Why do we trade?... no really, why? | Page 3 | Forex Factory

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Why do we trade?... no really, why?

  • #41
  • Nov 14, 2009 11:55am Nov 14, 2009 11:55am
Hey, Rab. Yeah, agree with all that. Something else I'd like to add as just a FYI for anyone who happens to be reading this. If you have enough deductions to file a 1040 long form, and you aren't donating to charity either in the form of cash or property, you're missing out on one of the easiest ways to significantly affect the bottom line. If you're giving your castoffs to Goodwill, ARC, DAV, or to any one of hundreds of qualified charities, ask for the receipt and claim it on your return. Clothing, sporting equipment, toys, electronics, tools, household goods, it all counts! You'd be amazed at how much it can reduce your taxes/increase your refund.
  • #42
  • Nov 14, 2009 12:58pm Nov 14, 2009 12:58pm
Quote
Hey, Rab. Yeah, agree with all that. Something else I'd like to add as just a FYI for anyone who happens to be reading this. If you have enough deductions to file a 1040 long form, and you aren't donating to charity either in the form of cash or property, you're missing out on one of the easiest ways to significantly affect the bottom line. If you're giving your castoffs to Goodwill, ARC, DAV, or to any one of hundreds of qualified charities, ask for the receipt and claim it on your return. Clothing, sporting equipment, toys, electronics, tools,...
Receipts are a requirement. If audited you'll have to have one or you won't keep the deduction.

Keep in mind that if your property's value is beyond a certain amount then you may need to get it appraised. Federal tax law only allows you to deduct up to the fair market value, minus any capital gains profit. The latter can be tricky if you have property that has increased in value, and might actually end up costing you money on your taxes, so talk with an accountant whenever considering donating an item over $500.

Consider this: If you make $50,000 per year you'll pay approx 20% federal income tax. Charitable donations are deductions, meaning they reduce your taxable income by the amount donated. If you donate a $100 piece of equipment, that reduces your income by $100. That's $20 in income tax you won't pay. When evaluating the price you do so at the current fair market value minus any required depreciation.

But there's more to saving money on taxes than just charitable contributions. Consider this: You buy a computer for $1000, 2 years later you want to upgrade. You want to get the most possible from your current computer. Let's say fair market price is now $400. If you donate it to charity you will get an $80 tax savings if you use the above numbers. On the other hand, if you incorporate and have the business buy the computer then you can sell the computer for $400 and write off the depreciation as a tax deduction. That's $120 plus the $400 you sell it for, or $520 total, for a difference of $440.

This brings up an entire set of strategies. When evaluating whether to donate an item consider the rate of depreciation and whether you can treat it as a business expense. People who play the tax game have both a charitable organization set up and a business corporation set up. Locally a group of property owners has set up a local charitable group for maintaining the value of the area they own. "Citizens for xxxx park" and they own the commercial property around xxxx park. The charitable organization pays for people to go out and mow grass and keep the area clean, and participating businesses donate stuff like park benches (they get them cheaply, but donate them at fair market value, lol). Not a bad trick.

If you've ever wondered how to turn a good deal on something at wal-mart into real income, that's how some people do it. Send the wife out for a day of shopping and be grateful that she was able to spend so much....
  • #43
  • Nov 14, 2009 1:49pm Nov 14, 2009 1:49pm
Quoting Rabid
This brings up an entire set of strategies. When evaluating whether to donate an item consider the rate of depreciation and whether you can treat it as a business expense. People who play the tax game have both a charitable organization set up and a business corporation set up. Locally a group of property owners has set up a local charitable group for maintaining the value of the area they own. "Citizens for xxxx park" and they own the commercial property around xxxx park. The charitable organization pays for people to go out and mow grass and...
Awesome stuff, Rab.
  • #44
  • Nov 15, 2009 5:56am Nov 15, 2009 5:56am
Quoting TiaForex
Everything I have had to learn to be a better trader has helped me be a better human being. Trading will shine an ugly bright light on every corner of your personality where you are lying to yourself, every bad habit, every flaw. It's an environment of unlimited possibilities which attracts people but it also means that all your personality defects and flaws run riot. Believe me when I say if you identify the things that hold you back in trading, you will somewhere along the line find a loved one who has given it to you straight that those are areas...
Wow. I am without speech.

If there was such a thing as a correct answer to my initial question, then I just read it.

If I ever write a book on trading, then this will be the foreword.

Kudos Tia
  • #45
  • Nov 16, 2009 8:55pm Nov 16, 2009 8:55pm
I am 27 years old and i am thinking to get an internal audit job and start building real life skills.

Trading is also a skill but i can very well trade on a 1 H chart with a full time job and then explore trading for the next 5 years.
  • #46
  • Nov 16, 2009 9:15pm Nov 16, 2009 9:15pm
Quoting Bud Fox
Ok, before you give the default response of "to make truckloads of $$$", perhaps let me rephrase the question.

What purpose does our trading serve, for others?


Cheers.
Ok, I read the first 2 posts only, I don't know if someone else replied what I'm going to tell you, but what does the owners of the business give to others???

They only sit on a desk, and watch everyone make money for them, why we can do the same, but for us!!!!

Is the same thing, they risk their capital for other to make money for them, we risk our capital to make money for us...

The money we make from trading can be used to buy a house, cars, food that at the end finish in commissions for other people, is a cycle... also for Tips, you are bringing money to you own country and by that you are giving money to others, and think if you don't do this, then the money you will not make from this business will never end on other people hands, so you do a good for your own country that's my 2 cents.

I hope this clarify your thoughts.

Regards,
  • #47
  • Nov 16, 2009 9:16pm Nov 16, 2009 9:16pm
Quoting TiaForex
I think following our passions keeps us alive, gets us out of bed in the morning. We need castles to build. As long as the passions don't blind us to our loved ones and our life then it's all good. But in truth, I think everyone who succeeded in this business spent a little time blotting out the sun and burying themselves in charts and study. Obsession and a little OCD along with a pig headed refusal to give in just seem to be necessary to trade. Ask James16, RyanMCD, mbqb11, raczekfx....man they all spent a long time in the wilderness. And at some...
Very cool. Its great to see this sort of evidence that this forum is maturing and while many are quitting and leaving, a select few are succeeding and sticking around, encouraging those that are following. Very inspiring post.
BTC Return This Year: na
  • #48
  • Nov 16, 2009 9:31pm Nov 16, 2009 9:31pm
Quoting Mr J
A successful trader contributes far more to the local economy, and in taxes, paying more than their fair share for infrastructure and services.
Well at my country if the income is from offshore is free from tax
  • #49
  • Nov 16, 2009 9:41pm Nov 16, 2009 9:41pm
Quoting Forex4pty
Well at my country if the income is from offshore is free from tax
So where do I need to move...uh, I mean where do you live?

Quoting kingfisher
I am 27 years old and i am thinking to get an internal audit job and start building real life skills.
I imagine that job will only build skills to be good at that job. If these typical jobs built real and life skills, I don't think society would be the way that it is.
  • #50
  • Nov 16, 2009 11:33pm Nov 16, 2009 11:33pm
Quoting M.A.C.Doug
Very cool. Its great to see this sort of evidence that this forum is maturing and while many are quitting and leaving, a select few are succeeding and sticking around, encouraging those that are following. Very inspiring post.
re: post above by TiaForex: I agree. If there were a FF "Hall of Fame" for best single posts that one would get my nomination.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #51
  • Dec 3, 2009 7:59pm Dec 3, 2009 7:59pm
Quoting Bud Fox
Ok, before you give the default response of "to make truckloads of $$$", perhaps let me rephrase the question.

What purpose does our trading serve, for others?
I believe the answer to this is unique to each individual trader. Personally, I see the markets as a means for solving chaotic/dynamic patterns using artificial intelligence and/or genetic/evolutionary algorithms. Forex has given me the challenge of creating things that could help improve other areas of life in the future.
  • #52
  • Last Post: Edited 2:58pm Dec 4, 2009 9:00am | Edited 2:58pm
I am a big Milton Friedman fan. In the first installment of his TV series "Free to Choose" (available on google video, links here), he talks about how no one person in the world can make a pencil. It takes lumberjacks in the US, copper and graphite miners in South America, Rubber farmers in Malaysia, an assemblyman in China, and a bunch of ships, warehouses and capital equipment. All to get a 2 cent pencil on your desk. And the reason all thse parts work together so perfectly is price. Prices for goods and services decide what will be produced, using what materials and in what location. Each individual currency trader plays a small role in setting the prices that make all economic activity happen. And that applies to every financial market participant or support worker.
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