OK will admit i did not write it clearly as I would have liked. I am saying that after taxes and retirement saving eat up 50-60% of your gross there are other things we have as traders that many dont have as wage earners. Wage earners are not growing a business for the most part. I try to grow my account at least 20% a year or better after expenses and such. I wanted only to say that someone making 50k a year and spending it all (after taxes ) is not doing that. I was simply comparing the lifestyle of a trader building a business and a working stiff spending their money. Kind of silly I guess after I looked at it, sometime things sound better in your head than they appear on paper. LOL. I just know that I make more money than most of my friends yet we live the same lifestyle because of what I am trying to accomplish. AllenZ
Excellent post. I think part of it is because people get used to the money so quickly. If you've made 400k for 3 years in a row, then 150k would feel like a failure, even though objectively it's a very nice income.
This is why numbers and dollars do not correlate. Choose to think in numbers. Meanings from just a few of the important words below take on a new meaning, make them your own: velocity time waves Michael B.
Question 1: How much DO the top traders make? I know someone who sat on a desk next to Marty Schwartz (of the book "Pit bull"). Marty made between 2 and 5 million dollars per year over more than 20 years, trading his own account. Question 2: How much do you want to risk? Marty put on routinely positions of 200 ES without blinking an eye. A base rule is that for every dollar you risk per trade, you can make $100 per year if you know what you are doing. So if you want to make 1 Million per year, you need to risk 10 k per trade. What does that mean? Assuming that you do not risk more than 3% of your equity per trade (quite high), you need about a $300 k accoount to make one million dollars per year. This, in my experience, is quite doable even with a larger account. Of course there is a limit somewhere: Marty did not go on to make a billion a year. But then, why would you need to?
Amen, but its the price we pay. I have a friend who just bought a real nice brand new house in Tulsa for $189,000. For that price in San Diego, if I am lucky I can get a 30 year old 475 sq. ft. studio in a "decent" neighborhood. But when taking into account Tulsa and San Diego...its a no brainer. We just need to make more money.