Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
If so how much did you have to put into your portfolio to start? How did you make it through lean/down markets as far as day to day money was concerned?
Did you end up just sticking with two portfolios from that point on or were you able to open a SEP IRA too?
I remembered day traders talking about how they try to make a few hundred bucks a day and it occurred to me I've had a lot of days like that in the last few years.
Then it occurred to me that it's kind of dumb to make in my retirement account over a few days what I'd make at my second job in a week or month.
My suspicion is only having a spare 10k to 15k that I'd be comfortable adding to a taxed account to give this a try is likely on the low end of what I'd need. Any thoughts?
i guess you can say retirees who get the bulk of their income from their portfolio's are investing as a job ,to support themselves . pre retirement in most years our portfolio grew more than i earned working . that is what happens over time as more and more accumulates .
there are safe withdrawal rates based on how long you want the money to last that are based on the worst of times . that is how the lean years are dealt with , no different then retirement only it is a longer period of time and lower draw rate then a typical 30 year retirement.
but i would never do this as a job unless i already accumulated enough capital to do this just like retiring .
Last edited by mathjak107; 02-26-2019 at 05:09 AM..
Look at it as a second part time job - done on your terms rather than working for the man. Take some money and see if you can make some money trading stocks. Caution: markets are near an all time high.
Look at it as a second part time job - done on your terms rather than working for the man. Take some money and see if you can make some money trading stocks. Caution: markets are near an all time high.
I suppose that could work I've done the 2 job thing for years were I'd just have some crap pt "day job" for cheap insurance & freelance, run my business, collect royalties from my books, and/or Ebay stuff with the other. Figured at least if I never make it big I at least spent half my time doing something for myself.
Last year I returned 400% and this year if I didn't have a bonehead screw up earlier in the year around 50% (my long-term goal is more like 20% to 30% average) so yeah I can make money in the market. But it's somewhat trivial since that's retirement money & if I was going to try to make a go of it for a job I'm sure there are plenty of additional concerns trying to fund the portfolio and draw a salary. Plus it's just more prestigious to be able to say you trade stocks for a living than it is to try and describe your business to someone who isn't going to understand anything outside of the part where you mention the secondary day job.
I suppose the biggest question to start with is how much is require to fund the initial portfolio to realistically make a go of it.
You need parents like mathjak who will provide inheritance of a base of at least $500K. Then you work to try to earn net of 10% of that each year or $50K and live in the Plains to limit cost of living to $25K a year during lean years.
I suppose that could work I've done the 2 job thing for years were I'd just have some crap pt "day job" for cheap insurance & freelance, run my business, collect royalties from my books, and/or Ebay stuff with the other. Figured at least if I never make it big I at least spent half my time doing something for myself.
Last year I returned 400% and this year if I didn't have a bonehead screw up earlier in the year around 50% (my long-term goal is more like 20% to 30% average) so yeah I can make money in the market. But it's somewhat trivial since that's retirement money & if I was going to try to make a go of it for a job I'm sure there are plenty of additional concerns trying to fund the portfolio and draw a salary. Plus it's just more prestigious to be able to say you trade stocks for a living than it is to try and describe your business to someone who isn't going to understand anything outside of the part where you mention the secondary day job.
I suppose the biggest question to start with is how much is require to fund the initial portfolio to realistically make a go of it.
are you living off the portfolio 100% and including retirement how many years does it need to last ?
the problem is not returns but the sequence of those returns when spending down ...
1987 to 2003 saw 17 years of almost 14% gains cagr .. but if you left the rate of inflation with the house and lived off the rest ,if we leave the rate of inflation growth with the principal and spend everything else for a $100,000 portfolio adjusted for inflation over those 17 years, the difference is a remaining balance of $76,629 to a deficit of $187,606. depending on the order those gains and losses came in .
so trying to live off your investing carries the same risk when you try to develop a pensionized income that is safe ,secure and consistent through good and bad years no matter how long or bad the bad years are .
over 40 years or more you need to figure initially drawing about 3% of your starting balance .... so 1 million can be counted on to provide 30k initially ..
if you do well and you are 50% above where you started , take a 10% raise on top of inflation adjusting .. repeat every 3 years ...
as you see , when you need to provide a consistent income in good and bad times , a lump sum does not go far ..
Last edited by mathjak107; 02-26-2019 at 06:58 AM..
You need parents like mathjak who will provide inheritance of a base of at least $500K. Then you work to try to earn net of 10% of that each year or $50K and live in the Plains to limit cost of living to $25K a year during lean years.
i wish .. i grew up in a new york city housing project .. we barely made ends meet .my motivation through life was never raising my own family in one
Last edited by mathjak107; 02-26-2019 at 06:52 AM..
The salient point is whether one would obtain a higher return on one's portfolio by (a) actively investing by doing research, (b) making uninformed picks that require no time at all, or (c) being totally passive.
I overwhelmingly lean toward (c). This means that with a sufficiently large portfolio, one might cease formally working and devote oneself to hobbies, volunteering or whatnot... but nowise would one engage in "investment" as a job, other than as a hobby with one's play-money. Or, as the colloquialism goes, "don't quit your day job".
To consistently make 20%-30% annual returns is somewhere between unrealistic and fantastical. If somebody actually could do this, I rescind my comments above, and say... yes, by all means become a full-time investment-pro.
i had a spectacular year trading in 2017 with my fun money ... last year no so great .
i would never think of investing in equities as anything but passively ... being retired i trade every so often , trying to make a days pay .. but it is not any way i would ever attempt to earn a living ...
all our income comes from funds passively .
most traders end up throwing in the towel when the money ends up running to low eventually .
the combination of bad trades and spending down make a big difference in your success .
are you living off the portfolio 100% and including retirement how many years does it need to last ?
the problem is not returns but the sequence of those returns when spending down ...
1987 to 2003 saw 17 years of almost 14% gains cagr .. but if you left the rate of inflation with the house and lived off the rest ,if we leave the rate of inflation growth with the principal and spend everything else for a $100,000 portfolio adjusted for inflation over those 17 years, the difference is a remaining balance of $76,629 to a deficit of $187,606. depending on the order those gains and losses came in .
so trying to live off your investing carries the same risk when you try to develop a pensionized income that is safe ,secure and consistent through good and bad years no matter how long or bad the bad years are .
over 40 years or more you need to figure initially drawing about 3% of your starting balance .... so 1 million can be counted on to provide 30k initially ..
if you do well and you are 50% above where you started , take a 10% raise on top of inflation adjusting .. repeat every 3 years ...
as you see , when you need to provide a consistent income in good and bad times , a lump sum does not go far ..
Well, probably wouldn't be living off of it for the first few years, but ideally that'd be the plan. Probably could get on with $24k a year depending on where I'm living at the time.
Right now to even try to calculate the cagr for my specific returns is probably pointless since before last year I was using a different method and there haven't been any really bad years to test me as of yet.
Although from the sound of it I'd need a whole lot more than I have access to at the moment.
So what are those day trader guys even talking about? Complete BS?
Quote:
Originally Posted by mathjak107
the combination of bad trades and spending down make a big difference in your success.
Last year I only had 1 unprofitable pick. This year I've had 2 so far (one I sold too soon & the other was a mistake I made that should've never showed up as it broke one of the rules). Currently every single stock in my portfolio is a profitable pick. I still get a kick out of that, but in the grand scheme of things it probably doesn't mean anything. The market has been decent so far this year so I'd imagine lots of people can probably say that at the moment.
Quote:
Originally Posted by ohio_peasant
To consistently make 20%-30% annual returns is somewhere between unrealistic and fantastical. If somebody actually could do this, I rescind my comments above, and say... yes, by all means become a full-time investment-pro.
The guy I learned from has an average of 25% since 2000. Another guy who's investment system I reverse engineered has had an average return of 20.5% going back to the 90's. I took part of his system and reworked it to be completely mechanical and am currently working on making a screen within a screen to improve on it (having a bit of a chicken or the egg issue with it until I gain more data). Another guy who's system I reverse engineered has had a 36% average for the past 9 years and last year had a 78% in the part of a fund he was responsible for running. Plus I have the benefit of my father's experience of beating the market for the majority of the 30+ years he's been in the market. And while I don't really have a track record long enough to really draw any conclusions I'm already pointing out several areas where he can improve his returns so...
I don't know or have access to many investment types, but the ones I do are pretty much all outperformers.
In another thread someone suggested I should just get a job at a hedge fund, but I don't really see that happening. I don't know anyone. No economic background. No, well anything that would suggest I could get one of those jobs. And even if I did I doubt they'd just accept my picks. They'd want a why and all I'd have for them is because my process picked them out and I didn't reject them based on my gut.
Last edited by Port Pitt Ash; 02-26-2019 at 07:57 AM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Then you work to try to earn net of 10% of that each year or $50K and live in the Plains to limit cost of living to $25K a year during lean years.
