Congrats! It’s amazing you’re at this point!
If you’ve recently came to realize you could take your side hustle/passion and make it your primary source of income congrats! That’s amazing, I still remember the day I realized I could sustain myself trading forex – was when I was writing cover letters for jobs just before graduation, I didn’t end up applying for those jobs after that realization (except one, McKinsey but they shot me down – something I’m grateful for)😊
But yeah, congrats, that’s really impressive! Would it be trading, photography, your blog, designing cool tee-shirts or whatever it makes me so happy when I hear people are making a living doing what they love.
Maybe you take photos of fruits and vegetables and somehow managed to turn it into a business… I mean it looks cool!
That being said, it’s not because you are able to go and turn your hobby into your sole income that you should quit your job or become a digital nomad – first you need to transform it from a hobby into a business and start looking at it that way.
When it’s a hobby it’s amazing, you get most of the upsides and you are quite blind to the downsides while being able to stop whenever you wish since that’s not the only thing you do.
Be prepared for the transition!
If you decide to take your trading and make it your income source and quit your job then be prepared for:
- Having lower returns that what you’ve come to expect in the first first few months since you’ll have some added stress, it happens to a lot of people who just took the jump
- Create a rather strict routine, it’s not because you don’t need to be at the office at 8 or 9am that you should still be in bed… You will have nearly no external barriers to becoming a couch potato, you will be the responsible for everything. While making sure you prioritize sleep, I didn’t in the past, and that’s one of my biggest regrets, making sure the brain gets its off time is really important
- See your income fluctuating, you won’t be making the exact same amount every month/every quarter (which is why I believe it is extremely important to have a six-month cash buffer before taking the step (mainly to reduce the pressure)) That being said, if you make three times more (on average) than what you spend you can probably just take out a fixed amount every month/quarter depending on your choice.
- You’ll spend way more time on your computer (next to an ikea plant)thinking that it will mean you will make more money – sadly that doesn’t go in hand, I wish it did, but instead it’s actually important to start disconnecting from the charts, if you spend too much time looking at them you will likely want to take a trade or micro-manage them – which in turn will probably have a negative impact on your income/returns.
- Accept the fact that your passion is now your job, which means you will need to find a new hobby and start learning something new in order to maintain your self development and your brain plasticity.
An advice I would give to anyone about to go full-time with their trading or side hustle would be to measure the amount of time they spend on it while still spending time at their job. Why?
If you spend an hour and half on the charts while working per day, make sure you don’t spend more than three hours (the double amount).
I understand that it may sound counter-productive, after all, you have now way more time to improve your craft and boost those returns, but if you were able to get to this point and replace your income with if there’s no need to spend that much more time working on it. There’s a point where spending more time will not only bring you diminishing returns but also reduce the enjoyment you get from it.
Something Neil Cartwright also points out is keep doing what brought you to this point, keep doing the exact same thing, don’t become too cocky, it’s not because your trading as really improved that you should stop your previous routine, if you used to watch content everyday, keep doing it, if you were meditating, keep doing it, if you were back testing three times a week, keep doing it. You probably got the point by now, but, just keep doing whatever you used to do.
It brought you here so it must be a good thing!
Now it’s your primary income… It’s a business
Now it’s a business, so start thinking about your monthly costs, how can you optimize and streamline the process, how can you leverage up and increase your profits, get in touch with a great accountant and figure out how to reduce your taxation etc etc.
While talking about the business side it’s also important to mention the fact that most successful businesses don’t pay out a 100% dividend, instead they constantly re-invest in the company (usually they do it to buy new machines or have more marketing or hire more staff, for us that just means leaving money in the trading account).
Now, if you’ve already been on this blog you’ll have noticed I also provide a monthly trade recap, which is basically an overview of my month (I have one way more detailed that I keep for myself) but the reason I do this, is because I’m treating my trading as a business.
Businesses need to publish quarterly income statement and all the other stuff, why wouldn’t you? If you run a business selling tee-shirts, wouldn’t you be looking at your revenue/profit/ad spend/ROI etc? If you don’t I would be surprised if your store keeps on going.
If you own a coffee shop, I’m sure you will be looking at your profits, revenue, costs etc while trying to figure out a way to boost your profits and potentially open in a new location?
Trading is a business, so make sure you spend time treating it as one. Don’t forget to think about the monthly reports, create a trading report where you will write down every single trade you took, the return, the reason for the entry and exit and all of this.
Obviously, you will have to keep doing your Advanced Self Review and spend time trying to find the tweaks you need to go through in order to improve.
A good example would be my mentors, even tho they have been trading for more than five years profitably they are still reviewing their months in order to make sure they are still on their top game and continuously improving.
Make sure you still enjoy it – and don’t only do it for the money
It’s not because you are going to turn your hobby/passion into your primary income source that you’ll start to despise it, I still enjoy trading and learning about the market remains one of my favorite things to do. But, you must start treating trading as a business instead of a fun activity you do because you think it’s nice side income or just because you want to keep yourself busy. We all get what we want from the market, so make sure you align your wants to this new reality.
Lastly, it’s something I’ve only recently started to realize but it’s not because you are now making money doing something you love that you should be blind to other opportunities. Diversity in your income source makes you anti-fragile and that should be the end goal.
Aim to become anti-fragile – being self-employed and having turned your passion into your income source is fantastic but keep in mind there’s no shame starting something new on top of that or even potentially getting a job in a industry you’re really interested in.
For example, I’m really into space because my long-term goal is in that world, if I get the opportunity to work in a cool start-up with really smart individuals in that industry I’d jump on that chance.
Anyway, I hope this was helpful.
I hope this was useful! If it was it would mean the world to me if you’d like this post or even leave a comment if you’d add something to this article!