How can i earn a living as a full time invester?

Question

No job, just living off investments?

Answer 1

First, don't quit your day job. Invest while working, or wait until you have enough money to lose money for the first few months.

Second, find a trading style that fits you. Is it long-term value, short-term momentum, daytrading, futures, bonds, or what? Figure out what the strategy can make (best case) and lose (worst case).

Third, test it on paper.

Fourth, test it real-time. Actually make trades on paper, without fudging or cheating. Do this for several months. Figure out what your average return was.

Fifth, figure out how much you have to invest, then calculate how much you can make, average, with your strategy.

Sixth, start trading. Almost always, you will do worse than your paper trading. Unfortunately, investing is 20% knowlege and 80% personality. It all looks good on paper, but you are an emotional, gambling-prone, freaked out investor who can't handle it. It happens.

Just some potential benchmarks, annual % return per year:

Long-term: 5-10%
Momentum (if you're good): 25-100%
Daytrading (if you're good): 50-200%
Futures daytrading (if good): 100-1000%

Remember, the greater the potential return, the greater the risk. Something like 80% of traders, daytraders, futures traders, lose money and quit. Experience matters, but I think personality matters more. Most people simply can't handle gambling, which is what short-term investing essentially is.

Here's a simple test: If you make money, on average, playing poker, you might be a successful investor. If you don't, it's unlikely you will.

Final point: Investing the right way can be just as boring and stressful and irrational as any other job. It takes a lot of hard work and discipline, more than most other jobs. To paraphrase an old poker adage: "It's a tough way to make an easy living."

Answer 2

Over the years I have invested my money for a living and other peoples money for a living. As long as you realize that investing your own money for a living is pure speculation and the expected result is an entirely random outcome, you should be fine. In all seriousness, being a full time investor sounds more glamorous than it really is. You have to understand that your "skill" has very little to do with the results you achieve. The collective wisdom of the market is vastly superior to even the most intelligent participants and your performance has more to do with luck than skill. You don't have to believe me, there has been Nobel Prize winning research done on this topic which argues against doing what you are wanting to do. If you truly want to earn a living from your investments, I agree with the other post here that says you shouldn't expect to take more than 4 or 5 percent from your portfolio value each year. So if you don't have a million dollars or more, you are banking on your ability to outsmart the rest of us. You are, after all, literally competing against incredibly smart individuals - Phd's with multi-million dollar systems and ivy-league educated employees conducting research 24/7 to try and find an edge. Even they can't consistently beat the market. If you want to read more about this, check out the library tab on my website at http://www.purposewealthmanagement.com. Educate yourself first, then if you decide to go for it anyway, at least you know what you are up against.

Hope this helps.

Answer 3

We call that retirement you can withdraw about 4% of your beginning balance each year the rest of your life so if you need 40K to live invest a million in mostly equities. Most people are over 50 before they have that much to invest. If you wanted to live on 20K you would only need half a million.

Answer 4

You can do it but it requires mental fortitude, good money management, a personal strategy that involves stop losses, emotional detatchment and even capital so that you never invest more than 5% ON ANY ONE TRADE.
Read 'Market Wizards' by Jack Schawger which describes real people who have made millions and, at times ,lost millions on the financial markets.

Answer 5

If you are good in managing money and have the stomach for trading, you can make some good money providing you got a chunk of capital to invest; and figure out how much you want to make as minimum per month.

Get some info here:

New to day trading? - Consistent profits with day trading. Discover the Three Secrets to Trading Success.

Answer 6

roflmao ok for two points you have to have a LOT of money and make SMART moves. Get a real job unless you have a silver spoon in your mouth.

Answer 7

Start small, get good. It doesn't take much knowhow to make 10% per month. So with 100k you'll make 10k a month.

Answer 8

Hire me as your Portfolio Manager.

Answer 9

Waterdrop - fabulous answer!!!!

Answer 10

i suggest you get really good at it.