Opening a business is often regarded as one of the surefire ways to build a fortune and to unlock the doors to financial freedom. However, many people fall in love with the idea of owning a business and they forget to pay attention to some of the other things that running a business requires. Interestingly, if your motivation for wanting to start a business is financial independence, trading binary options might be a better idea than opening a business.
This post seeks to compare and contrast some of the key differences between opening a business and trading binary options.
Cost of entry
One of the things you must consider before starting any business is the start-up costs. Starting a traditional business involves a great deal of startup capital and many entrepreneurs often take business loans in order to raise enough money to start their businesses. You’ll need to buy or lease a location for your store, office, or sales outlet – it costs money. You’ll need to get some permits from municipal and state authorities – it costs money. You’ll need to buy machinery, tools, and equipment – it cost money. In most cases, you’ll also need to buy raw materials or an opening stock for your business – that also costs money.
However, starting an online venture such as trading binary options has practically zero setup costs. You don’t really need to buy a new PC and most people have a computer already. However, many trading platforms have mobile apps that allow you to place trades or monitor your trades on the go.
The only real cost to entry is the trading capital and you could start trading with as low as $100. Nonetheless, you should note that your profit is directly tied to your trading capital. Hence, you’ll need to trade with a significant amount of money to make jaw-dropping profits. However, if you are willing to devote enough time into learning your craft, you can start trading now with a relatively small amount of money and you can compound your capital exponentially with consistent gains and reinvestments.
Cost of operations
The second factor that makes a difference between opening a business and trading binary options is the cost of operations. A business owner must cover a number of recurrent costs to keep his business alive irrespective of whether the business has turned a profit or not. He must pay utility bills for electricity and water among other things. He must pay the wages and salaries of his workers.
In contrast, trading binary options doesn’t entail any significant operational cost. Other than the trading deposit with which you are placing your trades, a binary options trader is not required to pay any other cost of operations. Nonetheless, binary options traders can expect to pay transaction costs when they enter or exit a trade. You might also need to pay some fees if you want to close your trading account or move your account to another trading platform
Level of freedom
One of the major reasons people start businesses is that they want to enjoy the freedom that comes with “being your own boss”. The sight of people trapped in a 9-to-5 job where they have no control on what their time is worth and how their time is spent is not a pleasant sight. However, many people who start businesses in the hopes of escaping the tyranny of their bosses often become slaves to their jobs.
To start with, a business requires a great deal of attention to many different things that could go wrong all at once. More so, a business owner often has to wear many different hats that include being the manager, customer care agent, marketer, accountant, driver, cleaner and janitor.
On the contrary, trading binary options can afford you a great deal of freedom that you see billionaires living on the TV. You can place your trades from the comfort of your home or anywhere in the world inasmuch as you have an Internet connection. If you happen to love your day job, trading binary options can be a great way to earn some money on the side without leaving your regular job. You could also combine trading binary options with other interests even if those interests won’t pay you a dime.
Fending off the wolves
From the foregoing, trading binary options might be a smarter move than opening a business. However, it might interest you to know that trading binary options full time might put you in a number of awkward situations. For instance, you might get an unending stream of concerned looks from family and friends about why you are not “working”.
Secondly, you might have to deal with the presence of friends and family who drops in into your house while you want to concentrate on trading. Many of them erroneously believe that you don’t do anything other than staying in front of a computer screen all day and that it is okay to drop in on your and pass some time with you. On the contrary, people tend to understand when you work at traditional jobs and they are less likely to disturb your peace if you are busy running a business.
In the final analysis, both acts of opening a business and trading binary options end in a binary proposition. When it’s a ‘YES’, the business succeeds or you are on the winning side of the binary options trade. When it is a ‘NO’, the business flops or you are on the losing side of a binary options trade. However, you can enter multiple binary options trades in order to hedge your risks but it’s not easy to start multiple businesses unless you have very deep pockets.
More so, you can test the water of binary options by trading with a demo account or putting down few bucks here and there. In contrast, starting a business often demands huge capital investments and it not always easy to close shop and cash out of business as quick as you can exit a binary options trade.
In my humble opinion, I’d rather trade binary options than tie myself down with opening a business. Nonetheless, I hope some people take the business route because there are a zillion things I’d love to buy with the money I make from trading binary options.