How not to make money
When learning about how to make money, it is also worth highlighting a few areas on how “not to make money”, which could save you a whole lot of misery and expense in the long run.
No matter how bad it gets, and how much you need the money, for whatever purpose, do not be seduced by the “dark side” to acquire money. Breaking the law will eventually catch up with you, and no matter what your original problems were, they will be far worse with the prospect of a criminal prosecution hanging over you, a possible fine, or worse still a prison sentence.
Even if you see or know other people are doing it, and appearing to be making truckloads of cash for little effort, and even justifying it by only breaking the law a little bit, don’t be tempted!
Betting or gambling isn’t illegal, (well it is in some countries), but it is a sure-fire way of losing more than you make, and ending up in a worse financial position than where you started from.
You will see numerous adverts for all manner of great opportunities to lose your money, plastered absolutely everywhere. Whether it’s the TV, radio, newspaper, magazine, internet, billboards, flyers, sponsorships, advertorials, or betting shops in your high street, the promotions are relentless. Even the Lotto is a form of gambling!
Whatever the spin maybe, handsome men throwing dice in a casino (whilst smiling), attractive women playing online bingo, during their lunchtimes (smiling even more), or a guaranteed system, for betting and winning on the horses, the outcome will always be the same. The house wins! (I.e. the betting company wins by taking all your money, and you lose, because you spend all yours.)
Other than the occasional Lotto ticket once in a while, and perhaps a flutter on the Grand National, stay away from betting and gambling, it’s a mug's game.
FX trading or foreign exchange trading isn’t illegal either, but it is often associated with many online scams, and get rich schemes.
In very basic terms, you are simply trying to predict which way currencies will go, either up or down, and also which currencies will be weaker or stronger compared to others, for example, the Pound v Dollar, Dollar v Euro, or Euro v Pound, etc.
This is actually a genuine trading strategy, and some people in the world do it for a living, both professionally, and privately, and no doubt some of them even make money doing it.
But, it is very unlikely you will make any money from it in the medium to long term, and it is very, very, likely, that if you do decide to try it, you will end up losing money. It is very easy to lose significant sums of money quickly.
I would strongly suggest you don’t even consider it. But if you can’t help yourself, then at least try the demo trading accounts first, to see just how quickly you can lose money in the safety of a demo account, without bankrupting yourself.
Spread betting, also known as trading, is another genuine trading strategy, used for making money that some people can become very successful at. The aim of a spread bet is to predict whether an index, such as the FTSE 100, or commodity, such as gold, or even a single company’s share price, will go up or down.
It may seem easy enough on the face of it, after all, it can only go up or down, so how hard can it be?
Well, that’s not quite right, it will end the day either up or down or level, but what the price does in-between is anyone’s guess, and the usual situation is that it goes both up and down throughout the day, meaning you can make money, and lose money.
The likelihood of you making money with spread betting is similar to FX trading, and it is well known that about 80% of traders lose money over time. If you don’t believe me, take a look at their websites, as they now have to publish the percentage of their customers who lose money for everyone to see.
So in summary, I would suggest you stay away from spread betting, but again, if you can’t help yourself, try a demo account first, and also make sure you read a good book on the subject, such as the Naked Traders “Guide to Spread Betting”, as it could save you a fortune in avoiding mistakes.