There will come a point when you’ll discover the world of investing. This world is very new to you and there’s plenty to learn about. From investment strategies to types of investment, it’s not easy to become a full-time investor.
But if you do it right, then you could very well become a real-life Wolf of Wall Street. And that’s why we’re here. In this article, we will give you 5 tips on how to make investing your full-time job. With all that said, let’s start.
Figure Out Your Business Plan
Say what you like, investing isn’t only a job that you should consider while working from home. Investing can potentially turn into a fully-fledged business. And what does every business need? It needs a business plan.
While this might sound strange to you, doing anything full-time will require a lot of attention to detail. What you should do at the very least is do a balance sheet and come up with a statement of cash flow. We mentioned earlier that there are all kinds of types of investments, and you could very easily focus on a career as a full-time money manager.
So, before you put any money into it, make sure to print out your business plan.
Figure Out Your Percentage Return
Let’s assume that you have some money to play with. Let’s also assume that you have to meet certain goals to stay afloat. You don’t have to open an investment business to be a full-time investor, but you still have to pay rent and eat.
The whole point of successfully investing is to generate enough money through your investments that you’ll be able to pay your expenses while still having something else to look forward to. To easily figure out how much money you’ll need to make to sustain your lifestyle, you’ll have to do some math.
First off, decide how much money you have to play with. Let’s assume that you have $30,000 but need $20,000 a year to cover expenses. That means that you’ll need a percentage return of at least 66,6%. Such a high return isn’t easy to get. You’ll need to be quite savvy with your money and actively look to invest in short-term deals to generate returns.
Set Up Your Portfolio
If there is one thing every full-time investor needs it’s a portfolio. Regardless if you’ll trade on the stock market, Forex, cryptocurrencies, buy and sell property, or personally invest in businesses, you’ll need to set up a portfolio.
What every successful investor should look at are long and medium-term investments and short-term investments. You’ll hear plenty of strategies on how you should allocate your percentages, but the safest one is the following.
85% of your entire investment portfolio should focus on long and medium-term investments that will generate money every year. The remaining 15% should go into short-term investments that will generate cash flow. You could very well split it 80% / 20% or 90% /10 and even 75% / 25%, but the point is to dedicate a much larger portion of your portfolio into long and medium-term investments.
Let’s go back to the previous point. Let’s assume that you’ll be investing $30,000 and need to generate $20,000 throughout the year. Your asset allocation should be 85% or $25,500 into long and medium-term investments and the remaining $4,500 on short-term investments.
Learn How To Invest
We should have probably mentioned this quite sooner but now is the perfect time to touch on it. Even if you do have the money to play around with, you’ll need to learn how to become an investor first.
Regardless of what type of investing you’ll be doing, you’ll need to find something that works for you. If you are particularly interested in stocks, then learn how to trade stocks. If cryptocurrencies are your thing, then learn how to invest in them. The whole point is that this might be a part-time job before you can make it full-time. If you have no prior knowledge of the topic, then it will be a process of trial and error before you learn how to make money.
Discover Your Loss Tolerance
Terms such as loss and risk tolerance get thrown in the industry all the time. But they’re not interchangeable. Risk tolerance means understanding how much money you can lose. Loss tolerance is the realization of the former.
Through time, you’ll discover what your risk and loss tolerance is. By doing this you will start to make less risky investments. The safer the investment, the more money you’ll make. You might throw a Hail Marry now and then and get lucky, but it’s all about figuring out how much you can afford to lose.
Investing can turn into a pretty lucrative full-time job. If you’re good at it, you can make hundreds if not thousands of dollars. But it’s safe to say that there is a risk with being a full-time investor. What’s important is to familiarize yourself with the job and figure out the best strategy that will bring you the most financial success.