2 Reasons Why Investing In The Stock Market Full Time Is So Difficult

Many people dream about becoming a full-time stock market investor because you can spend all day working from home, researching various companies in order to find decent investments. However many people that chase this dream end up either losing money or not making as much money as they thought they would.

There are a few reasons why. First of all the harsh reality is that you need a lot of money set aside to invest in the stock market if you're serious about making a full-time living. I know someone here in England who's recently retired but figured he could replace his income from his previous employment with income from the stock market. However the major problem was that he only had £25,000 to invest, which is nowhere near enough.

The average income in the UK is around £20,000-£25,000 so on that basis he would need to make nearly 100% percent profit per year just to make a relatively comfortable income. Obviously this is an almost impossible task because even the very best fund managers don't achieve anywhere near those kinds of returns. The only way you could realistically achieve that goal is to invest in the highly speculative small-cap stocks, but this is fraught with danger.

The fact is that even if you had £100,000, for example, and invested it in high dividend stocks paying 7% for instance, you would still only earn £7,000 per year (not taking capital growth into consideration), which is less than the minimum wage.

Another point worth making is that if you want to become a full-time investor making a steady and reliable income, you need to be a highly skilled investor. In other words you need to be able to make money in both bull and bear markets. Anyone can make money when the markets are heading higher, but only the very best investors can make money when the markets are falling. So this is another point to consider.

There are of course many people out there who do make a very good living from stock market investing, but the point I want to get across in this article is that it's very hard to do in reality. You need to be highly skilled at both finding profitable investments and preserving your capital when the markets are in free-fall. Plus you also need a lot of capital if you are serious about earning a full-time income from your investments, regardless of whether you are looking for capital growth or income from dividends.

By: James Woolley

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