What Traders Desperately Need

What Traders Desperately Need

Aug. 28, 2023

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“The three most harmful addictions are heroin, carbs, and a monthly salary.”

-Nassim Taleb

That quote is thought-provoking and hits us where it hurts.

It’s so wise and…so misleading?

Granted, there’s no disputing the heroin part. Stay away from that.

Carbohydrates, though, get a bad rap. I’ve lost weight eating a lot of carbs. And also not become addicted.

It’s that monthly salary thing, though. That’s the tough one.

Because one of the most important questions is: Why do traders fail?

The first answer is the losing.

Most people give up. Almost everyone, actually.

And the reason they give up is the first hint of losses.

A little bit of losing leads to a whole lot of quitting.

But that’s not the only reason.

A trader can be steadfast, smart, motivated, and own a thoroughly-researched system that’s robust.

And that trader can still fail.

Why?

The lack of a “monthly salary”.

Trading for a living is hard by itself.

But what do we do when our portfolio is down for a month? Or two months?

How do we pay our bills when we’re losing money?

It turns out, the exact thing traders need is a monthly salary.

We need something to make money while we wait for our system to win again.

Yes, a monthly salary can psychologically keep us trapped in a tiny box and make us forget our dreams. I get it.

But a steady paycheck is absolutely essential to trading for a living.

How do we get it?

If we’re only trading, we can’t.

But we don’t have to only trade.

We can put some money in a place that gives us a guaranteed monthly salary. And we’re in the Golden Age of this right now.

Because banks are paying outrageous rates on their savings and money market accounts.

The FIRE movement doesn’t even need their precious index funds anymore to reach their magical 4% withdrawal amount.

At the moment, we can get more than 4% by doing nothing!

With my money, I moved a chunk of it over to Capital One. It currently pays 4.3% on their savings account.

At our other bank, I was able to secure a money market for 4.07%, and the rate is guaranteed for six months.

Or you could even better.

  • SOFI is currently paying 4.5%
  • BMO Alto is paying 4.75%
  • CIT Bank is paying 5%

And there are others in that neighborhood. Plus, bonds are also around that number.

Now, these rates won’t last forever. We know that.

But it’s going to last for a while.

And getting paid that amount–guaranteed–while we trade for the next 12 months could be exactly what we need.

It can be the monthly salary that keeps us in the game.

In our next Newsletters, we’ll look at other ways to get paid while trading our portfolios.

Talk to you soon.

 

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Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.