3 Reasons Professional Trading Is A Bad Idea (And A Superior Alternative)
Trading is the hot new career path. Over the past year, crypto currencies have gone mainstream, the GameStop short squeeze became an international news story, and NFT investing dominated social media.
It seems like anyone with a couple bucks and a brokerage app can easily trade their way to millions.
Until the market corrects, at least.
With crypto and stocks down over the past week, I thought it would be fun (and important) to look at why professional trading is a bad idea. I’ll also share a trading alternative that’s potentially less risky and more lucrative.
Without further ado, here are three downsides to trading full-time.
1. You Need Enormous Amounts Of Starting Capital
I’m in South America for the winter, and will confidently say that there are many excellent Latin American cities where you could live quite comfortably for less than $1,200 USD per month.
I spent November in the Brazilian city of Florianopolis. It was fantastic. You can safely walk anywhere, and there are dozens of beautiful beaches.
Why am I bringing this up?
Because it’s easy to imagine yourself moving to a tropical city, working a few minutes every morning, and then spending the rest of your day goofing off at the beach or riding around on a jet ski.
Trading gurus even use this concept as their main pitch when selling courses.
Here’s the thing. You would need enormous amounts of starting capital, or unparalleled trading skills, just to make $1,200 per month. And keep in mind, while $1,200 is more then enough to live in Brazil or Colombia, it’s below the poverty line in the USA. So making enough to live in Miami or New York would be even harder.
Suppose you save up $100,000 (which is a lot of money and top 1% net worth for most age brackets).