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Using Binary Options as a Personal Finance Tool

November 4, 2014 •

Most people have two main issues when it comes to increasing their net worth. The first has to do with debt. Whether it be credit cards, loans, or financing for expensive items, debt often carries a higher interest rate than a lot of investments, thus giving lenders a long term advantage. The other issue has to do with earning potential. Most people feel like they are underpaid for what they do and their education levels. And most of these people don’t do much to try and solve these issues.

One way to give yourself an edge in increasing your earnings and reducing debt is by trading. However, many people avoid financial markets completely, even long term retirement savings. This can be an easy frame of mind to be in because they can’t afford risk, and yes, there is some risk involved. But there doesn’t need to be a lot of risk if you approach it right, and binary options allow you to increase safety.

This needs to be done in incremental stages, though. The main advantages of binaries are that you can make worthwhile profits off of small amounts of risk, and that your money is not tied up for long. If you buy $1,000 worth of stock, it could take five years to turn your money into $1,250. It could take more, even, if your stock of choice is moving slowly. But any analyst will tell you that a 25 percent growth rate over this timeframe is pretty good. Most stocks would not see this growth, and many would even lose value over time. So, gaining $250 off of this is not a bad start to growing your portfolio. With binaries, though, winning trades are rewarded 75 percent or more per trade. Obviously not every trade will be a winner, but the ones that you are right on will pay you handsomely.

The short timeframe accounts for the dual nature of this instrument. You can earn a lot on a correct trade, but you also can lose a lot on a wrong one. So, the short timeframe is an encouragement to not risk a lot at once, and it allows you to recover quickly when you’re wrong. If you lose $50 in a trade, you can make it up in a few minutes, if need be. The timeframes are short enough that you can lose a lot at the start of the day, and still come up a big winner at the end. You won’t find that you are earning 80 percent at the end of a year in most cases, but thanks to the ability to customize your trades and focus on what works best for you, you can earn double digit rates of return with ease–something that is quite difficult in the traditional stock market.

Binaries are certainly not for everyone, and they are not something to be used without caution. If they are used incorrectly, they can increase your debt in a big way, and you definitely do not want that. But the same is true of payday loans, credit cards, and bank overdraft fees. These need to be used correctly. But there is a place for binary options trading within your personal finance system for some people, and if you follow the markets already, this is a good way to give yourself a little extra income and get on the right path to financial independence. They are also a good way to encourage yourself to learn the markets so you can be profitable. Again, they’re not for everyone, but those that find success with them find big success, and that is an empowering tool to have on your side.

Categories: Starting Out
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