Always have a plan B just in case plan A stops working or the income becomes too small to maintain whatever lifestyle you're use to having. Many famous celebrities, athletes have other passive incomes on the side just in case their primary careers end. During the summer in my senior year in high school I worked part-time for a architecture CAD company. The business owner was a famous NFL football player. He started that business with a childhood friend that was an architect and it became very successful...about 40 employees. Almost 10 years later his football career was done due to injuries and immediately his plan B as a business owner of an architecture CAD business kicked in full-time with his business partner the architect. Take a look at Maria Sharapova. Very successful tennis star. She is also the owner of a very successful candy business @ http://www.sugarpova.com/ along with a few other businesses (e.g. clothing lines). Simply, some people just like working even after their primary careers have ended. Other have no choice because they didn't do a good job with their personal finances in plan A. Thus, they need to continue working and that's when plan B kicks in. Some do it to pass something down to their children when they become adults. They know its much easier to start a business now in the middle of their careers instead of waiting until "after" their careers has ended. I know a judge that also owns an art gallery and not because he as some fear as a judge. Art has been his passion since a very young child even though he didn't have the skills to be a good artist. His daughter (about my age) is co-owner of the gallery.
@wrbtrader Sports people who have alternative careers are different. Their name has value on its own and they can invest in businesses in incredibly favorable terms by just lending their name, not the case with small-ish traders - if anything we have worse terms. Having alternatives is important, you're right but a sports career has more health risk than a trading career and they know they can't do it after reaching 45-50 years of age. What alternative plan can a trader possibly having a very low 6 figure account have, realistically? It's best to hope that the acquired programming and analysis skills will amount to something.
I understand your point but I don't agree only because some here in this thread have already stated they have other jobs or businesses and I'm sure their name doesn't have value to help them succeed in those other businesses similar to the judge being a gallery owner...nobody knows he's a co-owner. They only know the daughter as the owner. Simply, you don't need to be professional athlete to have a side business as others have stated their doing in this thread. Here's another example, in college the apartment building where I rented was owned by a doctor (orthopedic surgeon). He owned several buildings manage by his son. There's an ET member here that's a full-time trader and co-owns a successful floral shop with his mom. Is trading doesn't work out...that passive income becomes primary income. My point is this, many people that are not famous nor rich do in fact own a business or work a second job...its a good alternative plan for traders assuming you have the time & energy for such as some have already stated they do in this thread...some see trading as passive income while others see their other business or job as passive income. When I was in college...I was a full-time student and working a job (30hrs per week making $17 per hour). Then in the summer I worked two jobs while taking one class. Its something I saw in others too...going to school full-time while working job. Trading is tough and most aren't rich out of the gate. Therefore, it only makes sense to remove some of that financial pressure that often leads to discipline problems. Having an alternative job or business on the side is a great way to take some of that pressure off while trying to become a trader. Just as important...don't quit your job to become a trader until you're a profitable trader with income that can support your lifestyle especially if that job has medical/dental benefits and other goodies that a trader would have to pay out of his/her pocket if they were just trading with no backup plan. Many ET members fall into the above category...trying to improve their trading while having a job. Some have full-time jobs that do not conflict with their trading schedule...even better. The traders in a riskier situation are the ones that do not have a backup plan and have this illusion they'll soon be profitable as a trader soon after becoming a trader...very few traders are profitable out of the gate. As for those that are unemployed and then decide to get into trading...I don't recommend trading. Instead, get a job and become stable in their finances and then take up trading but only if it doesn't conflict with the job (e.g. swing trading, trading before/after work).
I was not saying you can't own businesses but your comparison with celebrities is incorrect. If you're a sports start, you lend your name to a business and you get 50% for just that, no money changing hands, as an unknown trader you'd need to invest millions. Of course we are not debating the idea of having alternative/backup businesses, that's obvious to everyone I would think but only after your trading is fully established and you have free time in your hands. It's much better to focus all your efforts on trading in the beginning years. Doing it properly requires great efforts, a lot of time and all your focus (not half, not quarter). You seem to suggest that doing it while working a full-time job is a realistic possibility, I can't agree and don't know any very successful traders who have done this. You focus only on schedules/time when in reality it's about "mental time". You have around 3-4 hours of sharp mental focus per day only, the rest is just mundane repetitive tasks. If you waste 3 of those hours working a job, that 1 hour that is left won't be enough to focus on a trading plan. Like in the show Shark Tank, they always insist that the entrepreneur has no side jobs, no other business ventures. This isn't for nothing, they know what they're doing.
Got to agree with D08, i get home from work, got 3 hours left of YM say, got zero chance of focusing and rarely trade in that time. I have literally had entire years where I've only had the time, to make 3 or 4 trades. What I've discovered is, if i stop off at gym, trade via my phone, then doing weights, looking at lycra clad girlies and loud music get me jazzed and actually i trade quite well. How long before someone wonders what I'm upto and gets me banned is another story. Switch to 7inch tablet and put tape over the camera might be an idea lol
I disagree because if you're a losing trader (most are) or a business owner that has a poor business reputation...starting another business will be tough. In contrast, if you're a profitable trader (few are) or a business owner that has a good business reputation...starting another business and using your name/reputation can be helpful based on the reputation of prior success or current success. It definitely shouldn't hurt you. Simply, people tend to pay more attention to those that are successful. Yeah, if you're profitable and you're hiding out in your parents basement...nobody isn't going to know who you are. Lets use Paul Rotter as an example. A very successful retail trader prior to becoming a fund manager. His name got around fairly quickly in the financial world as a very successful retail trader...his name was stamp on many big trades that even the professional trading firms gave attention too...a guy that in prior had worked for an institutional trading firm before going retail. If that guy had started a side business on Wall Street or in some financial district in Europe while as a profitable retail trader and word got out he was the owner of that business that occasionally came by to chat with the financial folks...I'm confident he can use his name (face on the brand) to attract more customers to his business than a losing trader trying to do the same. Note: I used Paul Rotter as an example because he once did consider starting a business when he was a profitable retail trader. I'm not sure what type of business he was considering in Europe. Simply, if you're a successful trader...you can use your name (if you want) to help launch a side business. If you're a losing trader, you can still launch a side business but only based upon some other talent your have (e.g. building nice custom patios and its something you were already known for such) What I'm saying that if you're one of the few profitable traders out there...you have a better chance to do such but there's no guarantee that the business will be a success unless you co-own the business with someone that does know what he/she is doing. As for a losing trader, most likely isn't thinking about starting a side business unless the person already has an existing skill in another profession as my patio example above (I know some as such...reason why I used that example). Yet, the most realistic option for most traders especially losing traders trying to stabilize their income is the following involving their job: 1) Don't quit your job until you're profitable with real money. It makes obvious sense. It just doesn't make sense for a losing trader to quit a job so that he/she can give trading 100% focus. Heck, someone can even take a leave of absence if available, trade during their vacation full-time (3 - 5 weeks consecutively) to determine if they can really make money from trading. Years back someone started a thread about such. He took like 6 months leave of absence to trade exclusively...100% focus and blew up his account twice. Now imagine had he quit his job and traded full-time...two blow ups and no job...that's a ton of financial pressure. Thus, you got to be smart if you want to trade for a living but if its just a hobby (you're just trying to make extra spending money or keep the debts under control)...only an idiot would quit their job just to give trading 100% focus. 2) If you have a job while a trader and you're profitable but the income just isn't enough to bypass the income of the job and its benefits...trade markets that do not conflict with your job or get a different job that allows you to trade the markets you want to trade or relocate to another time zone that makes it easier to trade and have a job (the latter is what I did once for 5 years back in the 90s). I know a few others doing such. Yes, its realistically possible...I've done it myself and so have many others. Everybody is different...some are morning people and some are a evening/night person. Thus, you may be more focus in the morning in comparison to the night or more focus at night than the morning. You know yourself and can adjust your trading schedule. For example, if you're a morning person...it only seem obvious that the best time for you to trade is in the morning prior to going to work. Thus, you need to find a market suitable for such or find a job that allows you to trade in the morning. There's a few ET members doing such. One in particular trades 6 hours in the morning in Crude CL futures and then goes to his full-time job at 12noon until 8pm as an airport employee with full medical/health benefits for him and his family. Simply, it works well for him but you believe its not possible. 3) If you're unemployed and you're not properly capitalized, I do not recommend getting involved in trading unless its something you've done before and was profitable at it and you have saved up enough living expenses prior to unemployment. The key point is a stable income to support yourself. Realistically, most traders are not properly capitalized nor did they save up enough income so that they concentrate on exclusively on trading. In contrast, if you're one of the few that's properly capitalized and have save up several years worth of income...yeah...you can quit your job and take a swing at full-time trading. Look at it this way, I know people that have a job but the hours conflict with their family life (e.g. spouse and kids). The fact they were not spending enough time with their family or barely seeing them...they got another job that better fits their schedule to prevent getting a divorce and having kids they don't even know. I've also met people in the same situation that do not care and they refuse to make changes. My point, if trading is just a hobby...there's really no need to make any changes in your life. In contrast, if your goal is to trade for a living or go to college and get a degree so that you can work for a professional trading firm... You really have no choice unless you're already rich. Once again, you know when you're focus and not focus...you can use that knowledge to your advantage and many are doing such currently or did such in the past. The latter is what I did when I first begin trading. It's realistically doable. P.S. Those that are retired and getting involved in trading or college students...completely different story and not part of my discussion unless you're a poor student and you're working you're way through college. P.S.S. If someone is not a successful trader and didn't save up a few years worth of living expenses...reality forces that trader to get a job if the trader really wants to be a trader. They then make changes in their schedule to be able to do both and I gave examples of above of being able to do both properly. Yet, if the trader is living off of someone (sugar mama or sugar daddy or parents) or the trader is already rich...different story.
Remember that BBC traders documentary, 1 guy quit a well paid business, was in the process of losing everything, 6 years in, still losing, still clueless, literally saying ' its going up, what do i do' errm join in, his account was 10% left and too afraid to trade. The other guy was a lying tosser, who couldnt trade, but said he could and made loads via a web site selling tips and teaching lol
Why would he quit a well paid business when he could just hire someone to manage his successful business while he was gone ? Very similar to someone having a well paying job and they go on "leave of absence" to do something else and still have a job if that something else didn't work out. Only people I know that quit successful jobs or successful businesses to take a swing at trading: 1) Someone that's rich from their successful business 2) Someone that inherited a ton of money 3) Someone that is going through a mid-life crisis and wants a career change 4) Someone that's an idiot All the above I've met online or in person involving a person that quit a successful job or business to get involved in trading...#3 fits most I've met that had a prior successful job or successful business. So yeah, there are idiots out there that own a successful business and throw it all away to trade unless they had a backup plan to go back to what they did before. Most likely not the case considering they didn't hire someone to manage their business when they were away to prevent quitting (selling it). That guy you saw in that documentary should have turned his primary income (successful business) into a passive income while he chased his dream of being a trader while allowing a business partner, relative or trusted friend to manage the business while he was away. I think two people in this thread eluded to such for their current situation. The worst situation for someone to get involved in trading with no prior trading experience...those that see trading as a lottery ticket to getting rich simply via the only qualification they need is money to open an account or those with no income (no saved income) to support themselves while they take a swing at full-time trading. We've had a few newbies here lately in such situation and being encourage to stay with trading by veteran members, encourage to tweak their trade method by other newbies when all should be encouraging the trader to get a job and become financially stabilized prior to venturing back into trading. Last thing a losing trader or small profitable trader wants is someone knocking on their door, phone calling them or sending them letters to pay their debts. Get a job, stabilize their finances and keep that job while as a trader if trading is more than just a hobby. That way if they have another blowup...they know they still have a job to keep to keep a roof over their heads especially those that have a family to support. My guess (a good guess), most at this forum aren't some 19 year old with a girlfriend. Most likely members here fit a large group of traders between 30 - 50 with a family to support or married with no kids or divorced or single trying to put themselves in the position to have a family in the future. This group are more financial vulnerable because of a greater financial need than the typical young trader that can easily go home and cry to mama/papa or move in with a buddy or girlfriend when things go wrong. P.S. Its much easier to go back to trading in the future if it doesn't work out now. A lot easier than going back to a well paid job unless the job is in high demand or you maintained a strong network with those within that career group. Simply, don't quit a good job unless you know you can go back to it if trading doesn't work. Instead. take a leave of absence or save up a lot of vacation and sick time to try full-time trading.
Looks like Clinton Portis should have had a plan B. http://www.totalprosports.com/2015/...=facebook&utm_medium=tpspages&utm_campaign=fb
That sounds right, not only in trading one better spend a lot of energy in his chore business before he's succesful, I don't think many diletantes make it anywhere, especially if they don't start up with significant financial backing. Also agree about the sports stars who have a huge asset in their name - we ended up twice next to Djokovic, his wife and kid this week in Monaco btw, great sports success story, I'm gonna feel dipressed after xmas holidays when I start practicing again. Not sure how he invests his money btw, but with his tournment gains and endorsements contracts he can live off the rest of his life safely from a low volatility passive portfolio. Yet about the very low 6 digit figure and the 50 y o trader you mentionned, that doesn't look too good for him. The idea put forward in this thread by several posters is that one better make it in one domain or another than set up other sources of income - passive or not, it seems to depends on the person style and oportunities he encounters/creates, I'm more interested in passive income at the moment for instance. If one can't make it anywhere, like your 50y o trader, the diversification issue is much of a moot point. But living in a european state with strong welfare may help.