The stock market can bring benefits to people across all of society – not just big money investors. Those who are straining under debt, whether it be personal, mortgage-related or from student loans, have a lot to gain from the stock market, with the S&P historically outstripping student loan interest rates.
The question is who should do it, how you can get involved and if it’s worth the risk.The diversified stock market, after all, runs the risk of losing you money. Here’s three ways you can invest to overcome your debt challenges.
Photo by Carlos Muza on Unsplash
Margin Investing
Margin accounts are where you borrow up to 50% of the money required to buy a security. By doing this, you are able to invest less of your money and still benefit, with the option to buy sometimes later on. The expense is a portion of the interest, and the fact that if you default, the security becomes wholly owned by the broker. Margin accounts are growing into upcoming markets like crypto, it was reported earlier in December, meaning there are plenty of options. Just beware that margin accounts check credit, and poorly managed debt is likely to lead to a negative credit score. Have a read here for more information.
Spare Change Funds
As part of the liberalization of banking regulations and stock markets, too, a few investment apps for the smartphone have popped up that operate on a ‘spare change’ investment strategy. To summarize, every dollar you spend will have the remaining cents shaved off it. So that $4.64 coffee you’ve just picked up will cost you $5, with the extra 34 cents – that you shouldn’t miss – going into an investment account that is subject to your choice of strategy, based on personal risk. This can benefit you as it allows passive stock market involvement whilst using money that you probably didn’t take much notice of.
Day Forex and Crypto Trading
Especially good for those with a keen sense of world politics is the forex and cryptocurrency explosion. Given the surge in interest and cutting-edge nature of cryptocurrency in particular, those with the time to keep a keen eye on the news and markets could find small funds – even a few dollars – ballooning into the thousands. The same operates for forex, where world news and events have a habit of turning currencies on their head every day. If you have the spare time and an analytical brain, this could be ideal as it requires low stakes to access the market – even just a single dollar.
Trading out of debt seems a bit mad. After all, by being in debt you technically don’t have the spare money to begin with. But, so long as you play carefully and keep the stakes low, you can stand to make big profits and pay off your debt ahead of time.