Would you want to be a full-time investor?

It’s the dream that almost every internet guru you see on YouTube and TikTok is selling.

“Quit your dead-end job and make a full-time income by investing in stocks or crypto! My course will make you a six-figure earner in under a year!”  ~ Every Internet Guru Ever 

If investing were that easy and lucrative, everyone would never work a normal job and be a full-time investor instead. 

Let’s get the main question out of the way early. To get right to the point and answer the question directly, yes. Investing can be a full-time job. For example, Wall Street traders and retirement planners are full-time investors. 

But let’s take a closer look into this question and answer it in more detail. There’s more to the question “can investing be a job?” than it may seem. 

Making a full-time income from active trading. 

When someone tells you that they’re interested in making a full-time income from investing, this is what they usually mean. Active trading is also called day trading and is a dangerous but potentially lucrative game. A lot of people would have you believe that trading stocks is the fastest and easiest way to make a lot of money.

These people also usually have something to sell you. 

Being a day trader usually means that you trade stocks throughout the day to make a profit. That being said, day trading cryptocurrencies is becoming popular these days as well. You use special strategies to make money off of price fluctuations that happen daily. You need a lot of technical know-how and self-control to pull this off well.

Becoming an active day trader used to be much more difficult in the past. However, with the internet making brokers more accessible to smaller traders, the number of traders entering the world of day trading has skyrocketed.  

While it seems like we’re trying to steer you away from becoming an active trader, there are actually a lot of benefits to day trading. One of them is that you can be as active of a day trader as you’d like. Whether you want a full-time job, a part-time opportunity or just a hobby that makes you some extra money, day trading is a suitable option for you. 

Please understand that being a day trader is a way for you to make a full-time income. However, you need to have a lot of ambition, patience and skill to pull it off. 

Becoming a day trader is easy. Becoming a profitable day trader is difficult.  

Check out our article on Entrepreneur vs. Business Owner: How Deep Do The Differences Go.

Making a full-time income from passive investments.

Making a full-time income off of passive investments is the dream and is the life goal of most people who actually have a plan for retirement. However, more and more people are doing their level best to get to the point where they can live off their passive investments as quickly as possible. They invest as much as they can afford so that they can live off the returns on their returns a lot earlier than the usual retirement age. 

There aren’t many people trying to push this idea through flashy online ads and free seminars because it’s kinda boring and there isn’t as much money to be made pushing this idea. Think about it. Which is easier to market and more attractive to people desperate to make money fast? 

“Get filthy rich fast by trading stocks and doing Forex!” or “Slowly buy assets that will eventually pay you a full-time income”? 

And now you know why there are so many broker ads plastered everywhere on the internet. 

What are some examples of passive investments that will eventually pay you a full-time income?

Here are two mainstays of the passive investment world:

• Dividend investing: You invest money into companies that pay out a set dividend to you every year. Some companies pay out dividends multiple times per year! As long as you choose trustworthy companies with a proven track record, you’ll get paid over and over again on your investment for years to come.
• Real estate investing: Instead of buying houses to live in or to flip, you can create a somewhat passive investment by buying properties to rent out. Buy a property and hire someone else to do all the work that you as a landlord would normally do. Hiring people to do your work will eat into your profits but it will also free up your time and make your stream of income passive.

There are many more examples of passive investments out there but those are two of the most popular choices.

Making a full-time income off passive investments sounds amazing right? So what’s the catch?

Unfortunately, there’s always a catch. You need a lot of money in the first place if you want to get returns that could be considered a full-time income. In fact, it’s a running joke in the financial community to say that making a full-time income off of your passive investments is just a sneaky way of saying that you’re already rich.

Let’s say you want to live off of $5000 a month. That amounts to $60,000 a year. Let’s assume that you’re getting an average return of about 6% a year off of your  chosen passive investments. 6% is a good amount to aim for if you choose to invest in dividend paying stocks or rental properties.

You’d need $1,000,000 to get a full-time income off of your passive investments. 

While that’s a decently realistic goal to aim for most people’s retirement, raising $1,000,000 would take the average person literal decades, if they could pull it off at all. This is not a get rich quick scheme.

Check out our article on Is Investing In Stocks Gambling.

Between active trading and being a passive investor, which is better?

Usually the answer would be that it depends. However, in this case the answer is being a passive investor. You quite literally do the least amount of work that you possibly can do in order to collect as much money as possible. 

While you need a ton of capital to make a livable income off of your passive investments, you also avoid the enormous amounts of stress that come with being an active trader. In most cases, choosing a job that you enjoy which pays decently well is a better idea than becoming a day trader. Then, with the money you saved up from your job, you regularly invest into assets that will eventually pay you a full-time income. 

This might sound a bit boring in comparison to being a high-flying day trader who changes cars like a regular person changes clothes. However, it’s extremely practical and much more realistic than quitting your day job to trade stocks to become a millionaire overnight.

Closing   

Can investing be a full-time job? Yes, it can. 

Is it an easy job that everyone can do? Absolutely not. 

While it’s true that you can learn to make a full-time income by being a day trader, almost every guru out there is underselling how difficult it actually is. You can’t just become a copy trader and become a billionaire overnight despite what all those YouTube ads might tell you. If you want to start becoming a day trader, understand that it’s not easy money. However, you should definitely start investing into assets for the long term in order to eventually make a full-time income.