Monday, 26 July 2010

Vocation Vacation

Money is a by-product of something I like to do very much – Warren Buffett
While trading on the exchanges is for most of us more of a part-time hobby than a job, for some people it is their main, or only, source of income.

Because a number of skills are required to be a successful trader, it’s reasonable to assume that just about every successful full-time trader is pursuing trading versus a career from choice, and that it is more of a vocation than a job.

I enjoy trading, for the most part, although at times it can be immensely frustrating, but as exciting as trading is, I can understand how it might get tedious. I think that were I to trade full-time, the added stress of having to make steady profits would be more of a problem than boredom. If you enjoy what you do though, you typically have the discipline to work hard at it every day. I enjoy my ‘proper’ job, and the flexible hours mean that there is plenty of opportunity to trade on the side. It might sound very glamorous to be a full-time trader, but a ‘proper’ job shouldn’t be dismissed too readily.

Where your job is more of a career, your earnings towards the end of your career are certainly going to be a lot higher than they are towards the beginning of your career. While an income from trading might match or exceed an income for someone in their twenties, there is no guarantee that a trading income would similarly increase over the years. It is arguable that as the exchanges mature, incomes are in fact more likely to decrease. Then there’s the possibility that the exchanges might start to ban consistent winners. The introduction of the Premium Charge no doubt hurt many full-time traders.

Although I guess full-time traders can boost their bottom line by claiming unemployment benefits, there are other benefits to a regular job too. Aside from the basic salary, many people get annual and spot bonuses. Getting paid for sitting on the beach is another benefit that is relevant to me right now as I will soon be taking a little more than a fortnight off work, and from trading (and blogging for that matter). Although this means a loss of income from trading, I can still enjoy my time off knowing that there is still some money flowing in to the Cassini coffers. Companies have other benefits too, mortgage applications are more likely to be accepted if you have a documented source of income, and many offer discounts on anything from cell phone service, flowers to company shares, not to mention the social side of working with other people. Saving for retirement is a lot easier when you have a steady income too.

Of course, working alone from home, not having to answer to anyone, would suit many people, and there are often significant savings in time and travel expenses, but it’s a brave man who chooses to trade full-time and there doesn’t seem to me to be a need to give up that day job. The evenings and weekends would seem to offer the lion’s share of sports although I accept that for some, their best opportunities may be during the ‘normal’ working day.

No two people’s circumstances are identical, and it would be impossible to cover every individual situation. The above post is therefore necessarily something of a generalization, with my own situation very much to the fore, but I suspect that at least some of my thoughts ring true to many out there.


Anonymous said...

Two consecutive posts highlighting Nebraska icons (W Buffett and Carhenge) Lets see if you can make it three in a row!

Keep up the great work!

NICK B said...

I wouldn't dare claim any benefits-more trouble than it's worth and most full timers I know have too much pride to do such a thing!

Anonymous said...

cell phone and generalization? Are you starting to turn American on us? Is this part of adapting to when internet gambling becomes legal in the US?

Not sure any real full timers would or could claim benefits - you're giving us a bad name!?