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How to start with very small money?
Are you a small investor as I am? Are you a beginner? Do you think you cannot afford investing because you do not have enough money?
Do you want trade stocks however?
I consider trading stocks as my hobby. I like it. I like the game, its adventure and danger. I am also full of emotions when trading and trying to control them. One of my friends trades stocks as a game too. He has no background, no knowledge, he just plays it as betting horse racing. He says, “when the stocks are down I feel offended and do not look at them at all and they come back begging for my attention”. This is how he made his first $10,000 dollars within two weeks. I envy it and I tried to find out why it worked for him while I was loosing money. He simply didn’t allow his emotions take action and sell his stocks when they displayed initial losses while I was selling to cut losses quickly. It is a good strategy however you shouldn’t cut those losses too quickly, otherwise you start collecting losses one after second.
Well, let’s talk how to start when you have no money and no idea. I did it this way three years ago:
Opening trading account
Review your salary and your family budget. Write it down on paper. Write down how much money flows into your household. I recommend considering only regular income instead of seasonal unless the seasonal income is regular too (for example a summer help or a winter ski school instructor, etc.).
After that, write down all your mandatory expenses only (such as mortgage, tuition, rent, insurance, etc.).
Then you would be able to see, how much money you have left for your personal expenses (or your household). Now you can ask yourself a question: “How much money I can afford save aside?” Is it $50 a month? $100 a month?
There are many brokerage houses out there. Go to the internet and do some research what are their conditions to open a new account. I personally trade with TD Ameritrade and they require min. $2000 to open the account. You can try Sharebuilder. I think they have no minimum and low trade commissions. But I do not know all of them, so you should do your own search and study. You can go to MSN Money
and search through other brokers.
If you however decide for TD Ameritrade, you would need a minimum amount of 2000 of dollars to open the account. Then go to your local bank and open a Time savings account (I opened 91 day savings account) and start transferring your $50, $100 or whatever you decided to save into this account. Do it regularly every month and prior you start spending the money. Whenever you receive your salary, send your minimum to your savings account. No matter what, no questions, no excuses. Do it. Do not touch that money and let them grow. Soon you would be able to open the new account and transfer the money into it.
During the saving period you will have enough time to study the stock market, stocks, strategies, read books, create your control loss plan, journal, etc. Overall you make yourself ready to trade. You can open a Stock simulator and there you can try your strategies as well as try how it works (placing orders, executing, creating portfolio, etc.).
After you have your new account opened, do not stop saving your money on your savings account. If you have no reserves I strongly recommend building your emergency savings.
Always consider your money on your broker’s account as already lost. If you cannot afford it, continue in saving as long as you would be able to afford it.
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Unconventional Ways to Save Money
Saving money is a concern that affects most people today. We have probably heard all of the conventional money-saving tips, such as, cutting back on your personal fun money or trying not to eat out as often. There are other ways to save money that are not so conventional, though. Let’s take a closer look at some of them now.
· TV Options
If you are paying for satellite or cable services, you have a pretty good chance to find ways to save money on your services. The savings you get can be as little as $5 or more than $100 depending on what you subscribe to and what you feel you can live without. The key to this is to constantly be looking at your service level to see what you are and are not watching. What you don’t watch, try to cut it out. We all enjoy our local channels though and with DIRECTV local channels are something that you will never need to go without.
· Skip the Meat
When you are looking at ways to manage your finances so that you can save more money, one way to do this is to save money on groceries. Yes, we already know about price matching, shopping around, and using coupons, so we won’t get into that here. Instead, what about cutting out one of the biggest expenses on your shopping list… meat. Meat can be incredibly expensive. This is especially true if you are a big fan of steaks, corned beef briskets, and the like. By skipping out on the meat during your shopping, you will be doing more than making healthier choices… you will also be making it easier for you to save a lot of money on your grocery bill.
· Give Up the Wheels
This might not be an option for a lot of people who live far away from their place of employment, or in rural areas, or even in cities that don’t have dependable public transportation options, such as in Mobile. AL. However, there are millions of people who remain without a vehicle, which enables them to save money on car payments, gas, insurance, taxes, and more. Some of the options you might have include using public transportation, biking, and walking. There are very creative ways to get around not having a vehicle. You can take a cab, rent a car on those occasions when you absolutely have to have a car, and you can even get your groceries delivered if you have a grocery store in your area that offers this. Almost everything else you might need can be ordered online.
· Avoid Tolls
Living in Chicago has its perks, but getting around without having to pay tolls can be difficult without help. You can always make sure to set your GPS so that you can avoid them and this can save you a lot of money. This might take a few minutes out of your day, but the savings, especially in toll happy places, can be significant.
· Make Your Own Clothes
A lot of people might be of the opinion that sewing is something that is hard to do. High levels of this activity can be quite difficult and can require a bit of experience, but you might be surprised at how much you can save on clothes just by hemming that pair of pants by yourself or doing a few simple alterations. At times, getting a single dress altered might cost you up to $20. You don’t need an expensive sewing machine either. You can get a good one for about $50. Then, just practice with a few patterns. You can make things like tote bags, skirts, pillows, and more with very little experience.
All in all, there are quite a few more obvious ways that you can save money. From not spending so much on your coffee every morning to sharing a ride with a co – worker. That being said, sometimes it can be a fun thing to try to stretch your limits and find more and more unconventional methods for you to save a bit more of your money. What can you come up with to save more money this year?
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Soft Versus Hard Economic Data And Why Wall Street Has It Wrong Again
I have followed Keith McCullough, the owner, CEO, and commentator at Hedgeye for some time and for the period of time he was spot on reviewing economic development of the US and its reflection to the stock market.
For a few last years, I think it was years, Keith was bearish on the US economy and the his view at market was reserved at minimum.
He caught my attention by pounding Janet Yellen and FED policy. Hedgeye’s memes that FED has it always wrong were entertaining.
But I considered Keith McCullough to be a permabear.
So I was surprised when his economic and stock market reversed some time ago (about a year ago now) and he presented his bullish view supported by economic data.
Today, Hedgeye came up with yet another article mocking Wall Street and talking heads for once again being on the wrong side of the river.
Enjoy:
Mainstream media and stock market bears have been kicking around this “soft” versus “hard” economic data meme for a while now.
“Soft” data are supposedly measures like Consumer Confidence, which just hit a 16-year high. Meanwhile, “hard” data are releases like Retail Sales, Durable Goods, Capital Expenditure and Jobs Growth which MSM says have been disappointing recently.
Nevermind that Retail Sales recently hit a five-year high, Durable Goods and Capex both accelerated for the month of March and Jobs Growth recently picked up for the first time in 23-months.
Forget that. The soft data will soften they say. Not a lot of softening of the “soft” data, yet. Today’s ISM Manufacturing data shows the Prices Paid component of the index closing the first quarter of 2017 at a 71-month high of 70.5 on the Index.
The Current Production component dropped below the 60-level while New Orders held just below multi-year highs. Employment is the big callout rising to 58.9 = highest level since June 2011 and Inventory positions continue to improve.
A few notes:
- New Orders are still strong but its hard to expect sustainable ramp from current levels. Middling may be more realistic as commodity/industrial base effect support will be waning and a protracted run >65 in mean reverting, diffusion series is an elusive beast.
- Inventories = custom inventory positions continue to improve as inventory-to-sales ratios continue to improve broadly. In other words, inventories are unlikely to be either an outsized driver or drag on investment nearer-term.
Too bad all these “soft” data experts didn’t call it out when it was softening like it did between first quarter of 2015 all the way to the low for GDP (of 1.3% year-over-year growth) in the second quarter of 2016.
Review the rest of the article at Hedgeye…
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