Quitting Time

19.96% was the final Total Charges calculation after last week's trading, just shy of the magical 20%, so another hit from the Premium Charge. A pity that the technical problems on Betfair this afternoon didn't impact their ability to deduct the charge. Funny how that never seems to be a problem. I guess the outage was a big deal for many people, but there's not often anything of interest to me late on a weekday afternoon. Some people work, which leads me neatly into this piece that was stolen from the Betfair forum (some bloggers have no shame) by Mark Iverson.

Well, a recent post on the Betfair Forum gave examples of two typical Betfair users. It then posed the question as to which type would be most likely to give this lark a crack full-time due to their personal circumstances. The types were...

TYPE 1 - 21 Years old, just finished uni but can't get a job (except maybe in a call centre) as every other Tom, Dick & Harry also has a worthless degree these days, no dependents, living at home with mum & dad, not paying rent, laundry done, meals cooked, use of a car (free of charge), not even paying for the internet, gap in CV could be easily explained.

TYPE 2 - 42 years of age, married, 2 children that are approaching university age, mortgage still being paid, very securely employed with 15 years service, currently earning £60k + bonus + car, final salary pension scheme, etc. etc (you get the picture).

The author then goes onto say.....

TYPE 1 would probably be happy to give it a whirl with £500 but the other guy is going to earn over £1m in the next 18 years if he just sits it out until his pension kicks in. Possibly a slightly more difficult decision for him and a different safety net requirement.

I'm not so sure I agree with the conclusion. With little life experience I think I'd be more concerned that the 21 year old would waste his early twenties barking up the wrong tree only to find out too late that he hasn't got anything to go to if the playing field changed quickly. Surely, giving up a £60k job with all the perks is much riskier though? What about all that security? All good points but in my mind the author failed to include that the second guy probably works 60-70 hours per week, travels around the country/world, is bored stupid and never gets to see his kids grow up and spend quality time with his wife.

That's some sacrifice and as someone who's recently taken a sabbatical from the day job I'm happy to say that I feel more relaxed and content than ever. I'm still working hard but as it's on my terms I'm appreciating every day and noticing things that I never did whilst making the daily round trip from 7am to 7pm. I've also started noticing more life opportunities and from a gambling point of view started making many more 'better' decisions.

Surely this is what life's all about? Long may it last :-)

My comments on this are as follows. An unemployed 21 year old has nothing to lose by effectively taking a gap year or two, or more, to try his hand at trading. Many people do not find the job they want to do until their late twenties, (Type 2 in the example started at age 27) but I would say that ones twenties are the best age to be in a work environment from a social perspective. There was no option in my day, but work was more about meeting friends, learning new skills, getting used to the 'grown up' world, and learning than it was about slaving away.

Anyone on £60k, working 60-70 hours a week is most likely a pretty motivated individual, and probably not in the least bit bored. When you get bored, you move on. He may not spend much time with his wife and kids, but his income means that they can travel and spend quality time together enjoying the fruits of his labour when he does take a break. Quantity doesn't equal quality.

In the event that our Type 2 friend should get interested in trading, he would almost certainly dip his toes into the water and splash around a bit first to confirm that it's worth his time. Assuming he finds an edge, he would most likely decide to reduce his hours, or reschedule his hours, and work on trading in his spare time, thus preserving his secure job (not to be dismissed too readily after investing 15 years), the benefits that go with it, and at the same time making a decent second income.

No two people's situations are the same, but I doubt that you would find many 42 year olds on a £60k income, (who are not financially independent), and with family responsibilities, who would give all that up for trading - at least not before a lengthy trial period. In the short time that I have been trading, I have seen markets change. I can't think of many things worse than jacking in a secure job on the Friday, only to find that the markets have changed and your edge is gone. Explain that to the missus.

Saving 10% of your income each year, and assuming a modest 6% return, our 42 year old would amass savings of an additional £1/4 million pounds in the next twenty years. Topping that up with money from a second income would make far more sense than quitting and having to make £60k a year before you are at break-even. Yes, I know that taxes complicate things and right now there is no tax on exchange winnings, but that can easily change. Did any see the Premium Charge coming some four years ago? It might sound glamorous and exciting, but gambling is hard work, and stressful enough at the best of times. Needing to win to pay the bills would be too stressful for me. If you're 21 with no bills to pay, I guess it's not so bad. £60k is a lot!

Besides the steady income and benefits, work isn't all that bad anyway. (If it IS that bad, update your CV and move). Many companies now let you work from home and at hours that suit you. 9 to 5 is an antiquated idea in many jobs. Then there's the social life, and if you have a steady second income, you can approach work in a more confident and relaxed manner. Meetings are a lot less boring when you can sit there with your lap-top pondering betting ideas, and the Internet is a wonderful thing... Oh, and there's the free coffee and tea and Xmas parties!