People all around the country are trying to find ways to invest their money in a meaningful way. Investment is the only reliable way for money to preserve its “buying power”. Buying power is the amount of goods or services a single dollar can buy. Because of inflation and other factors, a dollar can’t buy what it used to. This is why things were so much cheaper one hundred or fifty years ago than they are today.
Investing grows money faster than the rate of inflation, which is at about 2% at the time of this writing. Inflation mostly comes from the central bank printing new money. People have all kinds of feelings about this financial action, for good and for ill, but the result is indisputable. Our money is worth less over time.
This means that to preserve wealth, a person needs to find a way to grow their money at a rate higher than 2% per year. There are ways to put money away in a CD or special savings account, or to buy government treasuries, which will almost always keep money growing slightly faster than inflation would allow.
This all makes sense and is easy enough to explain to just about everybody. The problem is “just about everybody” does not have the extra money they would need to create an investment portfolio that will grow enough to build wealth or provide security for the future.
That’s why tools like spread betting are a must for investors who want to learn solid trading skills, get significant returns, but who don’t have lots of money to begin. Spread betting is different than stock and equities markets, because it doesn’t require the user to buy anything. Through spread betting brokers like ETX Capital, a new user can make informed decisions about the future prices of all kinds of financial entities and products. But rather than simply guessing, spread betting gives the user the opportunity to make real money.
To begin, a user will make an initial deposit. It doesn’t have to be very large – often less than the price of a single share of stock. This money can be used to create spread betting contracts. A contract like this will “lock in” the money for a period of time that the user chooses. The user also chooses from one of many stocks, bonds, Forex, markets, etc. that the brokerage firm makes available. The user tries to decide if the price is likely to be higher or lower than its current price, after the time runs out.
If all works out, and the price has changed according to prediction, the user will get his money back, plus extra money based on how much the price changed in the predicted direction. When the user gets to know specific financial entities, and about the many factors which cause them to gain and lose value, the user will start to be able to make these value predictions fairly consistently.
With experience and consistency comes returns that are fairly predictable. In this way, the user can start to save up money that can be used as income, savings, or fuel for further investments. The user also gets the benefit of learning skills that will translate to any other form of investment – specifically the ability to be able to understand why stocks and other equities change in value, and to be able to predict these value fluctuations ahead of time with some accuracy.
Spread betting users can begin with a demo account that lets them try their knowledge and intuition without risking money. Try it out yourself and you may decide it’s the perfect investment tool for you.