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I have more than a few investing bruises. But I do learn eventually. For years I went for the quick high-risk trades, the ones that would let me retire immediately, extremely exciting. Seriously you haven’t traded until you’ve traded VIX Options. Options on a volatility index. Here is the story: Wild ride, lost my shirt. I did fairly well trading the Australian Dollar against the American Dollar, nice repeating cyclic pattern, but soon the amount of work that active trading takes against the actual rewards becomes apparent. High risk investments require constant monitoring. You can’t take time off. At some point it becomes a trade-off of mediocre gains vs what is your time and presence of mind worth? Not to mention the sheer excitement of possibly losing most of your investment.
Don’t get me wrong, I made money with active trading. It really comes down to your time, the amount of risk you are willing to take on, actual investment gains and of course taxes.
There are a few easy steps you can take to financial independence and if you take them early enough in life, you can securely retire early.
The Street, or financial markets are smarter and get better information quicker than you. The Street/Financial markets also have institutional advantages. You can’t match their high-speed access to markets backed up with large staffs of really bright guys and gals with access to tremendous computing power. It is not a fair…
