Moving to real money safely

Scams, licensing, leverage and starting small, with pointers to ASIC’s MoneySmart. · about 5 min

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General education only. Not financial, tax or legal advice.

General information only, not advice. You are never obliged to trade real money.

Check who you are dealing with

• In Australia, businesses offering financial services generally need an Australian Financial Services Licence (AFSL). You can check on ASIC’s public register.
• MoneySmart (moneysmart.gov.au) is ASIC’s free consumer site, including investing basics and scam warnings.

Scam warning signs

• Guaranteed or very high returns, or “risk-free” trading.
• Pressure to deposit quickly, or to move to an unfamiliar platform or app.
• Strangers on social media or messaging apps offering “signals”, coaching or account management.

Leverage and CFDs

Leveraged products such as CFDs can lose money very quickly, and ASIC has restricted CFD leverage for retail clients because of the losses many suffer. Our desk lets you use up to 2× exposure only to practise sizing, not as a suggestion to use leverage.

If you decide to start

• Only use money you can afford to lose.
• Start much smaller than your paper account.
• Keep following your plan and journal, now including real costs.

Key points

• Check licences and use MoneySmart.
• Guaranteed returns and pressure to deposit are red flags.
• Start small, and never with money you can’t afford to lose.

Checklist

Tick these off as you practise (saved in this browser).

• I know how to check an AFSL on ASIC’s register
• I can name three scam warning signs
• I have a rule for the maximum I would start with

Quick quiz

Pass mark: 2 out of 3. You can retry as often as you like.

1. Which is a classic scam warning sign?

Guaranteed high returns A written fee schedule A licence number you can verify

2. Where can you find ASIC’s free consumer investing information?

MoneySmart (moneysmart.gov.au) An influencer’s group chat This site’s sponsors

3. A sensible approach to going from paper to real money is:

Start with your whole savings Start far smaller than your paper account and only with money you can afford to lose Copy a stranger’s signals

Check answers