How much capital to make a living... Question has been asked before ... Answer how long is a piece of string ?
Depends on how much $$ it cost to sustain your life style ... cost of living could be as low as $50k per year or less ... near on bread line subsistence living for a family depending on where you live or if you single or could be $500k or more per year if your like to live the life of luxury ...
Answer of course its different for everyone.
Quite obviously the more capital you have the easier it will be (given a basic level of Trading skill). If you could not earn 20% a year on average on your starting capital STT'ing then your doing something seriously wrong . There are high flyers here that I suspect will earn many multiples a year, year in year out ...
so lets take a modest 20% return year in year out ...
starting capital 50k = earnings $10k before Tax. ... You can live on that. No
500k = 100k before tax... takes you just above subsistence level
$5m = a cool $1m .... you start living the high life with prob 550k After tax approx.
$20m = a even more cool $4m ... approx. 2 mill tax bill...
Advice: If your thinking of sustaining yourself trading then..
Step 1. Reduce your outgoings to your personal subsistence level what is the min that you and your dependants can survive on.
Step 2. Part time trade for several years (10-15) using your system through a full economic cycle (ie, through a major market collapse and recovery) and judge objectively whether you can sustain that subsistence level of income on avg year in year out. Its about maintaining discipline over the long term .. a marathon?
Step 3. Once successful at Step 2 Discuss with you spouse /partner if they would not mind working while you trial full time trading... If yes proceed to Step 4 ...if not revisit Step 1
Step 4. Execute ..day in day out your strategy knowing at any time that ... your historically defined procedures could all go to shite and need to be redefined on the fly. ...ie back to Step 2.
Step 5. retire ?? ... not sure ...as I'm still at step 4. and been there since 2008
So question then after Step 4/5 how much money is enough money ... again how long is a piece of string? ... For some they will never be satisfied whatever the balance is ... I can tell you one thing money does not buy you a happiness if it does it is fleeting... it buys you one less thing to worry about for a time and 1 more thing to worry about with a bit more time .... In fact the more money you accumulate .. the more you start to worry about ensuring its preserved. Several members within my greater family unit have experienced losing everything several times during their lifetime through war, legal and illegal means, illness. etc etc . You need to ensure you cover bases for all eventualities ... and I mean everything.
