Trading For a Living: Is Your Trading Making Payroll?

Brian McAvoy here with Inside App Trading. Today we're going to talk about something that really is really crucial if you want to save yourself a lot of regret later on down the road and a lot of frustration right now. So here's the big question. Is your trading making payroll? I know that might sound like a weird question, but it's actually perfectly valid because, you know, a lot of people, they're sitting here, you know, they got some money over here in the bank and they're like, you know, got 7% a year, just doesn't sound like much or, you know, maybe it's in savings making even less as far as a return on your money. So you're thinking, well, you know, I got this money, you know, I want to, I want to do something with it so I can make, you know, so my money can make me money. And that's, that's a good idea. That is smart. You know, you want to put your money to work for it. The thing with trading though, unlike putting it into, you know, the stock market, just, you know, an index fund or whatever or you know, buying stocks or other buy and hold investing, whether, you know, even, even if it's some other asset, but where you just put your money over there and it, you know, grows over time or hopefully ideally, you know, does produce cash flow. But if you're putting your money over there and you know, it just, it does its thing and you don't have to do anything cool, that's your return on your investment. But with trading, it's a business and here's why. Because you have to work there, you're self employed as a trader and so you're putting your time in and your time has value. It has significant value. I want to run you through a real quick exercise. Here's what I'm talking about as far as making payroll. Because if you're going to take a job and trading is your job, you're self employed here. If you don't, if you don't trade, you don't make money. So here's the exercise because again, you know, if you were doing something else, if you put your money over here and you know, just a regular index fund, you know, just put it in the S and P, whatever, it's going to make a certain amount of money and you could go do something else and generate income. And so your time does have significant value and you really should account for it. If you were buying a business, this would be a big factor. It really would. Because if you're going to be working there, to run the business, you need to be getting paid, you need to be getting a paycheck. Otherwise that money is coming out of your, you know, your investment return. True, because you're working there. And you know, again, when you're looking to buy a business, you know, whether looking at EBITDA or owners discretionary funds, this is a big factor. You know, whether it's an owner operated or a, you know, self sufficient business, if you're working there, you have to take your pay into account. Now for trading, let's take a look at what that, that would add up to because you know, a lot of people say, well you know, you know, it doesn't really cost me anything because you know, I'm just putting in my time. Your time has value and you could be putting it elsewhere. So let's say, and you just want to use something really super basic, you know, like if you were to go do something else, you can make 20 bucks an hour mowing lawns and you know, landscape Work easy. 20 bucks an hour. So let's take a quick look at that, what that would look like. And so yeah, here's the question, you know, is your trading making payroll? So here's the question, you know, let's say you're putting in 10 hours a week with your trading just two hours a day and not anything beyond that. Not just your active trading, but all your time, you know, put towards trading, it's just 10 hours a week. At 20 bucks an hour, that's $200 a week. $200 a week, 50 weeks a year, that's 10 grand a year. So if you're sitting there, you know, you put all this time into your trading and it's not paying you well, you're missing out on this money that you should be getting paid, that you could be getting paid if you were to just put your, you know, take whatever capital you got, put it over here in investment, let it do its, let it work over there by itself without your time. And then you could go over here, you can mow lawns, make, you know, make 10 grand a year on top of what your investment is making. This is super important for you to pay attention to because if you let this drag on and this is just a 10 hours a week, most traders are putting in over 10 hours a week. I mean seriously, here's, here's the rule of thumb. For every 10 hours a week, at $20 an hour, every 10 hours is costing you 10,000 a year. So if you're putting in 20 hours a week, that's 20 grand a year. You could be making, doing something else. And again, just let your money sit over here and make it 7% a year, you know, trucking with the S and P. So. Or, you know, some other managed fund down at Schwab or Edward Jones or, you know, some other. Some other investment house. So it's really important. If your objective with all this is financial, then you have to pay attention to the financials. You can't just say, my time is free. Because your time is your life. If you're putting in 10 or 20 hours a week, whether you're trading, that's 10 or 20 hours a week. You're not doing other things. You're not living your life. It's, you know, pursuing personal interests or personal growth or, you know, helping out with a cause that you like or spending time with your kids or your spouse or vacationing or any of that kind of stuff. Those hours count because if you're investing them in your trading, you're not getting to spend them elsewhere. And this is money that you could be having 20 bucks an hour. There are tons of things you could do, go and do and make 20 bucks an hour. So you need to take this into account. All right, so I'll stop. Stop at the screen share, but keep that in mind. I mean, you're trading. Okay, here's the main point of it all. If you're going to be doing this, you're going to be investing the time. Make sure that you're going to get to where it covers your payroll in a reasonable period of time. You don't want to be sacrificing, you know, 10 grand a year for three or four or five years. Let's say you do that. You just, you know, you put in 10 hours a week with your trading and you manage to hit break even. And then you just kind of coast for five years, which a lot of traders do. A lot of traders, it takes them five years before they get profitable and are actually making money, any money. So they're working five years and they're giving up $10,000 a year for every 10 hours to work. And over five years, that's 50 grand. You don't want to let this take forever. Okay, so what do you do? I'm not just trying to do this to get you worked up and leave you hanging. What do you do? First of all, you decide, okay, I'm only going to invest so much of my life, so much time, so, so many $10,000 chunks before I say, wait a minute, I just need to stop and reassess what I'm doing. Is this working? Do I want to continue investing $10,000 a year, you know, for every 10 hours? Let's say you're working 20 hours a week. Okay, Do I want to keep investing 20 grand a year, 10 grand every six months, and just let it drag on and I'm not getting paid? No. Also, are you working with sufficient resources so that you can get to where you're making payroll? And think about this. Okay, let's say you get to where you're making, you know, you're putting in, you know, 20 hours a week. So that's your 20 grand a year. You're actually making 20 grand a year with your trading. Okay? All you did was cover payroll. You still didn't make a return on your investment, the money that you've put out there. So you want both. And again, when you're looking at buying a business, the business has to produce the same thing it needs to cover the payroll and show a profit. So with trading, it's the same thing. It is a business. It's an activity that you're engaged in to make money. It's a business. So you got to look at it this way now, okay? So you want to put a time limit on it. You want to make sure that you're working with sufficient resources or you're going to get to sufficient resources in a reasonable period of time so that you can at least get paid for your time and hopefully make a good return on your money. Now, a couple of different ways to do this. You can use a prop firm. A lot of people do that. It can be a path to accelerating. You know, how much you're making with your trading, if you do it properly, if you get good help. So here's the main thing. You don't want to just. You don't want. You don't want to do this trial and error. That's why so many traders do it. You know, they'll watch some YouTube videos, maybe attend a webinar. They'll try this strategy. They'll try that indicator. They'll try this. And. And they're just trying stuff, trial and error. And that is the long, hard road. And the thing is, stuff is not going to make you a profitable trader that earns good money, better than 20 bucks an hour. You need training. Get the training. Seek out the training that will get you to where you have the skills that you can go to the prop firm, demonstrate you have the skills they'll give you the funding. Now you can get paid if you got your own money. Cool. You still want to skill up and get profitable ASAP, right? You don't want this to take 1, 2, 5, 10 years. No, you want to get there. So invest in yourself. Invest in you. I mean, of course you need tools, you need a strategy, you need a data feed, you need charts. Of course you need the stuff to do the thing in the business. But you're the most important part of your operation. You need to be bringing the skills so that you can make use of all the tools to make the kind of money that you want. Seek out the training. I offer the training to show you how to yes, get profitable quickly and stay profitable there. I have a number of colleagues that, a couple of them that also run prop firms. So if you want to go that path, they can help you and take you that route. So what you want to do right now is book a call with me. Let's talk about your situation, where you're at, what your objectives and goals are with your trading and how to get you there with the most direct path and the shortest path so that every week you can be getting paid what you're worth and, and, and make a profit on top of your money. That's the whole point, right? I mean, that's why you got into trading, so that you can do something that's fun and it makes money. You're getting paid and you're earning a nice return on your investment. If you're just doing it, you know, to make a little bit of money. You're, you're, you're, and you know, you're saying, I'm doing it for the money. You might be kidding yourself because if you're not getting paid, then you're doing it largely for the entertainment. If you're serious about making money, do it in a manner that's going to make you money and including your time because again, your time is your life. Anyway, three things to do right now. I hope this been helpful if it has. Subscribe to my channel. I produce videos that help you become a good, successful trader. Now, I'm not just, you know, I'm not like, you know, just showing you stuff like, you know, new, new, new strategies or new indicators or new tools. I'm going to help you become the kind of trader that makes money and enjoys this. You will become a successful trader. That's what I do. So if you like these videos, that's what these videos are all about, go and subscribe to my channel. If you like this one, give me a like down below. If you have friends that trade and you want to help them do better, share this video with them. They'll they will appreciate it, and they'll thank you for it. So again, I hope this has been helpful. Like, subscribe and share with your friends and swing by inside out trading.com book a call with me. Let's get your trading on track. Let's get you there. Now. Don't let any more time pass. It's costing you at least 800amonth. That's what the 10 grand a month. 10 grand a year works out to a little over 800amonth. So every month that goes by, it's costing you 800 bucks. Let's get you there. Let's get you paid. All right, Cool. Talk to you soon. Cheers.