Two Reasons Explaining Why Making An Investment In The Market Full Time Is So Troublesome

Written by Ronald Hakeem Saturday, 23 July 2011 11:12

Many folks dream about turning into a full time stock exchange financier because you can spend all day telecommuting, researching diverse corporations to find decent investments. However many folk that chase this dream finish up either losing money or not making so much cash as they believed they might.

Many folks dream about turning into a full time stock exchange financier because you can spend all day telecommuting, researching diverse corporations to find decent investments. However many folk that chase this dream finish up either losing money or not making so much cash as they believed they might.

There are 1 or 2 reasons why. First off the cruel reality is you need a ton of money put aside to take a position in the market if you really are serious about making a fulltime living. I know somebody here in Britain who's lately retired but figured he could replace his revenue from his prior work with revenue from the market. However the significant problem was that he only had 25,000 to invest, which is far away from enough.

The average earnings in Great Britain is around 20,000-25,000 so on that basis he would need to make almost 100% % profit a year simply to make a comparatively cosy earnings. Clearly this is a virtually impossible job because even the absolute best fund managers don't achieve anywhere near these types of returns. The sole way you might realistically achieve that goal is to speculate in the highly hopeful small-cap stocks, but this is perilous.

The reality is that regardless of if you had 100,000, as an example, and invested it in high dividend stocks paying 7% for example, you'd still only earn 7,000 a year ( not taking capital expansion under consideration ), which is less than the minimum wage.

Another point worth making is that if you would like to become a fulltime financier making a steady and trusty earnings, you have to be a very talented financier. To paraphrase you must be capable of making cash in both bull and bear markets. Anybody can earn money when the markets are going higher, but only the absolute best stockholders can earn money when the markets are falling. So this is another point to think about.

There are of course many individuals out there who do make an excellent living from stock exchange investing, but the point I need to get across in this post is that it is very tough to do in truth. You have to be highly talented at both finding lucrative investments and protecting your capital when the markets are in free-fall. Plus you also require a lot of capital if you're serious about earning a full time salary from your investments, no matter whether you're searching for capital growth or revenue from dividends.