Investing has long been a good way to bring in extra income, but with the rise of the internet, people are able to get their money working for them with the press of a button. This makes it easier for individuals to earn extra money through financial investments…so easy in fact, that some people are working from home investing instead of doing the nine to five.
If you are interested in learning more about investment opportunities, this article will explore options that might work for you.
Day trading is defined as the buying and selling of securities on the same day based on short term price fluctuations. This type of work is often done online.
Although day trading can be a good way to make money, it is not for everyone. Day traders must be well funded as the practice comes with a lot of risks.
Day traders must also be knowledgeable about the market. Technical analysis and chart reading are both good skills for a day trader to have, but you also need to have a good understanding of the products that you trade.
If you feel that you have what it takes to be a day trader, there are two ways you can go about making income in this line of work.
The first is to work for a large institution.
Traders who work for a large institution have the advantage of access to a direct line, a trading desk, large amounts of trading capital, analytical reports and much more. These types of traders are typically looking for easy profits that can be made from one off opportunities and news events. Their resources allow them to capitalize on less risky day trades before other traders can take action.
The second type of day trader is the individual trader.
These traders manage other people’s money or trade their own. They do not have access to the resources traders at a large institution do, but they have strong ties to brokerages and access to other resources.
However, their limited resources force them to take more risks and make it difficult for them to compete with large institution traders. Those with strong analytical skills and leverage can still make substantial profits.
Other Investment Opportunities
While day trading is a good way to make money, there are plenty of other investment opportunities that can increase your income.
These are as follows:
Certificates of Deposit (COD’s): These are federally insured time deposits that have specific maturity dates. They typically have higher interest rates than savings accounts. They are low risk investments that currently pay out at a rate of about 2.4%.
Money Market Accounts: A money market account is an FDIC insured interest bearing deposit account. They bring in more interest than savings accounts but they also require a higher deposit. They provide limited access to the money in the account.
These accounts carry some amount of risk. If inflation rates rise higher than interest rates, investors can lose all their money.
Treasury Securities: These are U.S. government issued securities that help the government pay for some its projects and debts. They are purchased at discount rates and the government pays back the full amount once they mature. Treasury securities have a 30-year maturity and pay a fixed interest rate every 6 months.
Treasury securities are virtually risk free but the value of the security can fluctuate based on interest rates. You can also experience a capital loss if you decide to cash out before the maturity date.
Government Bond Funds: Government bond funds are mutual funds that invest in debt securities issued by the U.S. government and its agencies. The funds invest in debt instruments such as T-bonds, T-bills, T-notes and mortgage backed securities by government enterprises.
Government bond funds are extremely low risk and they are recommended for beginner investors and those looking to increase their cash flow. However, they are subject to risk including interest rate fluctuations and inflation.
Municipal Bond Funds: These funds invest in different municipal bonds or munis issued by the state or local government. Earned income is generally tax free. The funds may be purchased through a municipal fund or an exchange traded fund. You can consult with a financial advisor to find the fund that is right for you.
Municipal bond funds are subject to default risk due to the possibility that the issuer is no longer able to provide further income or principal payments. Bonds are also callable which means the issuer may retire the bond before it matures so the investor is no longer able to collect payments.
Investing is a great way to make extra money and, in most cases, you will be able to generate income without ever having to leave the comfort of your own home. Research carefully and consult a financial advisor to determine which investments are best for you.