Business and Banking News

Many people think that making money in the stock market is easy and is the easiest and most profitable to invest. It is estimated that from 1900 to 2009 the average annual return that the stock was offered at 9.4%. For gains of this magnitude, an investor should have been at least average, but 80% of those who invested in the stock market failed to reach it. In fact, eight out of ten ended up losing money.

That does not mean you have to leave the bag, but played before the savings in equities would be appropriate to try a different strategy, completely safe and economic benefits which are guaranteed.

It is simply investing in yourself and your family. How? Getting rid of the accumulated debts with credit cards.

The best investment in 2011, not to defer loan payments
2011 may be an ideal year to make the decision to think like an investor. A good investor puts his money to work for him and makes sure that every dollar is going to stop something that provides a reasonable opportunity to make it grow.

If a person receives a dollar and asks him to put to work to become something more than a dollar, you could opt for several options: add a few more and make home repairs, buy something you can collect, open a deposit in a bank to earn interest …

However, canceling the debt of a credit card provides a higher gain than any of them.

Paying up debts on credit
This can be verified by a simple calculation. Taking the example of the United States, a country with a real zeal for credit card debt average household credit card is about $ 16,000.

If you calculate the annual interest payments by taking half of the types and assume that it takes a year to repay this debt, the total interest is approximately $ 1,500.

If a person received $ 1,500 and were asked invest in something profitable, it could stretch over a year to buy food, a new TV, gasoline and clothing. Or you could use them as advance payment to buy a new car.

Credit cards used as personal loans
None of this will bring an extra gain in terms of profitability. In fact, the safest thing is that nothing remains of that money within the year, as it has invested in things that are not revalued. Families do it all. Each time you use credit card deferring purchases, and therefore paying interest for them, is to make an investment with guaranteed loss.

That is, money is spent as an investor, but as a consumer, and this is one of the main factors contributing to the difficult financial situation of families.

The example can be extrapolated to countries like Spain or Mexico , where increased credit card use has increased in recent years, especially in times of economic crisis .

Getting rid of debt before investing in the stock market
To liquidate the debt of credit cards no interest is paid annually, so you save that amount and you can invest in something productive.

After settlement of the debt, only to use credit card to pay for purchases next month, that is, without adding new interests. With the money saved you can start to pay the bill of the car or anything else.

If for example you want to invest in the stock market, go ahead, but only after settlement of the debt of the credit card.

Saving money by canceling debts provides peace of mind
Despite the low wages that are in countries like Spain, that’s not true, or at least the only reason that many families experience financial troubles. This is because the money that is invested in things that produce negative returns resulting from the abuse of debt . Buying food is inevitable, sometimes it is the purchase of a vehicle. But buying a high-end car is not absolutely necessary. Think of every dollar the way you would an investor.