Getting around to the idea of trading full time
2024 is a personal 5 year for me (according to Numerology) and the 5 year is supposed to be all about freedom, change, and facing your fears. In my last post, I just wrote about how my phrase for 2024 is quantum leaping because I want to invite huge, unimaginable change into my life. The year 5 theme of freedom really resonates with the internal struggle I continue to face as I think about whether or not I want to go back to a salaried job.
There have been three major things regarding trading that have been a source of hesitation.
The first is that it doesn’t feel like a “real job.” However, as I put more effort and seriousness to how I trade, including my daily routine, this idea has diminished. A real job is one that pays and this certainly fits the bill. Of course, this income isn’t as steady or guaranteed as a salaried paycheck, but given the companies have been laying workers off, I’m not sure that tech / startup paychecks are as secure as they once were.
My attitude towards trading not being a legitimate job comes from my parents’ disapproval of this as a career choice. They think I’m wasting my brains and talents sitting behind a bunch of screens. Especially given that I have a master’s degree in public policy, sometimes I wonder if I could be having a bigger impact elsewhere but there is little incentive to do so. I have found that even with my degree, the jobs that I thought I would’ve wanted either still consider me to lack the skills/experience they want or pay so little it’s not really an option.
The second concern is that it doesn’t pay as well as a salaried job would. My last full-time job had an annual compensation close $300K when you take into account all the salary, equity, and benefits. If I have a good year trading, my likely income will be around $100K-$120K. However, given the market conditions right now, many of the jobs I’m looking at have a base salary between $140K-$170K, which isn’t that much better, especially compared to the hours and stress that a full-time job would entail.
If I knew that I could make $200K annually trading, this would be a no-brainer. Trading would be the obvious choice—why wouldn’t I choose the job that gives me independence, freedom, and more? According to my projections, in a good-case scenario, I could make $200K as early as 2026.
Thirdly, when you’re trading you don’t get the benefits of working a salaried job like being able to get a mortgage easily, subsidized healthcare, and earned income to contribute to retirement accounts.
There are ways around all of these but they require additional paperwork and money. At the right income, incorporating as a business can provide the same benefits a company would — the definition of being self employed.
One thing to note is traders do not pay Medicare and Social Security taxes (which you would have to pay if you incorporated) so there is some tax savings, offset by the fact you can’t contribute to retirement accounts. If you’re like me and have already earned enough credits because of previous earned income contributions to Medicare/Social Security, you could still quality for SS benefits later on (but potentially at a lower rate than you would have received with a salaried income).
All of this to say that I’m getting more comfortable with embracing the idea of becoming a full-time trader. Like I said, if I knew that I could make $200K annually it would be a no-brainer. So following that logic, it’s not that I have any real reservations about trading—it’s really about the stability and certainty of income…which I think can be solved for over time.
Trading full-time feels like a way to pursue freedom but it definitely feels like it’s in the realm of possible things. I’m much more curious and excited about all of the unimaginable things. Just this past week I was dreaming about starting a fashion line, selling my ceramics, or selling my kimchi. Perhaps those are glimpses of other versions of me.