It appears as if the term 'passive income' is popping up all over the Internet lately. And why shouldn't it? People have been intrigued with the thought of making the most money doing the least work. Previously, residual income was generated through multiple rental properties or royalty fees. Today, the internet has created many opportunities to generate residual income and many people are cashing in.
Unfortunately, there are various companies online preying on people's desire to make money online. It is crucial before investing in any business opportunity - especially one which seems too good to be true - you do your research and make sure the opportunity is reliable.
Managed foreign exchange accounts have proven to be a great residual income generators for the right investor. Here are some details to help you decide if this investment opportunity suits you:
Background
The forex market is where banks and other institutions trade the world's currency. It's the largest financial market with over 2 trillion trades posted daily. The foreign exchange market began as an investment tool over a decade ago. Before this, only banks and other investment firms like hedge funds had the opportunity to invest. Individual investments started at $10 million.
What is A Managed Foreign Exchange Account?
A managed fx account is where an authorized investment firm makes trades on an investor's behalf. Investors allow them to have control of their investment and a firm's account managers make the daily currency trades. Typically it will cost anywhere from 20% to 50% of the monthly profits as a management fee. This can be best for investors looking to earn a residual income given that they only charge if they earn profits! Choose the best managed currency accounts.
Investment Requirements
With regards to the currency trading firm chosen, an investor is usually required to invest at the least $5,000 to $25,000 to start trading. When choosing a firm, make sure that as an investor you're in control of your money at all times and can monitor all trades. Often a trading manager uses a limited power of attorney to make the currency trades on an investor's behalf.
Forex Fraud
Unfortunately, there are many fraudulent forex investment companies operating online and elsewhere. Prior to selecting a managed forex account as a residual income investment, make sure to know the signs of a forex scam. From 2001 to 2007, The U.S. Commodity Futures Trading Commission declared that 26,000 people lost $460 million in forex frauds. Here are a few of the warning signs the CFTC issued when determining if a forex firm is fraudulent:
If it sounds too good to be true, it likely is
Do not choose investment firms that guarantee high returns
Stay away from companies that promise no financial risk
Don't trade on margin unless you understand what it really means
Investigate a firm's background and background before investing
A well-managed forex trading account can be an excellent passive income investment for the right person. These accounts typically comes with high risk, so it is important to only invest money that is not earmarked for other important uses. For investors who have the disposable income, the high risk can often mean high gains with very little effort!
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