Do I go for it ?

Slightly off topic ..........but this is one of the best threads in ages:

For insights into frugal living read:

"The Millionaire Next Door" by Thomas J. Stanley

by the way hopefull, fair play to you for posting such an interesting/honest post.
 
Skim,
Since you obviously don't need money, I assume you trade for pleasure? ;-)
Richard
 
Trading for a living is a business decision on a par with other self employment, such as owning a shop or B&B or ......

You need to decide if you have a passion and ability to undertake it. You need a business plan which defines your business risk as well as what you plan to do in running your business. The business risk is how much you would be willing to put at stake in making the business work. In trading this will be the loss of earned income and the loss of your trading capital and the expense of running your household. You potentially need a time limit as well as a money risk limit in terms of achieving a profitable business. If either of these are breached you then know that you have to do something else to make some money.

However you finance it, the money is "borrowed" - it is money that maybe used up in the course of the business and that you may not get back. If it is your own, you have worked hard to earn it and could have used it for other things that would have enhanced your lifestyle.

Given your age and asset base it appears that you would have a reasonably low risk in trying this for 6 - 12 months, but it depends on how you and your wife view the risk. If it is likely to become a point of contention or pressure then you should not start in this business full time - nothing wipes an account out quicker than feeling an urgent need to win (been there, done that!). Having said that you do need to be "hungry" to succeed - this is not a business to be in because you are bored with the alternatives or want some entertainment.

Hope this helps and good luck with whatever you decide to do.
 
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Get a job ,any job that produces a stop gap salary, sell the house, downsize in agreement with your wife , release equity ,but strictly trade small and learn...when your stats show you are on the right side then start to incrementally up position size with your equity .When the stats will support you and your family with comfort throw the job....
 
Skim - Fantastic advice and 'keeping it real in every sense'

Yes, I can cut back - Already cancelled that gym membership this morning (never used it anyway).

Slightly off topic..

When my wife and I first got together we lived in a small flat and made a modest living..we sometimes look back now and laugh at the daft things we did and the care-free attitude we had.

Funny really that when you are younger many of your motives are based on obtaining material possessions then when you work like hell to get them all you realise they are more of a rope to strangle yourself with !

H
 
Mr Charts:

Everything I now do is for pleasure. Every day I wake up with a big cheesy grin on my face because I'm not constrained by stress, pressure, or keeping up with the Jones'.

Trading means I can buy the best asparagus in the shops ... but it won't be a patch on the big juicy shoots I've cut myself and which took 2 minutes to cook.

I learnt how to be frugal and yet live like a King from one of the wealthiest people in the world - it was his outlook on life, living, and pleasure which changed my outlook.

I'm now the one driving in the slow lane on motorways, pootling along and noticing the surrounding countryside because I have all the time in the world to get to wherever I'm going. I often laugh at all the stressed-out speed freaks in their latest shiny top of the range cars on the outside lane, getting frustrated because the car in front is only doing 80mph and they're late for their appointment. I laugh because that used to be me.

It's the little things in life which give so much pleasure.
 
Hopefull:

Being frugal is all a game. You imply that you look back longingly at what you used to have - you can have it all again!

If you are fortunate to have two sets of grandparents, then in the summer park your children for a week with each, buy yourselves a bike each from the police lost property sales, and buy one of those 2-3 person tents. Then get on the train with your bikes and spend two delightful weeks cycling and camping around The Netherlands, or go to France. With no children and no car you can drink wine when you feel like it, have immense fun, and recapture all the wonderful things about living with no family ties - for two whole weeks of sheer bliss and self-indulgence.
 
I empathise completely, Skim.
Freedom has given me that same long happy smile for the last four years.
Harrods - no, but I had a superb meal with trader friends at the Waterside Inn at Bray last week and I could never have afforded that in my previous life.
Oh, I still like driving fast though ;-)
Richard
 
H - one other thing. I note you're using an SB. If you do go down the 'go for it' route - it would be a really good idea for you to consider setting up with a proper broker.
 
The Waterside Inn is OK, but the Fat Duck is better. :cheesy:

I've eaten in some of the best places around, from the Four Seasons, Le Gavroche, Waterside Inn, Connaught, Le Manoir, Gravetye, Skibo, even Highgrove, but I can never remember what I ate because it was nice but not truly memorable. The most memorable was a 'breakfast' of home baked brown bread and home made sausages wrapped in foil and newspaper and still warm, eaten on a beach in North Wales having just had a swim in the icy water in April.
 
Did you try the bacon and eggs ice cream at the Fat Duck?
Highgrove? Shame on you Skim, I thought better of you than to mix in such dubious company.
 
Hey, it was a free lunch! LOL

Followed by a nice saunter round the garden.

Crockery was somewhat unusual - had piccies of the yew hedges on it, made by Thomas Goode (only I could be rude enough to look underneath a cup!).
 
BBB said:


If you cant trade a $10k account with profit, you wont have a chance with $100k either. FACT.

The biggest problem this guy is going to have is the emotional pressure to provide for third parties (family and bank manager).

The business plan idea though is a good point.

Sorry - didn't mean a £100k account. Just that if he needs £2500 to live now (with a 78k mortgage) then this amount will surely rise by at least a few hundred with the extra mortgage and of course items such as a good real-time data feed. I figure say £3000. 12 months = £36k. So add a contingency (maybe I was a little high her, but I've allowed £14k in my calcs.

So then put £50k into an account. Have a "shutdown" amount of say £15k losses. At east then if it all goes pear shaped he's only made one 1 re-mortgage and ends up with a terminal drawdown of say 20% of his re-mortgage. It's just a different way of looking at the numbers. Sorry for any confusion - just to clarify - I agree 100% if you can't trade £20k and make money you are screwed - I was thinking of the longer term.

With £10k isn't the effective shutdown amount on futures about £2k? My broker (remember Mike Stiller from the floor?) won't let me trade even a 1 lot if there is under 10k Euros in an account.

Agree 100% about the major pressure - when you and I was starting out on the floor we were young kids. Add a wife etc. its a tough ask.

Still, good luck to him though if he decides to do it.
 
Hi Hopefull

before I start I want to make it clear that I'm not trying to pee on the fire.

About 10 or so years ago I found myself in a very similar position to yourself. Solvent, some capital, some equity, a good job etc. The company i was working for decided to close the European technical operation. I was the technical manager and was first out of the door with a generous goodbye. I decided after a couple of weeks that I was not going to commute anymore and was going to work for myself. With the full support of the wife I started my business. The wife went back to work and we had 2 years of hard slog where we took the bare minimum from the business. Then the very thing we had been working towards happened. A phone call turned into a large amount of work for a very large client (I wont say who). I had to invest heavily in materials and labour for prototypes etc. Anyhow, to cut a long story short the plug was pulled on the project and not a single bill was paid. A little naive on my part but I had not realised that these where the terms I was working under. We thought we were working as contractors. Our customer was in fact using us to push forwards a pet project for which there was no budget. The big boys probably accept that this happens but we were a small 6 person business. It killed the business and put incredible financial pressures on the family. End result was we lost the house and I was facing personal bankruptcy. Not the end of the world though so I got a job with a local company fixing PCs. Came home one day to find my clothes in bin bags and locked out. I was homeless and insolvent. The one thing that stood out in all this was that when pushed to the edge a womans priorities are herself and the kids. She felt she could do better on her own and so acted on it.

Everything I did in that period I did with the view that I was doing this for the family. I was building a business that would support them and myself and give us a better quality of life even if we had less money. I had not appreciated how much failure would cost us both in financial terms and in our relationship.

Anyhow, I got through the homeless bit and the bankruptcy bit and learnt a fair bit about myself in the process. I was surprised at how little you can live on if you have to. I did the last minute shopping at the supermarket to pick up the mark downs and I would haggle for everything I bought (even in the supermarket). Tip: the supermarket meat/fish counters will usually give you a little extra but not change the price. Every penny was considered before it was spent (ok - no sniggering at the back).

Ten years or so on and I'm now about to sell my London property (small mortgage) and move to Devon. I have a partner and two young children and I trade near enough full time. I still do some IT work and I don't turn it down if it comes my way as it can make a nice break and I enjoy the social interaction which is limited when trading from home.

The point i wanted to make was don't risk everything for this because it could be far more that you are risking than you imagine.

Personally and only if this is really what you want to do I would downsize the house, cut costs to the bone and trade small until you have sufficient trading experience to trade bigger. With minimal outgoings the pressure to earn from your trading is significantly reduced and it will give you the time to develop as a trader. Earn the right to trade bigger is the expression that comes to mind.

Would I go for it in your position? Yes but I would also pull the plug if the risk situation changed and/or supplement my income with other work. If the costs have been cut it does not take a lot of other income to make the difference between tight but content or short and unhappy and believe me you do not want to get to the point were the other half is unhappy.

Good luck and i hope this has helped.
 
Hi Bunyip -

Again, thank you very much for your input - in what is becoming an active thread.

I understand that releasing equity is still borrowed money..and borrowed money needs paying back.Fair point - well made.

I had planned to trade another 8 months before giving serious consideration to doing it full time but the best laid plans....

So I am doing what I guess most other people would do - I am reviewing my situation.Getting another job in my current profession (I use the term loosely) has minimum appeal, my heart aint in it - so its a recipe for disaster.

Also at a practical level I will be office based again working v. long hours and unable to trade.

Please be assured,trading is not something I take lightly.Like everyone else I have worked hard for my money and have no intention of throwing it away on a whim.

It is not something to fill my time,a cop out or anything else along those lines.I demo traded for 3 months before opening my live account (and yes things did change).

It is most definitely not something I am looking to do simply because I am bored and disillusioned with my current line of work.I am passionate about it and have invested a great deal of time into it already..why - because I enjoy it and knew if I could develop a trading style which produced a consistent level of positive weekly returns I would have an option away from my current field of employment..I guess that may be the case for the many people here...

Ok things have changed quicker than I expected.Such is life..
 
Hi jp

Long time no speak - I am going to pop in the chat room shortly but didn't want to clog things up in there with my predicament.

(Currently sitting on 64 pips on my E short from last night at 1.925..luckily just missed my SL by 4 pips - stopped out at BE on the remaining Cable short...just to see it tank this morning -!)


Thank you for sharing your experience and yes..I am a slightly hesitant that if I give it a go and it doesn't work then there will be consequences but just as with my trading I will impose a 'stop loss' set at a pre defined, appropriate level.This will be decided right from the outset and if hit - I am out.

Should this happen then it will be out of my system so to speak and I'll move on knowing that I gave it a go and did so with all the commitment and energy that I could.

Please to hear that everything turned out well for you - where abouts in Devon are you off to ?

H
 
jpwone

A very salutory post that may help others in similar predicaments and gives the hope that there is light at the end iof the tunnel and it is not an approaching train.

Good fortune on your move to Devon

Regards

bracke
 
well Skim, you obviously realised what so many people don't get,that the things in life that make you sustainably happy are not the things that you ever bought and indeed are not things that you could ever buy....way too profound for this time of day
 
Everything I now do is for pleasure. Every day I wake up with a big cheesy grin on my face because I'm not constrained by stress, pressure, or keeping up with the Jones'.

Skim - I agree with this 200%.

Don't want to sound too rude, but 'tongue in cheek', you seem to come across as a Worzel Gumage type. How do you get a table at Caprice, Sketch, Wolsey et al wearing a straw hat and dungarees??
 
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