Tips for trading Cryptocurrencies & Personal finance
The following article does not provide investment advice, contributed by a guest author
In the ever-changing world of today, technology is changing at rapid speeds and there is always certainly something shiny and attractive enough to make you spend your well-earned money. If the bills and mortgage are not demanding money off you, it's that new smartphone with a hundred cameras on it that you convince yourself you need. Truth be told, it is difficult to save money in today’s economy, especially with the introduction of new taxes such as the new sugar tax, spiking the price of small indulgences, but it’s not impossible to save.
An investment made at the right time can give investors the leverage that they need. Owning spare cash is a great feeling, and saving it for a rainy day is a must. However, it’s wise not to let all your capital lie dormant, make it work for you. There are many different types of investments out there and investing your money in the right place, like cryptocurrency, could boost your financial background. Cryptocurrencies have allowed many people without a formal financial background, especially young people, to invest and profit from cryptocurrencies. Here are some reasons why it might be a good idea to get into crypto now and some basic financial tips that can be used in crypto investments.
Crypto trading and personal finance
Many investors are wary of using their personal finance to invest in unknown markets like cryptocurrency and rightly so. For this reason, it is wise to understand the market that you are investing in and why you should want to invest in it in the first place. Markets tend to rise and fall which is why investments of any type are tricky. You must keep in mind that you may not receive the outcome you were expecting. Investing is taking a risk, but you can still secure your investment by knowing, through your research, the market that you are investing in will give you more back. As an example, here are some reasons why you should consider Bitcoin.
1- In relation to stocks, Bitcoin is achieving better return year on year than some other major technology companies such as Netflix, Google and Amazon, even before its rapid growth in value between 2017-2018.
2- As cryptocurrencies become popular, the availability of their use increases which means now crypto is accepted and can be used in a wide range of places. This was very different from before as crypto wasn’t such a flexible currency. Now Cryptocurrencies can be sent anywhere around the world which includes hard to access markets. Digital currencies are also now supported by such a wide and diverse range of wallets for users to choose from and can be used at pay points of sale worldwide, these include smaller fees than traditional financial institution charge.
3- Bitcoin trading fees are lower than general currencies or stock which again makes them so attractive. In many cases, the exchange charge for a transaction is under 2%, depending on which company you choose to exchange with. Transactions are also executed instantly in real-time which helps to eliminate the risk of potential price change as the purchase is processed.
4- One of the biggest advantages of investing in Bitcoin is that no one else is in charge or is in control of your assets. One of the core concepts of cryptocurrency is the decentralisation of them. This means there is no central organisation or government that hold you currency or information which makes it hackable. Not only does it make your investment safe but it also means that you possess the freedom to do with it what you wish and this is regardless of the time or your location.
Initial coin offering (ICO) and
digital money investing concept - Physical metal digital coins with blue global trading exchange market price chart in the background.[/caption]
Types of Crypto trading
- Long term investing- investing in crypto for the longer term is one the easiest ways to make money. Many people decide not to trade crypto but rather buy a set amount of coins and hold them in their wallets until the price of the currency rises. They then sell them for profit. Long term investing would indicate that as an investor you have done your research and have invested in a currency you believe you will get more market share over a long time. For this reason it is wise to invest in a well known crypto.
- Day trading- If you are wanting to make money faster then try day trading which is a trading strategy which sees investors buy and sell multiple times in a day. The fluctuation in the market makes crypto ideal for day trading as the market's natural fluctuating cycle gives investors many opportunities to make a good profit. To do this you will need to look for low priced opportunities to buy and sell at a higher price. Each time you do this you may only make a small profit but overtime it will add up, a bit like penny shares. Day trading does require knowledge and skill so try and set up a demo account to practice.
- Cryptocurrency Faucet- Crypto faucet is where a website releases small amounts of cryptocurrencies every few minutes. The website makes money by advertising which users are presented with while they wait for the crypto to drop. The site is usually easy to use allowing users to earn many coins but the amount of coins is quite small and the process can be very time consuming.
- Trading cryptocurrencies as CFDs- This is done in the form of Contract For Difference and you can be a buyer or a seller. The way it works is by earning the difference between the rise and fall on the currency. It is a very profitable way of making money as you don't need to buy real crypto but just hold a contract and keep it in circulation.
- Crypto Gaming- Although there are many popular games out there, they once started off small. When new titles get released they need people to download the game for it to become popular. Some games award players with crypto prizes when they download and play a game. Users simply have to use their smartphone and download the game and play it. After completing the game, users receive a certain amount of crypto.
Tips for personal finance
The rules that are concerned with traditional investment also govern cryptocurrency investment. In order to invest, you will need to have some money saved. To help you save it is wide to put away some money at the end of every month after being paid and all your expenses have been removed. This is easier said than done and it can be hard to save which is why here are some tips to help save to give you the step you need to invest in crypto.
Keeping an eye on your spending habits
There are a number of different actions you can adopt to help you save money. Some say doing annual financial pulse is a great way to find out whether or not you are on a solid financial foundation and it will also help you notice if you have strayed from your goals a bit. Others suggest using personal finance apps which help you highlight and track your spending habits every day. Either way, both are great and can work well, helping you micro-manage your finances.
Personal finance apps on your smartphone from smartphone cheker are great with smaller day to day transactions but when making bigger expenditures they are sometimes harder to see where they can fit in when micromanaging your finances. Another downside is that if you are working in freelance fields it can be hard judging daily expenses especially against an inconsistent stream of income.
Reviewing spending habits is a great way to see trends in your spending and pick out how you could save rather than spending money on small superfluous items which over time can add up. Recording the purchase can help you identify your habits, causing you to be more reflective of what you are buying to help you save.
Use cash rather than your card or phone
Using notes and cash seems like an antiquated way of paying for items which are understandable, especially now as society has made it possible to not only just tap out contactless cards but also use our phones to tap and purchase items. However, to save money it would be wise to use cash. The psychology of handing over physical cash is very strong and goes against all the cells in our body. This will help you spend less of your money and make better decisions when spending as it will feel more painful handing over the physical cash.
Make your money goals bit size
With anything, the further away from the goal the more unlikely it is we will reach it, inevitably giving up. No matter how big the goal, like buying a house, your goals should be split up into small bite-size chunks that give you a better sense of achievement. This will help you stay motivated and help you continue to stick to your short term goal which will help you reach your long term goal.
In hindsight, saving doesn’t mean not spending your money on things you enjoy. A modest regime compared to a spartan one can help you reach your goals without making you feel guilty for spending some extra cash when out. Although your future goal is what your sites are set on, don’t let it completely change your lifestyle and rob the joy out of your life on a daily basis.
Have an essential only day
For one day in the week, dedicate it to only spending money on essential, depriving yourself of spending excess money on other things. This can be an effective and positive effect for a number of reasons. For one, it clearly shows you what you can do without on a daily basis, like that morning pan eu chocolate. This can have a knock-on effect which you can carry throughout the rest of the week. Secondly, your creativity might force you to find alternatives to your routine spending, so instead, you might learn to make pan au chocolates which will save you money in the long term.
A current account is only for essentials
If your current account holds a large sum of your money then you will feel the freedom to spend as much as you want from the account which is quite dangerous. For this reason, it is wise to only keep the amount that you need in there to get you through the week. The above points about keeping a track on your spending will help you figure out how much money to keep in there at any one time. The rest of your money should be placed in a savings account which accrues interest.
By making these small changes you will soon find yourself with enough capital to begin investing in cryptocurrencies, making your money work for you. It should be noted that the content is for informational purposes only.