Maybe I'm missing something, but if you have a 14.2% gain this year, all time annualized high of 72% return, plus income from a day job, plus income from books..... how will it take you 8 more years to get to 300k?
That's only 37,500 per year, which should be do-able from any one of those things (except maybe the book, but that should provide some at least). By end of this decade did you mean end of this year?
I think the market will catch up to you, but I wish you the best of luck.
When I say "by the end of this decade," I mean just that - sometime before 12/31/2019. :) I had a pretty rough start when I graduated from college just when the Second Depression hit. It was just bad timing, pure and simple... It took me a few years to get on my feet and find a job with a fairly decent salary - now it's all about saving and investing. ;)
After 30 years of steady rent increases and finally selling the home, I could be well into the 1000% profit range on average compared to the initial down payment, closing costs, and repairs. In real estate, the longer you're in it, the more you make on the original investment.
That last sentence sounds a lot like Ponzi scheme - go all in, go long-term, and if a bunch of speculators don't crash the housing market (and if your property isn't in a dying city like Detroit, which I hear was a fairly nice place 30 years ago), you'll make money. I'm not saying it's impossible to make money in real estate, but I'd rather stick with something that works for me (and has been working for a few years now) and makes money here and now, not 30 years down the road.
Get my stash up to $300,000 and enjoy the pleasures of geographic arbitrage. ;)
Only $300k? Good luck.
Assuming a 4% annual withdrawal rate (Jacob's ERE formula), that's $12K a year, which is more than enough to live comfortably in a lot of fun and foreign places. Don't knock it until you do your research.
If you are successful year after year at doing this, why not start your own fund and have others pay you to invest their money for them?
I haven't ruled out that option.
Patience is a virtue, for sure. But nothing about short term trading is related to patience.
The more you write about this, the more it seems you've never tried anything like this yourself. FYI, it takes quite a bit of patience and strong nerves to avoid selling on an impulse when the market has a hiccup, or to hold on to a stock that took a small hit instead of shooting straight up. Psychology of trading is a fascinating subject - and yes, patience plays quite a big role in it.
Ha. I knew you were going to skirt your answer to my tax question. Why? Because even if you magically make money on short term trading on a consistent basis, you still have to do 15% better over the long term than those who simply make long term gains. So not only do you have to be good at placing bets against the market, you also have to make enough to cover your extra taxes for short term gains.
Don't take this too personally, but you've demonstrated that your way of thinking is incredibly linear (e.g.,
"I'm not going to take somebody seriously who prefers day trading over real estate investing."). There are
very many legal ways to avoid getting robbed by the IRS.
We're only 2 months into 2012. I wouldn't count your chickens just yet.
If I stop right now, and if the market has yet another mediocre year, I will have won by default. A lot of people would kill for a measly 5% return over the course of one year...
Investing for retirement is about long term success, not short term wins and losses.
Not always. There are always exceptions.
Yes diversification is key. So even though you have income from other sources, it doesn't make sense to risk large sums of money on something as focused as a couple of stocks for a couple of hours or days.
Where did I say anything about a "couple of stocks"?
I doubt I'll change your mind, but I will say this. I hope you do well and I wish you luck on your short term trading because that's what it is, a game of luck. When, not if, you lose big money, I hope it's significant enough to help you think more long term about your plans.
Heh. Good luck to you too, B - I hope your real estate ventures are successful but when, not if, something goes terribly wrong and you end up with a piece of land in an abandoned/devastated/post-bubble location (see Detroit, New Orleans, Las Vegas), I hope your loss is significant enough to help you open your eyes to other people's money-making strategies.
