Review of Betterment Investing: Is it Better?

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Some people avoid investing because they feel unsure about how the system works and are afraid to make costly mistakes. However, thanks to the increasing number of services and applications offered today, the field is becoming more accessible to everybody. Enter the review of Betterment Investing app. Most apps provide complete investment management. Services range from the creation of a balanced portfolio to the reinvestment of dividends. The bottom line is that you don’t need to be an expert in investing to make an account! If you are new to this world and are looking for a way to invest without having to select stocks or mutual funds yourself, you should consider Betterment Investing. Because we want to help you make an informed choice, we put together this review of Betterment Investing. Here, you’ll find out what’s in for you and what drawbacks you might have to face.

What Is Betterment Investing?

Review of betterment investing: Should you invest? What is this all about?

Betterment Investing was the first automated online investment platform and still is one of the best applications out there. The system uses Modern Portfolio Theory to allocate your money to the right stocks based on your risk levels.

The application provides the same level of service you would get from human investing advisors. It will automatically invest your money in diversified stocks and bonds without the high expenses that advisors require.

It’s important to not in this review of Betterment investing, that they offer three different plans to fulfill the diverse requirements users might have. The basic plan is free and provides users with a debit card and the possibility to withdraw money with no limits. The “digital investing” option is for account balances under $100,000. This includes socially responsible investing options, automatic features of rebalancing, and advanced tax-saving strategies. The “premium” plan charges a 0.40% flat fee on the account. It is really only suitable for profiles with a $100,000 minimum balance.

Why Is Betterment Investing Good?

Betterment investing is an app on your phone that you can use to invest in stocks and bonds.

My review of Betterment investing should note that they offer a simplified investing model and do not require any financial knowledge from the investor. The application has a user-friendly interface with the possibility to create financial goals and checking your investments live. Also, Betterment investing has no requirements in terms of initial investment, making it more accessible to anyone willing to start investing, no matter the budget. You can open an account for free and fund it as you please with regular contributions. Plus, the annual advisor fee charged is lower than the one offered by the competition: you can manage your account for 0.25% per year!

The app allows for flexibility and makes it possible to adjust your portfolio to your risk profile.

Also, Betterment offers tax-loss harvesting strategies on all taxable accounts, which minimizes tax liability when it comes to your investments. Furthermore, you’ll get unlimited access to financial planners and advisors. Plus, the application offers the possibility of opening a checking account, which would allow you to earn cashback from various retailers.

This review of Betterment Investing would not be complete if we didn’t consider what doesn’t work well with the application. Let’s have a look at the drawbacks in the next section.

Disclaimer: I receive affiliate compensation for some of the links in this post at NO cost to you. However, these are the best tools I have used and tested that I believe are most effective for launching and running an online business. You can read our full affiliate disclosure in our privacy policy.

What Are the Drawbacks of Betterment?

Betterment may be better for beginner investors.

To start with, the variety of investments is rather limited since users can only consider stocks and bonds. Amateurs may like this feature, but it might limit experienced investors. Also, the app presents itself as an “affordable” service, but pricing raises on higher balances, making it suitable only for smaller accounts. If you are concerned about fees, you can find alternatives that charge no fees at all, no matter your balance.

The app does not allow synchronization with different accounts unless you have a premium profile. If you have more than one account, you might want to look for another service.

The Bottom Line: Review of Betterment Investing

Betterment is a valuable service, but it does not work for everyone. New investors will probably get the most out of Betterment because there is no minimum investment to start. Plus, there is a simple interface. The service is generally suitable for people without time to manage their investments. Including those who feel overwhelmed about finance. Overall, Betterment is one of the best online and automated financial advisors for inexperienced investors. If you are looking for an efficient platform to handle your passive investments at affordable prices, you should consider this application.

I enjoy looking into many of these investing apps that can make our lives easier. I did review of the Acorns App, and it is very similar to this review of Betterment investing. If you are looking to compare, I would suggest take a look at that review as well. At the end of the day, if I can make investing decisions easier, that would give more people the financial education to invest more and achieve the ultimate goal of financial freedom.

That is what we are all looking for, right? The opportunity to be independent of a clock or a boss. We would still have priorities and deadlines, but they would be our priorities and deadlines, not someone else’s. I hope that is your goal as well. Keep in mind though, as I say often, investing in the stock market is only one piece of the puzzle. There are four asset classes and we need at least five streams of income. Make sure to check out how to build you own business below. Having a personal business as a side hustle can only get you to your dreams faster. Cheers to your success and Happy Trading!

Before you go…

You can start a business easier than you think, but it requires help and education to make good money. The program below offers a coach mentor on day one and walks you through the process how to get started.

Partner up with me by clicking on this link and watching the video.

We will show you EXACTLY how to build a business online and customize a plan just for you. We will help you choose a niche, setup your online business and help with selecting offers that you can promote.

On top of that you will get ONE on ONE mentoring to make sure you are doing things right.

A great way to be able to save more money is when we make more money.

Cheers to your success and See you at the Top!

-Cameron

Mind Money Masters

Review of Acorns Investing: Read This First!

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Investing apps and services seem to be booming lately. However, when it comes to taking the concept of easy investing a step further and automatize investment strategies as much as possible, Acorns investing does it best. But before you run to their website and set up your profile, you should have a look at our review of Acorns Investing. In this essential guide, you’ll find all the information you need to decide whether this service is the right fit for you.

What Is Acorns? (Review of Acorns Investing App)

Acorns Investing is one of the several app-based investment platforms you can find in the market. What makes it unique is its concept of using spare change to invest. To put it simply, the application rounds up your transactions and invests those cents into a diversified portfolio. All without you having to do anything. The app’s idea is to remove anxieties and mental blocks to become investors and simplify the whole process.

In this review of Acorns investing, we need to talk about the pricing; Acorns currently offer its services at three pricing levels: the Lite, Personal, and Family profiles ranging from $1 per month to $5 per month for a family profile. It is worth mentioning that aside from that monthly fee, there are no charges on transactions on Acorns.

The app is easy to use and offers efficient customer support, available seven days a week from 6 a.m to 7 p.m.

This review of Acorns Investing will cover pros and cons and personal opinion.

The Pros of Acorns

In this review of Acorns investing, we want to discuss pros and of course, cons of using the App. But first, the pros; The app offers portfolios ranging from conservative to aggressive. The system suggests the best fit for your characteristics. Once you’ve linked your debit and credit cards to your Acorns account, the investment of spare change will be automatic. The application will take care of it all, which takes away a lot of stress. Plus, the amounts taken from your account are so small, you won’t even notice they are missing.

Removing Complexities of Investing

The application, therefore, takes away all of the complexities of investing. The idea is that you don’t need to understand economics and financial theories to use Acorns.

Another big win for the app is that, contrary to other similar services, Acorns Investing does not require a minimum deposit to start using it. Furthermore, if you are a new investor, you might appreciate the educational content you’ll find in the app. Their videos and articles are useful to make sense of the world of investment. Also, you’ll get some advice on personal finance, credit cards, and loans.

Acorns investing can be an easy way to invest.

The Cons Of Acorns Investing

As with many things in life, not all is rosy about the application. We have to include all of the drawbacks of the service in this review of Acorns Investing to give you a good overview of what you’ll encounter.

One considerable drawback of Acorns is the possibility of losing money, even when investing in rather conservative portfolios. After all, Acorns is an investing platform, not a savings account. Also, because of the small quantities managed by the app, it is unlikely you’ll be able to save the 10-25% per year you need for your retirement goals.

Limited Investing Range

The portfolio you’ll find in Acorns is smaller if you compare it to other applications. Also, it’s usually made up of low-cost iShares and exchange-traded funds, which might feel restrictive to more experienced investors.

Disclaimer: I receive affiliate compensation for some of the links in this post at NO cost to you. However, these are the best tools I have used and tested that I believe are most effective for launching and running an online business. You can read our full affiliate disclosure in our privacy policy.

The Bottom Line: Review of Acorns Investing

It is no doubt that Acorns and similar apps have contributed to making investing more popular. If you are new to investing, you should consider getting an Acorns account: you’ll be surprised to discover how quickly your pennies can accumulate. Acorns is an efficient way to save and invest little money that you would spend on other things. Still, investing is not for everyone, so think twice before setting your account, as you might lose money.

It is important to point out that Acorn’s fees might wipe away your investment returns due to the little balances.

Overall, Acorns Investing can help you start nudging yourself into investing without causing overwhelming changes in your lifestyle. Acorns investing is a good choice for boosting your savings and opening your path to investing. In general, it is fair to state that Acorns is good for you if you are looking to automate investing as much as possible and if you value simplicity over other elements (such as variety in portfolios).

My Final Take

Whenever you select a new way to invest, it’s really important to look at all the facets of that program. Personally I do use the Acorns Investing App for a small portfolio. I like that they use ETFs in their portfolios. Acorns has taken the thought out of picking ETFs and custom tailor a portfolio for each individual. In this review of Acorns investing, we see that the portfolio is still managed and there are fees as stated above. Be careful with the fees that it doesn’t take away from you gains. You might even want to compare this option with Betterment Investing.

How To Generate Consistent Cash Flow

That being said, I’ve stated in many other articles and on my YouTube videos, paper assets are only one piece of the puzzle. It’s important to have multiple streams of income. This way you can have consistent cash flow to fund any investment you are interested in. The best way to do that is to start a side hustle or a side business. My personal choice is in digital marketing.

You can start a business easier than you think, but it requires help and education to make good money. The program below offers a coach mentor on day one and walks you through the process how to get started.

Partner up with me by clicking on this link and watching the video.

We will show you EXACTLY how to build a business online and customize a plan just for you. We will help you choose a niche, setup your online business and help with selecting offers that you can promote.

On top of that you will get ONE on ONE mentoring to make sure you are doing things right.

If we are generating multiple sources of income and cash flow from multiple assets, it can make saving and investing much easier.

Cheers to your success and See you at the Top!

-Cameron

Mind Money Masters


Cash Out Refinance: Home Owner’s Guide to Equity Refinancing

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Do you need a large amount of cash to pay down some debts? Maybe renovate your home, or finance your child’s education? How about you go for a cash-out refinance? If your home value has increased and interest rates are hovering very low, tapping your home equity can be a great option. With a cash-out refinance, you can typically take out almost 80% of your home equity. The idea sure sounds good, but before you dive into it, let’s discuss how it actually works.

Below you will find everything you need to know about using some of your home equity in a refinance.

What Is a Cash Out Refinance?

A cash out refinance can change your expenses and your use some of your savings to close the loan. Make sure it makes sense.

A cash-out refinance is a loan option that replaces your old mortgage with a new one. This loan is higher than your previously existing loan balance but, helps borrowers get money out their home mortgage to use for their financial goals.

In the real estate world, refinancing, in general, is about replacing an old mortgage with a new one. This new mortgage introduces the borrower to more fortunate terms. By refinancing your mortgage, you may be able to decrease your monthly interest rate, negotiate lower monthly mortgage payments, modify periodic terms, and yes, potentially take out money.

To use this type of refinance, you must have a considerable amount of equity built-up on your home.

Key Takeaways

  • In cash-out refinance, a replaced mortgage is more than your previous outstanding mortgage balance. You receive the difference disbursed to you.
  • Usually, a borrower pays more points or a higher interest rate on a cash-out refinance mortgage.
  • A lender decides how much cash you will receive with your refinance. This is based on your current credit profile, bank standards, and your home’s loan-to-value ratio.

How A Cash-Out Refinance Works?

Here is an example of what a typical cash-out refinance might look like.

Suppose you took out a mortgage of $200,000 to buy a property worth $300,000, and after many years, you still owe your lender $100,000. If we assume that property value is still $300,000, you have an equity build-up of at least $200,000. Having equity can make you eligible for a cash-out refinance.

Typically, lenders are willing to pay around 75% of a home’s value. For a $300,000 property, this amount would be around $225,000. Now, if you have a remaining principal of $100,000, you have a good chance of receiving $125,000 in cash, which is the difference. The whole process generally looks like this

Your home equity could offer a pile of cash if you use it correctly.
  • 75% of a home’s value: $225,000
  • Remaining principle: $100,000
  • Cash-out: $125,000 (minus the closing cost)

If you decide to take out only $50,000 of cash, you would refinance with a $150,000 mortgage loan that would come with new terms and lower rates. The replaced mortgage will consist of the $100,000 remaining loan principal and $50,000 that you cashed out.

When Is It Best To Cash Out From Your Equity?

A cash-out refinance is a good option to maybe lower your interest rate on a new mortgage. Also, if you want to use some of the equity in your home. But, seeking a cash out refinance to fund a new car or a vacation might not be a good idea. This is because you will have little or no return on your a car. You really shouldn’t use cash to pay for liabilities. You should buy assets that can create consistent cash flow and with that cash flow maybe buy the liability.

That being said, you can use the cash from the refinance for any of your financial goals. Most homeowners cash out their equity for the following reasons:

Investment purposes: A cash-out refinance provides homeowners with capital to help them purchase an investment property. You can also fund a retirement vehicle assuming the return is higher than your interest rate on the loan.

Home improvement: Use the money from a cash-out refinance for a kitchen or bathroom remodel. Also, updating furniture is a sound option and can benefit you in the long run.

Consolidate debt: refinance rates are comparatively lower than other forms of debt like credit cards. The proceeds can help homeowners pay these debts off, and pay the mortgage back in one, lower-cost, monthly installment.

Child’s education fund: Education is expensive. Taking money from your home equity is a wise option if you get the interest rate lower than your child’s student loan.

Disclaimer: I receive affiliate compensation for some of the links in this post at NO cost to you. However, these are the best tools I have used and tested that I believe are most effective for launching and running an online business. You can read our full affiliate disclosure in our privacy policy.

What Are The Benefits Of A Cash-Out Refinance?

silhouette photography of jump shot of two persons

This loan has many advantages over other types of loan models if you are anticipating a large sum of cash. Here are some common reasons you should opt for a cash-out refinance:

  • With cash-out refinancing, you will typically get a higher rate on your mortgage. This is the main reason why people prefer traditional refinancing.
  • If your home improvement project increases your home value, tapping into your home equity can actually deduct the mortgage interest from the taxes. You would want to talk to your tax advisor on this. Also, the cash-out refinancing option can be much less expensive than personal loans or credit cards.
  • Paying your debts off with a cash-out refinance makes a lot of sense. However, make sure you do the math first. This move is only beneficial when you can reduce the interest rate on your primary loan and make good use of the cash you take out.
  • Mortgage debt can be repaid over a typically longer period as compared to other types of debt. In most cases, this period goes up to 30 years, so it can make paying a large amount of debt a little less troublesome.

Is There Any Fee For a Cash-Out Refinance?

While doing a cash-out refinance, expect to pay 3-4% of the new mortgage amount for the closing costs. Your closing cost would consist of your lender origination fee. To get the most competitive rate and terms, search the market and shop around for multiple lenders.

A cash out refinance of your home equity must make sense. Make sure to do the math before deciding.

My Final Take

Before diving into the process, make sure that a cash-out refinance is the right option for your financial goals. Remember that you are actually using your house as collateral, which means you may lose it if you fail to pay the new mortgage. Tapping your home equity is a decision that you should make wisely. It is a strategic way to boost your financial profile.

Whenever you decided to take money out of your equity in your home, there should be a really good plan for the funds set forth. Many people take a cash out refinance to pay off credit card debt and that in and of itself is not a bad idea. You want to keep in mind that should we face another mortgage crisis like we did in 2008 – 2010, the value of your home could fall. Furthermore, if your home holds less value than your loan, you are upside down in value versus cost. Plus, you still have to pay the higher mortgage. For this reason, I do not consider your home an asset as it by itself does not produce cash flow.

Uses of the New Loan

If you are using the funds from a refinance to fund an investment or increase cash flow in some manner, then that is a positive way to use the funds. Remember, an asset is anything that puts money in your pocket. Debt is not a bad thing, but it can be used for the wrong reasons. There are many very successful people who use debt as a tool to become more successful.

The last point I want to bring up in this final take section is another use for the funds from your new loan is to fund a personal business. A personal business, even as a side hustle to start can offer an additional stream of income. The wealthy have at least 5 streams of income. If you are relying only on a paycheck as your only source of income, then that is very scary place to be. Take the chance to learn something new and explore other side business opportunities.

Before you go…

Do you want to learn how to start a business and scale it to achieve your dreams and goals? You can start a business easier than you think, but it requires help and education to make good money. The program below offers a coach mentor on day one and walks you through the process how to get started.

Partner up with me by clicking on this link and watching the video.

We will show you EXACTLY how to build a business online and customize a plan just for you. We will help you choose a niche, setup your online business and help with selecting offers that you can promote.

On top of that you will get ONE on ONE mentoring to make sure you are doing things right.

A great way to be able to save more money is when we make more money.

Cheers to your success and See you at the Top!

-Cameron

Review of Marcus by Goldman Sachs Savings Bank

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In this review of the Marcus by Goldman Sachs Savings bank, we will discuss multiple things. It’s important to have a short history of Goldman Sachs and how Marcus started. Also, we will go into the general structure of the savings account offered, including some pros and cons, then of course I will give you my final take on using this option as alternative to your everyday bank for storing cash.

When you think of Goldman Sachs, possibly the thought of high-end investors comes to mind. We may dismiss any account by Goldman Sachs as being beyond our reach. However, the relatively new Marcus savings account changes all that, with an account that does not require a minimum investment or minimum balance. Opening an account is simple and you simply fund it anytime within the first 60 days, and that’s it.

Goldman Sachs is one of the world’s largest investment banking companies. The company was formed in 1869 by Marcus Goldman and is headquartered in New York. It also has other offices in major financial centers. Goldman Sachs Bank USA is a direct bank serving customers directly through online accounts.

As a Direct Bank, the everyday costs of Goldman Sachs Bank are significantly reduced, making it possible to offer far more competitive banking products. Very few people tend to use bricks and mortar facilities, even when banks offer them. Online banking is far more convenient.

In this review of marcus by goldman sachs, we review the pros and cons of considering a new savings bank.

Marcus

For this review of Marcus by Goldman Sachs, we should give some background on the Marcus account. It was created in 2016 and immediately made Goldman Sachs much more accessible to the general public.


Important aspects of the Marcus account are that it carries no fees, and offers a competitive 0.50% APY, putting the account in a strong position against the competition.

No monthly maintenance fees and no transfer fees are a refreshing change in this environment. It is especially unusual to find what people typically regard as a high-end bank is reaching out to a broader marketplace.

Your Marcus account is FDIC insured. The FDIC limit is $250,000, so you are protected from market vagaries. Most accounts offer this same coverage.

Saving

The Marcus account, like any savings account, is a wise choice. However, the Marcus account helps you get into the habit of saving by allowing you to set up automatic transfers so that you cannot be distracted and forget to make your deposit. Successful saving needs to be a seamless process where money just moves from one account into another without taking any action.

Most savings accounts do not to allow too many transfers each month. They are not intended as accounts from which you make transactions, they exist to allow you to put aside money for the longer term. Marcus has a generous monthly allowance of six transactions, including deposits and withdrawals. This should be more than enough for somebody who is using the account correctly. The good news is that instead of allowing extra transactions to go through, and then hitting you with fees, they put a hold on the transaction.

An excellent feature is that you can transfer $125,000 online and unlimited transfers if you call first.

Disclaimer: I receive affiliate compensation for some of the links in this post at NO cost to you. However, these are the best tools I have used and tested that I believe are most effective for launching and running an online business. You can read our full affiliate disclosure in our privacy policy.

Marcus by goldman sachs offers a full range of products.

Pros & Cons (Review of Marcus by Goldman Sachs)

For the purposes of this review of Marcus by Goldman Sachs, we will offer some general pros and cons versus any direct comparison against another bank. The intent here is not to place one bank as better than the other, but simply to offer options that are available to you as an informed investor.

Pros

1.   Excellent interest rates

2.   Live (USA Based) Call center staff during office hours

3.   No Monthly Maintenance Fee

4.   No Minimum Balance

Cons

1.   No Mobile deposit for checks (they have to be mailed in)

2.   No ATM Card available with this account

3.   No physical branches for banking transactions

Marcus Bank Review: High APYs, No Monthly Fees

Deposits and Withdrawals (Review of Marcus By Goldman Sachs)

Since this is a saving account, rather than a current account, the convenience of paying in and withdrawing may not be quite as important, but it is still worth considering.

You can make deposits into your Marcus account using one of the following methods.

1.   Free Electronic funds transfer

2.   Free Direct deposit

3.   Free Wire transfer

4.   Check posted to the office (will cost you a stamp and an envelope)

There are two ways to withdraw funds from your Marcus account. Remember, in common with most other savings accounts only six withdrawals are possible per month.

1.   Electronic Transfer

2.   Wire Transfer

My Final Take (Review of Marcus by Goldman Sachs)

The Goldman Sachs Marcus account offers excellent rates of interest, comparing a couple of competitive accounts we see:

Marcus Account               0.5% APY

CIT Bank Savings Builder        0.4% APY

American Express High Yield    0.4% APY

Of course, as an online-only bank, you have no branches to visit, but that does not bother many people. More importantly, is that you do not have an ATM facility.

The other major factor that might appeal is the “No minimum balance” which is also offered by American Express, but not CIT Bank who requires a $25K deposit/$100K per month. The Marcus account is certainly worth consideration. I have another great article just on general savings techniques in my post on ‘Investing and Savings‘.

It’s plain to see that if you are comparing just general savings accounts, this appears to have many positive aspects that don’t exist with other banks. Keep in mind that interest rates offered are always subject to change. Please don’t make an investing decision based solely upon the interest rates at the time. My impression is that Goldman Sachs is offering the Marcus savings account to attract new investors for their financial products. Which, in and of itself is not a bad thing, I would simply suggest that there may be future strings attached. If you have a desire to invest with Goldman Sachs, then by all means feel free to utilize this savings account. If you are curious about another option, please check out my review of Chime Bank. It could fill your needs better.

Before you go…

I would always suggest, however that there are four asset classes and Goldman Sachs may be able to offer several, but ultimately to achieve true financial freedom and long term wealth, we need to have a side business of some kind.

Have ever considered a side business where you can devote at least 30 minutes per day and achieve lasting success? The program below helped me get started. It will teach you everything you need to know to be successful with a digital business. This is the same program that has allowed me the freedom to work for myself full time. You can start a business easier than you think, but it requires help and education to make good money.

Partner up with me by clicking on this link and watching the video.

We will show you EXACTLY how to build a business online and customize a plan just for you. We will help you choose a niche, setup your online business and help with selecting offers that you can promote.

On top of that you will get ONE on ONE mentoring to make sure you are doing things right.

A great way to be able to save more money is when we make more money.

Cheers to your success and See you at the Top!

-Cameron

Mind Money Masters

Review of Chime Bank: Should You Use it?

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Lately there has been an increase in not only working from home, but banking from home. So many banks have built out better options to bank from the comfort of your home as long as you have an internet connection. Chime Bank is one of the leading institutions in this space and I think we should discuss some benefits. In this review of Chime Bank, we will first discuss the basic understanding of what Chime Bank is, how it operates, some pros and cons and also some frequently asked questions regarding this cutting-edge banking program.

What is Chime Bank?

Review of Chime Bank Logo

Chime Bank is an online-only financial business. It is far removed from what most people would imagine a bank to be, with a local bricks-and-mortar building. Chime has no branches and you interact with Chime online. But let’s be realistic, when did you last visit your bank to make a transaction? Most people will probably not remember as this tends to be so infrequent. They may not have local branches, but they do have FDIC insurance, so your money is completely secure.

When you join Chime, what you are getting is a checking account. Chime call this account a “Spending Account” (who used checks these days?) You also get a Savings Account. You will appreciate the virtually zero fees. There are no overdraft fees and no monthly fees. What is more, is that there is no minimum balance to maintain.

None of this is new. Other online banks offer very much the same product, Chime, however, has added two new features that make the account much more functional.

Review of Chime Bank Debit Cards

Whenever you review any bank account, we must always bring up the notion of Debit and credit card rewards. This review of Chime Bank is no different. Many people dislike the idea of credit cards. They do not want to build up debt with a credit card. A debit card will carry out much the same function without risking slipping into a debt spiral.

There are many benefits to using a Chime Bank Debit card

Unfortunately, many debit cards do not have the rewards schemes offered by credit cards and this is where Chime is very different. The Chime rewards program is more sophisticated than the average cashback scheme with a fixed percentage cashback. With Chime, you get a discount voucher with selected purchases and when you make a purchase in a qualifying store a discount voucher is automatically added to your account.

Quite probably the Chime reward scheme is not going to be as good as that offered by a credit card company, but it is certainly better than nothing, which is what you get with other debit cards offered elsewhere.

Automated Savings Account

In my review of Chime Bank I noticed a special feature that I particularly like; the automated savings feature. Once again in its basic format, it is not unique, but Chime has added their own take on the idea and improved it.

It works like this. Chime will round up purchases made with your Chime debit card to the next complete dollar. It then transfers the extra change into your personal savings account. That is not unique, but what makes the Chime scheme better is that once a month they will calculate how much you saved this way, and will then give you a bonus of 10% on that amount. So if all the rounded-up amounts come to $30 in a month, then Chime will add an extra $3 to your account.

Disclaimer: I receive affiliate compensation for some of the links in this post at NO cost to you. However, these are the best tools I have used and tested that I believe are most effective for launching and running an online business. You can read our full affiliate disclosure in our privacy policy.

Review of Chime Bank Pros & Cons

Pros

1.   You receive Direct Deposit payments early

2.   Useful automatic savings tool

3.   Free withdrawals at 2,400 ATMs (MoneyPass)

4.   Virtually no fees

Cons

1.   The Mobile payment app only works if both parties have a Chime account.

2.   No branches

FAQs (Review of Chime Bank)

1.   How do I deposit checks?

 Checks are deposited via mobile deposit on the Chime App.

2.   Where can I use my debit card?

 Anywhere Visa is accepted. You can also add your Chime debit card to Google or Apple Pay wallets.

3.   How can I get a replacement card?

 You can order your replacement Chime debit card through the Chime App

4.   What happens if someone steals my Chime debit card and makes purchases?

 Chime debit cards are covered by Visa Zero Liability Policy, so you will not be charged.

5.   What are the requirements to open a Chime Account?

 You must be 18, a USA resident or citizen, provide your home address, and your social security number.

Chime bank is an online financial institution with multiple benefits.

My Final Take in the Review of Chime Bank

In this review of Chime Bank, we see that the account is easy to apply for, simple to use, and fully protected by the FDIC and Visa. It will be sufficient to handle the needs of most people through the App. If you are someone who regularly goes into your present bank’s branches, then maybe you might miss that facility, but most people rarely if ever go into a branch, so it will not be noticed. The addition of the 10% override on your rounded up savings, and the limited reward scheme, make this account marginally better than most other similar online-only accounts.

Remember from previous posts on Savings and Investing, my particular dislike of just saving money in a bank account and not using it for anything investment related? That feeling still stands true with this review of Chime Bank, however, there are certain perks on this account that cannot be understated. If you can use this account and its special features to your advantage and in turn purchase additional assets to grow your financial wealth, then maybe this is the account for you. I would also suggest taking a look at my review of Marcus by Goldman Sachs as a banking option. My goal with any of these posts is to give you enough knowledge to make the best decision for yourself. Cheers to your success!

Before you go…

Finanical Education is vital to your pursuit of financial freedom and success. Learning the best ways to to business is just one part of the equation. Have you ever considered becoming your own boss and starting your own business?

If you want to learn how to start a business and scale it to achieve your dreams and goals, there is help. You can start a business easier than you think, but it requires help and education to make good money. The program below offers a coach mentor on day one and walks you through the process how to get started. This is the same program that I used to get my online business started.

Partner up with me by clicking on this link and watching the video.

We will show you EXACTLY how to build a business online and customize a plan just for you. We will help you choose a niche, setup your online business and help with selecting offers that you can promote.

On top of that you will get ONE on ONE mentoring to make sure you are doing things right.

A great way to be able to save more money is when we make more money.

See you at the Top!

-Cameron

Digital Wallet: A convenience? How does it Work?

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In many circles, there has been a rising discussion surrounding digital currencies, cryptocurrencies and general blockchain technology. One of the buzz words tossed around more frequently has been “digital wallet.” Now, the digital wallet does not necessarily have to be only related to cryptocurrency, a digital wallet is simply a software base system that allows users to store payment information.

I think it’s safe to assume that the changing market environment is causing many people to give up physical forms of payment, i.e. cash or card, and moving to an even more electronic form of payment. Over the next few paragraphs, I want to discuss digital wallets in a little more detail. For the purposes of this article, I discuss from what they are, how they can be used, some pros and cons and a final wrap up of my personal opinion on the technology in general.

What Is It?

A digital wallet can use a barcode or a QR code to establish payment of goods and services.

A digital wallet or e-wallet as it is sometimes called, can be a useful tool. We briefly touched on the definition above. It is a software-based system that securely stores users’ payment information and passwords for numerous payment methods and websites. Interestingly enough, they have been around for quite some time. PayPal and Venmo are considered digital wallets. You may also have heard of Apple Pay and Samsung Pay. An eWallet, however, is not only for making payments or transfers, you can store personal information in these as well. Identification cards, tickets, public transportation passes can be stored in this wallet as well.

Digital wallet applications are downloaded to a smart device and carry a high level of encryption. You will create a user name and password to keep the information safe. When you need to pay for products or scan an ID, simply log into your digital wallet and you have access to everything at once. You may be able to use your digital wallet at some ATMs to access cash.  If you are interested in looking at a digital wallet just to store your cryptocurrency, here is one that I use.

Pros And Cons

There are multiple advantages and disadvantages to a digital wallet. I have broken down to three of each below.

Usability Of A Digital Wallet

This is definitely a positive for the digital wallet case. It offers a relatively easy buying experience. I’m sure you have seen either at the check out of a drive through when the person in front, hands over their phone to the cashier and they scan a barcode. It is a very easy and contactless delivery process.

In addition, many merchants offer a points system if you use the app as a payment vehicle. So you can earn free merchandise simply by using their portal. Opposed to using cash or your debit card where you may earn points, but typically not.

Additional Protection From Theft

Physical exchange of cash and card can be stolen easily. There is little security with cash and card.

There is no physical exchange with a digital wallet, it is all based on your application, so this is a much more secure way to pay for products or services. How many times have you lost or misplaced your wallet? There is no security on a physical wallet, even less if you have cash in the wallet. Notwithstanding, I’m sure that we have also misplaced our phone, but we can password protect our phone and have GPS locating technology. Now, I’m sure we have all heard of hackers and technology criminals, and this is still a risk. However, there are ways to enhance your security on your digital wallet as well. Nothing is 100 percent secure, unfortunately.

Changing Technology With Touchless Experience

In these times of continued pandemic fears or general airborne illness, many people prefer not to deal with cash or exchange physical cards. They do not know what has been in contact with the physical item. Digital wallets can alleviate that concern. If you are just using your phone and most people don’t hand out their phone, they know where it has been.

Resisting The Changing Technology

Using a digital wallet can be a big change for many people. Change can be hard.

Our modern society was built on a cash system. Many people still only use cash or use cash only as a budgeting tool. It has only been recently where tapping your card versus swiping is accepted.

There is real feeling of loss when you take physical cash out of your wallet and pay for something. This is beneficial for some who cannot control spending. Also, physical cash on your person cannot be stolen unless you lose your wallet or get robbed.

Usability Of The Digital wallet

I know what you are thinking, “wait a minute, that was an advantage, not a disadvantage.” Well, we are both right. It’s a pro since it’s easy to use, but a con because you simply cannot use it everywhere. Card and cash are accepted pretty much everywhere as a means of exchange, however if you only have your smart device and the app, you may not be able to pay for everything that you want.

Cyberattacks

Cyberattacks are more prevalent in the information age. We need to focus on better security measures to keep our assets safe.

Many people have been victims of identity theft and bank fraud. These are all too real for some people. The concern of switching entirely to a digital wallet is scary. We mentioned above the resistance to change and that is a big part of this. Companies are working harder on better levels of encryption for financial transactions, but there are always risks associated. There are some wallets that may have better encryption than others. I would encourage learning about the different levels of encryption prior to purchasing. For the sake of this article, I will not go into different types of digital wallets. That is for another post.

Disclaimer: I receive affiliate compensation for some of the links in this post at NO cost to you. However, these are the best tools I have used and tested that I believe are most effective for launching and running an online business. You can read our full affiliate disclosure in our privacy policy. Also, I am not a licensed advisor, any information within this article is purely my opinion and not an endorsement of an investing strategy.

My Take On Digital wallets

Adapting to change can be hard. Technology is changing so rapidly that it sometimes seems to be impossible to keep up. When I first considered a digital wallet, it had more to do with keeping my cryptocurrency secure. Since cryptocurrency is completely digital, you need a digital wallet to house it. However, upon digging further, you can store everything in one spot. Sure there is concern over cyber-attacks, but physical forms of payment aren’t going away anytime soon. This gives an opportunity to better enhance security on digital payments and potentially alleviate concern.

Personally, I have a bit of a hybrid perspective on digital wallets. I use both physical and electronic payment methods. Not because I have any overarching concerns over electronic, but because society has not fully accepted digital payment. Out of necessity, I need to use both. The business world is changing at the speed of technology and in order to keep up, we must be up to date with technology in order to be competitive. I write articles like this to help everyone gain business and financial education. I hope you were able to get some good information from this article.

Before you go…

Do you want to learn how to start a business and scale it to achieve your dreams and goals? You can start a business easier than you think, but it requires help and education to make good money. The program below offers a coach mentor on day one and walks you through the process how to get started.

Partner up with me by clicking on this link and watching the video.

We will show you EXACTLY how to build a business online and customize a plan just for you. We will help you choose a niche, setup your online business and help with selecting offers that you can promote.

On top of that you will get ONE on ONE mentoring to make sure you are doing things right.

A great way to be able to save more money is when we make more money.

Cheers to your success and See you at the Top!

-Cameron

Mind Money Masters

Buy and Hold Investing Strategy: Is It Dead?

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The buy and hold investing strategy for stocks may be dead. I’m not sure it makes sense anymore. We hear financial advisors strongly recommend, “a diversified portfolio of stocks, bonds and mutual funds” whenever the word, retirement is mentioned. But, did a diversified portfolio help in 2008 and 2009, when the market lost half its value? Maybe it helped a little, but most people saw their 401k and retirement assets cut in half.

I have heard the recent statement, “Buy and hold isn’t dead, it’s just impossible.” Is that a truer statement? In this article, we dive into a quick description of what the buy and hold strategy is, why would we use it, why it may not be the best strategy and finally some alternatives to the strategy. I hope you read until the end, because as always, I will give my personal thoughts.

What Is Buy And Hold Investing?

Buy and hold investing is similar to keeping all your eggs in one basket.

Now, we are talking solely about the stock market. For the sake of time, I will not go into thoughts on the bond or real estate market much. A buy and hold investing strategy is where someone purchases an investment for the purpose of holding it regardless the general market fluctuations. This can be a stock, ETF, bond, mutual fund or real estate strategy. An example of this is buying a mutual fund, consistently adding money to the investment over time, with the hopes that it will increase in value.

This particular strategy was created based upon the average annual return of the S&P 500 index being around 10 percent since its inception in 1927. Furthermore, mutual funds were created under this same concept. If the S&P 500 can average annual returns of 10 percent with so many companies represented, then another basket of stocks (mutual funds) could potentially do the same. Therefore, the thought was a buy and hold strategy of multiple mutual funds could potentially diversify your investments and allow an even greater return. Please check out my article on ‘Mutual Funds’ for more on that.

Why Would We Use This Strategy?

Buy and hold investing in the stock market is typically driven by investing in mutual funds. Although, it can be accomplished with single stocks. Furthermore, it is a very passive investing strategy. There is not a lot of research or work involved in this strategy. Many financial advisors would recommend this strategy for individuals that are not interested in researching investments. This offers the option to automatically add money to your investments without having to “monitor” the market.

Why Would We Consider It Dead?

The general consensus as to why the buy and hold investing strategy is dead could be because the strategy is unrealistic during a market down-turn. Take for example the 2008 – 2009 stock market crash where most portfolios lost around 40 to 50 percent of their value. A buy and hold investor more than likely sold at the bottom and waited until the market went back up to buy back in. Thereby, missing out on all the gains while the market went up. This would depend on what mutual fund or stock you held during this time. There were some stocks, mutual funds and ETFs that went up in value during this time.

If you were using the buy and hold investing strategy during the market downturn of 2008, you may have lost quite a bit of your portfolio.

Another issue here with the buy and hold investing strategy is that it focuses only on individual investors with long term time horizons. Furthermore, the strategy assumes that over time, most investments will go up. If you have a shorter time horizon for growth, this strategy could be very costly if the market turns down. Given that the S&P 500 has an average annual return of around 10 percent for the past 90 years, this perspective may be true.

However, there are several caveats in this equation. If you invest 1,000 dollars in the market and lose 50 percent, you now must get an annual return of 100 percent the next year in order to simply get back to where you first started. Think about it, $1000 minus 50 percent ($500). We now have $500 starting in year 2. In order to get back to $1000, it would have to double that year. Specifically, this poses a problem for mutual funds. Since there is no way to truly manage risk in a mutual fund, other than diversification, you are stuck taking the loss. Would you buy at the bottom, sell or leave it alone?

Risk Management On Buy And Hold Investing

Whether you invest in Stocks, ETFs, bonds, mutual funds or real estate, every investor must understand their risk. Not only understand it, but manage it. Risk management is the key to building a successful portfolio.

Smart investing manages risk correctly.

In the buy and hold investing strategy for mutual funds, there is no way to diversify your risk. Unless, you bet against yourself and buy the inverse of the fund you currently own. With Stocks and ETFs, you can buy insurance on the downside price fluctuation. As with real estate, you can purchase insurance against total loss. Insurance for stock fluctuations are called options. Oftentimes, commodities can be a risk management strategy. Gold, silver, oil and precious metals offer a way to manage some risk of a stock market collapse. Some also invest in foreign currencies or cryptocurrencies to spread exposure.

Disclaimer: I receive affiliate compensation for some of the links in this post at NO cost to you. However, these are the best tools I have used and tested that I believe are most effective for launching and running an online business. You can read our full affiliate disclosure in our privacy policy. Also, I am not a licensed advisor, any information within this article is purely my opinion and not an endorsement of an investing strategy.

Alternatives To Traditional Buy And Hold

The most obvious alternative is active trading. This could mean day trading or swing trading. This does require research and time to be effective. Another alternative could be to avoid the stock market all together. Investing in real estate offers multiple options. Flipping real estate or wholesaling could be a viable way to build income. A buy and hold investing strategy in real estate could actually make sense given that there are many tax advantages to owning real estate, providing housing and collecting rent. Foreign exchange trading and cryptocurrency trading are also alternatives. Lastly, creating your own business is another option.

My Final Take

The point I am trying to make here is that, with so many alternatives, is the buy and hold strategy for stock investing really a good strategy?  I would offer that it depends on your viewpoint. It is your money, therefore, your investment. How hard do you want to work for your future? Remember, I am not a licensed advisor and cannot give you advice one way or the other on financial planning. However, investment in yourself and your education is the best investment of all. Learning new things and new ideas is what separates the wealthy from the non-wealthy. If you are interested in buying and holding, I really enjoyed the book, ‘The 3% Signal’ by Jason Kelly. This book offers a different view on buy and hold that may be an excellent strategy. Plus, it takes the guess work out of investing.

close up of beer bottles on wood

In this article we learned that managing risk is key to building a successful portfolio. It is difficult to manage risk with mutual funds. You can buy insurance on ETFs and Stocks. Real estate investment offers many tax advantages. Currency trading can offer another level of protection against inflation. However, it’s still incredibly important to learn how to manage your risk with trading. Notwithstanding, if you are really looking to build something that can offer a far better return than a buy and hold strategy, build your own business! This will require time and investment in yourself, but the returns are far greater than any other strategy.

Before you go…

Do you want to learn how to start a business and scale it to achieve your dreams and goals? You can start a business easier than you think, but it requires help and education to make good money. The program below offers a coach mentor on day one and walks you through the process how to get started.

Partner up with me by clicking on this link and watching the video.

We will show you EXACTLY how to build a business online and customize a plan just for you. We will help you choose a niche, setup your online business and help with selecting offers that you can promote.

On top of that you will get ONE on ONE mentoring to make sure you are doing things right.

A great way to be able to save more money is when we make more money.

Cheers to your success and See you at the Top!

-Cameron

Mind Money Masters

Cryptocurrency Trading: What’s It All About?

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I’m sure everyone has at least heard the term cryptocurrency, but what is it? I must admit I have only recently discovered some of the benefits and I have traded stocks, options and forex for quite a while. Is cryptocurrency trading the next big financial vehicle? Will Bitcoin take over as the ultimate form of transferrable currency? If you have heard the term cryptocurrency and are wondering what is it, then this post is definitely for you. In the next few paragraphs, I will explain what is cryptocurrency, some different types of currency, high level benefits and how to get started with cryptocurrency trading.

What Is Cryptocurrency?

Cryptocurrency is a type of digital asset that can be used to exchange value. From a high-level perspective, it is no different than another currency, like the US Dollar versus the EURO. One of the major differences here between cryptocurrency and standard currency is that there are no physical coins or paper associated. These are only digital. To be honest, I think of several futuristic movies whenever I think of cryptocurrency. I’m sure you have heard the line in movies to “pay with credits” or some other digital form of payment. Then they hand over a mini disc or scan a barcode and the payment is received. This is how I would explain cryptocurrency.

Trading cryptocurrency can seem like a foreign language at first, but if you start relating it to what you know, you will be able to trade like a pro.

Currently our technology allows for digital exchanges such as Paypal, Venmo, and most banks have an ePay service. This is similar to using cryptocurrency, however the big difference here is that cryptocurrency is not regulated by a centralized banking system. This means it is decentralized.  When someone pays via Paypal or Venmo, the attached bank account confirms the value and transfers the funds electronically. There is usually some kind of charge for this, albeit small, the financial institution receives some payment. I will go into decentralization and the transfer process of cryptocurrency a little later.

Types Of Cryptocurrencies To Trade

Currently, there are over 8,500 different types of cryptocurrencies. If you do intend to start trading cryptocurrency, I would suggest bookmarking coinmarketcap.com. This site gives a lot of information and I could easily talk about that alone for hours, but I would suggest going there and checking it out. It will give you the name, price, day change, market capitalization, and volume for every traded cryptocurrency. For the purposes of this article, I will only discuss a few of the well-known ones.

Bitcoin

Bitcoin (BTC) is the leader in the cryptocurrency world. From a market capitalization, price and utilization perspective, it is the most common. It was created in 2009. Bitcoin started the cryptocurrency revolution. There are companies today that actually pay employees in Bitcoin. Plus, there are stores that accept bitcoin as payment. In addition, there are Bitcoin ATMs that allow you to withdraw bitcoin in the currency of the country you need. If you start trading cryptocurrency, Bitcoin would definitely be a good benchmark for your portfolio.

If you are just starting trading cryptocurrency, it might make sense to start with some of the more well known currencies.

Ethereum

Ethereum (ETH) is arguably the most versatile of the cryptocurrencies. It is the most versatile because it can be used to create your own cryptocurrency. They do this by creating tokens and building a new currency. In fact Ethereum is instrumental in creating many of the other cryptocurrencies that are out in the market currently. A new currency typically goes through an initial coin offering which is similar to an initial public offering for a stock market company. This currency also has the current second highest price and market capitalization.

Litecoin

Litecoin (LTC) was launched in 2011. It typically doesn’t have as much volatility as Bitcoin. This may have been created as an alternative to Bitcoin. You may use this to buy and sell goods, similar to Bitcoin. Also, it is much less expensive per coin. However, the market cap is much smaller as it is in the top ten, but lower on the list.

Tether

Lastly, Tether (USDT) made this list because it is the fourth highest cryptocurrency traded by market capitalization and highest in volume. There have been recent issues with Tether corporation regarding the currency being backed by gold or the US dollar. I would suggest doing some additional research before you consider investing or trading this cryptocurrency.

Benefits of Trading Cryptocurrency

You can trade currencies or you can invest in currencies, but you can also use cryptocurrency to make payments.

When I discuss trading cryptocurrency, I not only mean on an exchange, but as a means of exchanging. This is the first benefit. When you purchase Bitcoin, for example. You buy a portion of a Bitcoin or multiple Bitcoins with local currency. In this sense, it is similar to trading Forex. With forex trading, you buy US dollars against EUROs believing that the US dollar will rise in value. In a similar sense you buy Bitcoin with US dollars believing that Bitcoin will rise in value. The caveat is that you can also use the Bitcoin that you purchase to trade for other currencies, and use to buy everyday items. For more on Forex trading, please check out my post on ‘trading foreign currencies‘.

Decentralization

No centralized point of failure in cryptocurrency

Another benefit of trading cryptocurrency is the decentralization factor. We discussed this briefly earlier, but now we go into more detail. When you pay someone via Venmo, the financial institution that is connected to your Venmo account confirms that the funds are not duplicated. They initiate a removal of your funds and add this to the other account. Now, since Cryptocurrency does not use banks, how are we able to transfer funds securely and successfully? The answer is Blockchain technology and cryptography. Think of this as a massive worldwide network of transaction checks and balances. If you use Bitcoin to pay for something or transfer to another person, the Blockchain will keep a record of the transaction and confirm currency movement.

Security of Cryptocurrency Trading

Lastly, a major benefit of cryptocurrency in general, is the security it can offer. Since it is all digital currency, it’s basically impossible to counterfeit. Plus, the encryption on the blockchain is nearly impossible to hack. Cryptocurrency is not subject to governmental intervention or policies that control the money flow, i.e., the Federal Reserve bank. That is to say, the market dictates the value of the currency, not the centralized government. In addition, with a digital wallet, you don’t necessarily need to store anything on a web server. I will discuss digital wallets in the next section.

How to start Cryptocurrency Trading

By now, the concept of Cryptocurrency has either blown your mind or you are thirsting for more and want to start trading. Below are three steps to get started:

Disclaimer: I receive affiliate compensation for some of the links in this post at NO cost to you. However, these are the best tools I have used and tested that I believe are most effective for launching and running an online business. You can read our full affiliate disclosure in our privacy policy. Also, I am not a licensed advisor, any information within this article is purely my opinion and not an endorsement of an investing strategy.

Open Your Trading Account

Open an account and fund it. Since this is a digital world and digital currency, you will need to connect your existing bank account to the cryptocurrency trading platform. Most allow wire or ACH transfers at zero cost or a small charge. I would suggest Coinbase or Gemini for new investors. If you decide Coinbase, you can get an extra 10 dollars in cryptocurrency right away when you buy 100 dollars of a currency. Keep in mind, it is not a bad strategy to have accounts with multiple platforms.

Click on this link to set up an account with Coinbase and get an extra $10 dollars of Currency.

Decide Which Cryptocurrency to Trade

Pick a currency and decide on a strategy. There are over 8000 currencies available. That is a lot to choose from. I will say, there is a cryptocurrency trading strategy to just invest and hold Bitcoin as the potential currency of the future. However, you can trade cryptocurrencies just like stocks, options and forex. If you do want to trade, I would strongly suggest looking into a trading course to review various strategies.

Keep Your Cryptocurrency Safe

black envelope with cash dollars on marble table

Make sure to keep your currency safe. This is by far the most important aspect of the process. When you are first starting out, a web wallet or mobile wallet can be the easiest. Installing a wallet on your desktop or laptop computer is also possible. Blockchain.com/wallet or Bitcoin.org/en/choose-your-wallet are two sites that you can check out for options.

I would strongly suggest that at some point get a hardware wallet. This is the safest and offers a physical thumb-drive like device that can keep track of your balance.

My Final Take on Cryptocurrency trading

I hope you enjoyed this introduction to cryptocurrency. I believe that there are multiple factors to consider if you want to start trading cryptocurrency. There are various risks with trading anything. It is how we manage that risk that makes us successful. Many people think trading forex or options has risk and it definitely can be unless you manage that risk. For me, cryptocurrency is an alternative investment. I rarely trade cryptocurrency. Mostly I use it as an alternative to traditional investing. My strategy is a buy and hold on this.

That doesn’t mean I discourage it, it simply means that long term investing in this is more my interest. Etoro is a cryptocurrency trading platform that offers an ability to mimic other seasoned traders. I personally do not use Etoro, but that is just because I haven’t researched enough about it. It may be a viable option if you are looking to trade consistently. Also, as with forex trading, I would suggest looking into a sandbox platform to test your strategies before you use real money.

Suggested Reading on the Topic

There are three books I would encourage you to check out if you want to take your learning to the next level. You know, I like to recommend reading more than anything else. These all should be available on Kindle or Audible. However, for these, it might be better to buy the physical copy simply because you may miss out on the chart graphs that would not be in the audio version.

1) ‘Cryptocurrency Trading & Investing: Beginners Guide To Trading & Investing In Bitcoin, Alt Coins & ICOs‘ by Aimee Vo. This is a very detailed book to get your started. If you like what I talked about here, this will reiterate a little, but offer more. It also gives you a nice intro to technical analysis.

2) ‘CRYPTOTRADING PRO: Trade for a Living with Time-tested Strategies, Tools and Risk Management Techniques, Contemporary Guide from the Beginner to the Pro‘ by Alan T. Norman. This book goes into more details around trading and the psychology around a trading mindset. As well as offers tips on when to buy and sell.

3) ‘Five Waves to Financial Freedom: Learn Elliott Wave Analysis‘ by Ramki N. Ramakrishnan. I put this on the list because the Elliot Wave Theory is actually used quite a bit in trading cryptocurrency. The book discusses trading and technical analysis in general. However, you can apply the theory to cryptocurrency trading.

Cheers to your success and happy trading!

Before you go…

Do you want to learn how you can take ANY business and scale it to achieve your dreams and goals? You can start a business not only investing in cryptocurrency trading, but teaching others how to do it. Starting a business requires help and education to make good money. The program below offers a coach mentor day one and walks you through the process how to get started.

Partner up with me by clicking on this link and watching the video.

We will show you EXACTLY how to build a business online and customize a plan just for you. We will help you choose a niche, setup your online business and help with selecting offers that you can promote.

On top of that you will get ONE on ONE mentoring to make sure you are doing things right.

A great way to be able to save more money is when we make more money.

Cheers to your success and See you at the Top!

-Cameron

Mind Money Masters

Investing In Forex Trading? 5 Things To Know First

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How To Trade In Forex For Beginners

Are you considering investing in Forex Trading? If you are, there are at least five things you should know prior to jumping right in. Foreign exchange trading has multiple nuances that are different that investing in stock trading. In this article, I go through what the forex market is, five of the basic terms and reasons why it might be a good addition to your portfolio.

What Is Forex Trading?

Foreign exchange trading is also called Forex or FX. If you have had a chance to travel to a foreign country you’ve probably already started investing in forex trading. It happens when you come across the various kiosks where you can buy dollars of the local currency. There is usually a fee associated with this. In addition, it’s a tangible exchange of one monetary vehicle for another. This is a form of Forex trading, but for this article I will reference the concept of actively trading various foreign currency at one time versus physical dollar exchange.

Investing in Forex trading requires knowledge of currency markets. Learn as much as you can.

The Forex market is the largest in the world but not often used in the general sense of investing by most investors. Usually, this is because currency trading is considered riskier than stock trading. The FX market is very active and involves somewhat complex trading strategies. For this reason, most financial advisors would not recommend this type of trading to be suitable for retirement planning. It is my goal to introduce you to the world of Forex trading only. Your individual investment goals may vary, so I would not recommend or discourage forex trading.

That being said, Investing in Forex trading can be very lucrative. In a general sense, Forex trading is betting on one currency going up against others. If you buy US dollars against Euros, you are expecting the US dollar to appreciate against the Euro. The quoting process also looks a little different, which we will go through in the next section on Quoting.

Know The Basics

When I first started forex trading, I discovered five things that were very important, if you want to have any idea what you are doing in currency trading. Those were; understanding the quote, the various lot sizes, leverage and capital requirements and the time factor associated.

Quoting

I put quoting first, because ultimately, you have to understand what you are looking at in order to trade it. When trading stock, you see a quote of 55.05 / 55.07. This means a bid of 55.05 and an ask of 55.07. The quoting of forex is similar; however, you may see this type of quote in forex: EUR/USD 1.20037 / 57. If we break down this quote further, we understand the bid to mean the price at which we sell the investment and the ask is the price we pay to buy the investment. So, in the terms of currency quoting, the base currency, the EUR (Euro) is always on the left and the counter currency is always on the right. The 1.20037 is in US dollars. So, if we were selling EUR, we would get 1.20037 per US dollar we were trading.

Bid and Ask are slightly different when investing in Forex trading than the general stock market. Know the difference to be successful.
Bid and Ask Further Defined

Now if we decide to buy US dollars, this is where the 57 comes into play. Since the base currency is at 1.20037, the ask is expressed as 57. This means that to buy EUR, we would need to pay 1.20057 US dollars per EUR. Therefore, maybe an easier representation of the quote is Bid: 1.20037 Ask: 1.20057 in US dollars for EUR. The spread is .00020. Every quote in Forex is expressed in a pair. You are always buying or selling the base currency (the one on the left).

The purpose of the bid price being lower than the ask price, when investing in forex trading, is for the market makers or brokers to make money off of the spread. They buy your dollars at the bid price they sell your dollars to other investors at the ask price, profiting off of the difference. Did I mention Forex trading was a little more complex than stock trading? Although, the bid and ask concept is the same in stock trading.

PIP

A PIP is a unit of measure in Forex.

In the previous paragraph about the bid and the ask, we saw that the spread was .00020 or 20 PIPs on a standard lot. This can be translated into 20 dollars of movement when holding a standard lot of currency units. A pip is simply a unit of measurement based upon the lot size you hold. A standard lot is 100,000 units.

Don’t worry, most individual investors trade in smaller lots. In fact, most investors trade in mini and micro lots. It would not be a very good strategy for an individual investor to start with standard lot trading.

Lot Sizes

Another interesting nuance that should be called out are the various lot sizes in Forex trading. Mostly in stock trading we consider a lot of 100 shares and you buy in terms of lots, so 5, 10 or 15 lots would be 500, 1000 or 1500 shares, respectively. In Forex, they have three lot sizes; micro lot (1,000 units), mini lot (10,000 units) and standard lot (100,000 units). The typical lot size for most individual investors is a micro lot or mini lot. To understand the pip movement on a micro lot, just move the decimal place 2 to the left. On our previous example, the spread would then be .20 PIPs or 20 cents.

Capital Requirement and Leverage

In order to start investing in Forex trading, reason would stand that you need to deposit some money. A benefit of Forex Trading is that the minimums to entry are very low. If you started with 100 dollars buying micro lots, remember that when buying micro lots, PIPs are equal to 10 cents. (Move the decimal place…yes that’s right) So, when you are placing any stop loss on your trade, and you want to manage your downside risk by a move of two percent, tow percent of 100 is two dollars. So you would set your stop loss at 20 PIPs (Two dollars in this scenario). As with other investments, the potential for higher gains depends on the amount you are willing to invest

1 dollar in capital could offer massive amounts of leverage in the FX market.

Leverage in Forex Trading is a huge factor. In a stock trading account, you may use leverage depending on what you are buying, we call that going on margin. In a Forex account, you can use leverage on most everything. Plus, the requirement may be a low as 50 to 1. Meaning that with for every 1 dollar invested it purchases 50 units of currency. Using leverage is a highly risky strategy and should only be optimized with a seasoned trader.

Disclaimer: I receive affiliate compensation for some of the links in this post at NO cost to you. However, these are the best tools I have used and tested that I believe are most effective for launching and running an online business. You can read our full affiliate disclosure in our privacy policy. Also, I am not a licensed advisor, any information within this article is purely my opinion and not an endorsement of an investing strategy.

Reasons To Start Trading Forex

There are multiple reasons someone would consider investing in the Forex market. I have mentioned several above, but three of the most important in my opinion are: Diversification, Time and Liquidity.

Diversification

When using Forex trading as an additional tool in your investing bag, it spreads your risk overall. If you are solely in the stock market, you will miss out on several factors that affect the company or companies you are trading. Foreign exchange is hugely important with many of the US companies. Foreign exchange affects the value of the goods or services exchanged overseas. Trading in the Forex market is a good way to become diversified in international investment. Also, as a hedge, Forex can be very useful, especially when trying to work against inflation.

Time Factor

Time is on your side when investing in Forex trading, since they trade 24 hours per day 5 days per week, you can make money as you sleep.

This is one that I personally feel as equally passionate about as diversification. Since the currency markets are worldwide, the Forex exchange never sleeps during the week. If you are an early riser like me, maybe you want to get your trades in for Forex at 4 or 5am, a good 4 plus hours before the US stock market opens. The only time the Forex market is closed is Saturday and Sunday.

Liquidity

One of the various ways to test a viable investing scenario is to confirm liquidity. If you remember in my post on ‘Penny Stocks’ we discussed how important liquidity was in that market, well Forex trading is highly liquid and trades constantly. This is a huge advantage if you want to get in to a trade quickly or get out of a trade quickly. Since this market is international and you aren’t focused on the sentiment of a company, more so the sentiment of a country, it is the largest market in the world.  

My Final Take

If all this scares you and you are more comfortable investing in the stock market because that is what you know, don’t worry, there are alternatives. There are mutual funds and ETFs that offer exposure to the currency markets. Work with your brokerage firm to understand any particular advantages or disadvantages they offer.

That being said, Investing in Forex Trading is an excellent option for many of the reasons listed above. One thing to consider prior to jumping into Forex trading is that most brokerage firms allow a demo account and this should be utilized prior to investing your own money. Get a feel for how things work in the Forex market and then start using your own money. I still firmly believe that this should be only one of the ways to make money.

Remember millionaires and billionaires have multiple streams of income. If you are going to start trading Forex, manage your risks affectively. Make sure you work with a reputable broker, understand using leverage and learn about the economy for the currency you are trading. Forex can be an exciting and profitable addition to your portfolio. I wish you all the luck. Happy Trading.

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