Financial prudence begins with learning how to save money from your regular income that you get from either your employment or your business. However, that is not usually the end of finance calculations prudent personal finance management. To gain financial freedom, you need first to get rid of your debts and then start building up your savings over time. Once you have accumulated a good amount of savings, you are then faced with the questions of what exactly you should do with the money in your bank account. As your financial discipline becomes improves, you are able to save regularly and amount saved can become huge and run the risk of being misused all of it if not well utilized.
To avoid a situation whereby you save for several years only for you to spend all the savings in temporary luxury and regret later, you need to focus on building your wealth over time. This does not however mean that you will need to quit your job and start being a full time investor; you can still make some passive investments even as you continue with you day job or as you continue running your business. There are several options at your disposal when you want to venture into passive income generation as a way to keep growing your savings in the bank. Among the most preferred are fixed deposit accounts, treasury bills and Forex trading. In addition, we have other new financial instruments such as binary options that you can take advantage of to earn some passive income from your free cash in the bank.
Fixed deposit accounts
Fixed deposit accounts are preferred by risk averse individuals. If you are afraid of losing your money in risky investments, depositing it in a fixed deposit account will be a good option for you. In this account, the money you saved there is locked in for a specified period of time and it also earns interest at a pre-determined fixed interest rate. The beauty of a fixed deposit account is that it both ensures that your money is not risked in investing but you also get returns from it. This is a better option compared to just having your money in a current account that does not earn interest; but instead might actually be having monthly charges. However, the fixed deposit has a disadvantage in the sense that in-case the inflation rate is more than the interest rate on deposits; your money will end up losing its purchasing power over time.
Binary options trading
For the risk takers, there are other investment avenues available to make returns higher than the inflation rate and ensure that the value of your money is protected. Among the most easy and convenient ways to utilize your savings is through binary trading. Under binary options trading, you open an online account that you can operate from any place as long as you have internet connectivity. After loading your account with money, you can then start trading on binary options by making predictions on whether the price of the underlying asset will either go up or down within the specified trading period. If your prediction is right, you make money and if you get it wrong then you lose money.
Forex trading
Every day millions of global business transactions are done and they involve exchange of foreign currencies. This led to the emergence of the Forex trading market which is estimated to be the fiance largest market in the world today. Under Forex trading you open an online Forex trading account and use it to trade on the different currencies provided on the platform that you choose to trade on. Due to the volatility of the Forex market, the potential for high gains are equally high but in the same manner you can as well lose a lot of money in a fraction of a second if you have mastered the trade well. This is therefore an option for the risk takers who have the mental strength to withstand the frequent price fluctuations in the Forex markets.
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Whether you are risk averse or you have a high appetite for risk, you definitely have a way you can better utilize the funds lying idle in your bank account and earn a return from them. From the above three options, you can choose the one that best suits you and give it a try.