lets make money

Lets make money is a programme about how to get the most out of your money. In this programme we hear the different views from an accountant and an economist on investments. transcript below: "Lets make money" Intro music 0:00-0:26 minutes narrator 0:26-0:33 minutes Hello and welcome to moneymaking.com, the focus of today’s programme is “making money”. narrator  0:40--0:47 minutes In today’s programme we hear the different views from an accountant and an economist on investments. narrator 0:50-0:53 minutes First of all, an economist’s view on spread betting. economist 0:53-1:35 Spread betting is gambling, there are two different types of spread betting, sports trading and financial spread betting. Sports trading, is anything from betting on tennis, to football to horse racing and financial spread betting is from currencies to stock to indices to commodities. The name spread betting comes from the fact that the companies who offer you this service, and a spread onto the prices and that’s where they make the majority of their money. For example, if a stock was trading at 100 to 101 they would add an extra point or two to make their profits. 1:36- 1:40 minutes And what exactly is the difference from trading? economist 1:40-1:56 minutes The main difference from trading is that spread betting is tax free. This is because it is classed as gambling. Another difference from trading is you don't own a piece of the stock, commodity or currency, you are just betting on a price and a price alone. narrator 1:56-1:59 minutes So there must be some advantages and disadvantages? economist 1:59-3:01 minutes As I just said one of the advantages of spread betting is that it is tax free, although if you lose money it is not tax deductible. Another one is there is no commission, most brokers bet on lots of shares, the more shares, the lower the price goes down but the more commission you have to pay. The only thing you have to pay for spread betting is the spread itself, although if you were to bet a higher price per point, obviously you would be betting a higher commission in the way of the spread. Guaranteed stop losses are probably the most advantageous things about spread betting. If our market was to move overnight when a lot of markets close, say a CEO just died, or something of that nature then that can cause the price to move. But with guaranteed stop losses you can hold your risk at a level which you are comfortable with. This means that you can actually limit your losses and know how much you are willing to loose before you enter a trade. narrator 3:01-3:06 minutes Finally, if you could tell us yourself one piece of advice when you started, and what would that be? economist 3:07-3:31minutes For starters I would say be patient, a lot of loses come from chasing trades which you missed, either from stepping out from the computer for a few minutes, and you come back you see that something that you should have been in, has just gone. You should never chase your trades, another thing is to always be patient The markets always going to be there tomorrow, there’s no rush to get rich. narrator 3:32- 3:34minutes Well that an economists view, now for the accountant’s view accountant 3:34- 3:59minute Spread betting is a way of getting rich quickly, but unfortunately it’s also very high risk and most of us don't want to take that risk. Spread betting is a way of getting rich quickly; the opposite could be getting poor very quickly. However another alternative, which I'm going to propose is to get rich slowly! sound effect 3:59-4:00 minutes Cha Ching accountant 4:01-5:46 minutes Well most of us don't want the risk of losing our hard earned money quickly, most people would like to invest and accumulate wealth over a long period of time, but often they wonder, well how do I get started?  Well, the first step actually isn't investing at all its looking at your own finances and putting your financial house in order. So before you start investing, look at your finances to see if you are paying off debts. Debts which you should clear before you can even think about starting investing. The ones to get rid of first, are the ones you are paying a very high rate of interest on. So if you have credit card debts clear those, if you have a personal loan on a car or something like that, or you've saved for a holiday, clear those and only keep debts which are long-term low cost debts like your mortgage. After that, the next thing to do before you start thinking about investing in stocks and shares or long term funds is to build up an adequate fund for emergencies. So once you've got your small fund in case your car needs to be repaired or something like that, you can think about investing. As well as getting over any doubts you have from procrastination's thinking about is it a good thing should I bother or not. By starting early your getting the benefit of long term compounding this will build up your funds tremendously compared to starting later for example if you invested for nine years and then stopped , your fund would be a certain amount the equivalent of doing it the other way round not investing for nine years and then starting. It would take you 41years to get to the same place, which sounds magical but that’s the benefit of long term compounding. So start as early as you can! sound effect 5:46-5:48 minutes Cha Ching, Cha Ching accountant 5:49-6:28 minutes What you can do now, is investigate thoroughly before you invest, read books, read newspapers, enjoy looking at the financial television channels, some are dedicated to the stock market all the time such as Bloomberg. You could even join an investment club, try to develop a diversified strategy so that all your eggs are not in the one preverbal basket and never follow the crowd just for the sake of it an example of this would be the dot com bubble, where people where just piling in because of advice of others, without really a sound basis and always remember if you want help you can always get it! sound effect 6:29-6:30 minutes Cha Ching, Cha Ching, Cha Ching accountant 6:31-7:42 minutes Once you've started investing remember that you are not in a game. Investing is definitely not a game. Many people mistakenly think of investing in the same way they think of the odd bet on sports or gambling as a game, it is not a game. The ups and downs of the stock market will occasionally give you entertainment and possibly an adrenaline rush, when you've picked a winner but you are in it for the long term as we have said earlier. Re-invest your profits, also your stocks will give you dividends try and reinvest these, and then effectively you'll have more money generating more profits. Towards the end of your long term plan, you may wish to take these dividends from your shares and spend them. What you will be able to remember then, is looking back to years or decades earlier, when you bought these shares, each year the management of a good company will have increased the dividend so that the dividend your getting maybe 30 years later, will be based on a very small purchase price. A much better return than your local building society. By starting early, for the long term, investing in shares you will have a very secure future. narrator 7:49-8:00 minutes Well that concludes today’s program, thank you for listening. You can reach us on www.moneymakingadvice.com And don't forget to tune in next week music by http://www.danosongs.com