 Image credit: Mikhail Nilov from Pexels Usually, there are two main ways to borrow money. You can take out a loan, getting the exact amount of money you need, or you can use a credit card. In either case, you’re basically using money that you don’t have and paying it back at a later date.
By definition, you’re already in debt. However, there’s a difference between being in a small amount of debt and being in massive debt. If you play your cards right, you can borrow money when necessary but avoid being in huge debt that leaves you on the cusp of bankruptcy. What should you do to ensure you’re not going to end up with debt collectors banging on your door? Don’t borrow too much money We see this all the time with people that end up in thousands of pounds of debt, and it usually comes from credit cards or payday loans. In both scenarios, the person will borrow more money than they either need or can afford. As a result, they struggle to pay back what they owe, leading to extra fees and higher interest rate charges. It can mean that you spend years trying to pay a loan back when it could all have been avoided if you just borrowed a little bit less. Credit card debt is perhaps the best example of this because people use too much credit on their cards, maxing them out. Then, they can’t pay the balance in full, so they start gaining interest on what they owe, while still using too much credit in subsequent months. It’s a slippery slope and a lot of debt would be avoided by using less credit and paying the bill in full. Be wary of interest rates When borrowing money from any source, always be wary of the interest rates. This is what you will pay on top of paying back the money you borrowed. With credit cards, you can often bypass interest rates by paying your balance off in full every month. With loans, the interest rate is basically how the lender makes money - think of it as a fee for borrowing money from them. Check the APR of loans or credit cards to see how much interest you’re likely to pay. The higher the APR, the more worried you should be. Ideally, you want to borrow money with as low an interest rate as possible, making it easier to repay without ending up in too much debt. Improve your credit score Following on from the previous point, interest rates fluctuate from person to person. Your bank can offer the same loan to you and another customer, but both of you have different interest rates. This is because people with better credit scores get better rates as they are deemed more financially trustworthy and responsible. So, improve your credit score to get the lower interest rates, allowing you to be in a more comfortable position to pay what you owe. There will be times in life where you have no option other than to borrow money. As such, it’s important to learn how to keep yourself in as little debt as possible for as short a period as you can. These three tips will help you do just that!
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 Image credit: Energepic.com from Pexels Stocks, forex and crypto are some of the most effective ways to grow your money. But just which of these investments is right for you? This post explores the pros and cons of each - and what you need to get involved.
Stocks Investing in stocks involves buying shares of companies, waiting for them to increase in value and then selling them. You can make a lot of money by investing in the right companies. You can also lose a lot of money if you invest in the wrong companies. You can reduce risk by diversifying your portfolio. This involves investing in a range of stocks in a range of industries. The most stable stocks to invest in tend to be long-established companies - these stocks tend to gradually increase in value over the years. Newer companies tend to be riskier, however they can offer some of the highest and fastest returns. Anyone can invest in the stock market with as little as $1. There are free trading apps that allow you to buy parts of shares on your phone. Alternatively, you can hire a stockbroker to invest your stocks for you. This involves paying fees, however you could reduce the risk of loss by having an expert invest your cash for you. It’s worth researching into companies before investing in them. By understanding the industry and the company, you can make good predictions as to whether a stock will rise or fall. Forex Forex involves trading foreign currencies. By buying a currency that is rising in value and then converting it back, you can make a profit. Buy the wrong currency and you could lose money. As with stocks, you should always diversify your portfolio by buying a range of different currencies. Some currencies are likely to be more stable than others - the more stable ones are less risky but will offer slower and smaller returns. To invest in foreign currencies you need to use a forex broker. To create an account, you’ll generally need to place down a minimum deposit of $100, although there are some brokers that allow you to invest with less. Fees are charged on every transaction. Currency prices can be affected by political events, travel popularity and rate of trade. By educating yourself in these matters, you can more accurately predict when a currency may rise or fall in value. Crypto Cryptocurrencies are digital currencies. They include the likes of Bitcoin, Ethereum and Litecoin. The principle is similar to buying a foreign currency - you buy a currency, wait for it to rise in value and sell it. Cryptocurrency however can be more volatile. This can result in much bigger potential returns, but also much bigger potential losses. As with forex and stocks, you should buy a range of cryptocurrencies to spread the risk. Certain cryptocurrencies are likely to increase at a much greater rate than others. You can look into buying ETH with Swyftx or another cryptocurrency exchange platform. Minimum deposits and fees can vary depending on the platform you use. When buying large amounts of crypto, it can often be worth using a digital wallet to keep your currency secure. Cryptocurrencies rise and fall in value based on demand. These rises and falls can be a lot harder to predict than with stocks or crypto however there are still ways of educating yourself and spotting trends. For a great introduction into how to buy bitcoin, SoFi Invest has some learning resources and is the ideal place to begin your Crypto journey. |
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