the same amount of seeds that you both bought. That’s exactly the difference between investing and trading.
Let us help you multiply your money by providing you the right program to attain the right skill sets and education that you need in order to be a successful financial trader. You can register and connect with us to know more about iX Global’s financial trading courses.