# What would you need to quit your job and become a professional investor?



## VSntchr

This has been on my mind for a while. I would like to create this thread in order to get a scope of interest of what other people think is a sufficient amount of capital to get out of the workforce and take on investing as a full time profession.

Whilst traders are welcome to participate in this, I am moreso looking for the opinions of fundamental investors.

In your response it would be a good idea to state your age (if your comfortable to do this), your experience with investing, and of course - the amount of capital you would find sufficient to pursue an investing career.


Me.
21 Years Old.
4th Year University about to complete a double degree in Bus/Comm.
Have been involved in the stock market for ~ 9 years. Although I have only found my niche in the last 3 years.
I have estimated that if I had $250 000 capital I could use my investing strategy to derive a sufficient income. This is based on the assumption that I could achieve a return of 15%p.a. This would grow my portfolio at $37 500 per year and I would also have a divvy income of at least $9 000. Wouldnt take long for compounding to turn this into a nice looking portfolio!
So far I have far exceeded this return over the last three years, I have lowered the expected return however, as I understand that 3 years is not long enough to determine the effectiveness of a strategy.

I understand that some people may find these figures ludicrous, and that is fine...we all have different goals, different standards of living, different expenses etc...but I would love to get an idea of what other people think about this subject!


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## wayneL

The problem with such a low capital base is removing funds for living expenses does not allow for compounding returns...

...and if you go through a period where your system doesn't work (IT HAPPENS), you are drawing down on your capital.

I traded for a living through circumstance for years (injury), but the best use of trading is to build wealth while having a non-correlated income via job or business IMO.

I have been well enough to have an outside income for the last year and believe you me, it opens up a whole new world of compounding returns.


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## tech/a

I dont think you have too.
I dont know that you should (Profitable trading is as boring as hell and doesn't take up a lot of time)--most of it doesn't require screen time.
If you want say $70K a year to live on you'll need to earn 2X that to cover tax etc.
So with say 20% return a year you'll need 600K ish.
Better return less capital.
If you want to grow your portfolio you'll need to return 3X which I think is more around the mark.

Under capitalization is the killer of many a business and this one would be more susceptible than most.


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## Bill M

VSntchr said:


> This has been on my mind for a while. I would like to create this thread in order to get a scope of interest of what other people think is a sufficient amount of capital to get out of the workforce and take on investing as a full time profession.




I looked at it in a different way when I retired. It was not important how much I had but rather what income I could get with what I had. My thinking was that I had to have growth assets that would at least go up with inflation and pay my tax. Then I had to get a reliable income from those assets. Now this is very conservative but for me I must clear 5% income from those assets and the growth must look after itself.

I simply times my asset base by 5% for the income (my salary) and the growth took care of itself. During the GFC my asset base reduced and so did my dividends so you have to be prepared for this. I am not a trader. I am a long term property, shares and fixed interest securities investor. I buy and sell stock mostly on fundamentals.

Probably doesn't really answer your question but there is one thing I always do, ALWAYS allow for more. If for example you need $500 a week plan for $700. If you need $1000 then plan for $1200. Then if things go wrong you have some back up, the back up saved my bacon during the GFC. I also try to keep some spare cash for when the markets take a severe plunge, I was 99% invested in March 2009, cheers.


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## So_Cynical

Considering my current yoy return is around 21% and my projected financial year return is 24% and that i would consider 55K to be the absolute minimum to live on (in Aust) and build my capital base then, i would need about 270K in the market to achieve that result.

However i plan on retiring from my real job and being a full time investor in about 7 - 8 years time..in order to have enough capital to do that and buy a reasonably nice place over seas etc i need to average a PA return of around 28%


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## Julia

Why would you have to make a decision to quit your job and rely on your trading/investing skills?

As Tech says, you don't need to get bored out of your mind hunching over a computer all day to make money.

You should easily be able to continue with whatever your job is and look after your investments at the same time, thus demonstrating to yourself whether you can in fact produce enough income and growth from your capital to allow you to let the job go.

I don't think it's possible for anyone to give you capital amounts, income levels etc when the variables are so great.  As a young, single person, especially if you happen to still be living with your parents, your outgoings will be minimal, and will bear no relation to someone with five kids and a mortgage.

It shouldn't matter to you what anyone else thinks is necessary or OK.
You simply need to work out for yourself what you need to live on, and what skills you have that you can apply to what capital base to make that happen.

If e.g. you don't have a lot of experience, and only have minimal capital, I'd be surprised if you could survive, but to even say that is to state the **** obvious.


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## skyQuake

If you have exp buy lack capital, prob best to trade for a fund/firm.

- You'll start off on a much larger book which can easily grow faster than ur P/L
- Trading with someone else's money means you are not fighting against yourself to keep expenses low etc. You can spend all your earnings and not have to cut position size.
- Same thing regarding drawdowns.


Trading for yourself entails significant risks as you're always under pressure to perform to pay for food and housing


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## VSntchr

Julia said:


> Why would you have to make a decision to quit your job and rely on your trading/investing skills?
> 
> As Tech says, you don't need to get bored out of your mind hunching over a computer all day to make money.
> 
> You should easily be able to continue with whatever your job is and look after your investments at the same time, thus demonstrating to yourself whether you can in fact produce enough income and growth from your capital to allow you to let the job go.
> 
> I don't think it's possible for anyone to give you capital amounts, income levels etc when the variables are so great.  As a young, single person, especially if you happen to still be living with your parents, your outgoings will be minimal, and will bear no relation to someone with five kids and a mortgage.
> 
> It shouldn't matter to you what anyone else thinks is necessary or OK.
> You simply need to work out for yourself what you need to live on, and what skills you have that you can apply to what capital base to make that happen.
> 
> If e.g. you don't have a lot of experience, and only have minimal capital, I'd be surprised if you could survive, but to even say that is to state the **** obvious.




Firstly, I would want to can the workforce, because I dont want to spend my time working. I would increase my time spent on investing...but not by a whole lot.

Secondly...I am not using this thread to ask for advice as to what amount of capital I would require, but rather to use it to see what other people would find suitable for their own situations...it is merely out of interest...


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## tothemax6

> What would you need to quit your job and become a professional investor?



A gun to my head.


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## moreld

I second skyQuake's view.

I'll add that working can be absolutely brilliant. I've had two jobs which I jumped out of bed in the morning to get to. Working with super smart, switched on people in fast moving stimulating roles. You learn 10x the speed of school or Uni, have a great time and hey travelling on someone else's dime takes a few years to get boring.

If I was young with a Bus/Comm degree I'd be looking for an exciting opportunity with a great firm. Life is a marathon; one day you'll have kids, or be sick like WayneL or just need some time to reassess your life and then that is a good time to trade for a living. Other times include when retired, or after you've had a few large six figure bonuses or have serious capital behind you.

The best advice I can offer is plan your next 5-10 years. Envision where you want to be and what you want to be doing. Read some motivational books like Think and Grow Rich while you're doing that.

If you really really really want to trade then maybe do Honors and PhD in business/finance while doing so, as then you'll have a terrific qualification for the rest of your long life that will open many doors (it's stupid, but it is).


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## skc

You can project your income/lifestyle based on average return, but you need to calculate your capital base on worst case drawdown situations. Investing is inherently disadvantaged as you often need to exercise patience to get the greatest return. You don't want to under-capitalise and be forced to sell at the wrong time because you have a bill to pay. 

If I was aiming for $37.5K from investing full time, I will need ~$350K to confidently go forth. If I was trading however, I can easily do it with $120K. There are so many inherent advantages in trading from a return and cashflow point of view... too bad you are not interested... 

BTW $37.5K is such a tiny amount it leaves you with very little to compound your portfolio size after expenses and taxes.

And like SkyQ said, by far the best way to invest for a living is to invest other people's money...


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## moreld

VSntchr said:


> but rather to use it to see what other people would find suitable for their own situations...it is merely out of interest...




Yeah I remember being 21. You know everything, advice is not required or desired. That's cool, we all need to live our own lives.

Here's what I found suitable. 
I needed a paid off house, $1M+ liquid assets and a partner earnings close to $200k to leave my very highly paid work. I'd been investing for 17 years then, had beaten the markets I invested in 9 out of 10 years and knew business from the inside out. I would not have left work just to invest, but had the added attraction of two wonderful young kids that I could hang out with and nurture. They're older now and I'm looking forward to going back to work.

Good luck with whatever you decide to do.


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## howmanyru

If you are investing instead of trading where is your cash flow going to come from? Unlikely that dividends will make ends meet. Investing long term is fine, if you are good at it one day you will have a nice portfolio worth a few bucks, but you need cashflow to eat, pay the bills, etc. What I would need to become a full time investor is not to need any cashflow from my investments.


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## AlterEgo

tech/a said:


> I dont know that you should (Profitable trading is as boring as hell and doesn't take up a lot of time)--most of it doesn't require screen time.




I really don't understand it when people say they would be bored without a regular day job. Do you find weekends boring being away from work? Wouldn't you value more free time to pursue other interests, hobbies, etc? You say it "doesn't take up a lot of time" as if that's a bad thing. Surely that's a positive thing, as you'd have more free time to do all those other things that you don't currently have time for. I don't know about you, but my weekends are never long enough to get even half the things done that I'd like to.

To be able to get out of the rat-race and be financially independent, my own boss, have to answer to no-one, to do something I enjoy (trading), get well rewarded for my efforts and get a great scene of accomplishment from doing it, to not have to be up early every morning for the mindless daily commute, to have more time to spend with family - that would be a dream come true for me. Isn't that everyone's dream? I could imagine nothing better!


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## tech/a

> I really don't understand it when people say they would be bored without a regular day job. Do you find weekends boring being away from work? Wouldn't you value more free time to pursue other interests, hobbies, etc?




I cherish my weekends.
But have all my friends and family to share them with.
During the week they're---Working!
Wife doesn't work but seriously 7 days a week I your partners pocket---not good.


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## qldfrog

an alternative idea: try to be your own boss:
consultant, contractor;
our goivernment is doing its upmost to suppress us but it does change your state of mind vs "the boss" who become the customer and helps enduring the daily commute, office policies etc;
usually better paid as well and add A LOT of freedom: so you can stop between contracts as much as you want, work part time, etc;
this way you can play the stock market if you want to but still have the $ for the cash flow that you need at 21;
I am going toward my mid forties, have my aims set  and even with home paid, etc I believe I need at least 1M$ to even considering giving up work:
you pay tax on your income and have to match inflation, then need only use the income that is left to live..and change car /pay med expenses, home repairs etc w/o touching the capital;
Very quickly:
on a return of 10% before taxes (remember: you have no luxury to speculate or take much risk): you end up with 70% in your pocket after tax at most; need to put aside 4% for inflation and ensure your capital is untouched-> you can only use 30k a year on a 1M nest ;
My advice: at 21-> keep your job, and if not happy change job but keep one


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## stargazer

> tech/a
> Re: What would you need to quit your job and become a professional investor?
> 
> I dont think you have too.
> I dont know that you should (Profitable trading is as boring as hell and doesn't take up a lot of time)--most of it doesn't require screen time.
> If you want say $70K a year to live on you'll need to earn 2X that to cover tax etc.
> So with say 20% return a year you'll need 600K ish.
> Better return less capital.
> If you want to grow your portfolio you'll need to return 3X which I think is more around the mark.
> 
> Under capitalization is the killer of many a business and this one would be more susceptible than most.




Hi

I have read that investors can just look at EOD charts get there trades ready and invest.  Check in once a week and see that all is good.
However with the world events that can happen pretty quickly and a negative impact can see stocks plummeting in a day or so.  eg GFC..Japan etc

Cheers
SG


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## tech/a

stargazer said:


> Hi
> 
> I have read that investors can just look at EOD charts get there trades ready and invest.  Check in once a week and see that all is good.
> However with the world events that can happen pretty quickly and a negative impact can see stocks plummeting in a day or so.  eg GFC..Japan etc
> 
> Cheers
> SG




Sure 
But you manage your stops each morning--in your portfolio and place your buy or sell orders.
These days with platforms like IB you really can trade on auto.


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## Intrinsic Value

Interesting topic. 

Personally I don't think you should even be remotely considering retiring or stopping work.

Rather than looking at retirement you should be looking at a job that interests you and suits your lifestyle be that self employed or working for someone else. 

As others have stated if you are a fundamental investor then you can still work and invest at the same time as it doesn't really take up that much of your time.

I am an independent SAP Contractor and I work about 9 months of the year and I spend the other three months in Thailand. 

If I was to retire I would need about 100k a year income minimum to live on. I always spend more when not working so you do need a fair amount to be comfortable rather than just existing.

How much capital do you need to generate that sort of income? I would say a minimum one million AUD and that is an absolute minimum. 

I have made a lot of money over the last 18 months from investments currently around 70percent for that period but that is in no small part due to the fact that there were a few good companies trading at way below their intrinsic value. 

I don't see those same bargains around at the moment and I suspect that the next 12 months might be more difficult and would be more than happy if I can get 20 percent for the coming year.

And of course like most people I lost money during the GFC.


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## nomore4s

VSntchr said:


> Me.
> 21 Years Old.
> 4th Year University about to complete a double degree in Bus/Comm.
> Have been involved in the stock market for ~ 9 years. Although I have only found my niche in the last 3 years.
> I have estimated that if I had $250 000 capital I could use my investing strategy to derive a sufficient income. This is based on the assumption that I could achieve a return of 15%p.a. This would grow my portfolio at $37 500 per year and I would also have a divvy income of at least $9 000. Wouldn't take long for compounding to turn this into a nice looking portfolio!
> So far I have far exceeded this return over the last three years, I have lowered the expected return however, as I understand that 3 years is not long enough to determine the effectiveness of a strategy.
> 
> I understand that some people may find these figures ludicrous, and that is fine...we all have different goals, different standards of living, different expenses etc...but I would love to get an idea of what other people think about this subject!




There are probably a few different factors to look at here.

1. Need to to be clear on the difference between investing and trading. My take on investing would mean you would need a very big capital base to provide a decent income to live on, because the nature of investing could mean you are not getting a regular income. For me personally I would Ideally want at least $100k to trade with to produce a regular income and another $50k for living expenses for the first year as well as another say $100k for longer term investing for a retirement fund.

2. With only $37,500 pa + $9k in d/e returns you are better off working for someone else, earning a good salary with super and all the perks etc etc, I personally would want to have the potential (ie skill and ability) to earn at least double what I could earn working for someone else to justify taking on the risks and pressures of trading/investing for a living.

3. At your age the other thing to take into account is making sure you are still employable and attractive to employers, if you say trade/invest for 2 years after limited work history and then find you can't earn enough from your investing you could find it hard to re-enter the workforce.

4. There are a lot of hidden factors and stresses in starting off a business to provide your sole means of income and a trading/investing business is no different. Monthly income revenue, monthly/quarterly/yearly tax payments & paperwork, long term income requirements (ie super), don't be fooled into thinking it will be just an easy couple of hours work each day with no stress - there is a reason the majority of people work for other people in all fields.

5. IMO, whatever capital you think would be enough you would probably have to double to make it work and even then it would require quite a bit of skill and luck to pull it off without failing at least once.


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## nomore4s

Julia said:


> As Tech says, you don't need to get bored out of your mind hunching over a computer all day to make money.




I always have a bit of a laugh to myself when I see this posted about full-time trading. This statement could be applied to the majority of office jobs imo, and quite a few manual labour jobs as well (ie being bored out of your brain), let's be honest here there would be only a small % of the population that would be truly happy with their jobs and not change it if given the opportunity(ie not having to work or compete for said position).


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## tech/a

nomore4s said:


> I always have a bit of a laugh to myself when I see this posted about full-time trading. This statement could be applied to the majority of office jobs imo, and quite a few manual labour jobs as well (ie being bored out of your brain), let's be honest here there would be only a small % of the population that would be truly happy with their jobs and not change it if given the opportunity(ie not having to work or compete for said position).




You think?

I dont have one employee here who doesnt love getting up in the morning to face anoter challenging day.
They wont last 2 minutes with the other guys if they are complainers or slackers.
New people dont have to impress me they have to impress the crews.

I love the challenge of business---our business and I make sure that the acceptance of that challenge is infectious. I breed Passion here.

If your bored in a job --change jobs and do yourself and your employer a big favor.
Most employers would cringe at the thought of employees bored with their jobs.
Sure it happens but you always have a choice regardless of the level of position.


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## againsthegrain

LOL my full time job I sit in front of the pc all day refreshing the same sites and checking my watch lists, it is almost like im a trader working with a base salary chasing bonuses placing buy and sell orders online.

So why not get into the work force, sounds like you might be scared. When i was 19 still at uni I used to have the same ideas, yea start a business and never do the 9-5 im too good for that ... only suckers work for a boss. 

In most cases you can't get to the top without starting at the bottom


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## prawn_86

tech/a said:


> Most employers would cringe at the thought of employees bored with their jobs.
> Sure it happens but you always have a choice regardless of the level of position.




Clearly you have never, or know people who have, worked in big corporate/government structures then.

I know heaps of people who work for banks or government depts that are bored, and the employers couldnt care less. State gov departments are shocking for this especially.

And back on topic:
I would need at least 500k is i was going to live o/s, or 1m to be living in Australia and make a 'living' off my investments


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## againsthegrain

prawn_86 said:


> Clearly you have never, or know people who have, worked in big corporate/government structures then.




+1

Thats exactly where I am, and if it wasn't for trading, investing, research and my other hobbies and extra money generation to which I have to sadly resort during my work day I would become a vegetable like half of the co-workers who I see on facebook and heraldsun page always clicking refresh


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## nomore4s

tech/a said:


> You think?
> 
> I dont have one employee here who doesnt love getting up in the morning to face anoter challenging day.
> They wont last 2 minutes with the other guys if they are complainers or slackers.
> New people dont have to impress me they have to impress the crews.
> 
> I love the challenge of business---our business and I make sure that the acceptance of that challenge is infectious. I breed Passion here.
> 
> If your bored in a job --change jobs and do yourself and your employer a big favor.
> Most employers would cringe at the thought of employees bored with their jobs.
> Sure it happens but you always have a choice regardless of the level of position.




Again only small % of the population work for good employers, you have seriously rose coloured glasses on if you think otherwise. Also for the majority of people changing jobs isn't that easy due to a number of reasons ranging from lazyness to incompetence.


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## againsthegrain

nomore4s said:


> Again only small % of the population work for good employers




There was a article I read not long ago that gave statistics of something like 80% are not happy with their jobs and would change jobs if opportunity presented itself. But I think only 20% were actively looking for new jobs.

So it just shows how many are actually doing something about it and how many are sitting there and being inefficient.


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## tech/a

nomore4s said:


> Again only small % of the population work for good employers, you have seriously rose coloured glasses on if you think otherwise. Also for the majority of people changing jobs isn't that easy due to a number of reasons ranging from lazyness to incompetence.




You guys are a laugh.

I work with some of the largest building companies in Australia.
Fulton Hogan
Baulderstones
Hindmarsh
Multiplex.
Many Government and Council Bodies.
Dept Road Transport.

Bored pathetic employees deserve to be bored.
They are generally their for "The security" and the Govt perks.
Your right Employers wont give a damn about drones.
They have no added value to the employer--why should they add value to someone who clearly doesnt seek it!!

The egg doesnt have to stay with the chicken it has a choice!!


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## againsthegrain

Anyway I think the OP should get into the workforce, get the feel how it is to work and get some experience. Skipping work and going straight to being sucessfull investor, business owner etc is just too easy. 
You need to get the feel of value of money and how it is to work for it.


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## Julia

nomore4s said:


> I always have a bit of a laugh to myself when I see this posted about full-time trading. This statement could be applied to the majority of office jobs imo, and quite a few manual labour jobs as well (ie being bored out of your brain), let's be honest here there would be only a small % of the population that would be truly happy with their jobs and not change it if given the opportunity(ie not having to work or compete for said position).



 If you're "having a bit of a laugh to yourself" about what I said, I'd suggest you have misinterpreted the comment.

What I thought was quite clear was that I was echoing Tech's advice that to make money, provided you have a decent capital base, you don't have to be avidly glued to a computer screen watching every movement of the market.

The jobs of many people may involve their doing mindless, repetitive stuff  but has nothing to do with the point I was making.

I agree with Tech:  if you're doing a job which isn't interesting, challenging and satisfying, go and find one that is.  There are plenty.


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## stargazer

Any vacancies Tech.  What sort of jobs?

So how do you make money without being glued to the screen.  We talking weekly time frame charts..? daily?


cheers
SG


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## tech/a

stargazer said:


> Any vacancies Tech.  What sort of jobs?
> 
> So how do you make money without being glued to the screen.  We talking weekly time frame charts..? daily?
> 
> 
> cheers
> SG




Civil Construction we have employees find us---dropping off resume's
My timeframe is Day to a few weeks.
Im at an advantage as its on my desk and Im the boss!
While its there its only a cursory glance and maybe an alteration to a stop level or twice a day I do a scan and may place a trade or so.
15 min each time. Just set and forget monitoring takes around 30 min total a day.
I need to leave the office be in meetings take calls and talk to you guys!!


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## nomore4s

tech/a said:


> You guys are a laugh.
> 
> I work with some of the largest building companies in Australia.
> Fulton Hogan
> Baulderstones
> Hindmarsh
> Multiplex.
> Many Government and Council Bodies.
> Dept Road Transport.
> 
> Bored pathetic employees deserve to be bored.
> They are generally their for "The security" and the Govt perks.
> Your right Employers wont give a damn about drones.
> They have no added value to the employer--why should they add value to someone who clearly doesnt seek it!!
> 
> The egg doesnt have to stay with the chicken it has a choice!!




 Not sure telling us what companies you work with/for has to do with the discussion.

I'm not disputing the fact that there are opportunities to improve/change your options at work I'm just highlighting the fact the majority do not actually act upon these opportunities.


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## skc

Being bored is a subjective thing. Given 100% identical situation one person might find it boring while others find it interesting - stamp collection being one example. Trading is another one. I love my trading and it's by far the least bored I've ever been with my career...

I worked in civil engineering as a fresh grad - I was so bored that I actually enrolled in a university doing an arts degree majoring in philosophy (which no doubt many will find boring)...

Back on topic... I think the general view here is that the OP should seek employment, but obviously it's up to him/her to decide. What is important to takeaway, however, is that your capital base assumption is inadequate, and you need to plan in more detail about managing cashflow.




tech/a said:


> Civil Construction we have employees find us---dropping off resume's
> My timeframe is Day to a few weeks.
> Im at an advantage as its on my desk and Im the boss!
> While its there its only a cursory glance and maybe an alteration to a stop level or twice a day I do a scan and may place a trade or so.
> 15 min each time. Just set and forget monitoring takes around 30 min total a day.
> I need to leave the office be in meetings take calls and talk to you guys!!




If you spend 30 minutes a day trading and 6 hrs a day posting, how much time do you have for your civil business?


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## tech/a

> If you spend 30 minutes a day trading and 6 hrs a day posting, how much time do you have for your civil business?




My "bored" staff take care of the important issues. 
I take care of the very important issues.(There are less of those.)


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## againsthegrain

tech/a said:


> My "bored" staff take care of the important issues.
> I take care of the very important issues.(There are less of those.)




The whole office is posting on asf and looking busy LOL


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## FxTrader

AlterEgo said:


> I really don't understand it when people say they would be bored without a regular day job. Do you find weekends boring being away from work? Wouldn't you value more free time to pursue other interests, hobbies, etc? You say it "doesn't take up a lot of time" as if that's a bad thing. Surely that's a positive thing, as you'd have more free time to do all those other things that you don't currently have time for. I don't know about you, but my weekends are never long enough to get even half the things done that I'd like to.




I can tell you that being a full time investor/trader as an occupation in itself is not boring but filling in the time when you're not trading can be.  Trading can be a very lonely occupation, that's why some try to achieve balance by having other work.  I keep myself occupied doing many things and don't miss being a wage slave but do miss the company of colleagues.



> To be able to get out of the rat-race and be financially independent, my own boss, have to answer to no-one, to do something I enjoy (trading), get well rewarded for my efforts and get a great scene of accomplishment from doing it, to not have to be up early every morning for the mindless daily commute, to have more time to spend with family - that would be a dream come true for me. Isn't that everyone's dream? I could imagine nothing better!




In most respects your depiction is correct and while it's not quite a paradise you do have more personal freedom and free time to pursue other interests.  There is little joy being trapped in a job you dislike (or hate) because you need the money to pay the bills each month - the vast majority fall into this category.

Pursue your dream, it's worth the effort but few will succeed because when it comes to money, most can't handle taking a loss and don't treat full time investing like an a profession.  Learning to invest wisely and profitably will serve one well their entire life, regardless of whether or not you chose investing/trading as a profession.  Living month to month, counting on a thankless job and good health to get by and investing little for the future other than in the family home is not a recipe for financial freedom and the lifestyle it can offer.


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## Julia

FxTrader said:


> I can tell you that being a full time investor/trader as an occupation in itself is not boring but filling in the time when you're not trading can be.  Trading can be a very lonely occupation, that's why some try to achieve balance by having other work.  I keep myself occupied doing many things and don't miss being a wage slave but do miss the company of colleagues.



Agree that a sense of isolation can be very real, especially if you're used to bouncing ideas off others before you make a decision.

Some of this isolation can be remedied by using your spare time to become involved in voluntary activities in your community, thus widening your area of interest and avoiding becoming too obsessed by market stuff alone.

To me, the greatest advantage of not being employed in the usual sense, is being able to set your own timetable and not to have a boss.


----------



## skyQuake

Agree with above, trading by urself will net you a lot of bad habits. 

Trading in a firm with like minded individuals is better than sitting at home by urself!


----------



## Bill M

prawn_86 said:


> And back on topic:
> I would need at least 500k is i was going to live o/s, or 1m to be living in Australia and make a 'living' off my investments




I think you are pretty close to the mark there.


----------



## Bill M

nomore4s said:


> let's be honest here there would be only a small % of the population that would be truly happy with their jobs and not change it if given the opportunity(ie not having to work or compete for said position).




I agree. I've had many jobs in my lifetime with big corporations and government as well as a small 1 man business and in the end only about 1 to 2% of all of the people I worked with were truly happy. The rest wanted out and out as fast as they could, they were ONLY there for the money as was I.


----------



## wayneL

Interestingly and timely, the results of a survey were released today that showed 62% of people were unhappy with their jobs. Many of these were well to superbly remunerated middle to upper management and executive staff... even MDs/CEOs!

On talkback radio, most of the dissatisfaction was down to @sshole bosses... IOW, good boss = happy munchkins. 

I can attest to this as I work for over 100 "bosses" (my clients). @sshole bosses are directed to my competitors because they make my work miserable... #### em!

I will put up with a lot of crap in my work if the "the boss" is pleasant.... (particularly if a hot looking female )

I argued for full time trading for a long time, mostly out of necessity on my part, but I'm happy to be out of may cave now and interacting with folk again... and making a few bob on the markets as well.


----------



## So_Cynical

howmanyru said:


> If you are investing instead of trading where is your cash flow going to come from? Unlikely that dividends will make ends meet. Investing long term is fine, if you are good at it one day you will have a nice portfolio worth a few bucks, but you need cashflow to eat, pay the bills, etc. What I would need to become a full time investor is not to need any cashflow from my investments.




Why not invest via trading, low cost averaging seems to work for me, i get long term exposure to big fundamental moves and dividends by trading to build my portfolio...my 2010/11 financial year projected gross income will be derived from the following sources..


65% Day job
26% Trading profits
9% Dividends and Distributions

---------------------------------



tech/a said:


> If your bored in a job --change jobs and do yourself and your employer a big favor.
> Most employers would cringe at the thought of employees bored with their jobs.
> Sure it happens but you always have a choice regardless of the level of position.




Sorry Tech but that's absolute twaddle, something that would come straight out of the mouth of a case worker or some other type of perfect  world delusionary....every time i have to listen to something like that i just cringe.


----------



## Julia

Bill M said:


> I think you are pretty close to the mark there.




I don't see how anyone can nominate a necessary capital sum without knowing what sort of lifestyle and commitments the investor/trader has.

Some of us, with no debts and a fairly simple lifestyle will obviously require much less than someone with a mortgage, credit card debt and a bunch of kids to educate.


----------



## Bill M

Yeah I know Julia, should have left that one alone, everyones different.


----------



## Bill M

So_Cynical said:


> Why not




So_Cynical, please clear your PM box, it keeps coming up as full.

(Apologies for being off topic)


----------



## Reasons

VSntchr said:


> I have estimated that if I had $250 000 capital I could use my investing strategy to derive a sufficient income. This is based on the assumption that I could achieve a return of 15%p.a. This would grow my portfolio at $37 500 per year and I would also have a divvy income of at least $9 000. Wouldnt take long for compounding to turn this into a nice looking portfolio!
> So far I have far exceeded this return over the last three years, I have lowered the expected return however, as I understand that 3 years is not long enough to determine the effectiveness of a strategy.




*VSntchr*, it is an interesting scenario that you propose. I both trade and invest, which takes a bit of self-discipline most times, but you can fit your rules to both and keep it manageable. I am 55, consider my assets to now be my main business and so don’t have time to be an employee, am still learning about investing after 30 years and about trading after 9 years, and hope to continue doing so until I drop off my perch; which I might add my children think should have been some time ago as no-one could be this old. 

I am going to somewhat disappoint you and only indicate what you might need to consider in terms of a sufficient amount to pursue an investing career, as that is something you need to decide based on a number of experience and risk mitigation factors.

The bottom line is that I use a disciplined investing strategy to generate baseline cash flow on the majority of my capital and use trading to add the alpha to my baseline return and increase my capital by using a smaller amount (10-15%). I zealously protect the capital on both sides of the equation; if I was to stuff up on the trading side, my loss rules dictate that this financial year I will never exceed 37% loss of my projected (therefore slippage risk) annual cash flow I am generating by investing. (eg, cease trading stupid, whatever you were doing is no longer working). It means you have to juggle 2 strategies simultaneously, but fundamental investing usually has longer timeframes (but I will dump anything in a heartbeat that threatens my capital protection rules) than my trading, which means you can ignore it more often, but my average time in a trade is still 33.56 days to date this financial year. I am not adverse to occasionally doing some property investing, but not at present.

So for example, say you had $500K. You allocate $400K to fundamental investing and you invest in hybrids and other higher return equities and term deposits and get a blended annual return of 9% on your $400K which is $36K (cash flow). Pretty close to your requirements. You use the other $100K to trade with the intention of getting 1% per week compounded (~$1+K), which is about 67% per year, or 0.5% per week, or whatever. Nothing wrong with thinking big and not making it (no use if you take senseless risks to get it either). This is what you intend to use to compound your $36K to get an alpha return on top of your 9% and increase your capital every year hopefully (by applying your money management rules – and all good fundamental investors have money management rules).

Some additional finance gotchas that might help your thinking are:
•	The gross tax on $37,500 is roughly $2K
•	You should keep adding annual inflation to your $250K, which in the first year at 3% means $7,500 of any gains is not available for your use.
•	You have to eat at the same time as investing, do you need additional capital initially for that purpose during year 1.

Some of the share market fundamental investment considerations are:
•	How confident are you in achieving 15% in any market. The market since March 2009 has not been in a stronger upward momentum probably since the 1930’s crash. Are your revenue assumptions based on best or realistic historical performance. 
•	Do you consider that protecting your capital is important. If so, what rules do you have to prevent capital loss should a share price fall below a certain percentage of your total capital.
•	How confident are you in achieving the $9K dividends annually. Are you basing your assumptions that you can always hold a share through the ex-dividend price drop and automatically regain the ‘lost’ capital and not have to take evasive action.
•	What if the market goes sideways for an extended period; would that affect your ability to get 15%. 
•	What if the market repeats 2008; how will you make 15% at this time if most shares are falling. What if that fall was for a very protracted period in terms of your cash flow.

Some of the market psychology issues you need to consider are:
•	What if you see your capital falling due to adverse market conditions.
•	What if you have to sell to protect your capital and have lost 10% (or more).

If I could be so bold as to rephrase it, I think your aim at the end of a year is to have had cash flow to pay your bills, to have replaced capital lost through inflation and to have further added to your capital base, with a target in mind. 

It is possible do it with the amount you suggested, but you would likely require a fairly aggressive strategy along the lines I have outlined to achieve it.


----------



## AlterEgo

Reasons said:


> The market since March 2009 has not been in a stronger upward momentum probably since the 1930’s crash.




What market are you looking at?! Sure, if you managed to pick the bottom in March '09 there was a strong trend until Sept/Oct '09, but since then the market has been flat for the last year and a half. So just 7 months of rally, *if *you were fortunate enough to pick the bottom, and then sideways ever since.



Reasons said:


> •	What if the market goes sideways for an extended period; would that affect your ability to get 15%.
> •	What if the market repeats 2008; how will you make 15% at this time if most shares are falling. What if that fall was for a very protracted period in terms of your cash flow.




No meaning to answer for the OP, however both of those market conditions have occurred within the time he specified that he has achieved that return. Ie. He said he has achieved that return over the last 3 years, so that would include the 2008 market crash. And it also includes the sideways market of the last year and a half. Note that the market is still trading well below it's 2008 level, so if he has achieved that sort of return while the Ords has dropped 1000 points or more, I think he probably hasn't done too badly.


----------



## GumbyLearner

Find a tax-free abode outside of Australia and dwell there permanently but tell everyone how they should live there none-the-less and regardless of my own personal benefit and subsequent wealth/FIGJAM contact information. Many more incentives than Canberra or the people that line their pockets like "Whatever it Takes" Graeme Richardson .

Who needs to pay taxes when they flow to you anyway? :


----------



## Reasons

AlterEgo said:


> What market are you looking at?! Sure, if you managed to pick the bottom in March '09 there was a strong trend until Sept/Oct '09, but since then the market has been flat for the last year and a half. So just 7 months of rally, *if *you were fortunate enough to pick the bottom, and then sideways ever since.
> 
> No meaning to answer for the OP, however both of those market conditions have occurred within the time he specified that he has achieved that return. Ie. He said he has achieved that return over the last 3 years, so that would include the 2008 market crash. And it also includes the sideways market of the last year and a half. Note that the market is still trading well below it's 2008 level, so if he has achieved that sort of return while the Ords has dropped 1000 points or more, I think he probably hasn't done too badly.




Ah. Rule Number 1; assume nothing. 

I have no idea when he allocated capital into the market; was he 1% invested during 2008, was he 100% invested March 2009, did he get out at the top early 2010 and cleverly take the excellent upswing from May 2010, was he overweight to resources, can he invest that way consistently, or did he hold through thick and thin and that is how he got his dividend return, what does it mean if he does not get those same big swings? 

I could not tell from his comments and have no idea about the granularity of his investing skills and analysis. But your broad assumptions have assisted with adding more detail to my response.

He asked an interesting question and I responded to him, but what he is considering is a big step, and mine are just broad questions to help him think about that decision and his investing record.

As the market has done a number of different moves over that time, depending on what he was doing in the market at the time, he might have enough data to do his analysis and see how he performs under each of the conditions.


----------



## suhm

I don't think I would ever quit my day job,  it gives me more satisfaction than making money and it can talking about annual reports and how I've been looking at volume analysis recently to improve expectancy is not exactly exciting dinner conversation.
I would however probably work part time in the future when I start a family and such as I am making more money from investing than working at present, the tax system is sort of skewed against you making money from a job, the pay is decent and there are a lot of extra deductions we get to claim in the job but I'd probably make more driving a truck in the Pilbara and wouldn't have spent all that time going to uni. Part time work isn't really a possibility for me until maybe 6+ years down the track given the nature of the industry and have nowhere near the capital base to retire.

To quit I'd need the final home I was going to live in or cost equivalent and enough investable assets that placing them in cash would give me a greater income than I would have as a consultant. That would be about 6-7 years down the track if I can compound at the same rate as I have over the last couple of years but I don't think that would be remotely possible, the last couple of years have been pretty good.


----------



## So_Cynical

Bill M said:


> So_Cynical, please clear your PM box, it keeps coming up as full.
> 
> (Apologies for being off topic)




Sorry Bill...done!

(Apologies for being off topic)


----------



## rogblack

Some people (me) really dislike working for bad employers in unstimulating jobs. Even in the most exciting industries there are many boring hours that can be better enjoyed. Freedom is very important to me and the time to explore and learn whatever takes my interest. You can leave your job and start swing trading to give you an income. Yes, keep your living expenses low. Even live in a van and travel if you want. You'd be surprised how little you can live on and how well you can live without rent and living costs. Use libraries and wifi and trade the 4hrly chart.


----------



## Value Hunter

I would personally use a "3% rule". For example if you need $30,000 per annum after tax to live on your net assets should be $1 million dollars. This allows you to invest long-term in shares that are (hopefully) increasing their dividends by a good amount so that over time your inflation adjusted income will rise. For me $700,000 or $800,000 in net assets is enough to retire to a developing country and live off the dividends. To retire in Australia I would want double that amount of net assets.


----------



## DeepState

Value Hunter said:


> I would personally use a "3% rule". For example if you need $30,000 per annum after tax to live on your net assets should be $1 million dollars. This allows you to invest long-term in shares that are (hopefully) increasing their dividends by a good amount so that over time your inflation adjusted income will rise. For me $700,000 or $800,000 in net assets is enough to retire to a developing country and live off the dividends. To retire in Australia I would want double that amount of net assets.



I think that's quite a workable rule.  If you are older, you could work off a lower multiple of target income.  A key risk is that you end up living a lot longer than expected.  You shouldn't plan on average outcomes in that regard, but the 'risk' of living to 100 is not remote for most.

A second risk is that, if you can't adjust your expenditure downwards in weak markets, the investment maths works against you because you consume relatively more of your capital at that time, giving less to recover or lower dividend amounts to reinvest.  In that event, you need to have a higher multiple as well. 

You can get decent info on the expenditure patterns as you age.  You don't need to factor in an expenditure rate as a 55 year old indefinitely.  You won't feel like going out quite as much when you are 80.  Although medical bills do rise, it isn't by all that much.  We will spend less on transportation as we age.  We also live in smaller places.


----------



## skc

VSntchr said:


> Me.
> 21 Years Old.
> 4th Year University about to complete a double degree in Bus/Comm.
> Have been involved in the stock market for ~ 9 years. Although I have only found my niche in the last 3 years.
> I have estimated that if I had $250 000 capital I could use my investing strategy to derive a sufficient income. This is based on the assumption that I could achieve a return of 15%p.a. This would grow my portfolio at $37 500 per year and I would also have a divvy income of at least $9 000. Wouldnt take long for compounding to turn this into a nice looking portfolio!
> So far I have far exceeded this return over the last three years, I have lowered the expected return however, as I understand that 3 years is not long enough to determine the effectiveness of a strategy.
> 
> I understand that some people may find these figures ludicrous, and that is fine...we all have different goals, different standards of living, different expenses etc...but I would love to get an idea of what other people think about this subject!




@VSntchr now that you are 27... how have things changed?!


----------



## VSntchr

skc said:


> @VSntchr now that you are 27... how have things changed?!



Wow - what an interesting exercise to go back and read through the thread. 
Obviously a very naive post by myself and worth reflecting on.

The goal of living from investment cash flow is still there, however the plan is far more realistic now. I have carved out a business of trading, firstly by gaining an edge with pairs trading and subsequently by developing/experimenting with various other strategies to supplement in times where pairs doesn't perform. Capital is generated from trading to fund my (still) modest living expenses, with the surplus being allocated to my investment strategy.

Contrary to what many in here said about being bored, I actually find this 'job' very exciting and look forward to Mondays  
The loneliness issue is certainly real, as is the possibility to take on bad habits as SkyQuake mentioned. 

I have found that trading has helped to further instill a value that I have around constant self improvement. Trading requires you to constantly evaluate and improve your process and I think this has certainly driven me to do the same in other areas of my life.  

The workaround for loneliness is to force yourself to get involved in online communities and networks. What this lacks in real face-to-face human interaction on a daily basis, somewhat makes up for it in that you are interacting with some of the most motivated and passionate people within the industry...as opposed to potentially someone just showing up for the pay cheque. 

Now in my 4th year full time I can say with gratitude that I have been able to get to the stage where I am earning more than I would be if I stayed within my finance profession. The relatively low volatility of equity curve over multiple market conditions combined with a variety of strategies gives me confidence that this is a sustainable business and is not simply based on recent market conditions.
After a year overseas where I managed to keep everything going on 'travel mode', I am motivated and ready to take things to the next level.


----------



## rogblack

My suggestion is different. There are plenty of people who trade forex and travel the world. You don't need a large capital amount to start trading or make a decent return. The most important issue is what are your living costs?


----------



## satanoperca

Thanks Vsnstcher for your great post, I too appreciate the online community

Thanks Joe for admin this great forum and putting in an *ignore *button for dicks like Mr Forex above


----------



## Value Hunter

I should add that I think my 3% rule should have contingency plans. Here is how I would handle it if I was to retire:

Firstly in good years where you get a big increase in dividends put some of it away into the bank account to support you in the lean years when dividends are inevitably cut (i.e. use discipline to smooth out your income). If you are investing in growth companies that are generating double digit dividend increases this should be easy to do.

Secondly in lean years if necessary you can trim expenses a little (i.e. temporarily reduce luxuries such as meals at expensive restaurants and lengthy holidays).

Thirdly in lean years you could consider going back to work temporarily, (assuming you are not too old too work). Even 15 hours a week doing for example night-fill at the local supermarket, etc could help you get through a couple of lean years.


----------



## OmegaTrader

VSntchr said:


> Wow - what an interesting exercise to go back and read through the thread.
> Obviously a very naive post by myself and worth reflecting on.
> 
> The goal of living from investment cash flow is still there, however the plan is far more realistic now. I have carved out a business of trading, firstly by gaining an edge with pairs trading and subsequently by developing/experimenting with various other strategies to supplement in times where pairs doesn't perform. Capital is generated from trading to fund my (still) modest living expenses, with the surplus being allocated to my investment strategy.
> 
> Contrary to what many in here said about being bored, I actually find this 'job' very exciting and look forward to Mondays
> The loneliness issue is certainly real, as is the possibility to take on bad habits as SkyQuake mentioned.
> 
> I have found that trading has helped to further instill a value that I have around constant self improvement. Trading requires you to constantly evaluate and improve your process and I think this has certainly driven me to do the same in other areas of my life.
> 
> The workaround for loneliness is to force yourself to get involved in online communities and networks. What this lacks in real face-to-face human interaction on a daily basis, somewhat makes up for it in that you are interacting with some of the most motivated and passionate people within the industry...as opposed to potentially someone just showing up for the pay cheque.
> 
> Now in my 4th year full time I can say with gratitude that I have been able to get to the stage where I am earning more than I would be if I stayed within my finance profession. The relatively low volatility of equity curve over multiple market conditions combined with a variety of strategies gives me confidence that this is a sustainable business and is not simply based on recent market conditions.
> After a year overseas where I managed to keep everything going on 'travel mode', I am motivated and ready to take things to the next level.





VSntchr said:


> Wow - what an interesting exercise to go back and read through the thread.
> Obviously a very naive post by myself and worth reflecting on.
> 
> The goal of living from investment cash flow is still there, however the plan is far more realistic now. I have carved out a business of trading, firstly by gaining an edge with pairs trading and subsequently by developing/experimenting with various other strategies to supplement in times where pairs doesn't perform. Capital is generated from trading to fund my (still) modest living expenses, with the surplus being allocated to my investment strategy.
> 
> Contrary to what many in here said about being bored, I actually find this 'job' very exciting and look forward to Mondays
> The loneliness issue is certainly real, as is the possibility to take on bad habits as SkyQuake mentioned.
> 
> I have found that trading has helped to further instill a value that I have around constant self improvement. Trading requires you to constantly evaluate and improve your process and I think this has certainly driven me to do the same in other areas of my life.
> 
> The workaround for loneliness is to force yourself to get involved in online communities and networks. What this lacks in real face-to-face human interaction on a daily basis, somewhat makes up for it in that you are interacting with some of the most motivated and passionate people within the industry...as opposed to potentially someone just showing up for the pay cheque.
> 
> Now in my 4th year full time I can say with gratitude that I have been able to get to the stage where I am earning more than I would be if I stayed within my finance profession. The relatively low volatility of equity curve over multiple market conditions combined with a variety of strategies gives me confidence that this is a sustainable business and is not simply based on recent market conditions.
> After a year overseas where I managed to keep everything going on 'travel mode', I am motivated and ready to take things to the next level.




Really interesting thread.


Sorry I have only come in towards the end.

What was the path that you took to transition into trading?

Working a job as well as trading or trading external capital how did work out exactly?

thanks


----------



## skc

VSntchr said:


> Now in my 4th year full time I can say with gratitude that I have been able to get to the stage where I am earning more than I would be if I stayed within my finance profession. The relatively low volatility of equity curve over multiple market conditions combined with a variety of strategies gives me confidence that this is a sustainable business and is not simply based on recent market conditions.
> After a year overseas where I managed to keep everything going on 'travel mode', I am motivated and ready to take things to the next level.




Thanks for the reply mate. Great to see your success and more importantly, finding and enjoying what you do after much personal and professional growth. No doubt there were lots of hard work and commitment involved.

It's a good thread to direct other newcomers if they are going through similar phases.



VSntchr said:


> Obviously a very naive post by myself and worth reflecting on.




Naivety in good dosage might not be a bad thing. I often read about how successful businesses owners reflect on how difficult it was at the beginning... that they were naive thinking it'd be easy and probably wouldn't have started the business if they knew what they know now. 

Dreams are made up of vision and ignorance of other inconvenient truths!


----------



## Huskar

Great to read VS and inspiring! Always interesting to read someone's self-reflection and development, because it makes you think more about how you can improve yourself


----------



## VSntchr

OmegaTrader said:


> What was the path that you took to transition into trading?
> 
> Working a job as well as trading or trading external capital how did work out exactly?



I started out with an interest in investing back in early high-school. But it wasn't until I was in the workforce and realized my personality didn't suit the standard workplace environment that I started pursuing the trading aspect.
In order to get started on the right foot, I did hours and hours of reading on trading strategies and styles. I spent time playing with excel and building trade calculators/trigger sheets. I developed ways to keep track of trades and measure performance. I spent time investigating brokerage firms and deciding on suitable products to trade. In short - I found what suited me/what worked for me, and I figured out how to make it work better.. and that's really what I'm still doing now. 

I didn't leave the workforce until I was convinced I had an edge and could at least have 'a chance' at making a full-time living out of trading. At the time I was not convinced making it was a certainty. But at a young age with no commitments and relatively low expenses, it wasn't the end of the world if it failed. 

I knew deep down I was never going back to the job I left, but at the time of quitting I hadn't ruled out the possibility of a different job if the trading gig didn't work out. 
With that aside, once I had left the job and begun trading full-time there really was no looking back. With all the extra time on my hands to refine my craft, I soon became more in touch with a vision of how exactly I could use trading as my primary source of income. 



skc said:


> Dreams are made up of vision and ignorance of other inconvenient truths!







Huskar said:


> Great to read VS and inspiring! Always interesting to read someone's self-reflection and development, because it makes you think more about how you can improve yourself



I'm glad you've found some value in here Huskar. I know I've had plenty of value from others stories on ASF over the years.


----------



## OmegaTrader

VSntchr said:


> I started out with an interest in investing back in early high-school. But it wasn't until I was in the workforce and realized my personality didn't suit the standard workplace environment that I started pursuing the trading aspect.
> In order to get started on the right foot, I did hours and hours of reading on trading strategies and styles. I spent time playing with excel and building trade calculators/trigger sheets. I developed ways to keep track of trades and measure performance. I spent time investigating brokerage firms and deciding on suitable products to trade. In short - I found what suited me/what worked for me, and I figured out how to make it work better.. and that's really what I'm still doing now.
> 
> I didn't leave the workforce until I was convinced I had an edge and could at least have 'a chance' at making a full-time living out of trading. At the time I was not convinced making it was a certainty. But at a young age with no commitments and relatively low expenses, it wasn't the end of the world if it failed.
> 
> I knew deep down I was never going back to the job I left, but at the time of quitting I hadn't ruled out the possibility of a different job if the trading gig didn't work out.
> With that aside, once I had left the job and begun trading full-time there really was no looking back. With all the extra time on my hands to refine my craft, I soon became more in touch with a vision of how exactly I could use trading as my primary source of income.
> 
> 
> 
> 
> 
> I'm glad you've found some value in here Huskar. I know I've had plenty of value from others stories on ASF over the years.





Its threads and posts like this that drew me to ASF.

I am not really into self development help, inspiration etc.
But sometimes you can't help but feel something.
I don't know what else to say.


Thanks


----------



## rb250660

I would need a bigger bank roll.


----------



## Wysiwyg

VSntchr said:


> The workaround for loneliness is to force yourself to get involved in online communities and networks. What this lacks in real face-to-face human interaction on a daily basis, somewhat makes up for it in that you are interacting with *some of* the most motivated and passionate people within the industry...as opposed to potentially someone just showing up for the pay cheque.



Some of is quite true. Most are hustlers and sharks pumping stocks and telling everyone how good they are (f.i.g.j.a.m) yet contribute no actual trading activity, evidence or proven strategies to back up their online persona.
Regarding the thread title, a million dollars to buy/hold (invest) income stocks and a million dollars for security and stock purchases when market crashes to insane value levels.


----------



## tech/a

Nothing
I couldn't think of anything worse.


----------



## skyQuake

tech/a said:


> Nothing
> I couldn't think of anything worse.



Interesting. Why do you say that?


----------



## tech/a

Personally I enjoy having a value to society through what I do for a living

Trading is as boring as duck down
Finding an edge and learning the art of trading is a great challenge.

Lack of human contact while trading full time doesn't appeal either.


----------



## willy1111

There are introverts and extroverts.

Trading from home much more suited to introverts.


----------



## captain black

willy1111 said:


> There are introverts and extroverts.
> 
> Trading from home much more suited to introverts.




+1

Best job in the world


----------



## CanOz

willy1111 said:


> There are introverts and extroverts.
> 
> Trading from home much more suited to introverts.




Unless your home is full of wife n kids!


----------



## tech/a

captain black said:


> +1
> 
> Best job in the world




From a business point of view it's pretty hard to beat.

Unlimited Demand
Unlimited Supply 
No limit on capitalisation to the plus side
Is transferable
Very low overheads
Can profit in good bad and ho hum times
Flexible hours
Always learning


----------



## blue0810

willy1111 said:


> Trading from home much more suited to introverts.




The markets are closed on Friday late night and weekends.


----------



## captain black

tech/a said:


> From a business point of view it's pretty hard to beat.
> 
> Unlimited Demand
> Unlimited Supply
> No limit on capitalisation to the plus side
> Is transferable
> Very low overheads
> Can profit in good bad and ho hum times
> Flexible hours
> Always learning




I live in a small country town and it still amazes me being able to sit in front of a PC and trade just about any market in any country in the world. The opportunities are endless.


----------



## Wysiwyg

captain black said:


> I live in a small country town and it still amazes me being able to sit in front of a PC and *trade just about any market in any country* in the world.* The opportunities are endless*.



And so are the costs. I would like to do that but monthly Level 2 Exchange streaming real time data fees and news feeds for all markets is substantial. Also costs more to raise the streaming cap. My ultimate plan was to run scans on multiple  open cash markets and future markets looking for set ups. That would provide plenty of opportunuities.


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## captain black

CanOz said:


> Unless your home is full of wife n kids!




...or a wife and 2 spoilt labradors who think they're kids


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## Triple B

CanOz said:


> Unless your home is full of wife n kids!



That's why you use your skillz as a plasterer to build a SOUNDPROOF garage and office!!!!


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## >Apocalypto<

1st division win in set for life


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## Gringotts Bank

Where's skc?


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## peter2

Ask him. He logs on occasionally since he returned from holidays


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## Dcollins

34...capital base of ~$1.5m. 

Made my nw through combination of founding/building micro cap private/public companies and investments. 

Some thoughts -

1. Never will you have more ability to take risk than your current lot in life. Young, single, low cash burn, etc. Take educated risks. Buy something in your portfolio that can make you 2,3,4...100x.

2. Keep the job and monthly burn low. Make enough cash monthly to cover your expenses. This reduces risk of finding yourself in negative situation. Better if jib teaches you something about investing. Promise you still have lots to learn. I do.

3. Leave some on the table. When you make a nice pass...leave a little. Meaning you got it right, great...but maybe you got it REALLY right. So....if you have $20k into a stock and it goes to your target of $30k, let $3k or $4k ride. I find its a little form of insurance policy against my own error (builds portfolio diversifcation as well)

4. Keep a stock pile of cash. Good markets never last. Meaning...sell early and sell often!!! You'll never buy at the bottom and sell at the top. Average in and average out does just fine.

5. Build your network. Some of your best investments will be generated from those that have more money and been doing it a lot long. Still do your homework on each idea you recieved.

That's all for now.


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## helpme

Interesting thread. Before making this major decision, the person should consider the impact to his family and how society will view him. We are all affected in some ways by how people around us view us, so that cannot be ignored.

If a person is still young in his late 30s or early 40s and quits his job to do full-time investing, society may frown on this person. Does this person have enough money to look after his dependents? It is irresponsible to have just enough to take care of himself only without sparing a thought for his family. Is he being selfish to quit his job and do whatever he wants, shirking his family responsibilities? What if he has a wife who desires to have kids but this person cannot afford to have kids because he has selfishly quit his job? Even if he is single, he still has parents to look after. Does he have enough money to take care of the parents if they fall seriously ill? Is he a weak person who cannot handle stress and hardship at work and using full-time investing as an excuse to escape from job stress? If this is the case, he will be a failure in whatever endeavour he undertakes if he cannot take stress and hardship. Why is he not contributing to the economy and society by holding a normal job or even setting up a business? What social use can arise from the electronic buying and selling of securities?

I hope I have not offended those who are contemplating becoming a full-time professional investor. I think these are unpleasant questions a person has to ask himself and be honest with himself on the answers before he makes a major career move that is going to impact the people around him.


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## Dcollins

Taxes on trading profits generate social benefit, and capital invested in companies creates growth and jobs. A few years ago a company I invested in and built in its early days now employees 60 people. I trade it's stock as a core position. 

Ability to take risk is a function of age, committments, capital base and experience. Those should all measured.


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## Smurf1976

helpme said:


> Does he have enough money to take care of the parents if they fall seriously ill?




In the Australian context the parents are mostly likely far wealthier, due to the housing boom, than their offspring.

Plus if they're working a normal job then no chance they'll be doing anything much to take care of parents anyway unless it's just a visit on the weekends or paying the bills. Work 9 to 5, plus commuting, plus time looking after their own house and children etc = that's the whole day gone for most at least from Monday to Friday.

Someone working for themselves, in any occupation, would be far better placed to look after someone else than someone working for an employer due to being able to set their own working hours.



> Why is he not contributing to the economy and society by holding a normal job or even setting up a business? What social use can arise from the electronic buying and selling of securities?




Agreed there's no real social value in shuffling money around. Only exception would be if someone is trading a genuinely illiquid stock an thus providing a market for anyone else who wants to buy or sell but that won't be most small time traders.

At present though we have an unemployment rate persistently over 5% and what seems to be an even bigger problem with underemployment. Taking someone out of the workforce won't harm business in the slightest since there's plenty of other people who would gladly take the job. Only real exception would be those with specialised skills.



> I think these are unpleasant questions a person has to ask himself and be honest with himself on the answers before he makes a major career move that is going to impact the people around him.




Agreed although that applies to any career change.

Eg a plumber becomes a manager of a plumbing business. No matter how good they are at actual plumbing work they could well fail as a manager. The safe option is thus to remain "on the tools" throughout their career but in practice plenty of tradesmen move onto other things at some point.

Same with a lot of jobs. Even things like Police, surely among the most stable of all jobs (no chance the employer's going out of business etc), you don't see too many in their 50's still on patrol. Some got a promotion within the Police certainly but plenty of others decide to give something completely different a go after a while.

In the past it was different but these days I'd say it's the majority of the workforce who will at some point make a major career change. Either "on the tools" work in whatever field to management of a related business or to something else entirely.

So I agree with your point but it's not limited to people becoming traders. A lot of people make a major career change at some point during their working lives and that applies in both directions (eg tradesman becomes a manager or a successful business owner decides they've had enough stress and that being a bus driver sounds like an easier way to fill their day - I know people who've done exactly that in both cases).


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## luutzu

helpme said:


> Interesting thread. Before making this major decision, the person should consider the impact to his family and how society will view him. We are all affected in some ways by how people around us view us, so that cannot be ignored.
> 
> If a person is still young in his late 30s or early 40s and quits his job to do full-time investing, society may frown on this person. Does this person have enough money to look after his dependents? It is irresponsible to have just enough to take care of himself only without sparing a thought for his family. Is he being selfish to quit his job and do whatever he wants, shirking his family responsibilities? What if he has a wife who desires to have kids but this person cannot afford to have kids because he has selfishly quit his job? Even if he is single, he still has parents to look after. Does he have enough money to take care of the parents if they fall seriously ill? Is he a weak person who cannot handle stress and hardship at work and using full-time investing as an excuse to escape from job stress? If this is the case, he will be a failure in whatever endeavour he undertakes if he cannot take stress and hardship. Why is he not contributing to the economy and society by holding a normal job or even setting up a business? What social use can arise from the electronic buying and selling of securities?
> 
> I hope I have not offended those who are contemplating becoming a full-time professional investor. I think these are unpleasant questions a person has to ask himself and be honest with himself on the answers before he makes a major career move that is going to impact the people around him.




True. Society don't take kindly to people with a different idea of making a living.
But then those who have a different idea of making a living tend not to give a stuff about what others think. So they're even.


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## Wysiwyg

luutzu said:


> True. Society don't take kindly to people with a different idea of making a living.
> But then those who have a different idea of making a living tend not to give a stuff about what others think. So they're even.



Right no one cares what others think in this self perpetuating, devour all comers industry. An industry rife with liars, cheats and thieves.


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## luutzu

Wysiwyg said:


> Right no one cares what others think in this self perpetuating, devour all comers industry. An industry rife with liars, cheats and thieves.




Liars, cheats and thieves never really care for other people's opinions (or assets)... but they're in all industry though. But true, more of them are found in high finance where if you're in the right office building you can make shiet load of money doing practically nothing useful for anybody.

But I was referring to Helpme's point about investing full time versus getting a "proper job". How it is risky but also carry with it that social stigma of being irresponsible, not doing useful stuff, and gambling of sort.

I know people whose job and financial position mean they really shouldn't be buying a house at this point in the cycle. Yet they not only buy one, they bought 3 and thinking of buying a fourth. They're hardworking people who's thinking of saving something for themselves and their kids and all... so that's great and I don't mean to say that it's not. Just man, not sure those choices have been thought through properly. 

But as far as society is concerned, doing what's normal - go to work for some, buy a few houses - is normal and responsible. 

Whether striking out on your own, doing something that still provide for the family but a bit unusual.. what's responsible and what's not I guess the person have to answer that for themselves. That and whether their loved ones would put up with it or not.


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## Value Collector

luutzu said:


> Liars, cheats and thieves never really care for other people's opinions (or assets)... but they're in all industry though. But true, more of them are found in high finance where if you're in the right office building you can make shiet load of money doing practically nothing useful for anybody.
> 
> But I was referring to Helpme's point about investing full time versus getting a "proper job". How it is risky but also carry with it that social stigma of being irresponsible, not doing useful stuff, and gambling of sort.
> 
> I know people whose job and financial position mean they really shouldn't be buying a house at this point in the cycle. Yet they not only buy one, they bought 3 and thinking of buying a fourth. They're hardworking people who's thinking of saving something for themselves and their kids and all... so that's great and I don't mean to say that it's not. Just man, not sure those choices have been thought through properly.
> 
> But as far as society is concerned, doing what's normal - go to work for some, buy a few houses - is normal and responsible.
> 
> Whether striking out on your own, doing something that still provide for the family but a bit unusual.. what's responsible and what's not I guess the person have to answer that for themselves. That and whether their loved ones would put up with it or not.




I think being an investor is a great occupation, and is equally productive as labour.

If you face stigma, that is more of a reflection of that persons lack of understanding of the economy.

Take the invested capital out of the economy and we would have naked miners digging in the dirt with their bare hands, and that would be very productive.

If I buy that naked miner an air conditioned  bulldozer and a uniform, which allows him to be productive and earn $100k why should there be stigma with be sharing in this extra productivity my bulldozer has created?


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## Smurf1976

Value Collector said:


> I think being an investor is a great occupation, and is equally productive as labour.




Buying shares in xyz and holding them no matter what happens to the share price would fit in that category I agree. 

Buying the same shares with the intention of selling them a week later is simply attempting to transfer wealth from one person to another however.

I'm not saying it's wrong, but I can't see how speculation creates any real wealth for society. Investment yes but not speculation.


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## Wysiwyg

Smurf1976 said:


> I'm not saying it's wrong, but I can't see how speculation creates any real wealth for society. Investment yes but not speculation.



It creates employment for brokerage businesses, charting software companies, forums, execution platform providers, algorithm developers, data providers, FSP's etc, etc. etc. Taxes arer paid. Churn is essential for the financial markets.


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## luutzu

Value Collector said:


> I think being an investor is a great occupation, and is equally productive as labour.
> 
> If you face stigma, that is more of a reflection of that persons lack of understanding of the economy.
> 
> Take the invested capital out of the economy and we would have naked miners digging in the dirt with their bare hands, and that would be very productive.
> 
> If I buy that naked miner an air conditioned  bulldozer and a uniform, which allows him to be productive and earn $100k why should there be stigma with be sharing in this extra productivity my bulldozer has created?




Investor as a business owner, yes. Investor as a mere financial "investor", not really.

Capital is important to an enterprise. But there have to be a balance. Labour alone can't buy tools and investments etc.; capital buying tools and gears can't do much without labour to operate it either.

But the problem with capitalists and most investors, both big and small... is they don't much care for labour. They measure success based on the financials. 

So if jobs are cut and more work are pushed onto the remaining labour force... that's called efficiency.

If shares are bought back, thereby increase the ROE and per share profit... executives get bonuses and tomorrows is somebody else's problem.

Looking at companies, we'd notice that those whose executives are spending money to actually invest in the business - new factory, new warehouse, new training programme for their workforce... The financial market doesn't react very kindly to such company's share price.

So unless the exec and board are real investor and actual business operator [as opposed to financial managers]... they'll just do share buybacks and other financial gimmicks.

Yes, in the long term investors and the market will reward those managers who invest in the actual business. Just that the long term mean some other a-holes who now sit on your CEO seat is taking the credit (and the bonuses). 

But then again, that's what make those investors who study the company in some detail, approach it as they would a business... those, as Graham said, will do well over time.


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## Value Collector

luutzu said:


> Investor as a business owner, yes. Investor as a mere financial "investor", not really.
> 
> Capital is important to an enterprise. But there have to be a balance. Labour alone can't buy tools and investments etc.; capital buying tools and gears can't do much without labour to operate it either.
> 
> But the problem with capitalists and most investors, both big and small... is they don't much care for labour. They measure success based on the financials.
> 
> So if jobs are cut and more work are pushed onto the remaining labour force... that's called efficiency.
> 
> If shares are bought back, thereby increase the ROE and per share profit... executives get bonuses and tomorrows is somebody else's problem.
> 
> Looking at companies, we'd notice that those whose executives are spending money to actually invest in the business - new factory, new warehouse, new training programme for their workforce... The financial market doesn't react very kindly to such company's share price.
> 
> So unless the exec and board are real investor and actual business operator [as opposed to financial managers]... they'll just do share buybacks and other financial gimmicks.
> 
> Yes, in the long term investors and the market will reward those managers who invest in the actual business. Just that the long term mean some other a-holes who now sit on your CEO seat is taking the credit (and the bonuses).
> 
> But then again, that's what make those investors who study the company in some detail, approach it as they would a business... those, as Graham said, will do well over time.




There is no difference between 1 owner putting up $1million to finance a company, and 1000 share holders putting in $1000 each, either way $1million of capital is being invested.

If you took away all the equipment and infrastructure that’s been paid for by investors in fortescue, would they be able to produce 170million tonnes of iron ore a year? I don’t think so.

Both capital and labour are needed of course, but saying the people that provide the capital should be stigmatised doesn’t make any sense.

At the end of the day, if my capital investments provide me enough capital to eat, why should I be compelled to work a 9-5, I would just be taking a job away from someone else.

But who cares what others think, as I said it just shows their limited understanding of how things work.


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## tech/a

There is a huge difference 
1 owner something will get done
1000 owners nothing will get done


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## Bill M

Value Collector said:


> At the end of the day, if my capital investments provide me enough capital to eat, why should I be compelled to work a 9-5, I would just be taking a job away from someone else.



That's the best statement I've read all day, I'm in the same boat, cheers.


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## Value Collector

tech/a said:


> There is a huge difference
> 1 owner something will get done
> 1000 owners nothing will get done



I am talking about from a financing of the operation point of view.

Not about an owner who also contributes labour in running the place.


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## luutzu

Value Collector said:


> There is no difference between 1 owner putting up $1million to finance a company, and 1000 share holders putting in $1000 each, either way $1million of capital is being invested.
> 
> If you took away all the equipment and infrastructure that’s been paid for by investors in fortescue, would they be able to produce 170million tonnes of iron ore a year? I don’t think so.
> 
> Both capital and labour are needed of course, but saying the people that provide the capital should be stigmatised doesn’t make any sense.
> 
> At the end of the day, if my capital investments provide me enough capital to eat, why should I be compelled to work a 9-5, I would just be taking a job away from someone else.
> 
> But who cares what others think, as I said it just shows their limited understanding of how things work.




Didn't I say the same things? With more words and less proper grammar? You red baiting me dude?

If your labour could earn you enough by working very little or not at all, then that is fine of course. No one would hold that against you or stigmatise you.

In fact, you'll probably get more money thrown at you and/or more people wanting to show you how to best use your money for other more worthwhile causes.


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## skyQuake

IPOs, pre-IPO rounds are essential to bridge the gap between 1 man startups and world conquering behemoths. 
Well developed capital markets are an efficient resource allocating machine
There's a reason nearly all the largest companies in the world have spawned from US exchanges rather than say North Korean exchanges (if any)


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## Value Collector

luutzu said:


> Didn't I say the same things? With more words and less proper grammar? You red baiting me dude?
> 
> .





When you said this.


> How it is risky but also carry with it that social stigma of being irresponsible, not doing useful stuff, and gambling of sort.




 I thought you were saying that the stigma is justified.


and then when you said this.



> Investor as a business owner, yes. Investor as a mere financial "investor", not really.




I thought you were saying capital owners that "owner operators" were productive, but "financial investors" such as share holders, bond holders etc were not really.

Maybe we are working of different definitions, What exactly did you mean by "Financial investors"?


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## Value Hunter

So_Cynical said:


> Considering my current yoy return is around 21% and my projected financial year return is 24% and that i would consider 55K to be the absolute minimum to live on (in Aust) and build my capital base then, i would need about 270K in the market to achieve that result.
> 
> However i plan on retiring from my real job and being a full time investor in about 7 - 8 years time..in order to have enough capital to do that and buy a reasonably nice place over seas etc i need to average a PA return of around 28%




So Cynical how are you tracking compared to your plan?


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## So_Cynical

So_Cynical said:


> (March 28 ~ 2011)Considering my current yoy return is around 21% and my projected financial year return is 24% and that i would consider 55K to be the absolute minimum to live on (in Aust) and build my capital base then, i would need about 270K in the market to achieve that result.
> 
> However i plan on retiring from my real job and being a full time investor in about 7 - 8 years time..in order to have enough capital to do that and buy a reasonably nice place over seas etc i need to average a PA return of around 28%




Wow flashback - 8 years later and things have not played out as i was hoping for 100% but close, YOY return is averaging about 14% now, capital base has been achieved and
then some, retirement has been pushed out by 2 years and i bought a nice place overseas 5 years ago...its good to look back and see pretty much all the boxes have been ticked.

21/24% ~ 2010/11 were very good years and turns out i couldn't maintain that, and thats ok cos i didn't need to.


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## barney

So_Cynical said:


> i was hoping for 100% but close, YOY return is averaging about 14% now, capital base has been achieved and then some




Well done … impressive

Interestingly when I first read the Thread title/question …

*What would you need to quit your job and become a professional investor?

*
My first thought was … A richer wife


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## barney

barney said:


> My first thought was … A richer wife




ps.  Just to follow up on that poor attempt to portray my ("obvious") apparent male domination on the home front (not), and,  just in case my wife ever sees my posts on ASF …. 

I am currently google searching how to cook a decent home cooked Chinese meal … so I can both impress my wonderful wife … and save her from having to cook after working so hard all day  ….

Model husband obviously … lol …

pps To keep the thread on point … what would you need to do to quit your job and become a Pro trader

Simple really ……

a) Learn how to extract money from the market in a proven regular way, (preferably stress free) 

and …

b) Quit your job …  and …. continue on with 

a)  (sorry, being flippant, but that is actually the truth minus the details)


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## Garpal Gumnut

I've really enjoyed reading this thread, as my "job" has fortunately paid me more than I would ever earn as an investor unless I went John Wick.

I only invest for my Super Fund, not for income. 

I'm now retired and it is easy from my reading, all the way back to the paperback Daryl Guppy days as to what one needs.

One mainly needs a cushion for unforeseen adverse events, a calm attitude towards good fortune with fortitude to bad luck. 

In our weekly Texas Holdem group this is between $14-$15,000.
Drawdown is important. It applies to shares, options, futures etc. Some silly guy with a nappy on his head turns the world upside down and your carefully planned buy goes to crap.

Rule number 1.................DRAWDOWN

The next one needs is self-belief, certitude, balls, ovaries, whatever you call it. Not out loud bravado, but an inner strength to enjoy the profits quietly and endure the losses with reflection.

Rule number 2.................EXAMINE ALL YOUR WINNING AND LOSING TRADES. DON'T HIDE. DON'T BOAST.

Rule number 3.................NEVER FALL IN LOVE WITH A SHARE. A share promises much. Like Jeffrey Epstein, Prince Andrew and Maxwell's daughter were promised by abusing in their deluded sick way the under-aged vulnerable. It all turns to dust in a smelly cell when it goes A up. Don't fall in love with a stock. If one feels even the slightest attachment, SELL.

Rule number 4.................THE LAST RULE. BE HAPPY. Shares ain't it all, nor options, futures, etc. etc.

gg


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