Discussion in 'Economics' started by peilthetraveler, Jun 11, 2010.
Are ETers savers or spenders?
I track every dollar I spend through sites like Mint.com or www.wesabe.com , etc.
I save between 60% to 75% of my monthly income. To be honest though, I bring in alot, so I'm able to save alot more than normal. I'm not bragging, I'm just saying.
Hopefully I'll start making money via trading consistently so that I can make even more (I can dream right ... ? ).
There is a whole lot of talk about how to make money trading, etc., etc. on this site. However, this topic is very important. As advice to newer traders, and traders just beginning to earn money through trading: if you intend on or have any hope of being a trader for the long-term, save, save, save, and then save some more. Your savings will become your plan b, your protection. I've been living off of purely trading income for around ten years now, and can tell you that saving as much of what you make as possible is hugely important to long-term success in this business (not that I yet consider myself long-term, but still at it, as I see those guys who have been doing the same for 20+ years .
When I was employed, I was saving about 50% of my net income. That does not include the 10% of gross income that went to my 201k.
That proved to be fortunate, as I have been out of work for 16 months. I still have savings sufficient to last another several years, and although it pains me to spend them on living expenses, I'm damn glad I have them.
It is impossible to save big percentages of your income until you are making more than you need to live on, plus some for fun, but it needs to be done.
I used to track every penny. I make good money now compared to what it takes me to live on. I'm a tightwad on big purchases but spend too much on lunches and such. I save over 50%+ of my gross. In my business it is truely feast or famine so saving is critical.
I save about 65% of my net after taxes, max 401k and various other sundry deductions. After a year of my first "real" job out of college, I went free lance for many years. You learn fast to save your money for the rainy days that are sure to come.
Making money is a whole lot more fun than spending it is.
I also track every penny I spend. I honestly do not know how I survived before I did this. Running out of money as a way to tell yourself to stop spending is no way to live. I would rather tell myself to stop spending while I still have money.
Tracking your spending, I believe, gives you more self control. I've also found out that its alot easier to save money if you pay yourself first at the beginning of the month, that way its like that money is gone and you are not tempted to spend it on something else.
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