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People with a stable and good internet connection tends to work from home rather than working from the office. These are some people who want to work for some side hustle so that they will achieve their financial goals anytime in the future.

One thing they have discovered is that in the stock market, there are the living “Day Traders” where they trade in the market for a day from the opening of the market until the market closed. With the right amount of capital and side hustle scheduled, they can already trade in the market. But the real question is, are they really ready? 

It is not easy to day trade without any system and discipline on yourself. With that let’s take a look with the 5 tips to become a successful Day Trader.

Risk Management

Risk comes from not knowing what you’re doing – Warren Buffet

In trading, we all know that you can’t control the market and you can’t control the number of participants who will participate in the market every day. You can’t even control the volatility that will happen on the market. To avoid being whipsawed by the market, you must control your risk in every trade. You must set for yourself a risk appetite that you are willing to risk per trade.

Control your psychological state so that when the market goes against you, you won’t be emotional because the market is just being abusive to you. Know your timing of entry and exit before trading the market so that you won’t get stopped out easily. When it comes to the risk reward ratio, always get a good risk reward ratio that will help you to be profitable in the long run. Always and always put a stop loss and follow that stop loss plan so that you won’t be dragged by the market. 

Cut your emotions

When you get your profits, avoid being too happy and when you take your losses, avoid being too sad that will force you to quit trading. A good trader will always be a robot because they trade without the emotions and stay neutral as long as they are in the zone of trading the market. The only rule in emotions is to control it and think properly while trading the market.

It is not about the gains

In the market, it is not always about gains, it is about being consistent in your trading plan that will help you to survive in the market. Once you are in the mindset of focusing on the money not the trading plan. I imagine that you will be affected by the greed that will lead you to terrible decisions when trading. That is why always focus on your trading strategy, stick to it and follow it no matter what because you created it.

Follow your Plan

“He who fails to plan is planning to fail” -Winston Churchill

Now that you have a trading system then always follow it. All you need to do is to follow your plan and nothing else. Always have an entry and exit, control your psychological state and know your risk management techniques. This will help you to survive in the market as a day trader in the long run. In the end, if you follow your trading plan, you will be a profitable trader in the future. 

Stay Disciplined

When you wake up in the morning what do you always do? Open your phone? Take a bath? Eat? Meditate? Or sleep again? The next action will help you to stay focused on the course for the entire day OR will make you do nothing for the whole day. Choose your decision well and stay disciplined on your routine. This also applies in the stock market.

Do you follow your trading plan consistently or do you break your rules when the market goes against you? It is your choice if you will stay consistent with your plan and become a successful person one day or trade and trade and trade like a machine gun without stop loss until your capital will become 0. Again, choose your decision well.

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We have been there, staring at our credit card bill and being overwhelmed by the sums of debt we have accumulated, the interest that comes along with it, and the credit terms pressuring you to pay by a specific date as if you have not enough deadlines in your life.

The worst part about debt is that it keeps us from reaching our goals, the more of it that we have, the farther away we are from our dreams and our financial freedom. D2ealing with debt is exhausting and stressful, but it does not have to take forever to pay off. 

CONTENT:

• What is debt 
• How debt keeps you from reaching your goals 
• Stigma of debt 
• Debt as a prison 

TL;DR

• Mind the gap (fix budget) 

○ Increasing Revenues 

○ Decreasing Expenses 

• Avoid Credit Card spending 

○ Deleting Cards from Online Stores 

• Reward yourself (with cash you have!) 

Methods 

• Avalanche Method 
• Snowball Method 

Conclusion 

• What method do we recommend? 
• Recap on the tips 

The first thing we have to do to pay off our debt is to mind the gap. This is the gap between your monthly income to your monthly spending. Having a tighter gap leaves you less room for financial flexibility, that is why there must always be a significant gap between your income and expenses. There are two ways to increase the gap, either you increase your income or you decrease your expenses. Managing to do both would be the best thing you can do.

By making the gap bigger, you can make enough room to pay for your debt in a shorter period. Try to think of anything that can help increase your gap, brew your coffee at home, prepare your own meals, eat out less, or maybe sell those old guitars you do not use anymore, anything would make a big impact. 

Next, we have to avoid credit card spending at all costs. It would not help acquiring more debt if you cannot pay off your current ones. Delete your credit card information from your favorite online stores, remove it from your internet browser, delete Shopee and Lazada from your phone, or even go as far as cutting your credit card.

It may seem like a punishment to you, but being free from debt is better than being stuck in a loop of acquiring debt and draining yourself to pay them off. Once we have established your gap and preventing further debts, we can now move on to strategies that we can use to be finally free of debt. 

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The Avalanche approach is the quickest and cheapest way of paying off your debt. You simply have to list down your debts from the greatest amount to the least, and pay the biggest debt first. This makes it so that you minimize the interest you have to pay by eliminating the biggest amount as quickly as possible, and after paying off the greatest amount, you can use the additional cash flow from paying off that debt to easily pay off the following amount, and so on. As simple as it may sound, the Avalanche approach is easier said than done.

This method makes it hard to start since you are dealing with the greatest amount first. Moreover, it is usually demotivating for you since you do not see results immediately. As humans, we love to see results quickly and not being able to get the results we want can be overwhelming. That is why in the next approach, we will be using human psychology to our advantage! 

The Snowball approach is perhaps the more effective method of paying off your debt. It is the opposite of the Avalanche approach, wherein we pay off the smallest amount first. This makes sure that we feel motivated everytime we scratch debt off our credit card bill. Even though this is not the cheapest method of paying off that debt, allowing the bank to squeeze a little extra interest from us, this method is more likely to keep you in track to your debt free life which, after all, is our goal.

In sum, we recommend that you start off small and pay the smallest debt using the snowball approach. Always remember to mind your gap, the greater the gap, the faster you’ll be able to be debt free. Avoid acquiring additional debt from the ones that you already have and finally, make sure that you are always on track. Do not forget to reward yourself every now and then, you deserve it. Paying off debt is not an easy thing to do.

If you are reading this article chances are you think you are too young to invest. You also probably think that you do not have enough money and that you lack the necessary business skills needed for investing. The truth is, most people need investing as a way to safeguard their future.

For those of who are still on the fence, it is important to remember that your investing journey does not start with your first deposit, it starts with your first initiative to learn about investing. But why exactly do we need to invest and if ever, how can we start?

 

First Reason to Invest: Compounding Interest

There are two main reasons to invest at a young age. The first one is compounding interest. The earlier you start investing the more your funds accumulate. Investing is all about making your money work for you and the sooner your money works, the sooner it multiplies to create more money which will in turn create money thereby creating an endless cycle of wealth creation.

For example, If we assume a starting capital of PHP 10,000 and a compounding  interest rate of 4% per annum and let’s assume that you start at age 25, by age 70 your investment will be worth PHP 58,412 amount. However if you keep the interest rate and the starting capital constant but instead start at age 15 your investment will be worth PHP 86,464 once you reach 70. Of course this is an oversimplification and you probably won’t have the same funds when you are 15 and when you are 25 years old but try it out for yourself with values that you think are realistic. 

Second Reason to Invest: Risk

The second reason is your ability to take risks. Adults typically don’t have the appetite for risky investments the same way young people do because adults have responsibilities to their family. Therefore, by the time someone starts a family, a person’s investment philosophy should be about safeguarding the future and capital protection as opposed to significantly multiplying their net worth.

On the other hand, you being young, can take on more opportunities with your desired amount of risk with minimal downside. With this, you are more likely to learn from your mistakes earlier and start being profitable earlier.

How to Start Investing

So how exactly can you start investing? You don’t have to go to Business School, you don’t even need to go to college to invest. In the digital age all it takes is 20 seconds. All it takes is 20 seconds to follow people in the finance world on Facebook, Twitter and on YouTube. This seems like a small thing but when you see finance on your timeline, it encourages you to learn more about finance and investing. In a way, you’re planting these small ideas into your mind which will eventually turn into your drive; into your passion for investing.

But let’s say you want something more actionable, what can you do? One of the most practical things that someone can do is to allot a certain amount of time to learn about investing. This can be done an hour per week or an hour per day; it depends on your schedule and how quickly you want to learn about investing. All you need to do is to look up basic terms like “interest rates”, “investing”, “capital”, and “compounding interest” and eventually, you will never run out of things to look up.

However it is important to have savings before applying your learnings on investing. Being young does not give you an excuse to be reckless. You still have to employ risk management strategies as well as to have a “cushion” just in case your investment doesn’t go as planned.

if you still don’t know where to start you can head on to InvestaUniversity, a free stock market program filled with activities, a welcoming community, and instructional videos all geared towards helping you make that first investment and eventually, financial freedom. 

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