To any members that make a living, or substantial supplemental income investing

Discussion in 'Stock Market Education' started by Gomer, Mar 17, 2014.

  1. Gomer

    Gomer Well-Known Member

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    Just a question as to what education you may have in the field.

    how long did it take you to become financially stable enough to make this your primary income, if it is? or at least be a good secondary income?

    I have been investing in as many things as i could for a few years. more recently actually getting involved and trying to do a better job of TA, exploring different vehicles. i.e. options, forex, and all that good stuff. Anyway, i was talking to an older guy i work with who has made more digits in the market than i have in total income from any source, in my lifetime so far. And he told me i need to get off my ass and go get an education in it, because apparently, he sees this is much more interesting to me than my current job.

    It kind of raised the question. What would i get a degree in that would really give me an edge here, if there is one. I have read a lot of books. Done a lot of my own research, here on this forum and other places, and felt i was well on my way to being successful in making a passive income out of this. now i am questioning is there a more formal education that any of you have received, other than self education and school of hard knocks? I do have a GI bill that is good for quite some time still yet. so school would be little to nothing for me, but i quit pursuing it for a while, (all excuses, i know) but due to life getting in the way, time, kids, all that. but most of all, i know what i want, and didn't feel any degree would really help me achieve that.

    Thanks for any input.
     
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I have been investing for nearly 20 years - I started maxing out my work plan after college once I settled into a decent job at 25. It's very important to max out any and all 410k / SEP / IRA contributions consistently as soon as you're able.

    I started investing on the side as well once I started making good $ and saving up some of it. My first job I landed after college was selling subprime mortgages and consumer loans for a company that is no longer in business. From there, I moved on to being a mortgage broker for a while.

    I eventually came into a six figure lump sum off some real estate I sold in a booming local market that exploded after a natural disaster. This just happened to be right about the time my mortgage co got bought out at the peak of a real estate market that would soon decline.

    From there, I decided to try my hand at day trading for a living. I spent a few months following the markets closely and reading everything I could get my hands on. I was attracted to the lure of the quick buck the authors of those trading books and systems promised, but I eventually got away from trading and adopted a more conventional approach to investing as I realized how risky and expensive day trading was, and how liquidating everything every day was not the most efficient way to make $. And if you withdraw any of that $ for any sort of living expenses or whatever, it makes the whole thing even less practical. It's better to keep investment dollars and income dollars separate.

    After about 2 years of this, I went back to work in consumer lending for a while, then retail banking. I was able to pick up several securities and insurance licenses on the bank's dime while I was there, but I didn't really care for banking. During all this time, I was applying for work with brokerage firms in my area, and I eventually got my opportunity and left the bank to work as an advisor trainee for a local branch of a very large firm.

    I have a 4 year degree in a business-related field. Getting sales experience (particularly personal finance-related sales) was what really opened the door to me eventually getting into the retail investment game, which taught me a lot about investing other people's $. I eventually left the firm and started my own private investment fund of a limited number of accredited investors.

    If you can go to work for either a bank or a firm as an advisor trainee, get licensed, and build up a good sized client base, you can make a very good living. Firms generally pay more per dollar in assets under management you have than banks do. But being a rep for a bank does offer you the advantage of having at least some access to the bank's retail customer base. Firms don't have such an advantage - you basically have to cold call, network, hold seminars, hound your friends and family, etc. If you have a wealthy family or network of friends and acquaintances who will hopefully hand you over tens of millions right out of the gate, this will be a huge advantage for you both in terms of job security and future income.

    If you live in a large city with a large number of people and lots of money, that will be an advantage. The business is very competitive, but a large population in your area will be an advantage due to the sheer number of people you can contact. It's a numbers game, and you'll probably have to contact a large number of people to get the amount of assets you'll need to first keep your job, and eventually make the 6 figures or more you probably hope to make. The "Do Not Call" laws make it pretty much impossible to call anyone at home who you don't know well enough for the call to be considered a "warm call" that won't get you in trouble. "Cold calling" the wrong person at home can result in a $10k fine if they report you.

    You'll mainly be calling people at work, which is another reason why you'll hopefully be doing it in an area with lots of businesses and industry. There are various ways to get names of many people working at various businesses who you can cold call and pitch. Networking, telling everyone you know what you're doing, and passing out cards just about everywhere to anyone who might have money or know people with money can also help, but you want to be careful to not come off as a carnival barker or pesky ambulance chaser / used car salesman type.

    And many people will lie to you about having money. They don't want you to know that they don't have any $ or that their business is barely staying afloat or whatever - so they lead you to believe that they've got a million "invested" at the bank or whatever, when they really are lucky if they have a THOUSAND in a checking account at the bank on any day of the month that is usually soon gone.

    But if you can get in the door, get enough assets in early to meet your hurdles and survive the typical 2-3 year training program, then eventually get in a good 9 figures in assets (or at the very least mid to upper 8 figures), you'll keep your job and make a very comfortable living on par with most other professionals who likely went to school for many years to be where they are. and if you can get billions in assets, you're making the kind of money that would make most corp execs jealous.

    But the failure rate is high, and there are lots of rules and regs that can make it very difficult to get business and also easy to get canned if you break the rules. It can be very difficult to get people to move their $ over to you, and some people can be very unreasonable when things go south in the markets and unrealistic in their expectations. It's always better to be 100% brutally honest with people when you meet with them about what they expect and what can and cannot be done. Better to under-promise and over deliver, and better to turn away someone if they give any indication that they will cause you problems.


    If you're going to quit working and make a living off investing your own $, you'll likely need far more $ saved up than you may think. Depending upon what kind of bills you have and what sort of standard of living you may want or need, you may need a large amount put into an income portfolio that pays you enough interest to do this, while you keep your actual investment / trading money in a separate account that you don't pull any money out of. Probably better to either 1) make a living investing other people's $ while you also invest your own; or 2) continue to make $ in other ways to live on and fund your own investing / future retirement.

    If you currently need say $60k a year gross to maintain your current standard of living, you'll probably need a good million and a quarter or so just in your income investments to be likely to maintain that principal longterm AND pay you that kind of interest longterm without too much risk of default to bonds or otherwise wild fluctuations in account value that would jeopardize income and / or principal. If you're pulling out much more than 5% or so a year from an income portfolio, statistically speaking you are risking eventually eating up your principal if you live long enough. Then there's the matter of having more $ outside of that to actually invest for wealth accumulation / growth.
     
  3. crimsonghost747

    crimsonghost747 Senior Investor

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    Well I wouldn't call it substantial secondary income yet, but my dividend income for the year would allow me to live comfortably for a little over a month. So I could say that I'm 8% there. Mind you, I'm still very young so I'm more than happy with what I've accomplished so far. It's also entirely possible that if by some magical accident I happen to find a wife and make children, my expenses would also skyrocket which would obviously force me to rethink my investing strategies too.

    Currently I'm working in a field that has nothing to do with finance, and I just enjoy investing my own money on my own time. I've learned everything by reading and doing, never got any formal education apart from the few economy classes I took when back in school.
     
  4. canoe

    canoe Active Member

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    Making money in the stock market takes time and is exponentially harder to do so the smaller your starting capital is. This is why if given the choice, I recommend everyone to start their investing education in a job such as goldman sachs. Obviously, I know this option is hardly available to the majority and for these people, I'd advise them to read, read, and read. Don't even try to trade or invest with real money for a solid year or two while you're learning the ropes. For the first couple years, test your strategies with a demo account. I know it's difficult to do this when you're trying to make quick profits but then again, you're in the wrong business if you're looking for quick profits here.
     
  5. firelily99

    firelily99 Well-Known Member

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    Sound advice canoe, I have been reading like crazy trying to absorb as much as possible before I make a greater financial commitment. I am in no hurry and do understand that this is a lengthy process.
     
  6. firelily99

    firelily99 Well-Known Member

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    This is something that cannot be learned overnight. It takes a lot of time and patience and the more that you know before you start the better off you will be.
     
  7. DomDom

    DomDom Member

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    I am in a simmilar position to you and I have been told you need a good 3-5 years of PRACTICAL experience to start being profittable at it. Read books, take courses and do it. 3-5 years of supplementing and then you cna continue however you want.
     
  8. ninjabean

    ninjabean Member

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    I think the 10,000 hour rule applies here. You should get at least 10,000 hours of experience before you can consider going out on your own. This can come in various ways such as working for another investor, trader or institution. Or if you're on your own you can study and do simulated trading. Don't jump in too soon or listen to the news channels like CNBC to tell you what to do. Figure it out on your own. Because there's so much disinformation out there on the markets it will take a while to sort it out.
     

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