How you could redefine your income this financial year

Have you ever wondered what the definition for ‘insanity’ is? A learned friend painted to me his version of modern insanity. It sounded appalling and definitely worth a second thought. To him, ‘Insanity is doing the same thing over and over while expecting a different outcome.’  He went on to pose a question that left me mum. He asked, ‘What happens then when the republic is inhabited by ‘insane’ folks?’

With all due respect, it would not be my pleasure to discuss insanity on this platform. However, in a nutshell, what my friend was trying to drive home was that modern day problems are as a result of our failure, or may be fear, to adopt new solutions. Roughly three weeks ago, the budget for the financial year 2011/12 was read implying the country had turned on a different financial page. This happened despite most of us still treading on our aged financial plans that are highly characterized by fixed incomes. With the recent hue and cry against the surging commodity prices, many of us have been bent on controlling costs and paying no regard to incomes. Well, just how then can you redefine your income this financial year?

The conservative citizen will tell you he would rather put his money where he can see it. He is the kind that will stuff notes in a bedside pillow as a safeguard against potential predators. With the advent of technology, that school of thought is rather fading. Today, folks worldwide have embraced technology to the extent that it has become a major platform on which to eke out a living. One such technology platform is the internet that has without a doubt bridged the trading divide a great deal. The beauty of it is that you can now trade in; currencies, stocks, contracts for difference (CFDs), options, futures as well as commodities like gold on major world markets. Well, like Mike Tyrell puts it, it’s never an easy task to trade in the above online. He notes that it takes a great deal of learning and you have to learn to stalk the market as a lion does while stalking its kill.

Mike is an experienced trader having commenced his online trading career early 2000. He is a jolly, humble gentleman currently residing in Uganda. Apart from online trading, he also enjoys a position as a member of the reputed investment club, The Rats Network Investment Group (RNIG). It’s at one of RNIG’s group meetings that I came to know him and out of curiosity developed interest in knowing more about his online trading career. His presence in the group has generated immense synergy portrayed by the fact that some group members have learnt the art of online trade through his guidance and are constantly honing their trading skills through a mentor – protégé relationship.

Online trade has been dubbed by many a ‘gamble’ due to the high risk attached to the trade. Mike’s experience however refutes such a tagline as he confidently advises that trading done properly is not gambling if proper money management practices are applied. He continues to advise that trading that is done without a clear, tested and a workable plan is what should be branded as a ‘gamble’. For instance, he only buys or sells when, say, three of his main conditions are met in his technical analysis. These conditions are based on basic principles and are bound to work in all markets.

Tips to guide you

Greatest of all, you have to know what you are doing. If you don’t, take time to learn before you venture. Most importantly your learning should be facilitated with the help of a mentor. In addition, the internet is laden with information on online trading. All you have to do is hit the Google search button!

Rumor has it that some companies are mushrooming in town and are promising to trade for their clients in return for an annuity monthly. The big question is, do you part with your money to people you don’t know?

You should start small and grow wisely. Mike advises a minimum capital input of USD 1000. Remember, invest what you are willing to lose. However, on each trade you have to work out what you are willing to lose, advisably a maximum of 2% of your capital. This will then guide you when placing your stop losses which will guarantee minimal losses.

Ultimately, your biggest strides in redefining your income through online trade will be your decision to commit yourself to learning, finding a mentor and obviously your first instance of actual trade. Good Luck.