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Author Archives: Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.

How Compound Interest Can Work for Traders

investing tips

If you have been trading stocks, forex or other financial instruments for some time and you are not yet using the power of compound interest, you are losing a lot. Compound interest is interest earned on accumulated capital and previously earned interest put together. Compound interest was described by Einstein as the 8th wonder of the world. Compound interest is what has enabled some people to turn small amounts of money into thousands and even millions of dollars. Believe it or not, compound interest has also made banks and credit card companies rich, even as it makes those on the wrong side of the coin broke and in debt. Compound interest is therefore a double edged sword, but you can put it to work for your money today. There are many retail traders who are complaining of losing money trading. A careful review of their trading activity will show that they do not understand the power of compound interest, and so they use maximum risk in a bid to achieve maximum returns. With compound interest, you can use minimum risk and attain maximum returns. The difference between the start and end points is time, consistency and discipline. So how can ...

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Pros and Cons of Binary Options

trading platforms

Binary options are an emerging as a fan favorite among the online trading community, with the novel trading format gaining pace throughout the trading industry. Online brokers are fast picking up this format allowing their users to experience the new and exciting genre of online trading. How Do They Work Trading with binary options allows you to trade a wide variety of stocks, FX pairs and commodities with a new twist. Binary options allows traders to choose a product and predict whether it will increase or decrease in value within a given time frame, much like betting. The fundamentals are extremely simple, guess right you win, guess wrong you lose. It gets interesting when you notice that the size of your loss or gain depends on how much your option fluctuates in price. If it’s a big rise you get a big win, small rise you see a small win etc. Now that you know the basics, below we’ve listed out the fundamental pros and cons of this format to help provide some insight before you get stuck in. Pros Ease of use When compared to a traditional trading format, binary options are really simple. Traders of any level are ...

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Buying a Dream: My First Lottery Ticket

winning a billion dollars

There are a few things modern society tends to participate in that I’ve never felt the motivation to do myself. I don’t drink coffee, rarely use any type of condiment, and have never waxed anything in my life. Up until two days ago, I’d never purchased a Powerball Lottery Ticket either. However, when the jackpot grew to a billion dollars, I had to jump in. There is basically no statistical chance of winning the lottery, but spending two dollars for chance at a billion is buying a dream. Dreaming is Fun We had so much fun at work on Monday talking about all the ridiculous things we’d do if we won a billion dollars. Everything from buying a private island to standing at the grocery store, handing a million dollars out to random people. As I was leaving for the day, I told them not to expect me back next week if I won but we’d all go for lunch… in Paris. If Money Was No Object More realistically, Jim and I talked about what we would actually do if money was no object. Assuming a miraculous win at Powerball, we’d take a lump sum and after taxes, pocket about ...

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What is CFD and How to Get Started

ways to buy and sell stocks

A Contract for Difference is a trading instrument that crafts an agreement between two parties by gambling on the movement of the value of a commodity. It allows for the exchange of the variance in the price of a particular currency, share or an index at the time the contract is made to the time when it comes to an end. It means that if the value of the product increases, the buyer will be awarded by the seller and if the value drops the seller will remain with the cash. CFD Flexibility When it comes to the CFD, there is no restraint on the input or output worth. Additionally, there is no limit as to when the exchange should occur and when it comes to selling or buying first, the options are limitless. These contracts for difference are traded to give the trader flexibility, chances and, in turn, power. The CFDs are considerably flexible as it offers the ability to trade on both sides of the market. That is the long side as well as the short side. When trading on the long side, you pay interest as well as receive dividends. This is usually used to gain profits ...

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It’s Never Too Late to Invest for Retirement

get started on investing for retirement

While we’ve made our share of financial mistakes, I’m always amazed when I run across someone my age or older who has nothing saved for retirement. Considering that a third of workers have less than $1,000 saved for the future, I guess it shouldn’t be that surprising. The good news is that it’s never too late to invest for retirement. Even if you might never be a millionaire, that doesn’t mean all hope of a decent retirement is out of reach. Figure Our How Much You Need to Live On Determining how much money you need to retire is certainly a million dollar question. Most retirement calculators assume  you’ll need 70-80 percent of your current income and won’t let you add savings rates greater than 20-25 percent. My favorite retirement calculator is the one from Personal Capital. At least it lets you add and subtract variables more easily than the rest I’ve tried. You can actually get a ballpark on your own by determining how much you spend per year now and apply that to retirement years. Some costs like health care will likely increase while others, like clothing and transportation, should decrease. If you have kids, hopefully those expenses ...

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