Do you really "need money to make money"? I often hear from people who are already convinced that yes, you do. Personally however, I have found this statement to be misleading.
A more accurate statement is perhaps "you need a positive attitude to make money" or "you need motivation to take action towards your goals to make money".
Rather than sitting back trying to feel better about oneself by repeating old clichés consider this instead... change your language, thoughts and focus then take some action towards your goals, no matter how small, and you will change your life for the better.
Trading is my area of expertise but I also run a small business and own a few properties. I started small in all three areas and have had success in all on varying scales. Property wise, my wife and I bought our first place in London in 2004 just weeks before leaving my job to trade the markets full time.
It was a tiny one bedroom apartment, for which we got a maximum 95 per cent mortgage and paid the interest only so that we could afford the repayments in my new venture as a full-time trader. I had friends in London at a similar stage in life who could have easily afforded a small place like that, but most did not buy either for fear of starting too small or they simply weren't willing to sacrifice their comparatively luxurious and spacious rental property for their own "box" apartment.
Today that tiny property has been rented since 2006, never gone more than a fortnight without a great tenant, is worth significantly more than what we paid for it and makes a tidy little income over and above the mortgage payments. I am no property expert, not by a long shot. In fact I have no 'expertise' whatsoever, just a bit of experience buying a couple of places. Many everyday people have done significantly better and the property market tends to move in the right direction if you stay put long enough.
While the first-home buyer market in New Zealand is certainly very challenging right now, my point is solely this - I started small and did OK whereas others never started at all because they had their sights set so high. Business and trading also tend to allow smaller starting points than property.
In business, I never once sat down and decided "I am going to start a trading education company". It started small, with no plan, no website and no upfront investment whatsoever.
It was based entirely on people I knew asking me to teach them to trade. I did this in my living room with groups of one to four people. Very early on, I did not even charge a set fee, I just said "I will teach you what I know and if you feel it was of value, you pay me what you think it was worth". Some people paid quite a lot (and came back for more!) and thus I realised there was a market for the training I was doing.
This progressed very slowly but surely and was entirely based on demand. I now have staff and clients all over the world and a successful business that started on nothing other than a skillset which others wanted to acquire.
Many of us have skills that others would like to learn. Have you considered mentoring those people? Who knows where it may lead. Maybe you need to find a mentor, there are plenty out there. I have found many experienced people on my business journey willing to lend me help and advice, often even for free!
In trading, my first trade lost me around $150 and I was absolutely devastated. It was a big loss for the small amount of money that I had available. I scaled it back thereafter and began risking in the region of $10-20 per trade, at times even less. I had a very small trading account and I took small risks until I knew what I was doing.
I made money and I lost money. When I made money I was lucky if it paid for bread and milk, however most importantly, when I lost money I could still sleep well at night. And all the while with this very small start, I did the most important thing towards achieving success... I was actually doing something! I was gaining vital experience which led to larger trading funds, better returns and even starting a business from teaching people my acquired skills.
In trading, what those who say "you need money to make money" don't realise is that you can open an account with just a few hundred dollars and risk just a couple of bucks per trade by limiting the downside with what is known as a 'stop loss'. This start point is significantly less than the deposit for a property and very comparative to even the lowest cost business ideas too.
You can pick up free trading education from most brokers just for opening an account with them. And best of all, you're actually doing something, taking a step towards your goal and gaining experience in the process. Taking action does not guarantee your success by any stretch, but it puts you in the game and been in the game is the only way you have a chance of winning.
Nick McDonald is a New Zealander teaching everyday people how to trade the worlds markets via his company Trade With Precision.
