One of the single most important factors in investment is time. If you never start, you’ll never give investments time to grow. This is most important when regarding investments that have a fairly low risk but grow over years and decades. I’m speaking, of course, of products like index mutual funds and ETFs. Using the power of compound interest, you can form yourself a little snowball rolling down a mountain, picking up matter and getting larger, faster as it goes along. According to ShowerHacks.com, This is the exponential growth effect of this form of investment.
The problem with this way of doing things is, you have to wait till the end to see the big growth. The big returns kick in frustratingly close to the end of the average human lifespan, meaning that you may have the best investment plan worked out, but you won’t have a ton of time to enjoy it once it pays off. If humans lived 200 years, index funds would pay off with plenty of time to spare. As things are, they leave wanting people hoping for a not-too-distant payoff.
Fortunately, this isn’t the only way to invest. It’s simply one of the least risky. For people who need to see a return on their investment in the here and now, there are plenty of other options. Two of my favorites are Real Estate and CFD. Almost totally unrelated, these two investment forms have been the way I have personally achieved a fairly decent education in investing. Together, they contain most of the sorts of the decisions required of lifelong career investors. Mastering these fairly simple forms, you’ll be able to handle just about whatever investment throws at you in your life.
Let’s talk about CFD. I use CMC Markets for a lot of reasons. I like their platform, their educational opportunities, their trial account that you can use to learn this investment process without risking any actual money. But most of all, I like CFD trading itself. It’s a form of day trading which teaches you a lot about the way the world works. There is an element of fun, of learning, of risk and anticipation. In short, it’s a thrill for me, and I’ve managed to profit from it.
CFD works like this: you’ll be offered thousands of different assets, markets, basically just financial products of every kind, anything that can be given a value and be tracked moment by moment. You’ll guess whether any given unit will increase in value or lose value over a specific amount of time. Get it right, and you get returns based on how many units you bought and by how much the product changed in value in the direction that you chose. Losses are tabulated the same way.
CFD is different from long term investments in that you don’t have to wait decades to see returns. The difference is that long term investments are relatively passive. You don’t have to know that much about them to see the benefit, but you do have to wait. With CFD, you don’t have to wait, but you have to know a lot more about what you’re doing in order to see the kind of returns you do with index mutual funds. I like this aspect of CFD. By learning about the world and all the countless factors that go into the valuations of these products, you’ll be able to see amazing returns in a short amount of time. But the time to start learning the process is now. It’ll take some practice.