Good day, ladies and gentlemen. Today I would like to touch upon such a not-so-obvious topic in forex trading as free money management. There are 2 stages: 1. Earn money; 2. Spend them or invest.
Anyone can cope with the spending of money perfectly and without advice, but I would like to talk in more detail about investments, not even so much about investments, but about money management in everyday life. All of the following is personal experience. No sofa analytics.
Who is this article for?
The tips outlined below will be useful both to those who have a very small income, and who earn more or less decent money. Somewhere up to a million rubles a month. If you are a scorched oligarch, you are unlikely to find anything useful here)
Why invest if there is forex?
I often give advice to withdraw half of the earnings from Forex every month. Many do not understand why. There is an illusion that if you constantly invest everything you have earned in your own trading account, then you will very soon become a billionaire. This is not true. Think about it: why do owners of factories / steamboats invest in other companies? Invest in funds, etc. ? Why do not they invest all their money in their own enterprise?
The answer is simple - diversification. This reduces risks and gives emotional calm. And this is very important.
Passive Income, Investment, and Self-Employment
There is an illusion, supported by sellers of scam courses, that there is a certain opportunity to invest $ 100 and get a million rubles in a couple of years, or better dollars. Examples include shares of Apple or Peter Thiel, who invested in Facebook early on. These cases are just an exception to the rule, and at least it’s not reasonable to expect that you are also lucky.
Money makes money whether you want it or not. Huge profitability is possible only if you plow in the business in which you invested. Those. if this is your forex account or your business. Investing is passive money management. Those. when you once made some calculations, invested, and then someone else does all the work.
If you open your own business by investing your own money and work in it yourself, this is not an investment, but self-employment. The resources of time and energy in humans are very limited, so we will not consider self-employment in this article. It will be about investment.
It may seem that there are countless investment tools, but in fact they are divided into a small number of groups:
- Bank deposits
- PIFs, investment funds
- The property
- Stocks, futures, etc.
- Trust Management, Pamm Accounts
- Various muddy schemes a la MMM
- Foreign business
Pyramids, hyip, network marketing, other scam
Leave such nonsense to naive schoolchildren and gullible alcoholics. Earn on the pyramids and projects "invest $ 100 - get $ 100,000" is possible only if you organize them yourself. Those. Stand at the top of the pyramid and money from silly coots flow into your pocket.
The main and easiest way to invest available funds available to mere mortals. Although many neglect it, referring to the low profitability. This is not from a big mind, but from a small amount of money. In fact, having deposits in the amount of 30 million rubles with an interest rate of 8-10% per annum, you can no longer work at all. And this amount is not so big, believe me.
The main advice when using bank deposits is, of course, the distribution of money on deposits of not more than 1.4 million rubles per deposit in one bank. Because this amount can be obtained back on insurance in case the bank closes. What to do if suitable banks have run out, i.e. Do you already have everywhere the maximum amount of insurance? Engage relatives, spouses, children, etc. Just do not forget that you should absolutely trust this person.
How to find deposits with a good percentage? To search for deposits with suitable conditions (in current realities, I advise you to focus on the rate of 7-10% per annum) it is convenient to use the site //www.banki.ru/.
But try not to invest in completely left banks. Check reliability by Forbes annual rating.
It should be understood that the more reliable the bank, the lower its interest on deposits. The golden mean is to open deposits in banks actively lending to the population. Currently, it is TCS, Binbank, Russian Standard, aggressively enters the Renaissance market, etc. The bottom line is that the bank has a good cash flow from those who take loans and pay huge interest, and this enables the bank to give high interest on deposits to us already. And since lending profitability is high, the bank does not need to engage in gray operations like cashing out and the probability of its closure is low.
Another tip - sometimes there are “tasty” offers from banks on deposits. You need to catch them and open a deposit for a long time. For example, in the crisis of 2008, it was possible to open a deposit in some banks with a yield of up to 17% per annum.
Do not forget about diversification. We invest in deposits with high rates in “progressive” banks, and in banks with high reliability, but with a small percentage. The most important thing is to avoid Sberbank, at all costs.
Minus deposits - loss of interest when closing a deposit. If it is likely that you may need the money, you can put it in a current account with interest on the balance. You can withdraw money at any time and interest is accrued every month. Binbank, Promsvyaz, Unicredit Bank have such accounts.
Should I open deposits in foreign currency? Worth it. Although deposit rates in foreign currencies are much lower, this is another diversification tool that should not be neglected. In addition, low rates are often offset by rising currencies.
Even more - save money in foreign currency. It is possible on a deposit, it is possible on a forex account, it does not matter. The bottom line is that the dollar grows strongly every N years, but the ruble ... you know.
Loans and debts
Try not to take loans (in any form) and do not lend. And everything will be fine with you.
An exception may be a “good” loan for a business, for example, purchase of equipment by installments.
In general, debts, when you have them, eat a hole not only in the budget, but also eat your energy. Although this is again not the topic of this article.
An exception is credit cards with a grace period when you can pay off a debt without interest for a period, usually around 1-2 months. Those. You bought something for 10,000 rubles, and if you pay off this debt within a month, you do not have to pay any additional pennies for the loan. But be careful - it’s very easy to get into the rage of consumerism. Consider such credit cards as a tool: for example, when there is not enough money to buy on a debit card or to book a hotel on a trip. By the way, it is better to book hotels with a credit card rather than with a debit card - it’s easier to remove the amount lock in case of cancellation.
Oddly enough, but plastic debit cards also provide the opportunity to increase your money. First of all, we are talking about cards with a percentage on the balance. Those. you spend money from a card and at the end of the month you get a percentage on unused funds.
Uralsib has such cards (5.5% on the balance), TKS (8%), Rocketbank (Interkommerts Bank brand, 8% on the balance). Recently appeared to Ibank - a Renaissance brand with a percentage on the balance.
Another way to save a little is the Cashback option. Those. return a small percentage of purchases to the card. Previously, this was only with credit cards (which we, of course, do not use), but now debit cards have a cashback. Examples, again, TCS and Rocketbank, Binbank, Ibank, Promsvyazbank (All Inclusive card)
You should have a lot of cards. Because they can be blocked at any time for a reason and without (it happened to me more than once). And the prospect of being left without money in another city, or in general abroad, is not very pleasant. Therefore, do not limit yourself to a card of one bank, make 5 pieces in different ones.
Never issue cards such as GOLD and Platinum, if this requires additional costs. The status of such cards has already depreciated for a long time and you will not receive anything other than extra service fees.
Personally, I don’t like cash, but you should have it. Moreover, both rubles and currency. Determine the amount yourself, but this money should be enough for you to live quietly for about a month. In case of war, alien invasion or the collapse of the banking system. Everything happens in life.
I recommend keeping money in a safe. The safe itself and its installation in the apartment are not at all expensive, and you will be calm for your values when you call a housekeeper or plumber.
Mutual investment funds are often presented as a source of enrichment. But this is not so. Yields on average over 3 years rarely exceed bank deposits, and management fees and risk of loss completely kill all the attractiveness of mutual funds. I believe that investing in mutual funds is possible only when the money has nowhere to go.
A very complicated topic. If you think that there are risks only on Forex, you are mistaken. 9 out of 10 new businesses are closed within a year. Are you lucky to invest in a project that becomes successful? Maybe yes, maybe no. Personally, for all the time I gave a large sum of money for a business to only one person, a good friend. And that, only because he has serious partners in his partners with experience. So far, this investment has not brought any special profits, but also losses.
Update: my money hung in the "debt" mode for an indefinite period. IMHO, do not invest in someone else's business.
Stocks, futures, etc.
To make money on stocks (not active trading) you need to do this from morning to evening. To study a bunch of reports, calculate risks, monitor the market, politics ... Ie it becomes not investment, but self-employment. Forex is enough for me, so I don’t buy stocks.
It’s not manna from heaven, but with a good selection of pamm accounts, incomes are higher than on bank deposits. Learn more about PAMM investing. Also every month our Investor Digest is published.
I want to note that pamms are also risky investments and it is not worth investing more than 10% of your capital in them.
Real estate investment
Kiyosaki does not work in Russia. Therefore, if you are hoping to take an apartment on a mortgage and pay a loan at the expense of rent, - forget it. Well, or move to the USA.
Buying real estate for investment, not for your own residence, is a very difficult and costly business. And this is "long" money, because You can sell the purchased apartment without losing taxes, only after 5 years. Therefore, I believe that investments in real estate can begin to be considered when you have 10 million of capital. To temporary freeze, say 5 million does not bother you.
Unfortunately, my experience in investing in real estate is not very successful so far. In the current crisis situation, I do not advise investing in new buildings, if you already take the apartment as an investment, then either it is a secondary property, or on a cycle close to putting the property in commission.
Finally, a couple more simple everyday life tips on finance.
Electronic Payment Systems (EPS)
Do not keep money in virtual systems such as webmoney, Yandex, etc. large amounts without special need. Still, this is virtual money and it is not insured in any way. In the end, hackers can simply hack your account and withdraw your belongings.
Because in all EPS, a certain commission is taken for the withdrawal of money, try to pay all that is possible via the Internet with the money that you have accumulated. Namely: a mobile phone, the Internet, utilities, tickets, various purchases in online stores.
Each of us at least once came across cards that give discounts, or cumulative bonuses in various stores, restaurants, etc. This is nothing more than loyalty programs. Their goal is to make you come again not to the neighbor’s store, but to the one whose discount card is in your wallet.
How to outsmart the system? Very simple. We, on occasion, draw up discount cards EVERYWHERE. Those. we do not feel attachment due to discounts to any institution, we get freedom of choice + discounts. Which help a little, but save.
Buying at sales is not a shame, but often profitable. So that your snickering snobs-friends do not say there. Moreover, if things are expensive, sometimes a tidy sum can be saved. The most important thing to remember - DO NOT BUY ANYTHING EXTRA. The purpose of a store sale is to sell you something unnecessary, just because it's cheap. So, we buy on sales only what we would buy without a sale. We don’t look at everything else, otherwise it’s not saving, but extra spending and a lot of trash in the apartment. Especially this advice applies to women 😉
If you often fly to other countries, pay attention to the Duty Free zone at the airport before departure - goods without VAT, which again saves you money. The principle is the same as with sales - we take only what we would buy in any case.
Never save on health, products and your own peace of mind. Everything should be in moderation. No need to walk to the other end of the city on foot to buy a bag of potatoes 3 rubles cheaper. Losses of time are too high. It is usually better to spend time earning than finding cheapness.
I sincerely hope that the above tips will be useful to you. How do you manage your money? Share in the comments 🙂