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Day trading keeps coming to mind but I don't feel like that's a good way to make income. Even if I make gains it will all get taxed anyway.
I've been wondering how would it be possible to not have a traditional job and live off investments... Would I have to save up a lot of money and put it into an ETF and live off dividends?
Day trading keeps coming to mind but I don't feel like that's a good way to make income. Even if I make gains it will all get taxed anyway.
I've been wondering how would it be possible to not have a traditional job and live off investments... Would I have to save up a lot of money and put it into an ETF and live off dividends?
Day trading is tough. Real tough. My opinion would be that getting a part time job so you have some income, and then day trading on the side - could be ok - as long as your expenses (hopefully no mortgage, no car payments, etc) are under control.
To live off your investments you're going to want to have a large chuck of money to generate income... you would also probably need to have a low cost of living depending on the amount of invested money you are trying to live off.
Day trading keeps coming to mind but I don't feel like that's a good way to make income. Even if I make gains it will all get taxed anyway.
I've been wondering how would it be possible to not have a traditional job and live off investments... Would I have to save up a lot of money and put it into an ETF and live off dividends?
I live primarily off my investments these days, although I have put some profits into buying real estate for rental income. I also do some side income things like Airbnb. To live off of day trading you need to be trading with a lot of money. When it comes to day trading you are just trying to make a tiny fraction of a percent, so if you only have the bare minimum $25,000... 0.3% isn’t going to do much for you and it’s also very inconsistant and if you don’t fully understand every aspect of technical analysis, you are just gambling.
Best way in my opinion would be to invest in higher risk stocks using your own judgement to build up your account value. Then learn about option trading, then you can switch to normal stock trading and then go less and less risk as your account gets bigger. That’s why I did anyways and it worked out for me, but know most people will fail for one reason or another. You need to get emotion out of it, you need to do A LOT of research, you need to find out what could you have done when you know you made a mistake etc etc etc. Oh and you need to know it takes a long time even with risky investments to get to the point where you can get most of your living income from it.
I started with around $2,500 sophmore year of high school and I’m 30 now.
I live primarily off my investments these days, although I have put some profits into buying real estate for rental income. I also do some side income things like Airbnb. To live off of day trading you need to be trading with a lot of money. When it comes to day trading you are just trying to make a tiny fraction of a percent, so if you only have the bare minimum $25,000... 0.3% isn’t going to do much for you and it’s also very inconsistant and if you don’t fully understand every aspect of technical analysis, you are just gambling.
Best way in my opinion would be to invest in higher risk stocks using your own judgement to build up your account value. Then learn about option trading, then you can switch to normal stock trading and then go less and less risk as your account gets bigger. That’s why I did anyways and it worked out for me, but know most people will fail for one reason or another. You need to get emotion out of it, you need to do A LOT of research, you need to find out what could you have done when you know you made a mistake etc etc etc. Oh and you need to know it takes a long time even with risky investments to get to the point where you can get most of your living income from it.
I started with around $2,500 sophmore year of high school and I’m 30 now.
I wish I started investing when I was in high school. What made you start so early?
I wish I started investing when I was in high school. What made you start so early?
I saw my parents doing it when I was really young and they actually let me end up picking stocks during the dot com era where everything was going up internet related. I didn’t know what I was doing, but that interest stayed with me a long time and I’d watch the market news, but then when I was in high school I got serious about learning different strategy methods etc.
I've been wondering how would it be possible to not have a traditional job and live off investments... Would I have to save up a lot of money and put it into an ETF and live off dividends?
Day trading is a horrible idea. Very, very few people are successful at it to any degree.
The bad news is the most reliable way is to have a traditional job (and maybe a side gig in addition to it) and to save a high percentage of your salary. That is how most people become financially independent in 10 years or less.
What is most effective is saving a high percentage of income--upwards of 50% after tax--and, as you say, putting it in a good ETF. Something like VYM might be a good pick.
So, yes, it's possible. But many people are either unwilling or unable to do what it takes. Unless your income is at least double the median U.S. household income, you won't be living a "normal" American lifestyle. And even if you have a high income, you won't be living the same lifestyle as your high income peers. That is what gets most people. Most people don't want to go against the grain.
In order to make it work, you have to have a really strong reason why, or multiple "whys". If you don't, you won't execute.
Yes, you need to save up a lot of money and put it into an ETF or mutual fund. You can probably live on a little bit more than just dividends if you want to. If your initial withdrawal rate is 4%, you can increase your withdrawals for inflation every year and have your portfolio last at least 30 years. If you live off less than 4%, say 3.5%, then your portfolio can last much, much, longer.
If you want to be financially independent in 10 years, you'll need to save / invest about 2/3 of your after tax income:
To live off your investments you're going to want to have a large chunk of money to generate income... you would also probably need to have a low cost of living depending on the amount of invested money you are trying to live off.
Correct. High income - low expenses = a lot of money to invest. This is the most reliable way to do it.
Most people who achieve financial independence in 10 years or less do most of the following:
--Live in much smaller/less expensive housing.
--Try to live withing walking or biking distance from work to reduce or eliminate the need for a car.
--If they do own cars, they are typically sensible economy cars with good gas mileage. They drive 'em 'til the wheels fall off.
--They keep the food/entertainment spending low. People with above average incomes get some slack in this category if they keep their housing & transportation costs low.
--They don't get into intimate relationships with people who don't share the same goals.
--They don't have kids in an unplanned, haphazard way.
--They do what it takes to earn more money, whether it be side gigs or getting promoted at work. They typically work more than the standard 40 hour work week.
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