Published by FrankNez Team.
A big part of your daily life is thinking about new ways to ensure you have financial freedom at least once in your lifetime.
It is often the most difficult part of being a whole person, but there are multiple ways to make it happen, one of which is to trade forex.
Yes, you read that correctly, trading can give you the ultimate steppingstone to your financial freedom.
The first thing you need to understand is that it does not happen overnight, it is a process that involves patience, research, and industry knowledge.
Another trick here is not to think about the individuals who get rich instantly but to rather grow your portfolio over time.
That is what is going to give you financial freedom in the long run.
Before you jump in, consider this
With anything, you need to ask yourself certain things, like what is compound interest?
This is the interest you earn on top of interest.
In other words, if you invest $100 and it earns 5% interest every year, you will have $105 at the end of the first year, then %110.25 at the end of the second year, and so forth.
Even in banking, it works like this, just check your savings accounts. With trading, it can work the same if you have a proper plan, now let’s dive into that plan.
What is your end goal?
Your end goal is the number that will decide your financial freedom.
Do you want $1 million after 5 years? Or is $100 000 in 10 months more what you are after?
Whatever the case may be, you need to figure out your end goal and ensure it works for you.
To keep it simple, if you want a monthly return of $1000 per month, you need to look at certain things.
Let’s work with this and follow some tips below.
Strategies are incredibly important to reach your goal, so here are a few things to consider.
The number of strategies you trade depends on how comfortable you are with trading.
But since you have a goal of financial freedom, there are three strategies you can use, they are breakouts, reversals, and trading markets.
Also for you: Xtrade Review
Rate of return
If you are after a monthly return, then this one is for you.
So, what is it and how does it work?
This is the percentage rate at which your capital grows. In other words, where your wealth accumulates month to month.
Considering the three strategies above, and to keep it simple, say each one of them will give you a return rate of 3%.
That means that 3% times 3 strategies give you 9% every month.
Now let’s look at your capital.
What do you need to do to generate $1000 every month with the 9% to reach your goal? $11,000 or $1,000/9%.
What’s next? Understanding growth principles as this will help you overall.
Understanding growth principles
A book titled The Richest Man in Babylon by George S. Clason highlights 7 simple rules of money, and this is what can be applied here.
These rules are
- Save money – saving money is often listed as one of the better tools to help you reach your financial freedom goal
- Don’t spend more than you need
- Invest wisely
- Avoid investments that sound too good to be true – chances are they are
- Own your home
- Have life insurance to protect yourself and your loved ones
- Gain more knowledge
You must think about how these tie into reaching financial freedom, but each of the points above will help you.
Growth principles are based on these 7 simple rules. You need to learn to save a part of your income every month.
The smallest savings requirement is around 10% of your salary, however, financial advisors encourage you to save between 25 and 30%.
Even if you need $1000 per month in return, you need to save more, in the long run, to have a higher return and inch that much closer to financial freedom.
Look at it this way, growing your capital will also increase your monthly return, so keep at it and push as much money into it as possible.
Lastly, can I, do it?
Yes, you can.
However, a lot of thought and research goes into this.
Trading is not a get-rich-quick scheme regardless of whether some famous and wealthy traders make it seem like this.
Just like the more traditional ways to reach your financial freedom goals, you need to be patient and have a plan.
Good luck, you’ve got this!