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5 Ways of Investing Money like a Financial Idiot

August 13th, 2007 by Shenron

Ladies and gentlemen. Welcome to the Investment Airport, where you can fly to the Elysian fields of profit and prosperity. There are many vehicles to choose from, but you must choose wisely. Some flights take off directly to success, while others get delayed. A word of caution here. There are some aircrafts that may not arrive at the destination. It is quite horrible to see these vehicles crash into fiscal demise. As your official airport guide, I am honored to take you around these investment vehicles and see for yourself.

The Lottery

Right this way, ladies and gentlemen, is the Lottery. This multi-million vehicle has independent flight routes in nearly all your home cities and states. In fact, ladies and gents, these flights carry many passengers aboard for only a dollar per ticket. Flying to that multi-million jackpot can give you grand houses, designer clothes, cars, the kids’ college funds, heck, even pay for everybody’s kids. Yes, indeed, this is the easiest way to financial freedom, but you see, sir, here’s the catch. Only a few passengers get to step out of the plane with luck, while the rest of the passengers make a return flight… I’m sorry, sir? Illegal, you say? Of course this flight is all legal! That’s exactly the way it works.

The Casino

If you please, ladies and gentlemen, take a closer look at our most dazzling machine: The Casino. It is no wonder that this is always fully booked every night. How come, you might ask? Well, sir, the whole ambiance is simply very attractive in which to lose money. You see, we have many guests coming from distant places, all lured by the glamour of this machine even with all the playing odds fixed against them. Despite the inevitable machine failure, ladies and gentlemen, this vehicle remains to be the most seductive.

Options and Futures

I’d like to take this opportunity to introduce our most exciting flights. What might I be talking about? Why, it’s the Options and Futures flights! My friend, I hope you can give them a try. A few things you should consider first, of course. These two flights cost a lot. You may need to pay for the amount equal to a large batch of expensive tickets, but the actual number of tickets you will get may only be a fraction of what you paid for. Before you get confused, people, let me explain! Just like in many financial vehicles, there are two ticket prices: the bid and the ask. To get the ticket, you pay the asking price, but the actual value of your ticket is its bid price (lower price). The reason for this difference (called the spread) is that the ticket seller, or the “middleman”, needs to get paid for his work. So he gets to pocket the difference for every ticket you buy. There are only a limited number of tickets and ticket sellers for both Options and Futures flights, ladies and gentlemen. That’s why the price spreads can be 10 percent or even higher for some tickets, and that this flight is indeed expensive.

For those lucky enough to buy the tickets, it is assured that the flight will be very exciting… in fact, too exciting, it seems. The thing about the aircraft, you see, is that it continually spins around in circles. Passengers rise and fall with it in a very volatile manner, so when you want to jump off the aircraft, you’ll need to time your jump perfectly. Very little room for error, my dear friends, if you want your investment to pay off. Anyway, there is always a constant flow of new passengers seeking for a thrill, and I hope you can experience the excitement, too.

Day Trading

Over here, my friends, is the fastest aircraft in the investment industry. In fact, many traders compete with these vehicles like a sporting challenge, flying through greater highs and lows, making the flight experience very volatile and emotional. But like an addiction, you, my friend must exercise moderation. First of, the cost of the ticket spread multiplied with the number of trading days can deal death blows to a passenger’s wallet. Imagine paying spreads to the ticket seller for every trade! Now that’s investing. Second, you must see how the inside of this aircraft looks like. Can you actually imagine staying inside this vehicle for a decade? Computer screens flashing with charts, phone on your shoulder, dank rooms, closed office windows, half-eaten meal, stacked books, and your poor tax accountant hunched over reams of data for each trade for the year. But don’t worry, my friend, this aircraft won’t slow down. You can always count on it for a quick buck.

Hyped Penny Stocks

This aircraft model, as you can see, is the smallest vehicle of all. It initially soars very high, but it lacks fuel to push through. How can it happen, you ask? The thing with most hyped penny stock aircrafts, dear friend, is the lack of credibility. Many hype operators maintain an online propaganda blitz, and let the price soar due to amateur investors flying in. Then they sell into the rise, laughing all the way to the bank. It is no wonder that it can only go so far.

There you have it, ladies and gentlemen. Our 5 most popular vehicles for many investing passengers, some being rogue traders and others looking for the quickest bang for the buck. I hope you enjoyed our quick tour today. Have a nice flight!

If you want to invest your money wisely you could do a lot worse then finding the highest ISA rates and opening one now to benefit from tax free savings.

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