A definition of an investor that I’ve always liked is a person who earns money from their various investments – in other words, they use their money to generate more money. The lure of being a full-time investor is often time and location freedom. I know that is what excited me. But, having been a full-time investor since 2005, and a part-time investor since 1997, I have learned all too well you do not get something for nothing; there are always tradeoffs.
To be a full-time investor, unless we are dealing with a monumentally large portfolio, we will not be able to support ourselves unless we are making very large returns. Most full-time investors start with very large portfolios they have generated through other means, like being a business owner, self-employed, or an employee. They have such a large “golden goose” to start with, the “eggs” it produces at low rates of return, are enough to live on. If we are looking to grow a small portfolio to a size that can support us, our money will need to work very hard.
I have found there is an inverse relationship between the amount of reward (and risk) an investment might have, and how much knowledge, experience, and effort we need to put in. There are definitely ways to increase efficiencies. Technology can help. Most of all, though, it takes repetition. Repetition of best practices. Repetition of things that don’t work creates bad habits. It is a perfect practice that makes perfect.
How long will it take?
That’s the question that is on the minds of most beginner traders.
How long before you figure out the market? How long before you stop losing money on 50%… 60%… 70% of your trades? How long before you start making money?
What’s critical to understand is that it is important to learn about investing and trading correctly from the get-go. Unlearning bad habits from repetitively doing things incorrectly takes an incredibly long amount of time than learning how to do things right from the outset.
So how long will it take?
Author Malcolm Gladwell came up with something called…
The 10,000 Hour Rule
It’s a principle that says – if you want to master ANY skill – you need to invest 10,000 hours of “deliberate practice” to do it. The NYSE is open 6 and ½ hours per day – 5 days a week.
At that rate, it’d take nearly 5 years 11 months to master trading.
The good news is that you don’t need to be a master to start making money.
So… How long does it take to do that?
I’ve recorded a video to answer that question.
Click the video above to watch it now.
You might be surprised by the answer.