Allow me to share a story which I posted on TMS M30 Charts thread. This is what may happen due to poor spending habits and trading burn-out. I would like to avoid this.
There once was a man (John) with a wife (Linda) and two kids living in California, USA. John and Linda both worked and made about $12000.00 a month and had a nice life. John got interested in trading. After many years of sweat and tears, he finally started to make money in trading. John saved and grew his trading account to a point that he started to replace his income. So John quit his job and became a full-time trader. After a while John took out his retirement money and added it to his trading account. Now his trading account stood at $400,000.00 and he was making a return of 5% per month so his monthly income grew to $20,000.00 per month. As a result, Linda quit her job as well.
As their income grew so did their spending habits. Bigger house, shiny new BMW, Big Boat, HD motorcycle and nicer everything and spent most of their income from trading. Now fast forward ten years. John continued to make 5% per month. After 10 years of trading, John is completely burnt out and hates to trade, yes it could happen. He needs a minimum of $20,000.00 to continue living his current lifestyle. If he had compounded part of his winnings for those 10 years and reduced his spending habits, he could have retired by now.
"Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it."
Albert Einstein
There once was a man (John) with a wife (Linda) and two kids living in California, USA. John and Linda both worked and made about $12000.00 a month and had a nice life. John got interested in trading. After many years of sweat and tears, he finally started to make money in trading. John saved and grew his trading account to a point that he started to replace his income. So John quit his job and became a full-time trader. After a while John took out his retirement money and added it to his trading account. Now his trading account stood at $400,000.00 and he was making a return of 5% per month so his monthly income grew to $20,000.00 per month. As a result, Linda quit her job as well.
As their income grew so did their spending habits. Bigger house, shiny new BMW, Big Boat, HD motorcycle and nicer everything and spent most of their income from trading. Now fast forward ten years. John continued to make 5% per month. After 10 years of trading, John is completely burnt out and hates to trade, yes it could happen. He needs a minimum of $20,000.00 to continue living his current lifestyle. If he had compounded part of his winnings for those 10 years and reduced his spending habits, he could have retired by now.
"Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it."
Albert Einstein
Trading can't be taught but it can be learned