Quit and Trade?
Let’s say you’re a student and you’re given $100k randomly. Maybe it’s a family friend or an inheritance or something weird like that.
For a student in a low COL state, that’s life-changing money. You could easily graduate college and still have some left over. On the flip side, you could start trading this money full time and hope to make enough to survive.
Let’s say you have an interest in the market and LOVE reading about trends + companies. You don’t have the knowledge yet but you’re thirsty to learn more.
If you were in this situation, would you quit looking for jobs and just start trading full time? Where would you start? How much would you expect to make per year/how long would you keep trying before giving up? Would you just save the money and keep trying to find a job instead - probably in something that isn’t markets-related because S&T is “on the decline”?
It’s not life changing money and it’s not enough to trade for a living. You can make 100k in an FO job in 1-2 years as an analyst depending on group performance/office. Why would you trade your own savings when you have no experience, no track record and absolutely no edge whatsoever? Sure maybe you could do well after one year... only to lose the next. It’s not a good decision risk/reward wise. If you kill it trading your 100k from home over a 5 year period, you make what...like 3x your money maybe if you’re really good/lucky? Ok so you made 300k total over a 5 year period...that’s not that spectacular versus alternative. Alternative is (if you think youre good) you go to a BB as analyst, get paid 125-140k p.a., start trading and then move to a fund where you’re running a book and taking a cut of pnl home on TOP of a very good base salary. Do you see what im getting at?
Very good, logical advice. Would love to hear the reasoning for the MS that you were given.
You have too many assumptions here.
majority of sell side ppl gonna stuck at their current job. why? Because less and less buy side oops available. I see established funds not hiring simply because they don’t need too many people. Most of trades are crowded so why bother hire more people to cut cake? In a good market, there are supposed to have more new funds opening which create more jobs. But sadly that’s no longer the case, I see more hedge fund dying than launching. Hedge fund or buy side is not a fast growing industry. Hate to say this but things are only gonna get worse. We will see less new job openings in hedge fund every year. Junior will hit their career glass ceiling faster every year. I would sincere suggest the career of trading alone or partner with a prop shop where u don’t get paid base but get cheap margin
You are a retail investor with 100k with no edge in technology or information. Sure, if you are lucky you might make decent money in the short run, but the probability that you actually make money consistently is very low. Assuming you do make consistent returns that beat or match the market (which you probably won't), you have to take your fees like every other money manager which is your salary. Will your salary be more than what you would make from actually working at a FO job? No.
Man, we’ve really got to be close to the top
Lmfao I was at the pool a couple of weeks ago with a friend of mine, and I literally overhead some squeaky 16-year-olds talking about buying "Tesla puts because it's going to crash." The top is definitely near.
I generally agree with everything I’ve read on this thread so far. Even if you somehow were able to consistently make profitable trades, $100K isn’t nearly enough to trade with.
Thank you all for the input! It definitely makes sense and I appreciate hearing every point of view.
It's life changing because you can put it in your savings account, invest aggressively at 10% a year, and find a few extra million when you're 55. Also means you can get fired and still weather out the year/look for a job aggressively instead of having to find a part-time job.
So you feel a lot more confident in your first job/venture.
I agree. It sounds risky to begin trading full time rightaway, regardless of the capital you are starting with. And having to look for a job while you are penniless is one of the most stressful situations in life, in my opinion.
I was given a book when I was in college.
Making 30% (generous) on even $500k is not enough to live off of and it’s literally just better to go learn real skills from experts in the field while you earn a salary AND can manage longer term investments anyway...
Take it from me, don’t do it.
Have you done something like this?
Would drop $50k into the SPY and not look at the money for the next decade. Leave the other $50k in an account for emergency funds.
It’s conservative but appropriate for someone with your level of financial knowledge.
100k capital is too small but possible. you do have to trade products with higher leverage.
You would be surprised how closely you have to follow the market. I lost 1.4 Million in 2017 while in college. I lost $1,300 yesterday because I wasn't paying attention. It definitely depends on your attention span. Recommendation, cash out early and take the profits while paying the taxes.
How the fuck did you have over $1 million in college?
pr0n
Neque dolores in aliquam sed omnis qui. Est placeat dolores numquam est tempore rerum. Ea minima veritatis sunt totam alias qui iste. Distinctio et unde dolor ut illo qui suscipit et. Voluptatibus voluptas sed cupiditate sint. Illo repellat eveniet sit ut harum est. Autem modi adipisci voluptatum mollitia ut blanditiis eum.
Ab voluptas deserunt ut eaque voluptas autem cumque officia. Et nisi velit impedit eos. Rerum non eius voluptatibus. Aspernatur dolor qui totam excepturi aliquam ipsum repudiandae est. Quisquam odio quia unde sed autem suscipit eos exercitationem.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...