Posted by forex at 1:20 AM
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1. Determine if you want it to be a personal account. Some professionals manage other peoples money and can raise funds through investors. For example, hedge fund and mutual fund managers collect the funds from numerous investors to fund a large account that they use to buy stocks. To run a hedge fund or mutual fund, though, you usually must be an industry professional and/or must have passed various licensing exams and have your brokers license. For the vast majority of individuals, therefore, you will need to fund your trading account from money you can earn yourself and it will be a personal account.
2. Set up a budget. This will give you an idea of how much you make and how much you spend each month. Once you know how much you have left over after your spending, you can use that money to fund your trading account. You can also look for areas to cut in your budget; for example, you can eliminate eating out or cut coupons to slash your grocery spending. You can then use that extra money to fund your trading account.
3. Sell things you don't need. If you have clutter sitting around the house, list it on eBay or Craigslist or have a garage sale and sell it to raise money to fund your trading account. It is much better to have the money invested and working for you than to have the cash tied up in a collection you never look at or furniture you don't sit on.
4. Increase your income. You can do this by finding a part time job, taking on extra hours at your existing job, asking for a raise or finding a new higher paying job. When you increase your income, you should channel all the extra money right into your trading account. Since you aren't used to having the extra cash, you won't miss it, and you can get into the habit of investing it right away.
5. Set up automatic transfers to your trading account. That way, you will be sure the money is getting in there. You can set it to automatically transfer a set amount to your trading account with each paycheck, before you even get a chance to spend the cash. Some online brokerages- such as Sharebuilder- will even allow you to buy small amounts of stock with periodic investments that are automatically withdrawn from your bank account.