How to Confidently Invest in Forex

Forex, short for foreign exchange market, had gained momentum in the past few years. Previously Forex was traded mainly by large companies or those with experience and understanding of the foreign exchange market.

What has stimulated this change? One answer is that average investors now have more information available to them than ever before. In addition, the internet has not only provided a wealth of knowledge but it has also made access nearly instantaneous.

Returns with Forex, although riskier than some other investments, can be high. But of course, not all Forex investors are as successful as others.

This may lead you to wonder, then, how to confidently invest in Forex so you can have success as well.

1. Educate Yourself

Whenever I lack knowledge about anything I usually follow the example of Hermione Granger in the well-known Harry Potter series. Granted, I don’t head to the library of a magical castle. But I do use other available tools to learn more about the subject.

Generally my method of educating myself is to look it up on my computer or smart phone. There’s no risk in learning about Forex, so read all you can.

Something else you must do is to have patience with yourself. You are most likely not going to learn how to trade Forex confidently overnight.

2. Get Help

If educating yourself about Forex doesn’t feel like enough, talk to a friend or somebody else you trust who has attained their investing goals trading Forex.

Another choice would be to hire an investment expert. This person should be educated in the field and usually works with investing daily. They will know all of the fine details of investing and can guide you as you delve into this new area of investing.

Obviously there will probably be a fee for their services. It can be worth it, though, in order to learn what you need to confidently invest in Forex trading.

3. Trade Virtually

A really great way you can gain confidence in Forex trading is to trade virtually first before trading in real-time. Choosing one that utilizes a robo-advisor can help you build your self-assurance and remove the guesswork.

There are some questions you should ask about virtual accounts that can help you. One is how long you can trade on the virtual account. For instance, if you have to start over with a new account every month it is harder to see progress.

Something else you could ask is if you can make the size of the demo account comparable to what you may actually be starting with. If the demo account is $100,000, as an example, but you only have $1,000 of real money to invest it isn’t very comparable.

4. Start Small

You could start with a small amount of money when you begin trading Forex rather than starting out risking thousands. Trading in this way is just one more method to help you confidently invest in Forex.

Furthermore, some people don’t have a lot of money to start out with. If you are one of them you may not want to risk your entire life savings on a high risk, high return investment. Instead, start small.

Despite the risks you can see that it is possible to confidently invest in Forex. Educate yourself, get help if you need it, trade virtually, and start your real account small and you will have a greater chance at building wealth for your future.

Finding A Reliable Forex Broker: 7 Things To Pay Attention To

Does it make sense to open a trading account and invest your money in the deposit if you do not have any guarantees of its safety? Why carefully analyze price charts and study the fundamentals of the foreign exchange market if the profits we earn can be being taken away by fraudsters?

It all comes down to the reliability of a Forex broker, which is usually assessed by such criteria as credibility, work history, insurance of risks and liabilities, availability of a license and the possibility of legal conflict resolution.

1. Credibility

Authority in forex trading is a vague concept. However, to determine the credibility of a particular office, you can read reviews about this Forex broker. Naturally, broker’s site is not a good place to be looking for reviews, where only positive feedback is usually gathered and all kinds of certificates are placed, which is called “about us” section. It is better to look for more objective data on the specialized thematic forums.

2. Reputation

The duration of the work of the Forex broker and its happy history in the foreign exchange market speaks volumes about it stability and good risk management within this company.

3. Risk insurance

Insurance of risks and liabilities is the most important indicator capable of protecting the funds of a trader in the event of a company’s crash. Therefore, it is absolutely necessary to check insurance guarantees.

4. License

Licensing is a certain kind of guarantee about the honesty of the owners of the company. The bottom line is that licensing of brokers gives traders the opportunity to file complaints and claims to special bodies. Such control bodies exist in all developed countries. In the UK, for example, this role is performed by the FSA, the Financial Services Commission, in the USA – by the CFTC or the Commission for the Supervision of Goods and Futures. Unfortunately, in the CIS countries the work in the foreign exchange market is not really controlled by anyone.

5. Contract

Legal regulation of conflicts should be indicated in the contract for the provision of brokerage services. Therefore, it is necessary to carefully study the contracts. The failure to pay proper attention to it often leads to disastrous consequences.

6. Currency pairs

It is better to choose a broker that offers a wide range of currencies. If a broker offers a couple of major economic powers, two or three pairs of developing countries with floating currencies, three or four fixed or tied currencies, then such a proposal is much better than the simple offer of 12 pairs of advanced economies.

7. Customer Support

The software can generate errors. In case of occurrence of such or similar problems, the trader needs to ask customer support for help. Therefore, a professional and patient support staff can seriously help a trader increase profits or, on the contrary, unqualified technical support can cause a lot of troubles.

Pay attention to these 7 factors, and you will surely be able to select the broker you will be comfortable to work with.

How to Trade Penny Stocks

Penny stock trading is usually day trading stocks that are priced under five dollars a share. This is not value investing or long-term investing. This is riding the wave of a hot stock for a short term, quick profit. The better you are “riding” the wave, the more successful you’ll be at day trading penny stocks. Here are three tips to get you started trading penny stocks.

Risk Respect

This is not about getting rich on one big bet. Keep your profits, and also your losses, small. You do this with risk respect. Most penny stocks aren’t worth the paper they’re printed on. They’re thinly traded and hugely volatile. What does this mean for you? It means the tides can shift quickly if you’re not keeping a close eye on the market, the stock, and therefore your money. Don’t be afraid to take those small profits if you feel the tides are shifting and cut those losses small. You might not be able to fight risk, but you can respect it.

Keep a Trading Journal

My favorite piece of advice I ever received was, you’re going to make a lot of mistakes day trading penny stocks, just don’t make the same one twice. The best way to do this, is to remind yourself of your wins and your losses. A great way is to diary your profits and losses is by keeping a penny stock trading journal. Typically, the best penny stock traders are methodical. They have a plan, they stick to it, they respect risk, and most importantly, they learn from their mistakes. A journal is a great way to keep yourself on track and your head in the game. Don’t dwell on the losses but make sure you learn from them.

No Pollyannas Allowed

Penny stock trading is not built for the eternal optimist. Ninety-nine percent of all penny stocks will fail. In order to be successful at day trading penny stocks you have to stop believing everything you read on the internet about what the next “big” thing is. Every single one of the companies you invest in might fail, but that doesn’t mean you can make a profit on them while they’re doing it. At the same time, don’t’ be afraid to cut those losses when you see a stock tanking. Penny stock trading is not about finding that diamond in the rough and riding it out. That strategy will most likely have you under water before you know what hit you.

Day trading penny stocks may not be for everyone, but if you can keep a level head and manage your risk you can find success in trading penny stocks. What do you wish someone would have told you before you invested in that very first penny stock.

XTrade Europe Tips for CFD Traders

As we all know, creating an effective trading strategy is one of the most important things in CFD trading. In other words, if we want to be successful in this business, we just have to build a solid foundation that will help us to deal with different situations on the global market. At the same time, creating such strategy is probably the hardest thing here, especially for beginners.

In this article, we will present you a few things that every XTrade Europe trader should implement in his trading venture before he actually invest money in any of the available opportunities.

Do not waste your capital

Although chasing for a bigger profit seems to be the main goal we should strive to when using XTrade Europe platform, maybe we should consider change this strategy. Of course, we all want to earn more, but if we want to survive in the world of CFD trading, we should definitely try something else.

In his great trading book High Probability Trading, one of the most successful traders Marcel Link explains that saving our precious capital should be our first goal. We must try to keep every single dollar in our pocket, instead spending it on suspicions opportunities. If you think about it, you will find it is a very reasonable strategy. Why? Simply because spending money is far easier than saving it. You can lose your money in a thousand different ways, but you can keep it safe only in one way- by using your logic. So, instead trying to invest all your money, you should try to save it for some real good deals. After all, what would be the point of searching for the great investing opportunities if you do not have enough money to trade with?

Be sure that you know where your limits are

If you really want to keep things under control when trading with CFDs, you just have to be able to develop some kind of a positive and secure expectancy trading system that would protect you if you get lost or if you start losing you money faster than you expected.

Believe us, everyone in this trading system want to get your money. It is a highly competitive business, where everyone fights for a spot under the Sun. This is why you have to design your own expectancy trading system and mark a few red lines that you must not cross no matter what. If you do not do this, you can easily stay with empty pockets. Even if you think you have enough experience, you must continue to work hard and try to stay focused.

Be careful with leverage at XTrade Europe

Leverage trading is a great thing, but only if you know to use it properly. As you know, this type of trading allows us to trade with more assets that we have actually bought or deposited. On the other hand, this can lead us to a big failure because we can lose more than we have. This is why you should be extremely careful when use leverage in you CFD trading venture. Think about it before you open your XTrade Europe trading account.

How to Seek Out Smarter Financial Investment Methods

Not everybody likes the prospect of change, especially when it comes to our finances, but looking at new ways to invest could prompt the kind of change that nobody would turn their noses up at; having more disposable income.

Long-term savings accounts and buying stock in the financial market’s most tried and trusted companies has long been the go-to method of earning a steady, if relatively small, yield on savings. Increasingly though, many people are willing to invest in slightly more unusual or higher risk opportunities in order to stand a chance of seeing more significant profits.

Real Estate

This hardly qualifies as out of the box but in today’s economic climate where markets can be notoriously volatile and even the largest companies are not immune to large-scale collapse, investing in property can be a good long-term bet. The very tangible reality of owning a piece of property is also something which many investors are drawn to. If you do a bit of research and rely on some local knowledge and intuition, investing in the right property in the right area could see you turn a fast profit too. If you have some time on your hands, investing in a place that needs some work doing on it can also be a positive incentive when it comes to getting your hands dirty. Hard work always seems a bit easier and more enjoyable when you know that the hours you are putting in are all going towards you making money, and the end result will leave you feeling proud of your achievements.

Peer to Peer Lending

This is a relatively new investment opportunity, so it is one that you need to be cautious with, but it is one that has reported quite strong growth in recent years. Just like it says on the tin, you lend to your peers without the involvement of traditional financial institutions. You choose which loans you would like to fund and then receive interest each month on the amount you have loaned to the borrower. Potential rates of return vary, with one of the major players in this industry, Lending Club, advertising average historical returns of 4.7 to 8.2 percent for notes with grades A through C. This kind of investing can be one that you feel more emotionally attached to by choosing peers whose ideas and objectives resonate with you. Watching them succeed, knowing you played a part in that success, and making some money- the perfect financial storm!


This form of investment can allow you to turn a hobby or passion for something into a fun way of making a little bit of money.  The term “collectibles” covers almost everything you can think of, but oftentimes the most favoured objects are pieces of art, antiques, and sporting memorabilia. The beauty of this is that if you can find a very specific niche market and have the time and patience to seek out specific items, you could end up with some items that are pretty valuable a little way down the line.


Trading on stock and forex markets is a hugely popular way to invest savings in the hope of making them grow. But, while putting money behind established, stable companies can make a small and steady income, to earn significant profits requires a more speculative approach: Discovering the potential for growth in lesser-known businesses and investing in them while shares are cheap is how to make more serious returns on investment, although of course the risks are higher. Spread betting is another alternative to trading where, instead of buying actual shares, investors place bets on how they predict certain assets will fluctuate in value and earn (or lose) money depending on whether they are correct. Many professional traders pursue this avenue to increase their capital in the short term as profits can be instantaneous and gains are tax-free. The risks are higher but so too is the payoff, and for those who study the movement of the market day-to-day there are opportunities to make significant profit. For anyone looking to break into trading with a spread betting or Forex account, the best place to start is by studying how online platforms and tools work, and to read up on the pros and cons from people who have first hand experience in this field of expertise.

Start Ups

The world is changing so quickly these days that companies that didn’t even exist 5 or 10 years ago seem to be getting bought out for billions every other day. Many of these companies started out as nothing more than a couple of guys with big ideas. If you keep your finger on the pulse of the rapidly evolving socio-technological landscape, it’s certainly not impossible for you to go out and discover little companies looking for help today who will turn into tomorrow’s next billion dollar success story. Better yet, come up with an idea of your own!

How ‘Brexit’ Would Affect the Forex Market

There has been growing speculation that Britain may be considering an exit from the European Union. Also known simply as a “Brexit”, there is a considerable amount of speculation in regards to the ramifications that such a move would cause. Although much focus has been placed upon political and economic changes, we also need to keep in mind that a Brexit may significantly affect the world of Forex trading.

Potentially Massive Hedging

Much like during uncertain economic times, we would likely see a good deal of hedging against both the euro and the pound. Some analysts feel that the pound itself may (temporarily) drop in value; leading to a selling off when any Brexit rumours become more substantiated. However, there are others who believe that the actual value will change little. It is still likely that many Forex traders will adopt a watch-and-wait approach as opposed to taking a more proactive stance.

Knee-Jerk Currency Fluctuations

If the Brexit does indeed come to pass, the chances are high that major currencies around the world will see dramatic changes in their value within short periods of time. The yen and the dollar would naturally be included within this category. This could very well prove to be beneficial for Forex day traders who are looking to capitalise on such volatility. From this perspective, the entire volume of the Forex markets is predicted to substantially increase.

A Confidence Issue?

Most currency investors are understandably concerned about how the long-term value of the pound will fare. Some economists feel that a lack of confidence in regards to a British economy with less ties to Europe could cause the pound to fall. Although it may experience a significant depreciation before, during and immediately after the Brexit, it is not likely that any permanent damage will be done. As the pound would no longer be as innately tied to the economic conditions of the European Union, it is not unreasonable to surmise that it could experience a return to strengths not seen since before the global economic crisis. Once again, this could prove to be quite attractive to active Forex traders of all levels.

Regulatory Issues

It is also important to look at potential regulatory changes throughout the Forex markets. Currently, many platforms based out of the United Kingdom can be accessed by European traders. It is still unclear if a Brexit would permanently change this unique relationship. This could have profound impacts upon firms which are currently located in Britain. Transparency and data protection laws may change while some companies might not be able to cater to the needs of specific geographic locations. Still, this is likely to be a worst-case scenario more than anything else.

IRAs: What You Need to Know for 2015

First and foremost, you need to know the answer to, what does IRA stand for? Individual Retirement Accounts (IRAs) allow you to save for retirement by taking advantage of certain provisions in the tax code. As with everything else in the tax code, the rules about IRAs can change from year to year. Here’s what you need to know for 2015.

An IRA can be set up by a bank, a mutual fund or your favorite online brokerage. There are two kinds of IRAs that you can open:

  • Traditional IRA – Gives you a tax break on the money that you save for retirement.
  • Roth IRA – Allows you to put in after-tax money, but you won’t pay taxes when you withdraw it later.

Which one is better? The answer is a familiar one: It depends.

It’s a pay me now or pay me later contest. Would you rather pay taxes on the money you pull out of your savings in retirement? If so, then opt for a traditional IRA. If you’d rather have tax-free money during your sunset years, opt for a Roth IRA.

According to a recent survey by TIAA-CREF, few Americans consider IRAs a priority. That same poll showed that 39 percent of respondents didn’t know enough about IRAs to even consider using one.

Maggie Shard, president and wealth advisor of Shard Financial Services in Fenton, Mich., says “Americans are missing out on the importance of an IRA because many don’t understand that they have investment options. They also don’t understand investing, so it’s easier to spend their money on vacation and appliances.”

Here are some IRA tips for 2015:

  1. There Are Contribution Limits

If you’re under the age of 50, you can contribute up to $5,500 per year to an IRA. After the age of 50, you can add another $1,000 to that number. Your earnings will grow tax-free, but the amount you can deduct from your taxes depends on your total income and whether or not you have a retirement plan at your place of employment.

In 2015, the deduction phases out if you have an income between $61,000 and $71,000 and you’re filing as a single taxpayer. If you’re married and filing jointly, the deduction phases out if your income is between $98,000 and $118,000.

If you’re contributing to a Roth IRA, the deduction phases out between $116,000 and $131,000 if you’re a single filer and between $183,000 and $193,000 if you’re married and filing jointly.

  1. Yes, You Can Contribute to Both a 401(k) and an IRA

If you’re offered a 401(k) at your job, you can contribute to that while still contributing to your own IRA. However, you might not be able to deduct all of your contributions.

Contributing to both a 401(k) and an IRA is a terrific financial strategy if you’ve maxed out the contribution to your 401(k).

  1. IRAs Are More Flexible Than 401(k) Plans

IRAs give you the option to decide where you invest your money. That gives them an added level of flexibility over IRAs.

If you think that you’ve got what it takes to manage your own money for retirement, pick an IRA with a qualified broker and diversify your portfolio as you see fit.

  1. There Is a Penalty for Early Withdrawal

If you pull money out of your IRA before you reach the age of 59 ½, you’ll not only pay your ordinary income tax rate, you’ll also pay an additional 10 percent penalty for the early withdrawal.

Do yourself a favor: Have enough cash in the bank for three to six months’ worth of expenses before you start putting money into an IRA. That way, if an emergency arises, you won’t be tempted to pull money out of your IRA early and face a penalty.

Keep in mind, though, that you can pull money out of a Roth IRA prior to retirement age without paying a penalty. That’s because you’ve already contributed after-tax money to that account.

  1. Plan Your Withdrawals

Once you reach retirement age, you can start taking distributions from your IRA. By the time you reach 70 ½, you’re required to take a minimum from your account every year or you’ll face penalties. You should consult an accountant or a tax adviser to determine that minimum.

You’ve worked hard your entire life. Be sure that you’re ready for retirement with proper planning that makes use of the tax code to maximize your benefits.

Why You Should Sell All Your Stocks Right Now

sell-all-stocksI recently sold off all my shares of another company that I  invested in, leaving me with only one stock investment left (that I’m likely to sell soon, too).  This stock I just sold performed poorly (I lost money) since a bought it a couple years ago, but that’s not even my principal reason for selling.  In fact, I’m not jaded by my stock investing experience at all.  I’ve had good luck (yes, I really do feel my other pick came down to luck, not skill), as my remaining stock investment has returned about 250% in the two years I’ve owned it.

My reason for selling is that stocks are not the best choice for the casual investor. I would consider anyone that’s not some sort of investing professional a “casual investor”. In fact, many of those that consider themselves seasoned investors should be looking to options other than stocks, too.

Why No Stocks?

First off, the idea of picking individual stocks turns people off to the idea of investing in the first place.  People think all investing is complicated and only for the elite.  Others think they need insider knowledge or to read magazines and other sources constantly to keep up with the changing markets. They also believe that you need to constantly manage a portfolio, making trades on a weekly or monthly basis.  This simply isn’t the case.

Secondly, anyone that thinks they are going to consistently beat the market picking stocks is foolish.  As Ramit points out in I Will Teach You To Be Rich, Warren Buffet, among the best of the best on investors, has returned about 22 percent annually on his investments for forty years.  22 percent is fairly modest to you and me, especially if you’re only investing a few thousand dollars each year. And, let’s not forget: You’re not Warren Buffet!  Even greatest investors out there can’t expect a return that’s a hell of a lot higher than the market itself returns (which is about 10% per year, historically).

The Easy Alternative to Stocks

What’s the solution without stocks? Investing in mutual and index funds.

I personally like index funds because they have a much lower expense ratio than mutual funds typically do.  Owning a mutual fund will typically cost 1.5-3% of your investment each year, while index funds often cost around 0.25% (my Fidelity Total Market Index Fund is 0.10%).  This is because index funds are essentially run by a computer whereas mutual funds are run by a person (and that person wants to be paid!) While mutual founds may not sound expensive, that 1.5-3% eats into your earnings and can have large affects over long compounding periods.  Besides expense ratios, many index funds outperform mutual funds anyway.  Easy choice, right?

The returns you can expect on index funds are essentially the same as how the market performs: about 10%, annually . I know that no one’s stock market fantasy involves an 10% return, but expecting more than that is incredibly unrealistic when considering what the pros return on their investments.

If You Still Want to Buy Stocks

If you really want to buy stocks (I know several people that love the idea of owning a piece of Apple), keep it to a small portion of your total investment portfolio. I try to keep individual stocks around 5% of my total portfolio.  Given the volatility and difficulty of trading stocks, it gives me the opportunity to have some fun taking a shot on stocks, but doesn’t risk my retirement savings at the same time.

Invest! Now!

The important part of investing is to get started right away.  You need to do so to take advantage of compounding returns that will grow your money the longer you have it invested. Now that you know that you can’t expect 1,000% returns on your investments (even if you are Warren Buffet), that means you have to make up for it by getting time on your side.

If you’re unsure where to start, I recommend checking out I Will Teach You To Be Rich or Your Money: The Missing Manual for an introduction to index funds. If you still need help, you can work with a financial planner to invest in index funds and give up the hassle and complication of dealing with stocks.

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The Magic of Compounding Returns and Investing Early

compounding returnsWhile I have a very mathy background to begin with, I’ve recently been mesmerized by how powerful compounding returns are when it comes to investments.  Ramit Sethi does a great job of pointing this out in his book I Will Teach You to be Rich with a very simple example:  Simple Sally invests $100/month for 10 years starting at age 25.  Dumb Dan invests $100/month for 30 years starting at age 35.  Each earn an 8% rate of return, which is about what the stock market returns annually.  The difference : at age 65, Sally has $200,000 and Dan only has $149,000!  That’s right, even though Dan invested 3 times more out of pocket, Sally has him beat by $50,000.

Many only dream of ever being a millionaire.  Thanks to compounding returns, you don’t have to actually save $1 million to be a millionaire.  If $5,000 a year is invested in a Roth IRA starting at age 20, there will be almost $2 million in your account by age 65!

This says only one thing to me: You need to start investing as soon as you can! The mathematical evidence of compounding returns clearly shows that you are at a disadvantage if you start investing later. It’s really hard to make up for the time lost in years later, even if you throw more money at the fire.

You may worried about investing when the market is having a bad year and the Dow is dropping.  There’s no cause for concern, as this factor is definitely not as important as simply getting your money invested.  A few points on this:

1.  Unless you’re Warren Buffet, timing the market is difficult and totally unnecessary.

2. If you invest early (and over a longer period), you’re are much less susceptible to sharp fluctuations that occur during shorter periods.  Yes, the stock market sucked in 2008 and killed a lot of investments, but, before that, returns were fantastic (and they’ve actually been good in 2009 and 2010, too).

3. Most people don’t invest large, lump sums of money all at once.  Instead, a portion of monthly income is invested, so you’ll be constantly investing in good months and bad.  Don’t worry, you have point #2 on your side.

4. If you suddenly have a big chunk of money to invest, you can use dollar cost averaging to spread the risk.  I won’t get into too much detail here, but you can read more on dollar cost averaging at Get Rich Slowly if you’re interested.

Just Get Started!

No matter what your age, you need to get started now to take advantage of compounding returns!  Here’s what to do:

1.  Open an investment account if you don’t already have one.  I have one with Fidelity, but others like Charles Schwab work grat, too.

2. Open a Roth IRA.  This will take about 2 minutes.

3.  Link to your checking account.  Again, quick and easy.

4.  Set up automatic withdrawals from your checking account to your Roth IRA.  Even if it’s only $50 a month, just get started.

5.  Choose an mutual or index fund.  Don’t get bogged down by this. Investing isn’t as complicated as you think.  Specific investments are outside the scope of this post, but I recommend I Will Teach You To Be Rich or Your Money: The Missing Manual to help pick out a lifestyle or index fund.  You don’t have to pick an investment fund on day 1.  Just start sending money to your Roth IRA and invest it as soon as possible.

6.  Reap the benefits when you’re ready to retire.

I hope I’ve convinced you that compounding is really powerful.  Not to be a downer, but it’s also really powerful on your credit card balances, too.  Keep that in mind, and always be sure that compounding is working for you, not against you.

If you’re interested in investigating more compounding returns and interest scenarios, head over to

3 Personal Investments With Better Returns Than the Stock Market

While I probably grabbed your attention with the headline, the three investments I’m referring to may not produce direct financial returns to you at all.  But that isn’t the point.  There are lots of investments you can make that are a much more important that getting 10% ROI.  Instead of squirreling away all your earnings in the stock market, consider these instead:

Yourself.  There’s (hopefully) not a lot of risk in this investment, but the returns can be long-lasting and invaluable.  By investing in you, you can improve your career, your relationships, and your outlook on life.

Photo by eflon

A practical way to invest in yourself is through education. But while I have both a bachelor’s and master’s degree, I would caution against going after another degree just for the sake of doing it.  Earning new degrees are often very expensive and you may not end up with the skills and knowledge you expected to gain.

Instead of a traditional educational path, consider more practical experiences.  Take adult education classes, attend seminars, or utilize courses that that will develop your skills in areas you’re most interested in.  For example, I spend on myself by purchasing courses that develop my online business skills, like David Risley’s Blog Masters Club.  Courses like these teach what I know I will put to use immediately and relate directly to my personal business and entrepreneurship goals.

Whatever you want to do now, find a way to invest and make that happen.  Maybe you want to learn a language or start a small business making crafts.  Whatever it is, spend a little money to make it happen.

Your Life.  While I preach quite a bit of frugality on here, I don’t support taking frugality to an extreme.  To me, investing in my life means not making severe sacrifices now just to save for later.  Sure, I could save thousands a year if I didn’t go travel on vacations to Greece, eat out a couple times a week, or take up hobbies like biking and beer brewing.  I’m positive eliminating these things would do wonders for my retirement fund, but it’s just not worth it to sacrifice life now for later.  I’m not suggesting that anyone should go into massive debt to live life now.  That’s not the idea.  But life right now shouldn’t be neglected for saving for the future. When I’m older I might not be able (or want) to do the same things on my travels, like long hikes or weeks-long camping trips.  But I know these things make me happy right now.

Plan a trip or something else fun that you’ve been holding back on.  If needed, work extra hard to earn the money to make that possible.  Just don’t make your life miserable now to save for later in life.

Your values and beliefs.  I’m sure there a lot of movements, charities, or ideals that you have an personal attachment to.  Everyone does.  On top of that, there are a lot of great organizations that severely need financial help.  While we may not all have time to volunteer regularly, almost everyone can afford to give something.  Regular giving to charity should be a priority.  I’ve donated $20 a month for the last 10 years to Children International, where I have an “adopted” child in Colombia.  It may not be a lot of money in the grand scheme of my life, but I’d gladly give up eating out once a month in return for making this gift.

I donate to other places, too, with a goal of donating 10% of what I make.  This might not be possible for me or you all of the time, but it’s a good benchmark to shoot for.  There are a lot of other great charities out there that I wish I could support at a greater level.  Having more to give to those in need is part of my motivation for earning more.

While I’ll continue to invest in stocks, bonds, and mutual funds, I’ll never stop contributing to these personal investments.

Do you have personal investment ideas of your own?

Photo credit: eflon