If you go into anything with the goal of being rich, you will be sorely disappointed and burnt out. For me, when I take on side projects (such as this writing for this website, daytrading, etc.) I go into it with one expectation: to passively make an extra $20, $50, $100, or $200 here and there every month. The more diverse and reliable income streams I have the more I can safely spend on increased luxuries I enjoy (bigger Mercedes, nicer house, etc.).
I started day trading a few years ago very conservatively, I only started with a few hundred dollars. Over the course of a few years I have become increasingly more aggressive in my trading, but not recklessly so.
I could tell you that this strategy will make you a millionaire, but it probably won’t. That’s kind of what every other site or blog claims though, right before they try to sell you the information I’m about to give you for free
The fact is, day trading only earns me about $50 – $100 a month. I don’t spend that much time on it though, and I invest rather conservatively. You could potentially earn more if you took more risks while using my strategies. For example, I had about $3000 earlier this year invested and later brought it up to the $6000 range. If you multiply all deposits I made by 10 ($30,000 – $60,000), I would be making $500 to $1000 a month.
It’s OK to invest instead of paying off credit cards or other debt
I’m not sure what my actual return on investment is since I sporadically add more money to my portfolio, however I would estimate it hovers around 10 – 15%. This is important, as my credit card debt is charged at a lesser interest rate. Therefore, while it may normally be foolish to invest when you have debt, I actually still manage to make a profit as my return is higher than the interest I pay for the debt I have.
If you manage to sustain returns greater than the rate you borrow money for, you could potentially borrow money to buy stocks and make a profit. I wouldn’t recommend this though unless you are confident in your trading abilities.
These are all my gains so far for 2013.
You might be wondering why the only loss I show is for $4.45 from Intel. No, I don’t have the ability to see the future and only buy stocks I will profit off of, I simply don’t sell a stock if I haven’t made money on it.
Below are stocks I still currently hold that I have a temporary loss on.
I say temporary because you only truly lose money if the company goes bankrupt. As long as the company is still in business, there is a chance you will recoup your losses.
Even if I never recoup my losses, I’m still turning a profit of about $600 for the year. Not bad for a combined 6 months of spending 10 minutes one or two days a week on the computer.
Percentage-wise, it’s hard to calculate my return. I had as little as $3000 in the account at the beginning of the year and in the last few months aggressively picked up my investing. I would estimate I made about a 10-15% return this year on my investment. 10% if you include my losses (which are by no means permanent) and 15% if you don’t.
Blind Leading the Blind
I need to emphasize here that I am far from an expert on the stock market. There are volumes of books written on the topic and being that I’m too lazy to read them, I only know what I learned by playing with my own money.
If you’d like to try and emulate what I did and see if you can earn an equal or higher return, check out my other articles:
(By Finance editor)
Disclaimer: These methods work for me, but they may not for you. You could potentially lose money in the stock market, but I assume you knew that already.
Image courtesy cooldesign / Freedigitalphotos.net