Do you own any crypto coins?

The rapid growth of the cryptocurrency market leads to the emergence of many new trading platforms in different parts of the world. Most companies operate legally, and their founders are successful businessmen. But some of the exchanges were originally founded by scammers who are waiting for the growth in the number of participants and the accumulation of funds in their accounts in order to disappear without a trace with them. Therefore, before entrusting their assets to any trading platform, investors should study in detail the main aspects of the company’s activities.

Growing demand for exchange services

In recent years, cryptocurrencies have shown exponential growth, significantly increasing interest in products based on blockchain technology. Now not only business, but also institutional investors want to join this promising direction. At some point, some of the exchanges specializing in virtual currencies suspended the registration of new customers due to the fact that the available resources and capacities were not enough to fully provide services to all new participants.

At the moment, there are more than 1,500 different cryptocurrencies on the market, with a total market capitalization of more than $340 billion. However, not all digital currencies get listed, so there is still enough room to launch new services.

How to avoid scam?

Investors are always looking for promising areas that they can join in order to significantly increase the amount of equity capital in a short period of time. Cryptocurrency exchange business fully meets these requirements. But protecting it from hackers, system errors and other threats requires a lot of effort on the part of the owners. Recently, even some popular exchanges have been attacked, while others have turned out to be fraudulent projects.

There are a number of indicators that you should pay attention to in the process of finding and choosing a suitable trading platform.

1. Reliability level

The investor should find out how the service on which it is planned to conduct trading operations behaves during periods of high volatility. For example, when the market falls sharply and the trader tries to open a sell order, the platform does not respond to requests.

The best way to find out if a particular exchange has such flaws is to study thematic forums and groups on social networks where members discuss companies. Dr. Bora Ozkan, Associate Professor of Finance at Temple University, said: “Liquidity is what helps distinguish a mediocre marketplace from a good one.”

This is the main indicator of the confidence of traders, which should be paid attention to in the first place.

2. Control

It is important to find out whether the company has all the necessary licenses, permits to carry out activities, and whether it falls under the jurisdiction of institutional regulators. The presence of control significantly increases the responsibility of the site to users. For example, the Japanese exchange Coincheck, which was hacked, was unregulated. Bitstamp received the status of a full-fledged regulated payment company from the Luxembourg government in 2016.

3. Quality of support and customer service

Customer service is a common problem that exists even on the best cryptocurrency trading platforms. However, it is worthwhile to find out in advance the level of organization of the help desk for participants. If, when trying to contact support, only a page with answers to frequently asked questions appears, without an email address or other communication channels, then this is a clear signal that it is worth thinking about the prospects for cooperation.

4. Commission rates and the possibility of margin trading

Commissions and margin trading are very important aspects of the activity that have a direct impact on the bottom line efficiency. Some services provide customers with complete information about how much they will charge for the transaction until the transaction is completed, while others hide it. If you cannot find out the amount of the fee before confirming the transaction, then you should conduct very careful activities on this site. In addition, it is desirable to find out if the SegWit and Lightnin Network protocols are supported, as they significantly affect transaction fees and payment confirmation times.

Margin trading is not available on all cryptocurrency exchanges, but some traders may wish to use leverage to increase the size of a particular virtual currency transaction. Therefore, you can additionally check whether such a service is available or not. For example, BitMEX, Kraken, and Poloniex offer this feature.

5. Security

You should check on the Internet whether there have been cases of exchange hacking. If such facts are discovered and the service has not taken appropriate measures to strengthen protection, then this can easily happen again.

It is necessary to take into account the presence of different levels of user security in the authorization process. For example, some services require you to enter a new code using two-factor authentication each time you enter the site. If you try to authorize in the system from an IP address that differs from the usual one, you may need to go through additional verification before starting work.

It may help you to change your financial life.

Why is it important?

People who are financially literate usually can manage their money, including investing, saving and debt management. Moreover, it is necessary to start taking care of your pension plan early on to make sure your retirement will be pleasant and safe.

What can I do today to better my financial literacy?

Here are some ideas you can use to change the situation.

Read journals, magazines, books and publications on financial topics

That is the best way to start down the road to understanding your money. These sources offer solid advice for different financial situations, the latest financial trends and long-term insights you can use in your financial planning. Reading articles can also help stay current on technology changes, for example, the latest devices and apps.

Download and use financial management tools

If you are unfamiliar with managing money, it may seem like a daunting task. However, nowadays there are many tools available to help make your financial life less complicated.

Such finance applications include a variety of features simplifying money tasks. These apps keep track of your budget, spending, and income, organize your expenses, check your credit score, and send reminders for bill payments. Thus, you can track your money efficiently and see exactly how your decisions impact your spending and income.

Try listening to podcasts about money and finance

Finding time to read can be challenging if you have a busy family life or work. Whatever you need to do, consider throwing on some headphones and listen to the ways to invest your money so that you will be able to retire early. That is one of our favorite way to learn as it is possible to do something else at the same time.

Enroll in a course

Why not get information in a fun way from a teacher? If you choose an offline format, it will be possible not only to learn but also to ask questions. Many people find this format more efficient. There are a variety of classes available: online lessons, adult education center and college course. Some courses cost money, some are free.

Set up a budget 

First step towards financial literacy, you need to understand value of a budget. A budget helps us pay our expenses, save for goals and eliminate debt. If you struggle with finances, part of the problem could be math. Start watching carefully over your budget to make sure that you don’t spend more than you bring in.

Set up a financial plan

A financial plan is a great way to achieve financial literacy. It covers a longer period than a budget. Financial plan also prioritize your long-term goals (10 to 30 years down the road). You may need some professional assistance to create a financial plan

A novice investor should be guided by the principles and rules of investment when making decisions. This is the basic logic of investment activity. And the rules are a set of actions in the investment market. Here are our 7 easy to follow rules to start investing today:

1. When choosing an investment object, study the market consistently and methodically. There are a lot of instruments, and in order to receive a stable income and avoid significant risks, you need to cooperate with trusted counterparties.
2. There are numerous funds, exchanges, qualified investors that you can trust. If you are worried about the safety of your funds, do not invest in dubious and adventurous enterprises, avoid high-risk transactions at first.
3. Create a safety fund: buy a low-risk asset that will bring low profit, but is practically guaranteed not to depreciate or “burn out” due to manipulation by financial market players.
4. Consult with experts. Examining the entire market alone is very problematic. Having the information and opinions of several experts, you can develop your own investment strategy, diversify your investment portfolio.
5. Calculate the amount of income you need. Based on this, you will be able to think over an investment plan, investment volumes and the required tools that will bring the required percentage of income.
6. Remember, you cannot invest borrowed funds, the funds of which you do not own, as well as your last savings. Also, you should never invest in anything if you are persuaded or forced to do so.
7. Perhaps the most popular and most basic of the investment rules is the so-called diversification. Simply put, this is a ban on investing in only one asset. Never keep all funds in one asset, as people say, you cannot store all eggs in one place.

Why is it important to be financially literate? What exactly is financial literacy?

Financial Literacy means having some skills and knowledge that allow us to to make better decisions about our financial resources. By better decisions we mean well-informed and effective ones!

There is a rasing interest in personal finance in such countries as Australia, Canada, Japan, the United States and the United Kingdom! Personal finance is monetary resources management which a family or an individual performs to budget. That also involves considering different potential risks and events.

Experts usually speak about five key components of Financial Budgeting:

Budgeting

At least the basics!

It’s not a secret that in order to keep your spendings adequate you should create and maintain the budget. Nowadays there are many tools available, so you won’t waste too much time doing it. For example, you can use Mint.com or other budget calculators as Quicken or MoneyAdviceService.

Interest Rates

Pay special attention to interest rates, you have to really understand them (especially such concepts as compound interest rates)!

Saving over Spending

That means the priority should be given to saving! Most of young people do not think about their future and do not pay enough attention to saving money for their retirement or some other things that are coming in the nearset 20+ years. That is so far ahead, who cares? But as soon as you realise that your well-being when you are 60+ depends on your current actions, you are going to make sure you save at least 20 percent of your income!

We advocate the 50/30/20 budget, have you heard about this system? 50 percent of your income covers all the necessities, 30 percent everything you “want”, and 20 goes to savings or for paying debts.

Here is a great calculator (NerdWallet) to use for your 50/30/20 budget!

Credit&Debt Cycle

Credit is much easier to lose than to get. Credit is a very useful tool when taken care of properly. It is better to get some knowledge on debt earlier than later. So, our tip is learn some important credit concepts and tools for responsible credit practices as soon as possible, otherwise it’ll cost you a fortune!

Safety

Last but not least, make sure you did everything to protect yourself against the identity theft! Our financial information is vulnarable to fraud, so take some preventive measures (password protection,  limiting the amount of information shared online) to save your finances!