For a lot of people investing money is akin to a side hustle. While there are plenty of investors who are working full-time in various markets, there is also the part-timer who is looking to split their income between living expenses and building a nest egg for the future. If you are someone who is looking at investing your money on a part-time basis, here are some of the ways that you might look to get into this world.
You may have heard of dividend investing but aren’t 100% sure on how it differs from other types of investments. Well, the short explanation is that dividend investing is the name given to the practice of investing in a company that has a good dividend payout ratio. The idea is to find companies that pay investors a high percentage throughout the year and buy stock in them. Rather than focusing on the fluctuations in share price, you will be looking at the dividend yield you’ll receive from the companies. So dividend investing means buying stock in companies that regularly pays out decent dividends to ensure a regular income.
One of the essential details to remember if you choose to go down the dividend investment route is that companies only payout to shareholders who own stock on the dividend record date – this is the date that the company in question checks its list of shareholders to determine who receives a dividend. You should also keep in mind that past dividends are not necessarily a sign of future payouts, you are better off researching over a longer period like ten years rather than just based on recent dividends.
CFDs, also known as, Contract for Difference are a very popular form of derivative instruments. Derivatives are financial instruments that allow you to trade an asset in the global markets without actually owning it. Common examples of derivative instruments are options, futures or swaps. An advantage of CFD is that you can speculate on price movements in any direction, up or down. The gain or loss that you make will depend on whether your forecast pans out. With CFDs, you can trade a large variety of assets, including currencies, equities, indices, cryptocurrencies and commodities.
Another area of investment that you might want to consider getting into the foreign exchange market online. What this means is that you will be trading one currency for another based on changes in the exchange rate. This market is the biggest in the world with a daily volume of over $5 trillion. The way you make money using the forex market is by buying and selling based on the exchange rate. When it comes to getting involved in this market, you need to make a decision about whether you are going to go for a long term or short term approach.
There are significant differences between investing in foreign exchange markets compared with dividend investing, the most important of which is that the payouts are far more regular when it comes to the latter. You can make good money investing in foreign currencies, but the common thought is that it is a longer game.
If you are considering investing in the forex market then you should keep an eye on world news alongside the exchange rates to notice the trends. Things like elections, political decision and announcements will influence exchange rates and that will be what you need to pay attention to in order to make money on this type of investing.