It is common now for people to undertake stock trading online. Historically there have been American stock markets from the 1700s. In Philadelphia an exchange for trading currency was established to enable business owners to support their business and to grow the economy.
In the early 1800s, the New York Stock Exchange (NYSE) replaced the Philadelphia exchange. Initially New York Stock Exchange was a group of business people who met on a daily basis on Wall St to trade their stocks or bonds. This initial trading was all done outside until the Exchange moved indoors in the early 1900s. Whilst this traditional formuala served its purpose admirably, trading is no longer the bricks and mortar industry it once was. Trading no longer requires you to be in Wall St.The way the New York Stock Exchange works could be compared to an auction. If a company is listed on the stock exchange, they have a post in Wall St whereby trades are listed and a specialist is employed as an "auctioneer" to oversee the bidding on each trade. This form of trading keeps an accurate balance between supply and demand in the stock market so the price of the shares is kept in check.
These days, it is far easier to get involved in investing in stocks. In traditional stock trading, you engage a stock broker to take and place your order for you. You phone your broker to take the order and then there can be a delay in the order being executed. Now you no longer need to worry about using a stock broker to act on your behalf. If buying or selling stocks online you can place your order with the click of a mouse. Conveniently, trading this way is also a time saver. Setting up an account with a reputable, online brokerage company is easy. These online companies provide access to a wide range of services that were previously only available via a traditional bricks and mortar stock broking service. Setting up an online account gives you access to a variety of services including: up to the minute stock quotes, detailed historic performances of individual stocks, as well as detailed information about company fundamentals.One of the most common reasons investors like buying and selling stocks online compared with traditional brokerage is price. There are much lower brokerage fees for buying and selling stocks online than there are through buying and selling stocks at a traditional brokerage house.An important advantage of using an online brokerage service to trade stocks online is the significant price saving in brokerage fees. This is combined with the immediacy at which you can gather information required in making your stock purchasing decisions when trading online. Many investors also like the independence associated with trading shares online. Many traditional brokerage houses would try to influence your decisions when trading shares, but an online account means all the decisions you make are fully your own.
Online brokerage sites are not just about trading shares online. By giving you access to a wealth of information, online trading sites provide an important resource in formulating trading decisions. Many online brokerage sites will also provide courses designed to help you learn the tips and tricks of trading online. You can also get immediate access to your portfolio, instead of having to find all your stock certificates or calling your brokerage house.
Keeping pace with increases in technology has allowed the global economy to grow. The ability to buy and sell stocks online becomes a reflection of the economy adapting to meet the abilities of new technology head on. The ability of an investor to log in to their portfolio, no matter where they are in the world at that particular time, to trade shares online gives them the chance to take a greater role in securing their own financial future.
Most people who want to establish a financially-secure future choose to invest or trade in real estate. Indeed, if you take a look at the list of names of the wealthiest people in any category, most of them have allocated major portions of their assets in real estate. Donald Trump, who made his fortune in real estate is very popular and his success story is an inspiration to all of us.
Books like Rich Dad, Poor Dad , by Robert Kiyosaki and other property investing books written in the last fifteen years, introduced the average person to real estate investing. Thanks to these books, many people have opened their minds to new possibilities which they can now envision for themselves.
This article will not dispute the validity and the wisdom of investing in real estate. However, it might not be the best option for everybody. Each of us has different limitations and our circumstances vary. At the start -- for most of us -- we have to choose which area to specialise in since there is only so much money to go around. What I can do, is to at least highlight a few aspects of trading and investing in both areas. I then leave it to you to decide what you would like to focus on.
I should let you know that I have not yet invested in real estate myself, but I have considered it and I have asked myself the same questions you might be asking yourself now. I have read a lot on the subject matter and my assessment is purely based from my readings. Individuals using real-estate as their vehicle to create wealth may have different perspectives and I strongly advise you to seek their counsel to gain a more balanced outlook on this issue.
PASSIVE INCOME OR CAPITAL GAINS
If you like the idea of buying property to receive rent revenue, then the real estate market maybe better for you. You can structure your properties and contractual agreements to maximise the passive income you get from your tenants.
However, if you prefer to buy a property mainly because you think you can resell it at a higher price later, then you want to make money mainly from capital gains. If this is your philosophy, then forex could be a better trading vehicle for you than real estate because exchange rates fluctuate faster than real estate prices. Furthermore, transactions are easier and they are instantaneous to complete.
CAPITAL
To buy real estate, you need have at least 10% of the acquisition cost of the property, if your bank is willing to lend you the other 90%. If the house costs $350,000, you will need to cough up $35,000. That is a year's gross income for many people.
If you want to start trading forex, most brokers allow you to open a trading account for just $200. With $50, you can trade 10,000 units of a currency, if you have a margin ratio of 200:1.
LIQUIDITY
Whenever you want to buy or sell currencies, there is always someone willing to buy from - or sell to - you at the most competitive price. The forex market is the biggest market in the world and if you have hundreds of thousands of dollars you want to exchange for another currency, you can do so within a couple of seconds. To buy or sell a house or an apartment, you expect to wait for weeks, if not months.
PRODUCT HOMOGENEITY
In the real estate market, one house is not the same as another. Each property is unique. One might have a better foundation, a worse design or a prettier garden than another. Knowledge of these strengths and weaknesses become a significant factor if you are to make money from a transaction. Therefore, if you enjoy or if you are good at selling, promoting, negotiating and bargaining based on these differences, the real estate market is for you. Further, your lawyers, accountants, advisers, real estate agents and consultants play a significant role in your success.
If you want to trade currencies, there is no need to negotiate the price with the other party. If you are a seller, there is no need to educate potential buyers as to the benefits of your product. If you are buying, you have piece of mind that you are getting the best possible price for the currency from your broker at that particular point in time.
TRANSACTION COSTS
Buying and selling real estate is much more expensive than buying and selling currencies.
'SHORTING' MARKETS
When you have a property and you suspect that its price will go down in the future, your options are limited: hang on to the property or sell it now. In forex, if you suspect that a particular currency will depreciate in value, then you can exchange it for another currency. You buy it back again after it has already reduced in value to realise your gain.
MEDIATED TRANSACTIONS
In real estate you are dealing directly with the other party, taking on the other side of the transaction. This is why you need to go through a lot of paperwork and consult your lawyers to ensure that you know about the options available to you when the other party fails to fulfil his or her end of the bargain.
In forex, you do not have to worry about whether a buyer or a seller is going to fulfil his or her end of the bargain for whatever reason, because you are not directly dealing with that particular person. You are dealing with the broker who ensures that somebody will always take the other side of your trade.
CONVENIENCE
The forex market is open 24 hours a day. You do not have to meet the buyers or sellers in person. You do not have to conduct meetings with lawyers, accountant, bank representatives and so on. You can buy and sell currencies in your pyjamas at midnight if you like and the transaction will be complete before you go back to bed.
CONCLUSION
All in all, if you are an investor looking to make money from a combination of rent revenue and capital gains, you may want to invest in real estate for the long-term. If you are a trader wanting to profit purely on capital gains, then trading forex is probably better for you than trading real estate because you can start with a small fund and your rate of return is limited only by your ability to trade well. The transactions are mediated, it is more convenient and transaction costs are a lot smaller. The market is also more efficient due to product homogeneity and liquidity. Lastly, there are opportunities to profit regardless if the prices are going up or down.
I believe that if done right, neither venture is more or less riskier than the other. The risks are up to you to manage. With this article, I hope I helped you make a decision appropriate to your circumstances.
When you first start banking online, you may be offered free online bill pay. Online bill pay is a brilliant invention that saves you time and simplifies your budget, but only if you use it the right way. These tips can help you avoid surprise late fees and overdraft charges:
Set up reminders. Some banks let you send yourself reminders if you would rather not pay your bills automatically. Each month, you'll get a reminder to check on your latest bills and then pay them online. While this option is not automatic, you can check your balance to make sure you can cover the payment, and it takes less time than writing a check. Reminders come in handy for bills with changing values, such as the electric bill, and you can also use reminders to alert you when the money in your checking account dips below a certain level.
Make sure you know when the payment posts. Just because you make an online payment on a certain day doesn't mean the company or person you are paying will receive the money on that day. If you make the payment just before a deadline, but the payment posts afterward, you still missed the deadline, and you might be charged a fee. However, many online banks let you know when the payment will arrive, and you can schedule the date of the delivery. Give yourself a little extra time between when you schedule the payment and when the payment is due, and take weekends into account.
Find out if the money has been withdrawn. Since you aren't writing paper checks, you may fall out of the habit of balancing your checkbook. However, you need to make sure the transaction has cleared so you know how much you actually have. Some online bill pay services have features that let you balance your checkbook, but you can use good old paper and pen to track what you've paid out.
Learn about the bank's security practices. While online banking is secure, even more so than banking on paper, you still need to read about your bank's security standards before you sign up. Many sites offer details on their security standards. If your bank has a bricks-and-mortar branch near you, you can set up an appointment with a banker. Many of them have been briefed about online security and can tell you exactly what the bank is doing to keep your information safe.
Stay involved with your money. Even with online bill pay, it is your responsibility to keep your accounts balanced and find out if you have enough money to pay your bills; otherwise, you may wind up dealing with a late fee.
