Typically I am writing about the smart things, about the ways you can invest your capital and, hopefully, increase its value over time. However, today we have a slightly different topic on our agenda. We are going to take a look at the actual things that should be avoided at any costs - the most stupid things you can do with your funds. Let us begin.
Have you heard of binaries? If you haven’t, this phrase may actually sound appealing to you. Many people actually find it sophisticated and assume that binary options trading actually has something to do with stock or futures trading. Unfortunately not. In simple words, binary options are not really different from regular gambling. The main difference is that the “house edge” is actually worse at binaries.
How do binary options work? Simple. You are making a bet, you either expect a price to be higher or lower within a defined amount of time, say 5 minutes. If the price moves in your forecasted direction - volia, you have just gained extra 80% from the size of your bet. If you are unlucky, the whole bet is gone. In other words, if you place 10 binary trades and end up winning 5 of them, you end balance will be smaller than the half of the initial. Does this sound like a smart thing to do? I don’t think so, hence stay away from binary trading.
In general, gambling is a pretty dumb idea too. The house has always a higher chance of winning than you and falling under impression that you might just get lucky can hardly result in anything profitable. Unless you are actually lucky, which is not often the case. Nevertheless, many of us have different reasons to gamble. Some treat it as a time spent, others get adrenaline rush and there are also individuals that try to test their newly invented systems.
However, when it comes to bitcoin gambling, it is definitely not a smart thing. While we know that gambling is very risky in its nature, with BTC gambling you are actually risking far more. As you can see from http://bitcasino.de/, you do have to deposit using Bitcoins, which you may not always have on your hands. The main risk here is that by the time you made your deposit and converted your USD into BTC, a rate can be, for example, 300 USD per BTC. By the time of your withdrawal BTC/USD exchange rate can get twice as low, so you will lose 50% of your funds even without gambling. In other words, bitcoin gambling has double the risks when compared to regular gambling. Don’t come close to it.
Similar to binary options, High Yield Investment Programs, often abbreviated to HYIP, are quite popular due to the impression of the term makes. First of all, it does sound like it is an investment program. Secondly, it assumes that you are going to profit quite a lot. Well, both statements are wrong. Not only this has nothing to do with an investment, but also there is no guarantee of the profit. In fact, you can nearly have a 99% guarantee of the loss. HYIP are nothing new. These are simple ponzi schemes that got reborn in the internet environment. The returns are paid from the new deposits, and one day this “investment program” could suddenly stop. Early “investors” get to profit, while most of the people that joined are actually losing their money.
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.
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