Warren Buffet, one of the most successful traders of all time, once said – “Don’t save what is left after spending, but spend what is left after saving.” Warren Buffet is a successful business tycoon and an investor too with a net worth of $109 billion. Given his success, it won’t hurt if we heed his advice. After all, he was not able to get to where they are now without going through the rough patch.
If you are aiming to build your wealth as early as now in preparation for your retirement, you must start saving a good portion of your monthly salary. But there are a couple of ways that you can prepare for your future. There are also pros and cons that you must know in each of these ways. The most common way to build your wealth is through saving in a high-interest account or stocks CFD trading on a reputable trading platform like MetaTrader 5.
Why Is It Important To Set Aside Money
If you are asking why you should save money, then there are so many reasons why. Here’s the thing, no matter the amount you earn from your job, you must see to it that you are saving at least 20% of your salary for your future. At some point in your life, you may need some emergency funds, a rainy day fund will also be helpful. In case you won’t be able to use this fund, you will get more money for your retirement.
With all the factors like inflation as well as compounding interest, this money that you saved up will be worth much more in the future. Most of the time, being able to save some money every month comes with a few sacrifices which will be worth it down the line. As little effort as avoiding a bottle of wine to save some bucks will be fruitful, nonetheless.
The Risks of Trading
Many people are starting to get interested in trading thanks to all the advertisements of ‘alleged’ successful traders. But it seems like trading isn’t that easy to accomplish just like the ones seen on these promotional ads. Stock trading can potentially give you huge gains if you are knowledgeable enough and know how to use it properly.
Although you cannot totally remove the risks of trading, you can minimize it through the use of a risk management strategy consisting of different orders namely; market order, limit order, stop order, and buy stop order.
Buy stop order – this order is used when the stop price is above the market price. Traders and investors use this to protect the profit that they were able to sell short.