Has anyone here made themselves "rich" or wealthy by trading?

[Klogg]

10 years investing/saving.

10 Years full time concentrating on lifting the return, as that provided more long term bang/time then continuing with a wage.

It's only in recent years that the investment returns have been asked to cover living expenses. The second wage in the family was important to let me initially concentrate full time on investing.

I'm 41

That is extremely impressive - hats off to you, sir.

 

[Ves]

10 years investing/saving.

10 Years full time concentrating on lifting the return, as that provided more long term bang/time then continuing with a wage.

It's only in recent years that the investment returns have been asked to cover living expenses. The second wage in the family was important to let me initially concentrate full time on investing.

I'm 41

I get the impression from talking to people such as yourself (and others in other types of investing such as property) that most of people who become successful in their chosen field of investing started through their own savings (and continued to pump these into their ventures even after they invested their first lump sum). They don't spend the profits either. This is where long-term focus, discipline and temperament become infinitely important.

I think the lightbulb moment for my chosen strategy was a person (who I cannot recall) saying that there is a big diffference between doubling your capital and doubling your income. Different people will prefer the former (possibly the majority), but I think it is easier to leverage your lifestyle through replacing your salary or wage with a sustainable income source through investment than it is to "strike it rich" through massive gains.

 

[Trembling Hand]

It's only in recent years that the investment returns have been asked to cover living expenses. The second wage in the family was important to let me initially concentrate full time on investing.

Completely and utterly underestimated the HUGE drag on returns having to pay tax and living expenses. The only people who don't understand that drag seems to be the ones who never get in the position.

I suspect thats why you see so few full-time long-term traders. Its all very well taking 200K - 500K out of the market one year but by the time you take out 30% tax (infact more because you have to extract that from a company and pay personal tax). Increase your livestlye a bit ( go ahead take 500K and see what you "need") then go bang up against a changed market and take a drawdown which will probably happen every 3-4 years. All of a sudden 500K in a good year is not nearly enough. And I say that with a straight face.

 

[Gringotts Bank]

I guess the point of my thread is to align my goal with reality, and to see if many people on here have managed to become wealthy by trading.

Steve

Your question is a very important one to ask. Probably the most important question a new trader could ask, imo.

Of the very wealthy people I've met (multi's), none are the type who would tell even their close friends how well they are doing. They are quite low key people. They are also not likely to be the sort of personality that would post on a public forum - it wouldn't even occur to them to do so. So you might be asking in the wrong place, or you might be in the right place but asking a question that a very successful person is unlikely to answer. My sample size is probably about 10, so it's not huge - keep that in mind.

A possible short term solution is to buy a system and trade it yourself. In other words, buy someone else's expertise. Keep in mind that you need verified broker reports and statistics over at least a year from the system builder himself. Be very careful about whom to trust. There are half a dozen websites that track performance of various systems for verification purposes. here is one such site: http://www.timertrac.com/Public/Default.asp

 

[skc]

Completely and utterly underestimated the HUGE drag on returns having to pay tax and living expenses. The only people who don't understand that drag seems to be the ones who never get in the position.

To be successful against the odds you need a few planets aligned. Having a dependable second income in the family and a good tax accountant are all part of the equation.

 

[odds-on]

Not yet! Strongly recommend the following book. Profiles of a dozen successful private investors.

http://www.amazon.com/Free-Capital-private-investors-millions/dp/1906659745

The author quite rightly points out these “average joe” investors are actually extraordinary, think about it.

Depending on how much control you believe you have over the future and your willingness to accept that it could all go wrong thus requiring you to restart again, you are probably on balance of probablities best putting all your spare money into a handful of "speccy" stocks. No leverage. Spend the rest of your time earning overtime/increase your earning capability.

 

[Steve C]

Not yet! Strongly recommend the following book. Profiles of a dozen successful private investors.

http://www.amazon.com/Free-Capital-private-investors-millions/dp/1906659745

The author quite rightly points out these “average joe” investors are actually extraordinary, think about it.

Depending on how much control you believe you have over the future and your willingness to accept that it could all go wrong thus requiring you to restart again, you are probably on balance of probablities best putting all your spare money into a handful of "speccy" stocks. No leverage. Spend the rest of your time earning overtime/increase your earning capability.

Sounds like a good read - I will order it, funny you mention overtime I am thinking about getting a job somewhere on a Saturday purely to add additional funds into my trading account.

 

[Julia]

I consider myself financial secure and independent as a result of investing.

I'd suggest the initial question should be adjusted to include any form of investing, rather than just trading.
Reason? Markets are cyclical. The only way I made real money from the stock market was because I started with a decent amount that had been derived from real estate over some years of high inflation and high capital gains.

If you're starting out with a capital of, say, $20K, you're going to have to be way more talented than I am to turn that into the sort of wealth you have suggested you want just from 'trading'.

I saved hard from salaries and I retained all investment earnings to build the capital base initially.

So from the start, craft, you were disciplined and determined. Important imo.

A big help was the ability to live of a second wage in our family until the income stream from investing become big enough to sustain those expenses.

Sure. I can tell you it's a bit harder to do it when you have to generate everyday living expenses from your profits.

No sports car. Compounding is Key and the future cost of a sports car is unjustifiable to me. (Obviously I’m not rich enough yet)

Having had various sports cars, could I suggest the thrill is decidedly overrated.

So there you go – My story so far is financial freedom at least is possible at a reasonable age. Preparing this response to your question makes me feel like I have an ego problem but how else do I convey the message?

Not at all. You have generously chosen to actually answer the question in some detail, something I'm a bit less willing to do, as I suspect will be some others.

Given the difficulty in answering the question I doubt you will get a lot of affirmative responses to your question if there are successful investors here. If my level of disillusionment with forums is representative then they are probably transient contributors at best.

I understand your disenchantment. It was not always so. There used to be some first class exchange of ideas without the petty squabbling that occurs so much now.

I think the amount of hours and level of dedication I have put into investing should have made me successful if directed towards most other careers, so investing is not a windfall way to make big money with no effort.

Plus your self discipline and having a long term target.

I get the impression from talking to people such as yourself (and others in other types of investing such as property) that most of people who become successful in their chosen field of investing started through their own savings (and continued to pump these into their ventures even after they invested their first lump sum). They don't spend the profits either. This is where long-term focus, discipline and temperament become infinitely important.

Exactly. I know I spend probably less than many people who are actually not financially self-sufficient.
I feel no compulsion to have the latest model of everything.

Completely and utterly underestimated the HUGE drag on returns having to pay tax and living expenses. The only people who don't understand that drag seems to be the ones who never get in the position.

+1.

 

[burglar]

Tech/a has introduced me to a book "Master the Markets" by Tom Williams
https://www.aussiestockforums.com/forums/showthread.php?t=13804&p=375372&viewfull=1#post375372

I have been reading for three nights and am now officially "sleep deprived".
(Nothing I say will make sense.)

It has opened my eyes to the world of trading.
It explains so much which has bewildered me in the past.


I won't join in trading ... methinks!
But I am thankful for the lightbulb moment.

... Add in the rinds of lemon for some zest.

If you don't have lemons you can use zest instead.

Sorry, couldn't help myself!

 

[skc]

If you don't have lemons you can use zest instead.

Sorry, couldn't help myself!

Zest in this context refers to "A quality of excitement and piquancy."

 

[Steve C]

Tech/a has introduced me to a book "Master the Markets" by Tom Williams
https://www.aussiestockforums.com/forums/showthread.php?t=13804&p=375372&viewfull=1#post375372

I have been reading for three nights and am now officially "sleep deprived".
(Nothing I say will make sense.)

It has opened my eyes to the world of trading.
It explains so much which has bewildered me in the past.

Thanks for the PDF burglar - I have just downloaded it, looks like it covers some great material. Is this something that a beginner could find valuable or more for the technical analysis experts?

 

[sammy84]

I have been trading in some capacity since 2008. Haven't made a huge amount in that time but haven't lost either. Time in the market is important to me. Only 4 years in what is a very long journey. I'll come back to this thread in 6 years time

 

[young-gun]

started through their own savings (and continued to pump these into their ventures even after they invested their first lump sum). They don't spend the profits either. This is where long-term focus, discipline and temperament become infinitely important.

This is possibly the most important step of all imo. Continuously reinvesting every cent you get be it savings, dividends, loose change etc, and make it work for you. Always continue to build on the asset base.

 

[young-gun]

It would be interesting to know what proportion of the population actually buy these. I've never bought one in my life. The odds are dreadful.

The odds or far far worse if you don't have a ticket at all

 

[jersey10]

The odds or far far worse if you don't have a ticket at all

Actually, the odds are only very slightly worse if you don't have a ticket at all.

 

[burglar]

Actually, the odds are only very slightly worse if you don't have a ticket at all.

And you retain the price of admission!

 

[young-gun]

Actually, the odds are only very slightly worse if you don't have a ticket at all.

must you get technical on me?

 

[Ves]

I think the amount of hours and level of dedication I have put into investing should have made me successful if directed towards most other careers, so investing is not a windfall way to make big money with no effort. I just chose investing because its what I liked and what seemed to come most natural to me. Looking forward, Investing is very scalable and compounding is powerful but the risks are real. My desire to continue investing is undiminished so my story is unfinished and the ending is uncertain.

Outside of personal enjoyment, did you find that you hit a point where there were diminishing returns from educating yourself? Or is it truly a lifelong learning process as some say? I seem to be progressing quite well in my own learning, but I feel as if I must have to take a step backwards sooner or later...

 

[Sir Osisofliver]

Hi All,

With all the scams and spruikers around promising the lifestyles we all dream of, I am legitimately wondering can anyone on here say they have made themselves rich or wealthy by trading (or know someone who has). My definition of rich would be enough capital to have no financial stresses, travel the world, buy that Porsche or Ferrari and live in a million dollar + home and I don't mean people that trade a bit and also earn $250 000 a year from their work income.

Hi Steve

Define "Rich" and "Wealthy". ATO defines wealthy as in control or direct ownership of $30M....I'm not there...yet

I would consider myself "rich", but it's not the amount of gold in the vault that determines this feeling. What makes me feel rich is my family, and those I choose to surround myself with. I don't consider life to be a competition where he who has the most money wins. You can't take it with you after all. So for me it's not about the money, that's just a way of keeping score and frankly I'm not interested in pissing competitions. It's about what the money allows you to do. Money is only important when you don't have any. Money does not equal happiness. Find out what makes you happy.

My goal over the next few years is to learn, save and invest as much as possible and use trading as a vehicle to fund a financial stress free lifestyle by the time I am 40 - 50, hey while I am at it go on lots of holidays, drive a supercar (or if that is to unrealistic, an M3, C63 AMG) etc.

I guess the point of my thread is to align my goal with reality, and to see if many people on here have managed to become wealthy by trading.

Steve

Try and be flexible. There's been a number of survey things here in ASF and I always find that I can't answer them completely. I'm a trader...but also a long-term investor. I have a salary...but I'm a shareholder of the company I work for. I invest in property...and commercial property... I've traded Bonds etc etc etc. So my skill sets are...wide. I wouldn't consider myself a gun in any of them - but I do tend to focus on the sharemarket because it's a challenge I enjoy. The important thing is why not necessarily how - you can buy how when you need to if you don't know it.

Hopefully what you'll discover and learn to recognize is that there is a time to invest in the share market....and a bloody great time to invest in the share market. That there is a time to trade....and a bloody great time to trade. There's a time to invest in residential property...and a bloody great time to invest in Residential Property. Everything has its cycles and time where you should focus your attention and funds. There is always an asset that is in it's optimal investment period. Learn what, when and why.

Great post - cheers mate, I guess the main difference for me is I now have a mortgage so free capital is even more limited, I guess it's better to play with 3k and lose it all then 20k with my current level of knowledge though.

Steve the way you say the above... I'm guessing you've made the classic mistake... Hell I did it myself until I realized what an idiot thing I did. I chained myself to a large asset that has an unappealing taxation profile. You are much better off in the long-term if your first property is an IP, not your PPR. You only get a taxation advantage on your PPR if you sell it....in a market that has an average 8 year cycle, you cannot effectively "trade" this asset and compound your returns in the short term. I'd have a couple of IP's under your belt before you go for PPR that's what my girls will be encouraged to do in a few years - because then the IP's help you pay of the non tax deductable interest payments much faster.

If all that sounds like too much hard work.....Marry a rich girl

Cheers

Sir O

 

[Timmy]

Hi Steve

Define "Rich"

He has (from opening post) ...

My definition of rich would be enough capital to have no financial stresses, travel the world, buy that Porsche or Ferrari and live in a million dollar + home and I don't mean people that trade a bit and also earn $250 000 a year from their work income.

link :