Take a step back. Remind yourself why you’re doing this. Freedom and flexibility, right?
Don’t lose site of the goal, growing your net worth. Our investments, trading, and/or day job all contributes to an upward sloping new worth curve.
What I’ve found over the years is that simple works. As the saying goes,
“Trading is simple YES, Easy No.”
As traders, we constantly find ourselves looking at charts, analyzing data, and projecting outcomes. I do the same in my personal life with the day to day finances and long term outlook on life.
Trading is great, but it needs to be constructive. Getting to that state of control or feeling of being “in the zone” takes a long time. For me it took about 5 years. Sure I had lots of success and learning experiences along the way, but it wasn’t until I had a complete bigger picture plan that trading fit into that I really felt comfortable.
If there’s one takeaway form this post, it’s to spend your time minimizing waste and putting energy into the things that will help you grow. And I mean personal growth, as well as net worth growth. Because the more you grow yourself, the better suited you will be to grow your riches.
Where to Start
What are your core goals? In life, in work, and in trading.
Now match your lifestyle to those goals. Everything from:
- Where to live
- Who to associate with
- What career to pursue
- What kind of relationships you want
- How you approach challenges
Everything action you make ties back to who you are at your core. You need to be honest with yourself and spend the time asking yourself what it is you want out of life. Once you know, then it’s easy to point the ship in that general direction. Not having a direction at all though, wandering aimlessly, that’s dangerous.
In Tim Ferris’s book The 4-Hr Work Week he talks about ideal lifestyle costing, which you can find here. Determine how much you need to live the life you want to live, and then come up with ways to earn that income, trading is just one.
Earn More by Mapping out a Plan
When it comes to Moonlighting Your Trading Business, there are lots of things to consider. In addition to your day job (at first) or even a part-time job you enjoy an eBay side business can be a great way to increase your income.
Do some spring cleaning and take note of what’s working and what’s not.
Plug some number into a compound interest calculator, the results may surprise you.
I break down my net worth (roughly) into three categories: long term investments (50-60%), swing trading growth (20%), and day trading (10%). The last 10-20% I put into business projects and similar investments.
It’s funny how the more you contribute to your net worth and longer term financial security the more confident and better trader you become.
Building a Long Term Portfolio
In the long term, mutual funds and ETFs work great. It’s those regular contributions that make all the difference. For the medium term growth swing trading is an excellent vehicle and for short term we have day trading.
The two funds I use are from Vanguard, and they are the Vanguard Star Fund (VGSTX) and Long Term Investment Grade Fund (VWESX). I contribute to these accounts on a weekly basis.
It’s really that simple. If you contribute on a weekly or bi-weekly basis to your long term portfolio or savings account I guarantee you will be pleased and even surprised 6 months or a year from now.
I use thinkorswim® (now powered by TDAmeritrade) for my brokerage and IRA accounts and have from day one. Click here to open an account.
Create Good Habits, Then Build on Them
All the things in this post are designed to create good habits, habits that you forget about and just do. Become good at spotting opportunities and when a door opens; be the first to step threw it. Sit back and watch how as you grow personally, your net worth grows too.