How To Make Money Using Financial Spread Betting

Spread betting finance provides you with an opportunity to make good money without paying any tax on the winnings. Financial spread betting is a leveraged trading that offers you a chance to trade the financial markets without taking ownership of the primary assets. Traders and investors have the superior buying power that leads to potential high returns in spread betting. The worth of your money will be leveraged irrespective of the financial market that you are interested in, whether shares, commodities or even currencies and you can access all these markets from one account. You don’t need to own any of the shares that you are trading but simply trading on the direction of the share price whether it will go down or up in spread betting finance due to its derivative trading form. Traders who win in spread betting tend to have a spread-betting game plan unlike the losers. It’s advisable to build your trading strategies to help you trade in spread betting.

spread betting

How to bet on the financial spread

If you are interested in betting on financial security you can trade with any amount. If for example you place 20 euros per point and you think the price of petrol is going to increase, you could place a bet at 16594, the ask price and very point increase or decrease will transform into a 20 euros profit or loss. Say you are lucky and the market rises to 16614, which is an increase of 20 points, your winnings will be 400 euros due to that 20 point movement.

Benefits of financial spread betting

Some of the benefits of financial spread betting that you can get at online trading companies like CMC markets are: access to a different range of markets, the winnings are tax free, there is an option to either take a long or a short position and there is a low barrier to market entry. Financial spread betting provides you with an opportunity to make profits while using little investments. The lack of no commissions or brokerage to be paid also increases your profit. Traders can bet on different markets including stocks and bonds. Spreading betting is gaining popularity in the UK and it’s absolutely legal.

Tips in financial spread betting.

Follow the trend

 It’s the most common strategy used by traders and especially new traders. The strategy includes looking at the force of the security to predict the possible future direction of the trend and its ideal entry points.

Limit the number of markets you trade:  

Choosing a couple of markets to trade like forex and trade on it only you are likely to make more profits. You need to learn how the markets work and understand how prices move. Build a connection with markets you choose to help you stay on the winning side.

Decide when to enter and when to leave: If you already have a possible spread bet from your trade setup, you now need to decide when to enter the trade. Good entry points could be when the price crosses a moving average or when it sidesteps the high or low of the last number of bars. 

Never risk too much on your account

To win more in a spread bet, I recommend you keep your risk low especially if you still learning the trade. If you are not sure of how much you could lose on a spread bet then I recommend you keep it as low as possible.

Reasons why most people lose in financial spread betting

Predicting the future is quite difficult. It’s the main reason why most people lose.

The betting structure also put traders on a disadvantaged side, traders buy and sell shares depending on a spread around the actual price. A share trading at 100% may need to be bought at 101%, where your winnings and losses are calculated. You are likely to win nothing if the shares go up by 1% and you will lose 2% share if it goes down by a penny.

Another reason why people lose, buying shares in the traditional means may offer investor profits via dividend which will need to be considered in any profit calculation. In spread betting, there are no dividends making many people to lose money.


How Does Americans Spend Their Money After They Retire?

Retirement is the most awaited phase for most Americans so that they can take the workload off their shoulders and enjoy the next phase of life.  Most of us plan a lot before retirement especially, how to deal with finances and make the best use of the limited source of income available. You would be planning to reduce your expenses after you retire and spend every penny wisely. But that’s not the case most of the time the reverse only happens at least in the initial phase.

How Does Americans Spend Their Money After They Retire

Let’s see how most Americans are spending their money after retirement.

Most Americans are spending more after Retirement:

A recent survey shows that “Americans are spending more after retirement.”

An analysis was made by the economists at the ICI (Investment Company Institute) and IRS (Internal Revenue Service) based on the tax data to evaluate the spending habits post-retirement.  After claiming social security benefits, taking in account the spending analysis for first three months of retirement spending rose for more than half of the taxpayers. The report also claimed that “nearly 90% of the people hold or have income from employer retirement plans, IRAs or annuities.”

The analysis focused on people with different income slabs and the outcome is shown below:

  • People with lower income

The survey showed that people with lower income were spending more than they were before retirement.

  • People with mediocre income

The people with mediocre income spent almost the same what they were before retirement.

  • People with higher income

But it was different in the case of people with higher incomes. They were expected to spend more than those with lower incomes keeping their salary slabs on the check. Instead, they were spending less post-retirement which is shown in the survey report.

Important Components of the survey report:

The survey report was not made based on actual spending; instead, it was made by analyzing the income left with an individual after taxes.

What was included in the survey?

  • Social security benefits
  • Salary and wages
  • Distributions from retirement accounts such as IRA, 401(k) etc.
  • Distributions from pensions

In addition, the researchers at the ICI wrote:

“For many individuals, retirement appears to be a multi-year transition rather than an action taken at a discrete point in time.”

Based on the reports, it was evident that even 3 years after claiming social security nearly 50% of the people were still working. After analyzing this the researchers also stated that “this doesn’t mean that spending won’t slow later in retirement.”

How can things change?

The report was made keeping in mind the people who claimed their social security benefits at the age of 62. If you plan on early or 30 years later retirement then things can change when you start tracking your spending habits.

  • Retirement phase is 30 years or longer: Your spending habits will fluctuate in the tenure. You might be spending more initially then once you start analyzing where you’re spending more, you can cut on those edges.
  • Focus on a target amount: It can essentially make a difference if you have focused on your target. But saving for your retirement is a moving target and it can be sometimes a bit stressful to chase such a target. Add a category in your savings to save for retirement.
  • Expectation Vs Reality: most of us expect to spend less after they retire as they don’t have to save for retirement anymore and your tax bill is likely to drop as well. You can expect your transportation costs to fall as you won’t be commuting to work anymore. You can also expect to have cleared off your mortgages as well. But in reality, the picture is different from what you think.
  • The relationship between money and hobbies: Retirement is the phase where people give more preference to their hobbies as they have enough leisure time. At the beginning of the retirement phase, most people spend money either on travel or on leisure activities.

How much you need to save for your retirement?

A much difficult task is to decide how much you need to save for your retirement. Let’s work on a figure to save so that you’ve got a target to save for.

Let’s work on a thumb rule for how much you need to save for your retirement:  Save enough to spend about 70% of your pre-retirement income in your retirement.

Summing up:

Your spending habits can guide you on how to work with your finances. It’s time to analyze how wisely you’re spending your hard-earned income. Choose the weak areas where you can cut down on unwanted expenses and plan to save for your retirement in a much-organized way. You can make your retirement phase a more relaxed and stress-free phase by taking a few essential steps mentioned above and with planning ahead.


Get Started With Saving With Our 5-Step Guide

Getting started is one of the most important and sometimes the most difficult part of saving. We all have a lot of excuses piled on to not get started with saving and then blaming your current financial situation on the other end. Even when you get started, if the progress doesn’t attract you there is again a big pause and you stop it there. One thing for sure if you need to stick to the plan until you see a large difference.

Get started with saving with our 5-step guide

At every phase of life, with the increase in expenses and costs adding up it might get hard to save money. So, you would be thinking about the ways to match up your savings with the rising expenses. Building up your savings can happen with few changes that you will have to do with your current way of handling finances. In short, these small changes in your finance management can yield bigger results in the end. If you make a step by step progress and are persistent about following the path in a consistent way, you can attain financial freedom. Follow these 5 steps listed below for a better financial future. As a beginner, start with these 5 basic steps to start a meaningful progress towards building your savings. We share with you 5-Step guide to get started with saving and handle your finances in a better and meaningful way.

A 5-Step guide to get started with saving:

Below are the 5 essential steps by experts to get started with saving.

  • Start it with a “one percent at a time” thought

When you get your paycheck for the month, make sure you put some amount in your savings account. To begin with, you can consider transferring one percent of your income towards your saving. Initially, one percent might not make a big difference in your bank balance but think about the figure at the end of a year.  By taking this “one percent at a time” step, you have made your first move from the one with no savings to one with some dollars in the savings account. Sometimes it’s good to be modest, so make the first move today.  Look for different banks that offer a better interest rate and opt for the right savings account to get best returns.

  • Set priorities and think about your future self

Once you get your paycheck, you might be spending on a list of things on a regular basis such as rent, student loan etc. Cultivate the habit of spending on your future self as well, which means savings for your future. Add saving for future in the priority list and contribute towards it every month.

  • Create a new budget and this time a more analytical one

You might be running on a budget already and might find it tight enough to shell out money on something else. But take a look at your budget again bad this time keeping in mind a more analytical one. Simply, categorize it as “needs” and “wants” and add every cost accordingly. Glance through your wants and ask yourself if you really need those wants. By cutting on such expenses, you can contribute that money towards your saving.

For instance: Instead of going to a regular spa you can try home facial options. Do you really want to buy food when you can cook and pack it for lunch?

A meaningful quote on the budget:

[highlight]“A budget is about giving every dollar a purpose.”[/highlight]

~Dave Ramsay

  • Work on achieving small, slow and steady steps

Small steps contribute to a big success at the end. You might wish to save for a down-payment for a home or car, a holiday to your dream destination or an emergency fund which initially would seem unfeasible. But if you take small, slow and steady steps by contributing in regular increments towards achieving your financial goal, then you can save for it easily. You can attain financial progress by sticking to the goal and taking steps towards it.

  • Automatic transfer is a great step

Today, most of us deal with the stress of any kind and it has become almost impossible to remember every detail. Automatic transfers become a lifesaver in such situation. You don’t have to worry about transferring some money every month into your savings account when it can happen automatically. It will also reduce your temptation to spend the money when you can save it.

Summing up:

Start today with these 5 steps to build savings for you and manage your finances in a better-organized manner. Once you get started with saving and follow a proper budget, you can be financially free in future. It doesn’t matter how much you can contribute today but gets started is what matters in the end.


Should You Go For Auto Loans Or Refrain From It?

Should You Go For Auto Loans Or Refrain From It Before you go for an auto loan, there are quite a few things to know to make the right move. We share with you few points to consider regarding an auto loan.

Points to consider regarding Auto loan:

  • Why a car loan?

Who wouldn’t love to own a BMW but whether you can afford it with cash, makes a difference. A car loan might sound the best thing when you get the loan to buy your dream car. But everything comes with a price and it depends on how you go for it.
  • Say yes or no to auto loan

Case: Yes to auto loan Let’s consider you’ve got a very good credit score and you can get a 60-month loan with 3% interest rate. You can get $15,000 @ 3% interest and invest it. You need to sell a few shares every month to repay the bank every month at $270. Still, if the market is good, you can make a good profit. After 60 months, you can get a profit of $8,000 which is quite a good amount.  The profit you might get solely depends on the stock market trend which can even take a sharp turn downwards at times. Case: No to auto loan If you choose to pay cash to buy the vehicle, then you can save the interest amount. Taking loan of $15,000 @3% interest would be $1,172 which you would have saved if you’d paid in cash. $1,172 might not be big figures but the stress of repaying a certain amount every month can be avoided.
  • The Negative side of auto loans

You would be on cloud 9 when your dream car becomes affordable through auto loans but everything has a dark side. Let’s look at the negative side of the auto loans:

It tempts you to buy more than you can afford

When everything that was beyond budget through cash becomes affordable, you can get tempted for more. If your credit score is very good, the banks will be more than willing to offer to auto loans and collect more interest from you. Most people get tempted with such offers and purchase things that are out of the budget. The latest study shows that non-housing debt in the US rose in the 2nd quarter and the major share is auto loans by 23%.  Auto loans have become an effective way to lure customers by helping them buy whatever they want. In 2017, there is 23% increase in the number of people taking auto loans.

Is it okay to invest that money?

After getting the auto loan, most people prefer to invest it in stocks or something else. The stock market comes with fluctuating risks and thus putting the loan amount in stocks can be a risky decision. Ignore the risks, not everyone would be wise enough to invest that money. Americans take disastrous decisions when it comes to money management. Some people even take bizarre decisions and spend the huge amount on buying kinds of stuff like a jet ski or a yacht. This is one such reason why so many families are in debt today.

Spending on a depreciating asset

We all know that car is a depreciating asset and taking such a huge loan for it would be a bad move. Unlike real estates, you can never expect gains over time with an auto loan. In the worst scenario if you’d to sell your car you’d end up owing money. Buying a used car might be the better decision with auto loans.

The monthly repayments

What is more heart-piercing than repaying the money every month out of pocket? Obviously, the bank would not give you loan as a gift. Taking auto loan is easy to buy any vehicle but think about how much money you can spare to repay the loan.

Summing up:

One of the interesting ways to make money is to invest other’s money at lower interest rates but it comes with a risk of pitfalls on the way.  It’s always better to go a loan which you can afford to pay back. The best way is to save for a car and pay by cash.]]>