I'm strongly considering going on my own to trade (I'm a broker now) I have sufficient capital, trading skills, etc. What scares me the most is things like health insurance, paying in to social security (do you still do it if you work for yourself?), being alone in an office for 8 hours a day with no other human interaction (will I go stir crazy?) Anyone have any thoughts on these things?
The human interaction I do miss, but nothing else, I love trading from home more than anything I could imagine doing. As far as social security as far as I know if you pay for ten years you will get something. I personally only paid it when I had a job as a teenager. I briefly held an office job after college in my early twenties (29 now) but the freedom makes it worth the risk if you know what you are doing.
Why do you say that? I'm very secure with my risk management/trading. The "HR Dept" stuff is what I'm not sure about. bathrobe--thanks for your response
Check out Robert Green's Trader Tax, he talks about your options "www.greencompany.com". This cbot presentation is also informative: http://mediasrv1.cbot.com/02062007_green Good Luck!
If you're an extrovert, you may be better off in a "group environment" with other guys to swap stories, jokes, opinions and B.S. with.
I just started trading from home full-time after taking an early retirement package. Generally self employed individuals must pay "Self Employment Tax" (Social Security and Medicare), but capital gains you make as a stock trader are not earned income and are not subject to this tax. Of course you will no longer be contributing to your Social Security account, which may reduce your future benefits, but I'd argue that you're better off putting that money to use somewhere else anyway. I think health insurance is the much bigger HR issue. I live in Canada so I have considerable government coverage, but many of my US colleagues did not take the retirement offer because they could not afford private health insurance. A major illness or accident could wipe you out. In terms of actually trading, I feel somewhat isolated and I think that the ability to discuss different positions would be helpful ... it's much easier to delude yourself when no one challenges your decisions. I'm experimenting with a sort of journal approach that forces me to record the rationale for my actions, but the jury's out. Good luck!
things like health insurance and social security is what every self-employed person has to deal with. But it's not really a big cost for successful traders.
Obviously, successful trading solves a lot of issues. But an individual abandoning a job to trade full-time needs to manage cash flow, and taking on high health care premiums while giving up regular employment income could be problematic. Each individual circumstance is different, and my only point was to avoid skimping on health insurance as a means to buffer any cash flow issues.