Forex Trading: Ways to Supplement Your Retirement Income

“You can be young without money, but you can’t be old without it.” - Tennessee Williams

Many people dream of the day that they can retire and relax, spending time doing what they currently do not have the freedom to do. However; the challenge is to ensure that they have saved enough to retire on. The combination of living longer, as well as reduced savings, are forcing people to work longer or retire on less than they originally anticipated.

Peter Vanham in his article titled "Global Pension Timebomb: Funding Gap Set to Dwarf World GDP" notes that "the world’s six largest pension systems will have a joint shortfall of $224 trillion by 2050, imperiling the incomes of future generations and setting the industrialized world up for the biggest pension crisis in history."




Many solutions to this problem are being touted such as increasing the retirement age as well as providing people with 70% of their pre-retirement income. However, this goes against the Organization for Economic Co-operation and Development's (OECD) guidelines for providing people with a similar standard of living during retirement as before retirement.

Therefore, the question that begs is what do you do to supplement your retirement income? 

Supplementing your income through currency market trading

You might be financially stable, and you don’t need to earn extra money. However, you have a lot of time on your hands, and you enjoy a new challenge and thrive on the chance to learn a new skill. Therefore, why don’t you consider Forex or currency market trading? 

By way of backing up the validity of considering Forex trading as a viable retirement side hustle, let’s look at the psychological advantages of being a financially stable investor. As a financial advisor from Weiss Finance notes: “The easiest psychological situation for traders is when there is little or no pressure to make a profit immediately or regularly. 

This situation allows them to make decisions when they are not stressed; ergo, they do not rush trading decisions and take the time to research and investigate potential trades thoroughly.”

THE BASICS OF FOREX TRADING

The Forex market

Investing in the global foreign exchange market is slightly different to conventional stock market trading in that the world’s currency market is not housed in one brick and mortar building. It is a decentralized market, where financial centers in London, Paris, New York, Hong Kong, as well as Zurich are all electronically linked together. 

All aspects of currency trading such as buying, exchanging, and selling currencies at current or predetermined prices are conducted through this network of global financial centers.

Currency pairs

Currencies are also always traded in pairs. The world’s four major currency pairs being the US Dollar and the British Pound (USD/GBP), US Dollar and the Euro (USD/EUR), US Dollar and the Swiss Franc (USD/CHF), and finally the US Dollar and the Japanese Yen (USD/JPY).

Currencies are quoted in amounts up to four decimal places, and the value of both currencies in a currency pair is quoted in relation to each other. For example, the USD/GBP exchange rate is quoted as 1 USD = 0.7767 GBP. 

These figures mean that 1 USD will cost you 0.7767 GBP to buy. Conversely, if you have GBP to exchange for USD, you will receive $1.30 for every £1 that you have.

In conclusion

This is just a basic introduction to investing in foreign currencies. Apart from learning the technical aspects of monitoring currency pair movements, overall market movements, as well as learning to understand the impact that the global geopolitical events, as well as the corresponding socioeconomic conditions, can have on the world’s currencies, it is important to trade carefully and practice risk-aversion strategies. 

The older you get, the less you should risk losing your retirement savings. The caveat here is that all financial market trading has an element of risk attached to it. Without risk, there will never be any gains. 

Therefore, you cannot and should not avoid risk; however, you must mitigate your risk of losing large sums of money by trading cautiously, only risking small amounts on each trade, and by choosing an appropriate trading strategy based on the current global conditions.

How to Actively Invest in Your 50s and Enjoy It

For so many years, we’re taught to invest in order to prepare a better retirement for ourselves. Frankly, a lot of us did just that and developed a strong investment portfolio; strong enough to allow us to enjoy the best things in life once we retired. 

The idea is to stop working and worrying about returns or revenues by the time we reach retirement age.

In truth, however, there are more opportunities to explore – and even better investment options to consider – once you’re actually retired. You have more time on your hands and more money to use. 

These make investing a lot more fun. If you’re intrigued by the idea of actively investing after retirement, here are some tips to help you get started.

Learn and Be Patient

Since you now have more time on your hands, the best way to get started is by learning more about the investment opportunities available to you. 

You can study the stock market or take lessons on how to invest. You can even learn how to be an investor for an up and coming tech startup.

There are two advantages of understanding how to invest your money wisely when you’re in your 50s. First, you don’t have to rely so much on advisors and third-party services, which means you can save a lot on fees. 

You can still use the services of investment firms, but this time you have the ability to assume more control.

Secondly, there are plenty of exciting things to do when you’re involved in the investments actively. 

If you’re worried about not having enough things to do or if you’re afraid you’ll get bored a few months into retirement, becoming an active investor is definitely worth considering.

Seek Revenue-Generating Investments

At this point, you already have a strong portfolio designed to secure your retirement. Chances are you have several investments aimed at long-term capital gains acting as the foundation of that portfolio. 

If the goal is to be more active in investing your money, then revenue-generating investments are what you need to be making.

There is no shortage of interesting opportunities to explore. You can look into agriculture investments from companies like Crawford Park Farming AG. 

You can join a VC as an investor and be part of the latest and greatest startups. You can even start your own business with the help of younger entrepreneurs.

Maintain a Buffer

Last, but certainly not least, always make sure you invest the money you can afford to lose. 

While it is a good idea to get back in the game, the adrenaline rush can sweep you off the ground; before long, you’ll get carried away and you won’t be able to make solid, objective investment decisions.

Remain on the safe side and always have an exit strategy whenever you’re venturing into new investments. You’re here to have fun and earn healthy returns, not to take excessive risks and chase losses. 

Remember the tips we’ve covered in this article and you will find investing in your 50s to be a fun ride.

5 Ways to Prepare Financially for Retirement

Everyone dreams of the day they’ll get retired, but romantic projection we have of retirement is often completely different from the harsh reality that often involves financial difficulties, loneliness and decrease in overall health.

The pension is usually much lower than our pay, which often makes new pensioners rethink about their spending habits and lifestyle. 

Still, retirement doesn’t have to be burdened by financial difficulties if the right financial strategy is applied even before the golden age takes place.

1. Don’t Rely Only on Savings

The fact is that nowadays people live longer than they did 50 years ago and often savings aren’t enough to live the lifestyle we are used to. 

So, before retiring make a financial plan that will make you money, even when the paycheck is gone. It can be investing in binary options, stocks, forex markets, or unsheltered savings.

It is always good to ask your accountant what are the possibilities or rely on a financial advisor who will make you a proper investing plan for the retirement.

2. Know Your Expenses

It is important to understand where all that money you make is going and to adjust your expenses to your possibilities while taking your future into consideration. 

Some researchers say that most people need 70-90% of their previous income to keep up with the lifestyle they had before the retirement, so it is important to rethink your priorities and needs before the first pension comes. 

Always have a real picture of your cost/income ratio.

3. Think Smaller

In our 30’s and 40’s we like to dream big, and we need big things, but once the children are on their own, all big things become a burden as they cost a significant amount of money. 

Try to cut costs before retirement by downsizing your home and getting rid of all unnecessary services. 

Find a cheaper mobile plan, get rid of expensive TV programs or TV on demand, and don’t be afraid to ask for a better deal or take your business elsewhere.

4. Reduce Your Debt

It is much easier to reduce your debt while still working than in retirement. People who efficiently handle their debts can enjoy their retirement care free. 

Besides getting rid of a credit card, student loans, and other types of debt, it is always good to check interest rates and fees charged by your bank. 

They may seem small, but they accumulate over time and can truly make a difference.

5. Review Your Will

Many things change over time and having an updated will gives you insurance that your estate will be distributed as you intended it. 

Periodical reviews of your will, will provide you the much more peaceful state of mind and will help your family in case of emergency. 

Also, sometimes thinking about future in that specific way, puts all things, including finances in a whole new way.