I've got a full-time non-trading job and do swing/position trading on the side. And so I think my goal is a little different than most: early retirement. From posts I've read on et there are a few of you out there who have achieved this holy grail and I'd like to know how you did it. 1. How much of a role did trading play in your early retirement, i.e. was it through trading that you accumulated your assets or through a business or 401k, etc.? 2. How much of a role did margin play, i.e. did you successfully attempt to amplify your earnings to achieve your goal more quickly? 3. How much of a role did "expense/lifestyle control" play in it? I'm looking for inspirational stories here. I think I can do this, but I'm at that juncture in my life where I have to decide if I want to undergo the discipline to pursue this for several years.
Given the very high failure rate amongst traders, your route (for newbies) is a good one... the problem with the relatively undercapitalized newbies who attempt to trade with no outside income flow is that they suffer the stress of HAVING to perform and the STRESS of not being able to cope with what are actually reasonable drawdowns... Trading should not be viewed as a route to retirement, since true traders find trading too much of a buzz to retire from... of course, if you are talking of viewing trading as a route to retirement from your day job, then I will totally agree with you!.... trading should be viewed as a route to financial and life freedom... freedom from the necessity to be answerable to a boss, freedom from corporate politics, freedom from the rat race, and simple things If you have read Kiyosaki's Rich Dad, Poor Dad ( http://www.amazon.com/exec/obidos/t...104-1972243-9108724?v=glance&s=books&n=507846 ), he discusses that even the less well off should attempt to liberate themselves by running a part-time business... well, regard your swingtrading as that part-time business and regard time as your ally, since your job income flow ensures that you are not financially reliant on immediate trading success... so grow your baby slowly and safely... if you play the game well, you should be looking to retire from your job within 5 years, so that you can focus all of your efforts on trading... For many of us who, by luck, took the full-time dive into the markets during the 1999-2000 madness, we got a massive capital boost and so we escaped the necessity of having to carefully build up our trading business... but it strikes me that if I was to start afresh today as a newbie with a modest sum of $30k, I would probably be blown out by the market conditions in a relatively short period of time... in the absence of extremely benevolent market conditions, non-trading income flow is pretty important... full-time trading should, in my view, only be dived into by newbies who have very significant amounts of initial trading capital (say $100k+ in cash)... in the context of $100k initial starting capital, a typical newbie's stop loss of $200 is a mere 0.2% of start-up capital... this is a desirable position to be in, since the learning curve for newbies is most certainly a brutal one in the current market conditions... As regards 401ks, leave that to the committed members of the life-long rat race... you need to make your money work hard for you, and not work at the leisurely pace of a 401k... trading is truly a wonderful phenomenon, since it gives us all the opportunity to mulitiply our capital manifold, and not by minor percentages... On your question of margin, if you are a newbie with a non-trading income stream, you can afford to be much more aggressive than a full-time newbie, since your position-sizing should take account of the Net Present Value (NPV) of your income flow added to that of your starting capital... On your final point of expense / lifestyle control, inexpensive pleasures abound... for instance, who says that you need to dine at the best restaurants? Wouldnt it be more fulfilling to hunt your food and cook it in the wild with your bitch and/or buddies? I have waffled on a bit... just a few random thoughts of a relatively young trader who feels relatively old...
I'll have to read rich dad, po' dad. It keeps coming up. And, yes, when I talked about retiring I meant from my day job. I love trading, so I don't think I'll ever retire from it. But I want to get to a place where I can continue trading part-time and do other things with the rest of my time - you only live once, baby! I like the idea of retiring in 5 years. Not a bad goal. If I double my account every year, I could pull that off. Now there's a fantasy...
I do love it - probably a little too much. I find it addictive. I'm one of these kids that loved baseball stats and astronomical charts when I was growing up. Now I find I can play with charts and numbers and make some money at it too. S-W-E-E-T ! !
Yeah,RDPD is a classic book about money. However, do readers really understand the theme the author is trying to convey? ie the secret? as for retiring early I know much about that and wouldn't advise it. Eventually certain issues wil crop up and make life miserable if not downright scary. Best bet is to just keep yourself occupied like 99% of the people. Just a thought, triple
For those of you who dont have time to read the book but would like to know a bit about it, see: http://www.bizsum.com/richdadpoordad.pdf