How Simple Financial Moves Can Fund a Year of Travel

Build your next travel fund by following simple financial investment tricks that many traders swear by. 

Traveling the world is something everyone wishes for at some point in life, but when the reality of how expensive it can be sets in, many realize they might not be able to live out these dreams. Flights, accommodations, and daily living expenses can quickly add up, making the idea feel impossible. However, what if funding a year of travel wasn’t as out of reach as it seems? The internet today has become a leveler, offering people new opportunities to earn money by the day. One that many are exploring today is investment in financial markets. Here is a quick look at how you can slowly build a dedicated travel fund through simple, consistent, retail investments in profitable markets.

Having an Investment Goal

The first rule of thumb when investing is to have a solid goal laid out, and it doesn’t matter whether you’re a full-blown trader or an entrepreneur looking to make a quick buck; everyone needs one. Now, the idea of having an investment goal isn’t anything complicated. You don’t need a finance degree, a trust fund, or veteran-level knowledge in the field. As a travel investor, your goal is to consistently allocate small amounts of money to get to a specific goal, and you can work with that. Ask relevant questions and set the proper timelines. Is it a short-term plan? Intermediate or long-term? This is very important because it determines the kinds of markets you should explore when it's time to start executing trades. It’s also essential to research and estimate all core costs, then create a target number tailored to your investment plans. If your annual travel goal is $5,000, you need to consistently invest around $300-$ 400 per month to achieve your desired results. 

Building a Micro Investing Toolkit

Having a micro-investing toolkit is where the journey truly begins to become practical. There are numerous platforms available that have democratized trading for everyday people, making them ideal for building a travel fund. By investment toolkit, we’re referring to brokerage platforms, charting tools, investment robots, and a forex trading app. 

Trading platforms like MT4 and TradingView offer investors access to a diverse range of assets and instruments that can enhance their trading experience. There are educational resources to help you get started as a beginner, as well as charting and analysis tools to explore and understand asset performance, and to predict future movements. If you’re not interested in all the complex stuff, you can look into other possible options, including tools like fractional share apps, which allow you to buy pieces or fractions of individual stocks at lower prices to make gains. The point here is that there are hundreds of tools with varying opportunities, and all you have to do is find the right fit.

Developing a Trading Strategy

Having a trading strategy is another non-negotiable for every retail trader. While the core of your travel fund is to build steady, automated investments, having a disciplined approach will help you take fewer risks and avoid making impulse-driven decisions. Your goals are also closely intertwined with strategies, as they work in tandem. For someone looking to get in and out of the market quickly, swing trading might be the way to go. On the other hand, if you’re planning long-term trades, you might want to take a position trading strategy that holds an asset for months. Some general tips that can help you develop a better strategy are:

• Know what to buy: don't make impulsive purchases. Have a watchlist of 10-15 assets that you understand. Prioritize less volatile options, such as blue-chip stocks and well-established, financially sound companies. 

• Know when to buy: Define the specific conditions that must be met before you enter a trade. Follow positive technical signals and fundamental events. 

• Know when to sell: Your exit point is just as important as your entry point in any trade. Decide in advance when to take profits and cut losses. 

Having a Risk Management Plan 

Since you’re not a veteran trader, your risk management plan must be as solid as ever. Most financial market investments are volatile, and this puts you at risk. Having a risk management plan ensures that a single misstep or an unexpected market downturn doesn't send your entire travel fund tumbling off a cliff. The three primary methods to ensure this are position sizing, implementing a stop-loss order, and diversification. For position sizing, the rule is to never risk more than 1-5% of your total speculative capital on a single idea. For a $2,000 portfolio, no single trade should put more than $20-$100 of your capital at risk. Now, this doesn't mean you only buy $100 worth of stock. This means that your stop loss should be set at a level where the maximum loss is $100.  If you buy $500 of stock and set a stop loss 10% below your entry price, your potential loss is $50, which is 2.5% of your $2,000 portfolio. This is a reasonable position size. 

The stop loss is another critical component of risk management, as it establishes a predetermined order to sell a security automatically once it reaches a specific price. Diversification, lastly, is king of investing because it helps balance your portfolio and make the most of several asset classes. This means you can invest in currencies, stocks, and even cryptocurrency assets simultaneously. The aim here is to ensure you’re not placing all your active trades in one sector to avoid getting wiped out. 

Making Smart Trading Decisions 

Trading financial market assets is a risky affair, and if you really want to make that trip, you need to be extra cautious about your trading decisions. Thankfully, the internet is a place that allows access to every tool and resource needed to make this happen. So, start building your toolkit; your adventure awaits you.