With the right guidance and knowledge, trading can be a great way to start building wealth.
So, if you find yourself curious as to why trading is a smart move for a young professional like yourself, keep reading to learn how it can set you on the path towards financial freedom and success.
What is trading?
Most people think of the stock market when they think of trading, but there are many different types of markets, commodities and assets that can be traded.
In its simplest form, trading is the act of buying and selling assets in order to make a profit.
This can be done through traditional means such as stocks, bonds and commodities, or more unique assets such as cryptocurrency and derivatives.
5 Advantages of Trading For 20-Somethings
Trading offers young professionals several benefits.
With the rise of remote work, freelancing, and picking up side hustles, a lot of young people are driven to learn entrepreneurial skills that can propel them forward in their careers and help them reach their financial aspirations.
Some specific advantages include:
Gain a deeper understand of economics
Becoming a trader forces you to stay in tune with macro and microeconomic factors that can affect the trading value of markets, stocks, bonds, commodities and other assets.
Trading requires you to understand the big picture of the global economy and to develop analytical skills to make data-driven decisions.
The more familiar you become with various economic theories, models and indicators — and their interactions with one other — the better equipped you will be to make informed trading decisions.
So, the next time someone around the dinner table asks a question such as: “I wonder what causes inflation?” you’ll be able to jump in with an informative answer and impress everyone with your knowledge.
When you are financially independent, you are in control of your destiny and can make decisions without having to rely on someone else for your financial security.
True financial freedom extends beyond simply not having to worry about how you’ll pay your bills. It also gives you the power to live your life to the fullest by being able to buy the designer bag or take that trip to Bali.
Flexibility and portability
If you’re looking for a way to make money that offers flexibility and portability, trading is a great option. With technology, you can trade from anywhere in the world — all you need is a laptop and an internet connection.
This is perfect for people who want to have more control over their schedules or find a better work-life balance.
Low capital investment
Unlike other businesses, you don’t need to have a lot of money to get started with trading.
You can start small and gradually grow your portfolio as you become more successful.
Unlike long-term investment portfolios, which can have annual returns of 6% or less, trading yields relatively high returns, even for newbies.
Annually, the average return is 10%, but it can shoot up to as high as 30% in a good year if you play your cards right.
What To Keep In Mind When Considering Trading
Trading is a great way to make money, gain knowledge and experience financial independence as a 20-something.
Through trading, you can build up your portfolio with a variety of investments and learn the fundamentals of trading in the markets.
With a bit of practice and dedication, you could be well on your way to becoming a successful trader well before you hit 30. So, what are you waiting for? Start exploring all the opportunities that trading has to offer and take control of your financial future.