Welcome to iCenter
iCenter is a website devoted to spreading information about secure investments and how to avoid getting scammed. Our goal is to help our readers improve their personal finances. We focus primarily on investing and trading, but we also feature information about how you can save more money every month.
Saving money
The most important step to better personal finances is spending less, saving more, and eliminating debt. Whether or not you should focus on investing or eliminating debt depends on how expensive your loans are. It is always best to eliminate expensive debt before you start investing. If you only have cheap debt, then investing can be better than reducing your debt. As a general rule, you should pay off debt if the cost of the debt is higher than the expected return on potential investments.
Everyone can reduce their spending and save more money. Everyone has unnecessary costs that do not contribute to their quality of living. Examples of this can be magazine subscriptions and unnecessary fast internet. Another common expense that can be reduced is phone and internet contracts that have not been renegotiated in the last 18 months. You can get a better deal if you call your provider and offer to sign a new contract in exchange for a lower fee.
Sometimes it can be easier to increase your earnings rather than reduce your spending. Working paid overtime or doing freelance work can be an easy way to earn extra money. An extra benefit is that if you work/and earn more, then you have less time to spend money. Increased earnings, therefore, often lead to reduced spending.
Long term investing
Saving money is essential, but simply storing cash in a bank account won’t build wealth over time. If there is inflation, it will gradually reduce the purchasing power of your money, making it crucial to invest wisely for the long term. The right investment approach depends on a variety of factors, including your age, your financial goals, and your risk tolerance. Whether you’re young and just starting out or older and preparing for retirement, choosing the best long-term investments can significantly impact your financial future.
Regardless of age, the best investment strategy is one that aligns with your risk tolerance, goals, and financial situation. Starting early gives the best advantage, but it’s never too late to invest wisely for the future.
Best Long-Term Investments If You’re Young
Young investors have the greatest advantage in investing—time. With decades ahead, you can take on higher risk for potentially higher rewards and let compound interest work in your favor. The key for young investors is to invest consistently, reinvest dividends and other gains, and avoid panic selling.
Of course, there is no one-size-fits-all advice that will work for all young people in all situations. You always need to take your own situation into account, including your own preferences and risk-tolerance. Suitable investment decisions will also depend on your time horizon. Many young investors are not primarily saving up for retirement; instead they are saving to get into the real estate market, pay for education, carry out long-term traveling or living abroad, starting a business, or similar.
Here are a few examples of investment choices that may be suitable if you are a fairly young investor.
- Stocks and Stock Index Funds
Investing in individual stocks or broad-market index funds, such as S&P 500 ETFs, allows for strong long-term growth. The stock market has historically provided average annual returns of 7-10%, making it a great choice for young investors who can ride out short-term volatility. - Retirement Accounts
In many countries, the law makers are encouraging individuals (and sometimes also their employers) to save for retirement by providing tax-advantaged retirement accounts. If this is available in your country or state, using them can be a great choice. As always, it is important to read the fine prints to make sure you understand the terms and conditions. Note: Under special circumstances, an individual may be permitted to withdraw funds from a tax-advantaged retirement account without facing any financial penalty. This can be important for young investors who want to carry out tax-advantaged investing but also wish to be able to use the funds before reaching retirement age, e.g. to purchase a home or finance a university education. If you are a young investor, pay special attention to the rules pertaining to early withdrawal from tax-advantaged retirement accounts. A lot of things can happen in life, and being able to reach your funds before retirement age can be highly beneficial. - Real Estate Investing
You may not be willing to take on the job and legal liabilities of being a property owning land lord at a young age, but there are actually other ways available for investors who wish to put their money into the real estate sector. You can for instance invest in Real Estate Investment Trusts (REITs) which can provide both passive income and long-term appreciation: It is also possible to purchase shares in an Exchange Traded Fund (ETF) that invests in real estate. With an ETF, the shares are traded on an exchange, in a manner very similar to stocks. This makes getting in and out of the fund very easy, and the liquidity tends to be high.
While purchasing investment property outright typically requires a lot of money upfront and to qualify for a mortgage loan, you can invest in REITs and ETFs even on a small budget. With REITs and ETFs, you can also ensure that you get a suitable amount of diversification from day one, instead of putting all your eggs in one basket by purchasing a single investment property outright.
- Higher-Risk Investments
While riskier, young investors with extra disposable income can allocate a portion of their portfolio to higher risk investments, since they have time to recuperate losses. As a young investor, you may for instance want to put a small portion of their portfolio into cryptocurrencies, startups, emerging tech, etcetera. You can invest in potentially up-and-coming companies that are (not yet?) traded on any exchange, and you can venture into geographical locations and industries that are considered above average risk. It is not advisable to do this with money you know that you will need soon, e.g. to put a down payment on a house. The risk of losing your money is of course higher with high-risk investments, and there is also the risk that, even with an ultimately profitable investment, it will take a long time before your investment hits the mark.
Best Long-Term Investments If You’re Older
As retirement nears, the focus shifts from growth to stability and income generation. Reducing risk while still growing wealth is critical to maintaining financial security when you are an older investor.
- Dividend Stocks
Instead of high-risk growth stocks, older investors benefit from dividend-paying stocks, which provide steady income and lower risk. Dividend-paying companies are typically large and well-established so called blue-chip companies, which are more likely to be able to ride out market storms. Of course, there are never any guarantees. A dividend-paying company can stop paying dividends at any moment, and there are plenty of examples of large and well-established companies that were run into the ground. Even with so-called low risk investments, it is important to ensure proper diversification across different companies, industries, geographical markets, etcetera. - Blue Chip Stocks
There are companies that are considered blue-chip stock even though they don´t pay dividends, and they too can be a great addition to your stock portfolio as an older investor. They tend to have steady and reliable growth over time. - Bonds
Bonds can provide you with a steady income in the form of interest payments, and when the bond expires, you get your principal (the money you paid for the bond) back. The risk-level of a bond depends on the credit worthiness of the issuer. Stable countries with a strong economy is considered low risk, and so are well-established and stable corporations. You can check the official credit rating for both countries and corporations before you invest.
In the United States, bonds can also be issued by municipalities. These bonds are often for a specific project and they will sometimes come with tax-advantages to encourage investors. The risk-level depends on the creditworthiness of the municipality.
- Low-Risk Index Funds
Instead of stock-picking, you may wish to consider broad-based ETFs or mutual funds that offer diversification and lower volatility. It is possible to find index funds that will only charge you a very low fund management fee, which means that more of your capital can be invested. More actively managed funds tend to come with much higher management fees, and this might be wasted money in a situation where what you want is a low-risk approach, e.g. a fund created to simply track an index rather than beat it.
- Real Estate
Just as for younger investors, getting exposure to the real estate market through REITs or Real Estate ETFs can be a smart move for you as an older investor. You can pick Real Estate Investment Trusts (REITs) and Real Estate Exchange-Traded Funds (Real Estate ETFs) that invest in a multitude of different properties, thus ensuring a high degree of diversification and smoothing out volatility.
There are REITs available designed to provide a passive income, which means you (if the investment goes well) will get an income to enjoy during retirement without having to sell your asset.
- Annuities and Fixed Income Investments
Annuities and Fixed Income Investments will provide a guaranteed income stream in retirement. It is important that you investigate exactly how and by whom this income stream will be guaranteed. For instance, what happens if the company you give your money files for bankruptcy? Some offers of “guaranteed” income are much less secure than they seem at the surface.
Why Blue-Chip Stocks Are Great for Long-Term Investing
- Consistent Growth
Blue-chip companies have a proven track record of steady revenue and earnings growth, making them more resilient to market downturns. - Dividend Payments
Many (but not all) blue-chip stocks pay regular dividends, providing a source of passive income while also allowing for reinvestment to maximize compound growth. - Lower Risk Compared to Other Stocks
While no investment is completely risk-free, blue-chip stocks tend to be less volatile than smaller, high-growth stocks or speculative investments. - Strong Market Presence
These companies are leaders in their respective industries and are more likely to survive economic recessions and continue growing over decades.
Blue-chip stocks may not offer rapid gains, but they provide long-term stability, reliable returns, and passive income—making them an excellent core investment for anyone looking to build wealth over time. Whether you’re just starting or nearing retirement, blue-chip stocks remain one of the safest and most rewarding investment choices for long-term financial success.
Blue-Chip Stock Solutions for Different Investment Goals
- For Young Investors
Many young investors start out with only small amounts of money to invest, e.g. a small monthly transfer from their checking account. Investing in blue-chip stocks through index funds or ETFs (such as S&P 500 ETFs) can provide diversified exposure to multiple industry leaders from day one, minimizing individual stock risk. With a small bankroll, achieving this level of diversified exposure to blue-chip companies by direct purchases would be difficult, as each individual share tend to be quite pricey. - For Older Investors
The older investor can of course also invest through funds, but if you are an older investor who already have a degree of diversification in your overall investment profile you may also want to consider gradually developing a portfolio where you own blue-chip shares outright. This would for instance allow you to attend and vote at shareholder meetings, and any dividends will be paid directly to you.
Mutual Funds as a Long-Term Investment
Mutual funds can be used to build long-term wealth, and they offer diversification, professional management, and potential for steady growth. Instead of picking individual stocks, investors can rely on a professionally managed portfolio that spreads risk across multiple assets. This makes mutual funds an excellent choice for those looking to grow their money over decades without the stress of constant market monitoring.
For young investors, mutual funds provide a strong foundation for retirement savings, allowing them to benefit from compounding returns over time. By starting early and contributing regularly, small investments can grow into significant wealth. Older investors, on the other hand, can use mutual funds to maintain stability.
With that said, you will pay for these advantages since mutual funds charge a fund management fee. Exactly how large this fee is can have a major impact on your money over time, as each penny you pay in fees is a penny you can not invest. Passively managed funds, including many index funds, tend to have substantially lower fund management fees than actively managed funds.
Diversification from day one
One of the biggest advantages of mutual funds is their diversification. Even if you only have a very small amount of money to invest, you can pick a fund that is already diversified according to your preferences. This type of diversification is not easy to achieve if you were to purchase investments outright instead, starting with a small bankroll.
Funds can be diversified in different ways, so it is important to read the fund prospect and other information. A fund can for instance hold only stocks, but make sure there is a mix of many different companies, different industries, different geographical markets, etcetera. A fund can also invest in a variety of assets, such as combination of stocks, bonds, and commodities.
Diversification is important, because when the risk is spread out, it reduces the impact of any single investment performing poorly. This is particularly important for long-term investors who want stability while still benefiting from market growth. Over time, markets tend to go through cycles of ups and downs, but mutual funds can smooth out volatility, making them a safer choice for investors who prefer consistency over short-term speculation.
Hands-off approach
Investing in mutual funds is also a great option for those who want a hands-off approach. Fund managers handle the research, asset allocation, and re-balancing, ensuring that the portfolio remains aligned with the investment goals. This is especially beneficial for individuals who don’t have the time or expertise to analyze stocks but still want to take advantage of long-term market gains. Mutual funds offer a solid long-term investment strategy. Their ability to balance risk and reward while requiring minimal effort from investors makes them a reliable choice for those looking to grow and protect their money over time.
REITs for Long-Term Investing
A real estate investment trust (REIT) is a company that owns, and in many cases also operates, income-producing real estate. A REIT (it is pronounced “reet”) can own many different types of real estate, e.g. apartment buildings, office buildings, shopping malls, warehouses, and hotels. It can even own real estate that does not involve buildings.
The exact rules under which the REIT falls depends on the jurisdiction. In some countries, REITs benefit from advantageous taxation compared to the average company when it comes to corporation tax and capital gains tax. In the United States, the two main REIT type are equity REITs and mortgage REITs, which are considered two different asset classes among investors.
Nowadays, many REITs are publicly traded on exchanges, making it easy for investors buy and sell shares in REITs. Examples of financial figures that are especially important for fundamental analysis of a REIT are net asset value (NAV), funds from operations (FFO), and adjusted funds from operations (AFFO).
Copy Trading for Long-Term Investments
In recent years, copy trading has developed as an alternative to mutual funds. With copy trading, you own the investments outright (e.g. you will be the registered owner of equity), but instead of making the investment choices on your own, you will simply copy another investor´s decisions. Special software is available that will allow you to have this done automatically.
The term copy trading has become strongly associated with fast-paced day trading, but the general concept can be used for all kinds of trading and investing, including long term investing. Just make sure you pick an appropriate broker, platform and copy trading solution, because those who specializes in day trading may not be suitable for long term investments and vice versa.
Copy trading has become an increasingly popular way for investors to participate in the markets without having to analyze stocks, bonds, or other assets themselves. This strategy allows individuals to automatically mirror the trades of experienced investors, making it an appealing option for those who want a more hands-off approach without relinquishing asset ownership to a mutual fund. While copy trading is often associated with short-term trading strategies like forex trading and cryptocurrency trading, it can also be used effectively for long-term investing when approached correctly.
One of the biggest advantages of copy trading for long-term investments is the ability to follow seasoned investors with a proven track record. Instead of relying on personal research, copy traders can align their portfolios with professionals who specialize in long-term growth strategies. By choosing investors who focus on diversified portfolios, blue-chip stocks, or dividend investing, copy trading can become a tool for wealth building rather than high-risk speculation.
However, the success of copy trading as a long-term investment strategy depends on selecting the right traders to follow. Many top-ranked copy traders on platforms developed for day trading and swing trading will focus on short-term gains, high-risk trading, and frequent position changes, which can lead to high volatility. Long-term investors should look for investors who prioritize steady growth, low-risk strategies, and fundamental analysis over aggressive trading. A well-balanced approach, where investments are held for years rather than days or weeks, will provide more stability.
Another consideration is the fees involved in copy trading. Some platforms charge commissions or performance-based fees, which can eat into long-term returns. It’s important to understand these costs before committing to a copy trading strategy. Additionally, while automation makes investing easier, it’s still crucial to monitor performance periodically and adjust strategies as needed.
As always, it is important to research the broker, platform and copy trading service you are interested in using. Regrettably, many scammers are taking advantage of the popularity of copy trading, e.g. by luring victims into downloading software that will effectively hijack your portfolio and trading account. Some aren´t even that sophisticated; they will simply ask for your log in credentials, promising that they will take care of all the copy trading for you and make you rich.
For investors who want exposure to the markets without spending hours analyzing charts or reading financial reports, copy trading can be a valuable tool, but it must be approached with caution. When used wisely and combined with a long-term mindset, it can offer you a way to benefit from expert knowledge. Rather than chasing quick profits, it is advisable to focus on stability, diversification, and fundamental growth.
Using Active Trading as a Strategy to Fund Long-Term Investments
For those looking to grow their wealth over time, active trading – e.g. day trading or swing trading – can provide an alternative income stream which can then be used to fund long-term investments. While traditional investing focuses on slow and steady growth, active trading—whether in stocks, forex, or something else—offers the potential for quicker returns, which can then be reinvested into more stable, long-term assets like mutual funds, real estate, and blue-chip stocks.
One of the main advantages of using trading to generate income for long-term investments is liquidity. Active trading allows for faster access to profits, and this means that successful traders can quickly reinvest earnings into more stable assets, creating a system where short-term gains contribute to long-term financial security.
However, trading requires skill, discipline, and proper risk management. Many beginner traders jump in expecting quick profits, only to face losses due to emotional decision-making or a lack of a proper trading strategy. To make trading a viable tool for long-term wealth building, it’s essential to develop a structured approach—whether through day trading, swing trading, or trend-following strategies. The goal should be to create consistent, manageable profits that can be set aside for long-term growth, rather than chase elusive “big wins” here and there.
A well-balanced trading strategy involves allocating a portion of trading profits into safer, long-term investments, while also maintaining enough money in your trading account to carry out proper risk management and ride through rough patches.
Instead of reinvesting all earnings back into risky trades, traders can transfer a percentage into stocks, ETFs, dividend funds, retirement accounts, and other long-term investments. This approach not only protects profits from market volatility but also ensures that even if trading performance fluctuates, long-term investments continue to grow steadily.
While trading carries high risks, it can be a powerful tool for wealth creation if you have the discipline to stick to a proper risk-management routine. By using short-term trading profits to fund long-term investment strategies, individuals can accelerate their financial growth while ensuring they have a solid foundation for the future.
Using Forex Trading to Generate Capital for Long-Term Investments
Forex trading offers the potential to generate short-term profits, which can then be reinvested into long-term investment vehicles like stocks, mutual funds, real estate, etcetera. While traditional long-term investing relies on steady growth over years or decades, forex trading can provide an additional income stream, allowing traders to accelerate their wealth-building process.
Two of the biggest advantages of forex trading are high liquidity and high accessibility. The global forex market is the most liquid of all the financial markets, and it operates 24/5, allowing traders to enter and exit positions at any time during those hours. This flexibility makes it possible to fit forex trading into your schedule with more ease.
Offering high leverage is very common among forex brokers, but leverage is a double-edged sword that should only be wielded with caution. The use of leverage in forex trading allows traders to control larger positions with a smaller amount of capital from their trading account, increasing the potential for returns. However, leverage also increases the potential for loss, making proper risk management even more important. Many novice trader have had their entire bankroll wiped out from over-leveraging and their refusal to stick to an appropriate risk-management routine.
For those looking to use forex trading as a way to fund long-term investments, a structured approach is necessary. First, you need to build up a bankroll in your trading account, to make sure you have enough to ride out rough patches. As it grows, it is important to not get carried away. Aim for small but consistent profitability.
The next step is to start transferring parts of the monthly trading profits into long-term investments in suitable long-term assets. For example, a trader might keep 50% of trading profits to grow the trading account each month and transfer the remaining 50% of monthly profits into stocks, ETFs, and REITs. This strategy ensures that even if trading results fluctuate, there is still steady progress in building long-term wealth.
Successful forex traders develop good trading strategies, stick to appropriate risk-management routines, and take steps to avoid falling to the trap of carrying out emotional decision-making in the heat of the moment. Many traders fail because they overtrade, use excessive leverage, and do not stick to an appropriate risk management plan. To use forex as a stepping stone to long-term financial security, traders should focus on consistency and risk control.
While forex trading can be an effective way to generate additional income, it should not replace traditional long-term investing. Instead, it can serve as a complementary strategy, helping traders grow their capital faster while ensuring financial security through diversified long-term investments.
CFDs
CFD:s is a leveraged financial instrument most suitable for day trading. You need to pay an extra fee if you want to keep your position open overnight. You pay this small fee every night your position remains open. CFD trading is high-risk, and 80-90% of all retail traders that try CFD trading end up losing money. CFD trading is illegal in the USA. European legislators have limited the maximum allowed leverage for CFDs and instituted negative balance protection. If you live outside of Europe, you might be able to trade with very large leverage and might not enjoy negative balance protection. This can cause very large losses. We do not recommend that you trade with CFDs unless you know what you are doing. You can learn more about how to trade CFDs on our website or by visiting investing.co.uk.
Using CFD Trading to Generate Capital for Long-Term Investments
A Contract for Difference (CFD) is a type of derivative, which means that a trader can use to speculate on an underlying asset instead of actually buying and selling that asset. CFDs are available for a wide range of asset types and financial products, including currency pairs, stocks, commodity prices, and indices. It is even possible to use this derivative to speculate on other derivatives, e.g. stock options.
When you engage in CFD trading, your are not trading with other traders. Instead, your broker is both your broker and your counterpart in the trade. This creates a conflict of interest, and it becomes even more important to pick a reputable broker that is regulated and supervised by a strict financial authority.
A Contract for Difference (CFD) is a financial agreement between two parties, which stipulates that one party (known as the buyer) will pay the other party (known as the seller) the difference between the current value of an asset and its value at the time the contract was initiated. This means, that the “buyer” is hoping for the price to increase from the opening to the closing of the contract, since this means the “buyer” will be compensated by the “seller”. If the price instead drops, the “buyer” must compensate the “seller”.
As a trader, you decide – for each CFD – if you want to take the role of the “buyer” or the “seller”. This makes it easy to profit from both rising and falling prices, without having to engage in short-selling to profit from falling prices. Unlike traditional investing, CFD trading allows traders to profit from both rising and falling markets, making it a versatile tool for short-term income generation.
CFDs provide an opportunity for traders to capitalize on short-term market movements, allowing you to generate profits that can be reinvested into long-term investment vehicles like stocks, real estate, or retirement funds. While long-term investing focuses on steady, gradual wealth accumulation, CFD trading offers a way to actively grow capital more quickly, provided that you manage risk effectively.
CFDs were invented in the UK in the 1970s as way to leverage gold, but modern-style CFDs did not become widespread until the 1990s. Still, CFDs are commonly highly leveraged financial products. For many traders, this access to high leverage is a very appealing part of CFD trading, as it allows you to control larger positions with a smaller amount of capital from your trading account. This means that even with small funds, you can reap the profits of a large profitable trade. Of course, this also means that you stand to lose a lot of money, because using leverage is essentially the same thing as borrowing money from your broker and risking it on a trade. Leverage adds risk and it is crucial to have a solid risk management plan in place that takes leverage into account.
Just as in the example above (about forex trading), it is crucial to first build up your trading account a bit, and then implement a strategy for how you will allocate a percentage of your monthly profits to long-term investments. A disciplined approach is necessary. Instead of reinvesting all profits back into high-risk CFD trades, you should allocate a portion of your earnings to stable, long-term investments each month. For example, a trader could decide to keep 50% of profits for trading account growth while transferring 50% into long-term assets like ETFs, dividend stocks, or real estate. This strategy ensures that long-term financial goals remain on track.
CFD is inherently risky and requires skill, patience, and emotional discipline. Many traders fail because they overtrade, take excessive risks, or fail to stick to a strategy. To use CFD trading effectively as a source of capital for long-term investments, it is essential to focus on earning consistent profits instead of chasing after get-rich-quick opportunities.
When approached correctly, CFD trading can serve as a powerful tool for capital generation, complementing traditional long-term investment strategies. By balancing active trading with smart wealth-building practices, traders can take advantage of market opportunities while ensuring financial stability for the future.
This article was last updated on: March 14, 2025