Become a Full-time Investor (& Kick-Off your 9 to 5 job)

Full Time Investor

I had consistently received a common doubt from many fellow Investors, which somewhat looks like this:

How can I become a Full-time Investor/Trader?

It’s a dream of many freshmen in this field to be called as a Full-Time Investor. You don’t need a degree, you don’t need a team, you don’t need anything enormous.

But.

Whenever somebody asks me – How to became an investor, and what advice I have for them, I usually caution them. Pursuing a dream is hard and costly. It requires lots of energy and dedication, but it can be worth the effort.

Though, It’s not gonna be easy.

These days, most people I meet are talking about their dreams. They want to launch out into their life’s work. They think they need to take a giant leap out into the unknown when, in fact, the opposite is true. It’s all about small steps over time.

Here are 6 Advice that you should follow to become a Full-Time Investor:

Advice #1 – Generate Capital

I had met many people who had ruined their life in Stock Market and are now indulged in some kind of day jobs with a small payout.

That is why you may have heard from elders that Stock market is pure “GAMBLING”. They believe that earning money in stock market is all by luck. You gain money instantly and same goes with losing the heap of money.

However, that’s not true. If did it in right way, then you can make fortunes.

But remember, there are only 2 ways to make money:

  • Work yourself.
  • Or let your money work for you.

In Investing, you need a little amount of work but you need money which will make another penny.

Don’t think your investments as a right to ownership in the company. They are your employees who are working for you even when you’re sleeping, dancing, walking eating….

Related read: Secret Revealed: Why Rich are Rich and Poor are Poor?

They will create another penny which you can re-invest again to get a compounding return from your investments.

That is why you need some amount of capital to make changes in your financial position. Investment in 8 digits is must before you think to become a Full-Time Investor.

If don’t have that much money then first, build some skills and start earning money, then saving and invest.

Advice #2 – Create your own Strategy

You’re going to be your own BOSS so you need your own strategy. Your own plan.

Simply following others is something which you can do even if you’re not a Full-time Investors.

First of all, chose your style of Investing:

  • Fundamental based OR
  • Technical based

……and is also categorized in the following manner:

  • Long Term
  • Medium Term
  • Short Term

Then create a strategy according to your style. This is a “must have” thing.

Without this, you’re nothing. Either you’ll end up losing everything or you’ll be begging for a job afterward.

You need your own corporal strategy which you’re going to use in the market to employee your money and which is effective & reliable to live your livelihood smoothly.

No matter, whether it is based on fundamentals (Earning, Debt ratio etc) OR technical parameters (charts, volume, moving averages or whatever).

But it needs to be profitable.

Advice #3 – Don’t leave your day job

Do not quit your day job.

I know. You hate your day job. The fact you call it a “day job” is a sign that you basically despise it as a grim, necessary evil.

But I’ll repeat:

Do not quit your day job.

Not yet.

If you’re going to become a full-time investor, you need a plan. Simply, quitting your job on gaining some quick bucks in the market is not less than a cardinal sin.

The time when you got a reliable intrinsic feeling that – You can live on your investments – is when you should pull the trigger.

No, I’m not discouraging you from following your guts. But, I want you to slow down. Ease off the stick, chief. Prepare yourself before you took any bold step. Think about your family, responsibilities, backup plan and everything which might get affected with your moves.

Don’t take unnecessary risks.

Advice #4 – Investor OR Trader

This is something related to your style of Investing. I had already talked little about the style above but still consider giving it a dedicated section to emphasize the importance of this advice.

Deciding this thing will change the whole thing. Your way of Investing. Your daily operations. Your thinking. Your tools. Or whatever.

Investor gives more emphasis on fundamental criteria like ratios, financials WHEREAS Traders look after the charts, volumes, moving averages.

Investors use Screener as a tool to track their stock WHEREAS Traders use Ambibroker like screening tool.

Investors spare their time reading annual reports, balance sheets, company’s operations WHEREAS Traders look over charts, historical trends.

You need to choose your own road. Going for both will end up with nothing. You can’t get expertise in many things instead of on one.

Advice #5 – Create multiple sources of Income

You may a full-time Investor but still, you need to have some backup.

Pushing off all of your savings in only one venture is not a wise step. Don’t only rely on 1 or 2 sources became if it tumbles, you too get affected financially.

There are many negative consequences of just relying on single pillars. Like Saudi Arabia has an Oil based economy. Oil prices tumble, so do the economy of SA collapsed a bit.

That is why, they took some crazy steps like 650% hike in Visa Price.

That’s why Create multiple pillars.

There were also days when the market was highly sluggish. People were afraid to put their money in stock market. Few years after 2008 financial crisis can be taken as a great examples.

And this will happen again. It’s something cyclic. So need to have some other sources which might help you to get uplifted at such times.

Therefore, create multiple sources of income like…

  • Write an e-book on any interesting topic (if got traction, long-term source of income).
  • Start providing freelancing services on sites like Fiverr
  • Keep your investment diversified with Bonds and debenture.
  • Always keep some ideal margin money aside in your bank account.
  • One of your house on rent.
  • A small side business
  • Etcetera

Advice #6 – Stock Market Investing is not the right way to create wealth

Yes! It’s possible to make fortunes in the stock market but this only works in long run.

You can even earn +100% return per month, per week and even on daily basis.

Trade Futures on high margins (which is maximum 10 times) and pray. If lucky, you’ll get more profits than your invested capital.

But.

It’s not only how much you can earn but also, what is the probability of not getting the invested money back which is also termed as “risk”.

Recently, I talked to a friend of mine who earned 13 lakhs with only 2 lakhs of funds. This equates to bit less than 700% of returns.

But in another couple of days, he lost every penny he earned accidentally.

Nothing is impossible. You can do anything but the point, here, is not – what you can do or cannot? – Instead – what you should do or should not do?

You should keep your greed low and just expect a return more than next possible highest returning asset class that stands the equity return between 15% to 20% per annum, not the month.

That’s the optimal return that you can earn from equity market with low risk.

And if you earn more than that then you’re lucky person earning more money with very less risk.

That’s it.

Stock market is for people who are patient and keep a long term perspective. But if you want to make wealth quickly then start your own venture and work your butt off to make your idea alive. You may be well aware of the business culture of our nation. Many startups are making millions in just a couple of years. They chose to work hard.

Wrapping it up

Three years ago, I was like many of you. Just starting out. Not a clue which way to go. I had a strategy and that was it, but I wanted to become a full-time investor. Yet, I hadn’t fully achieved the dream.

Fast forward a couple years, and I’m doing this for a living.

You’re even afraid to say it out loud, in case you sound plain crazy:

“I want to make a living as an investor.”

(You can just imagine the snorts and smirks from family and friends.)

But it’s true — you’re no closer to reaching that goal than the day it first popped into your head.

The problem isn’t your dream; it’s the way you’re going about achieving it.

About Sowmay Jain 59 Articles
Hello! I’m from Hub of IT (ha!) Hyderabad, India. I work full-time from home, making a living from my blog and another dynamic medium from my investments. Like so many other people, I’m on my Plan B career. At the same time, I share ideas and techniques to help my readers in mastering stock market and overcoming losses.
  • Thanks for your value addition to the post. Stay in touch.

  • I removed that part of article. Even it sound awful to me. By the way, meaning was something sarcastic that the person is not mentally prepared that’s why not able to chased his dreams.

    However, Just ignore it.

  • Early to investments, more will be your compounding returns. Thanks for your kind words.

    • Sreenivas Doosa

      Yes, you are right, missed the compounding part.

      • AG

        Just to add .. the two most beautiful mathematical concepts in long term investing are .. a. Compounding, which has been mentioned .. and b. Rupee Cost Averaging, not sure if this has been mentioned.

        Once one has accumulated the desired number of shares then one decides to hold it for long term. In this holding period compounding does wonders.

        However, accumulation process is not easy, although we take it lightly. Acquiring at lower price gives extra margin of safety. In the accumulation process Rupee Cost Averaging does wonders.

        Example –

        Scenario 1.
        Say you have Rs 600. Price is Rs 8. You go ahead and buy 75 shares and you are done.

        Scenario 2.
        If price fluctuates as 8 >> 10 >> 8 >> 6 >> 8 .. then the market price is back to Rs 8 per share after moving on both sides by equal amount. If you decide to buy Rs 120 worth shares at 5 price points then you get 15 + 12 + 15 + 20 + 15 = 77 shares. So that’s additional 2.66% shares acquired in the same money.

        Of course if the share just immediately runs away never to return to original price and below it then you have fewer shares but then you are invested with lesser money also because you couldn’t buy the desired number of shares by following the 2nd method. In that case one shouldn’t chase too far and should look for some other good opportunity with the leftover money.

  • AG

    Very good topic. And very well thought points that you have presented. I personally consider point no. 3 the most important. Often people don’t understand that 9 to 5 job, doesn’t matter how boring, is their “primary” source of “regular” income. And they leave their safe and secure job to jump into markets with some capital in hand and some risk-return assumptions in mind. Soon the shaky plan collapses. I think that the very first thing one should always do when one thinks of a career shift, particularly as drastic as from a 9 to 5 job to being full time investor or trader in capital markets is to become totally honest with self and ask the self some tough questions. My simple point is – there are just too many people who pretend to be risk takers but actually are not. Either they don’t have risk taking appetite or risk taking ability. Just appetite is not sufficient. Ability is very important. One must have the required capital and skills, not just appetite. So in important decisions in life one needs to be downright honest with self – clarity on how to go about the decision will come automatically thereafter.

    I have seen people trading and losing money but not willing to study charts and not willing to spend time tracking news. I have seen people investing serious money on tips. It’s so foolish to everyday throw money like that, even if you are Kuber.

  • Jitesh Barmeda

    Great Article – One of the biggest reason people loose money in the market they trade to make quick money. We need to take trading as a business. We need to start small and as we gain knowledge, experience we can increase our capital.

    Also, I have since many getting excited when they open a demat account and want to take position in the market as soon as possible rather then waiting for the right opportunity. This is due to lake of knowledge. Every traders needs to learn trading before he starts investing in stock market.

    Here are few thing every trader should learn before trading :

    1. Japanese Candles
    2. Trend Identification
    3. Stop loss and trailing stop loss
    4. Global Market analysis
    5. Multiple time frame analysis
    6. Position sizing
    7. Pyramiding and inverse pyramiding
    8. Controlling emotions while trading

    I have also since many traders learn and then they start trading. However, they focus only on technical analysis and ignore other key aspect of trading like risk management and trading psychology. Every trader need to know risk management is the most important aspect of trading. Professionals and institutional trader are very good and risk management and hence they make huge money from stock market.

    Also, we need to control our emotions (like : fear, greed, excitement) while we are trading. We need to have patience.

    If I want to conclude : We need to focus and learn technical analysis, risk management and trading psychology to become a successful trader. To learn you may visit : http://tradeforliberty.com/