When the potential is given to the average guy that he can possibly replace his existing income with profits from Forex, it becomes an easy aspiration to want to trade for a living.
Simply because you might have had a few good months, don’t be so quick to tell your boss to piss off. There’s a lot to consider before you do so.
First, let’s think long term. Right now you most likely have a job. It’s not likely you plan to work until you die. There is a point where you would want to be able to retire. For most, that age is on their mid to late sixties. You will need a big pile of money to support your retirement lifestyle. Do you really plan to stay glued to your charts your entire life? Of course not.
To secure your retirement you will need to consider the amount of money you will need to be financially independent. If at a minimum you are satisfied with your existing lifestyle, then take your gross income, subtract taxes, all current liabilities, and existing amount you currently save. What’s left is your current lifestyle.
For simplicity let’s say you currently gross $60,000, but after taxes and other expenses your existing lifestyle requires 30k a year. If you plan to retire and live for 30 years in your retirement you would need to accumulate $2.6 million dollars. The assumption being that you planning to retire in 30 years, are obtaining a minimum of a 5% return on your investment, and battling a 3% inflation rate. You would need to set aside over $600,000 today if you wanted to secure such a retirement.
There are other elements to consider. And that pertains to your risk management. It’s likely you are getting your health, life, long term care, and disability insurances provided by for your employer. If not, then you should add another 25% to your existing lifestyle because when you are trading for a living you have to take care of those expenses on your own and it does not come cheap. This can be considerably costly if you or an existing family member are unhealthy or uninsured. If that is the case you will need to set aside a considerable sum of money to absorb such risks.
And I don’t want to hear how your spouse has these insurances covered through his/her employment. Don’t be a d*ck. Retire your spouse first or retire together. Don’t be the @sshole that gets to chill out at home when you send your spouse out to support your nonsense.
This is your life and it is serious business. Don’t be a fool. You are already nuts because you trade currency, but for the love of all that is holy, don’t don’t put your family at jeopardy. Even if you are single don’t be stupid. It’s not worth the risk, even for yourself.
Therefore, do not trade for a living until you have amassed a bankroll that allows you to set aside the net present value of your retirement. Thereafter, have two years of lifestyle income set aside at a rate that would include taxes and your insurance expenses. And finally, you can take a dump on your boss’ desk when the monthly withdrawal rate from your account can cover your lifestyle expenses making sure you leave in enough gains to allow the account and your withdrawal size to keep up with a 3% inflation rate and whatever amount you want your bankroll to further grow on an annual basis.
Trading can be stressful enough. And that stress only exponentially compounds when your ability to financially survive is taken into consideration.
If you are interested in knowing what it personally takes for you to go pro, feel free to message me or reply below. I can help to work out the numbers for you so you know what you’re up against in this crazy game we play.
#priceactionhero
