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Day Traders vs Small Business Owners: What’s Best?

By November 21, 2016trading
Day Traders vs Small Business Owners: What’s Best?

Day trading and entrepreneurs both have upsides and downsides.  Both require hard work and trial and error.  And, both come with substantial risks that correspond to the amount of capital that you put in.

Although they are similar in the comparisons above, they have striking differences, too. 

With either, you could feasibly become a millionaire.  On one hand, you can become a millionaire while never leaving the comfort of your home office, armed with only a laptop.  And, on the other, you can become a millionaire in a variety of different small business ways.

While day trading can be a solo effort, answering to no man, an entrepreneur must rely on other people to some extent—not necessarily to do the work, but at least to buy a service or product.

While day trading has little to do with people at all—you might go days or weeks without seeing a single face, if you so choose, an entrepreneur may or may not have that luxury.  They must pitch ideas, negotiate terms, hire employees or handle any number of actions that require face-to-face interactions.   

There are good and bad sides to both of these careers. Some of them are common to day traders and business owners, others are unique.  In case you’re at a crossroads, considering which path would be better for you, here they are.

 

The Pros of Day Trading

The Sky is the Limit

Day trading has the potential for unlimited income in a relatively short period of time. As a day trader, you are limited only by the amount of effort you put in.  This is its greatest lure and it works for those who are decisive enough, determined enough, disciplined enough and talented enough to take every opportunity as it comes and make the best of it, while also being ready to roll with—and learn from—what are sure to be losses.

Of course, not every day trader has what it takes to make it as a day trader.  But, those who do have the right qualities have endless opportunity.

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A Thrill Like No Other

Whatever low-risk, stuck-in-the-rut individuals say, let me tell you that the thrill from making a juicy profit with just a couple of clicks is like no other. The reason for this trading high is because the risks are great and everyone loves a good risk.  On top of that, you earned this money without relying on anyone else, thanks to your own efforts and abilities. Star traders are the gunslingers of today’s world.

 

Small Upfront Capital

Being your own boss is what motivates a lot of people with some knowledge and experience of financial markets to choose the day trader path. Some even leave a prestigious position at one of the big financial services firms, in order to pursue an individual trading career. Others have no knowledge of the markets and want to give it a go anyway, free from the grind of the 9-5 world. But, unlike entrepreneurship, trading takes little upfront capital.  Your mummy and daddy don’t have to give you a million bucks to start your new business venture.  You can start with a couple thousand dollars—something anyone can save with a little discipline and priority setting.

 

The Day-Trading Cons

Win-or-Lose

Just as you can make millions with day trading, you could feasibly lose millions. You can read all of the technical analysis in the world, all of the analyst forecasts and all the relevant info that you can find—and, you’re still going to lose, at least sometime—and losing ain’t pretty.  Of course, you can always make it back and use it as a learning opportunity.

 

Stress Kills

If there were no other drawbacks to day trading, besides the danger of losing of money, it would be too good to be true. But, the risk of losing goes hand-in-hand with stress and that’s not just the stress of losing money. You have to keep tabs on so many things, including the price charts that you’re watching.  If you’re extremely disciplined and unemotional, this may save you from burnout.  But, it won’t save you from the general stress that’s such a big part of a day trader’s life. But hey, if there was no stress, there wouldn’t be a thrill.

Trading Stigma

You’ll find, if you haven’t already, that there is a certain stigma associated with being a trader.  Traders are thought of as people who fly by the seat of their pants, unrealistic, head in the clouds and pie in the sky gamblers.  Of course, we know that’s not true.  But, if you choose trading as a career, be prepared to see that “disappointed face” time and time again, whenever you tell people what you do for a living.

simon-cowell

Now, let’s look at entrepreneurial endeavors:

The Pros of Managing Your Own Business

Get Creative

When you strike out on your own and start a company, every decision is yours and yours only. There is no one above you. You get to choose exactly what it will be that your company will do and how you will do it.  You can change your mind, change your direction and do something that no one has ever done before. New products, new service—your stamp.  You can tap into a new market and get your name known. You can choose the people that help you to build your business and, in many cases, you can choose your clients, too. And, you get to choose how much time you devote to your work, depending on your goals for the future.

 

Flexibility, the Good F-Word

Smaller businesses are more flexible than large corporations. A growing number of product and service users are waking up to this fact.  And, even though the big guys have decades of experience, reputation and billions of dollars working for them, small businesses have more flexibility.

The Entrepreneurial Cons

One-Man Show

When you start a business, unless you have rich parents or friends to give you a big financial push, you’ll have to do everything from management to sales to marketing to accounting. That can be quite a heavy load and you’ll have to do stuff that you don’t particularly like and stuff you don’t really know much about. You’ll learn as the business grows, but it’s often a steep learning curve.

 

You’re Fair Game

One of the not-much talked about sides of the business world is that small fish are fair game for the big boys. You may have designed a super-innovative product.  But, if you don’t have the financial resources to patent it ASAP, you may find it patented by a big company that has poached your baby and has the resources to protect its property. The business world is brutal.

 

Your Money, Your Life

That’s the dark side of independence and getting to call the shots. If a shot you call turns out to be disastrous, it’s you that will bear the consequences. If, for some reason, the market gets depressed, or your product—no matter how awesome—is rendered obsolete, you could lose your business through no fault of your own. It happens. And, you could have to start all over again.  You’ll have to build up a serious amount of resilience, in the face of all the challenges that are lurking along the way, if you are going to make it and make it big.

Neither scenario is fool-proof and both require hard work.  Take some time and mull over both scenarios, then decide what works best for you. You could even experience the best of both worlds. Many people choose to trade part-time. See how trade part-time but make a full-time profit

 

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