Many people don’t even consider Investment as a possibility for their lives until they’ve achieved a certain level of financial stability. But others plan ahead, hoping to one day invest, but not knowing at which point this would be an appropriate action. Most people understand that a lot of investments take time to mature, especially traditional investment models meant to pay off during retirement. Other investment forms exist which pay off in the shorter term, but these tend to carry with them higher levels of risk. Among these are fast-paced investment forms made available to the general public, like binary options trading through Banc de Binary. With much lower barrier for entry than long term retirement savings, would-be investors have much the same question of binary options: at what point in my financial development is investment appropriate to take seriously?

There are different schools of thought on this matter, and individual situations and preferences will call for different actions. But in order to decide what mode of action is right for you, all future investors must take careful stock of their current financial situation. The criteria are pretty easy to understand. Investment is just one way to create wealth. And wealth creation is all about Making Money Faster than you lose it.

Any basic budget will reveal if you are, in fact, making money faster than you lose it. A good budget can be a barometer by which you learn how to live beneath your means. Budgets don’t just show you the state of your everyday spending and earning. They should also include detailed analysis of your debt. Debt is one of the hardest financial realities to accept. People carry around a lot of shame, regarding debt they have from many sources: school, credit card spending, loans, and many other sources.

Debt can make investment a silly idea. Many high interest debts, like credit card debt, accumulates extremely quickly. APR (the combination of annual interest and fees) is often in the 20’s or 30% per cent for some credit cards. Compare this to the earnings that mutual fund investors hope to achieve in a year: 7-9%. Clearly, money that is being lost at a rate of 25% every year wipes out profits earned at 7%. It is important for future investors to eliminate high interest debt before investing seriously.

But not all debate disqualifies someone from investing. Many debts can be described as “good debts”. These include car or mortgage payments, or student loans that paid for an education that resulted in higher earning potential. For would-be investors with steady income and reasonable amounts of moderate or low interest debt, investment is an appropriate choice. This is especially true of long term contributions to retirement investments, which need decades to grow. Short term investments like binary options are also an option for these individuals, as they may be able to acquire dividends quickly, which may serve to pay off debts or contribute to long term investments. There are endless options. The above principles should help.