Some people are good at making money. This is an awesome skill to have. If you have great earning potential, then a lot of the common financial problems in life are more easily solved than they are for people who don’t make a lot of money. But just because you have a good salary doesn’t mean that your life gets easier. In fact, many people who have incredible jobs just don’t know how to use money. They end up in debt, working ever harder for a break that never comes. For people like this, you often hear complaints about how it’s impossible to retire these days, or a good job isn’t what it used to be.
The thing is, despite economic troubles in many markets, money works like it always has. If you have high earnings, spend beneath your means, and invest a lot of your take-home pay, you should be able to build a great future where your money works for you and not the other way around. We’ll include several examples of how that works in the following guide, but none is so relevant to today’s investment market than spread betting. If you don’t know what that is, you soon will.
What is spread betting? It’s actually pretty easy to understand, but it takes a little longer to explain. Spread betting is a way to invest your money in various predictions about the future values of stocks, Forex, indices, commodities, and other financial entities whose values can be measured accurately and in real time.
There are various spread betting brokerages, each which will show you lots of different prices for all of the markets and products already mentioned. The user deposits money and tries to decide which financial product to focus on. When a decision is reached, the user will lock in a contract with a specific amount of money, then input a prediction about the future value of the financial entity in question: whether it will gain or lose value over a specific amount of time.
If, at the end of the predicted time period, the price has moved in the predicted direction, the user will get dividends based on the amount of money invested and the amount the value actually changed in the chosen direction. If things didn’t go as planned, losses are proportionate to the amount the value changed in the other direction, possibly capped with a stop loss or other fail safe measure.
For those who don’t want to be directly responsible for the growth of their money, but instead want to rely upon the business acumen of some of the world’s best business minds, more traditional investment may be a better choice. Investing in index funds which cover whole markets are a great way to get slow steady growth, often for developing a retirement nest egg. For people who are looking for returns in the shorter term, investing in well chosen stocks can provide fast growth, if all goes well with the chosen companies.
Of course, you can choose all of these options in your investment portfolio, including spread better, stock market trading, and index funds. The end result should be to create extra money for now, and extra money for down the road, perhaps when your income potential is greatly lessened.
It is absolutely necessary for people with high earning potential to make the most of their situation by saving and investing a large portion of their income. Start now, keep at it, and you will have an incredible retirement awaiting you when you don’t want to work anymore. Not everybody in your shoes does the hard work in this situation, but you definitely should.Previous: Building Business Momentum, When Does Business Growth Leads to Self Sustainability?