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Four ways to cut your investment costs today!

by , 19 June 2013

When I saw the fees my friend was paying to buy his shares, I was absolutely flabbergasted. At the rate he was paying, his returns would NEVER be able to come anywhere near his targeted returns! After a thorough investigation, I found the route of the problem…His broker. You see, not all brokers have your best interests at heart. And at the end of the day, if you're making a loss, it could be because you're paying too much in fees! Here's why…

The ultimate reason brokers want to trade and why you shouldn’t
 
Let’s think about how a broker earns a living for a second. Generally, they earn a base salary as well as commission for each trade they make for their clients.
 
In other words they win, whether you buy OR sell a share. 
 
That’s why when you speak to a broker they’re often so excited – and get you excited about a share. All they need you to do is take action and they’ll earn more money for themselves.
 
But that means the more you trade, the more expenses you’ll rack up and therefore the lower your returns!
 
Brokers want to trade as often as possible because it means more profits for them…But it’s exactly the opposite for you…
 
But don’t worry; there are ways to reduce your fees!

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Even if you’re flat broke…

I’ll show you how you can have a million in the bank in just seven steps
 

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What you can do to cut your costs…
 
1. Make sure you’re not overtrading. A lot of the time, it’s very unlikely your broker will try and talk you out of a trade. This is because he earns brokerage every time you trade.
 
So make sure when you trade, you’re trading for the right reasons. You don’t want to trade just for the sake of trading. This’ll just see you paying more in fees without any real potential for profit. Only trade when you see a genuine profit opportunity that you are convinced will reward your investment.
 
2. Build a relationship with your broker. It’s important to communicate your long-term goals with your broker so that he understands you’re in it for the long haul. Knowing that you’re likely to be an active client for years to come will make a broker more likely to guide you into the right trades and help you avoid the bad ones. 
 
After all, if you make money and trade for years, the broker can earn years of income as you trade. Having your broker on your side means he’ll help you find more cost efficient ways of trading.
 
3. Make sure you’re trading big enough! A lot of the time, investors ignore the minimum fees that brokers charge. The problem with this is, you could find yourself paying way too much in fees if you’re not careful.
 
Let me explain. Let’s say your broker has a minimum fee of R100 per trade. Now let’s assume you’ve got R10,000 that you want to invest.
 
If you decided to invest this R10,000 in ten different shares, it would cost you R1,000 in fees. (R100 x 10)
 
That means you’d pay 10% of your money in fees.
 
Now, if you invested your R10,000 in one share, you’d only pay R100 in fees.
 
That means you’d only be paying 1% in fees. As you can see, it’s far, more cost efficient to trade bigger.

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Timon Rossolimos Reveals:

“I grew my portfolio six-fold by ignoring these commonly believed trading clichés”

There are nine trading clichés standing in the way of your trading success!

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4. Get the right broker. Because of the competition between many different brokers all looking for your business, you can shop around to find a better rate.
 
What you need to do is phone up several brokerages. Tell them how much you plan to spend in investing as well as how often you expect to buy or sell some shares. They’ll then send you the rates they’ll charge.
 
Don’t just accept the first one you receive. If for whatever reason, you have your heart set on a particular broker, ask him if he can beat your lowest quote you found.
 
They’re normally more than willing it cut their costs. Remember you’ve got nothing to lose by asking.
 
So make sure your costs and fees aren’t costing you your investment returns.
 


Four ways to cut your investment costs today!
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