Hi,
Is there anyone on here who is a full time private investor? If so how are you doing with it? What is the minimum amount of cash that you play with? Is it even possible to pay the bills as a profession? I'm looking at it as a possibility but would like to hear views/advice first.
Cheers,
Bisc.

Fundamentalist,

thanks for the clarification, i think this is the well known basic situation. If you wanted to 'earn' ( or try) a full annual salary equivalent, lets say circa 35k plus (have to start somewhere) then the other 20k after deducting losses would be subject to 40% tax without the benefit of income tax allowances , as I understand it. Given what crocodile said above I don't see how it can make sense to try and be a full time trader unless you have serious sums to invest or are trading as a business with all that that intails.

I have managed to build up a portfolio in 3 years worth about 23k but cannot yet see the day I could live of the profits even if I regularly fantasise about it when i'm fed up at work!

GN

How much is an almost impossible answer to give with out knowing your style. But usually it is a lot more than people usually think. There are plenty of full timers out there.

A 'follow-up' point to the posts above:
1. It is true you can put shares in your spouses name. But be aware
(as awful as this sounds..) that the shares will than be in their
name, meaning they will be theirs legally to do with as they wish,
and if you split up they would be legally your partners not joint
assets...(Sorry to sounds cynical but it needs pointing out..as
they say been there done that....)

stockbunny

Good points, and lets not forget the loss would not be deductable, (lightheated comment but true)

Biscuit, Perhaps you need to answer these questions for yourself:

How long do you plan to trade couple of years to the day you retire (could be the same!)
What are your personal commitments mortgage, children, expensive hobbies?
What capital are you going to commit?
Do you have savings plans/pensions/property/critical illness insurance you need to make sure this is taken into account. Remember, if you are ill you cannot trade.
In terms of the likely return on your investments, you need to calculate it like this (and there could be more things to add): % return on investment must meet your income for the old job, + grow at the rate of inflation, plus have additional capital growth for the day you dont trade but want to draw down money from your gains.

Something like this say: 30% annual profit from trading + 5% for inflation + 20% you take off the table each year for later in life (but could be reinvested of course). You can adjust these as I am just using them for illustration. Earlier in this thread someone mentioned that many traders lose, so finding realistic figures for growth is essential especially when starting out.

So if you earned 30k per year in your day job and you have 100k to invest, then to do everything above, you must bring in 55k per year. Less then that, your plan isnt working. In the FT today on p12 of the money guide, they show the growth of someones portfolio over 2 months. 144,730 GBP has grown by 328 GBP two months later.

I have not mentioned tax at all, nor investing in computers, backup drives, security systems, subscriptions, broker commissions etc. Nor have I mentioned the most costly thing that everyone pays for..the trading mistakes of being in the wrong share at the wrong time and taking a really hit!

And of course if you are relying on this as a substitute income, then you may have to draw down as you go through the year. While a salary comes every month, if you have only earned 328 quid on two months, you can expect a few red bills through the post!

My own plan is to trade part time. The profits if I make enough, will be taken out time to time and I plan to put them into property. I haven't got the courage to go full time. I am a single parent - two sons - and to be honest, I am glad I do not rely upon this as my main income.

All above is my own opinion, just a view as I think asking how much people set up with will vary a great amount between traders.

My working life covers the last 25 years, of which I have only ever worked full time for less than 10 of those years. I have various part time jobs, including running various small companies to provide me with just enough income to pay the bills and help create capital to invest in shares.

I have regulary spent a good proportion of my gains to pay for the little extras in life - like paying off additional amounts on my mortgage, cash to purchase a car, cash for furniture, holidays etc! My taxable Income now is between 30-35k a year, but because only about 10K of it is acually liable to tax & NIC and because I'm a Basic rate tax payer, I get to spend the rest! If you consider the extra money I receive (20-25K) is completely tax free I have a lifestyle of someone who earns about 40-60% more than I do!

I utilise both Personal Allowances & Capital Gains Allowances (now about 12.5K together) and the extra benefits of being a basic rate tax payer on dividends!

I read some where that the average day trader lasts 6 months before going back to work. I also read that starting with less than 50,000 of risk money won't allow you to take large enough positions to overcome the friction of doing business - broker charges, spreads etc.

Testing your ideas before trading is an excellent idea, although trading with real money is a completely different mindset.

Where it comes to CGT, my understanding is that this is taxed as the top slice of income. If you are not earning elsewhere you will be taxed on your capital gains on the same sliding scale as your income.

Alternatively you may establish an offshore investment company through which you can conduct your trades. You will still be liable for UK taxation on profits remited to the UK but you have more choice as to timing.

Using a good broker should allow you to continue in your own job while receiving advice and also have someone who can follow the market for you while you are away.

If you are serious, you may wish to consider (1) taking a course with, say, BPP Hyperion, then sitting one of the securities institute exams. They may not teach you a trading strategy but you will have a much much better idea of how the markets work. (5 day courses, exams monthly, about 500gbp). No, I don't work for BPP.

Finally, if you pass the course, apply for a job at a brokers as an assistant to a dealer or a position keeper on a trading desk. Most are coming out of the doldrums and a qualified enthusiastic individual should find a good home. From there you will get more experience, get cheap trading, be surrounded by people who can validate your trading ideas, and maybe even get paid

Good luck !