[00:00] Let's talk about investing versus trading and&nbsp; which one is right for you. Now, when it comes&nbsp;&nbsp; to investing, the barrier to entry is very low.&nbsp; Everyone has access to it and it's super super&nbsp;&nbsp;
[00:14] simple and not time consuming whatsoever. The&nbsp; returns, however, is where there's a little bit of&nbsp;&nbsp; an issue. On average, the S&amp;P 500 or the overall&nbsp; stock exchange on average has returned between $8&nbsp;&nbsp;
[00:29] and 11% annually. So let's say you invested $100,&nbsp; you would get $8 to $11 in return for the entire&nbsp;&nbsp;
[00:41] year. Now investing is a longterm investment. You&nbsp; are investing for the future. So if you let that&nbsp;&nbsp; interest compound over time, it is the most&nbsp; wonderful thing known to mankind. Compounding&nbsp;&nbsp;
[00:57] interest is the ninth wonder of the world. And&nbsp; how it works is basically your base capital,&nbsp;&nbsp; the $100 plus, let's say 10%, which would give&nbsp; you a new base capital of $110. 10% of 100 is&nbsp;&nbsp;
[01:14] $10 plus the additional base capital.&nbsp; Now, the following year, you were invested&nbsp;&nbsp; $110 into the market. You get another 10%. You&nbsp; add $11 this year. So, now your 110 is $121.&nbsp;&nbsp;
[01:29] You see that extra bit that was added onto it?&nbsp; That's where the magic is. That little extra bit,&nbsp;&nbsp; that percentage that gets added to your capital&nbsp; and compounded interest-wise over the course of&nbsp;&nbsp;
[01:43] 50 years is something magical. Right here, you can&nbsp; see percentage gained without compounded interest.&nbsp;&nbsp; And next to it, you can see it with compounded&nbsp; interest. And this is over 30 years. The amount&nbsp;&nbsp;
[01:59] of money made due to the compound interest as&nbsp; opposed to without it is absolutely insane. Now,&nbsp;&nbsp; anybody can invest in the stock market. There&nbsp; are things called index funds which basically&nbsp;&nbsp;
[02:13] mimic the S&amp;P 500 or the NASDAQ or the Dow Jones.&nbsp; And it's a single asset that you can buy and that&nbsp;&nbsp; portfolio has diversified into all of the S&amp;P 500.&nbsp; So instead of you doing it yourself and buying&nbsp;&nbsp;
[02:30] each individual company, they allocate a specific&nbsp; percentage to each company and have an index fund&nbsp;&nbsp; that you can then invest into. This is how hedge&nbsp; funds make their money. The hedge fund has their&nbsp;&nbsp; portfolio and you give your money to a hedge&nbsp; fund and they invest it in accordance with their&nbsp;&nbsp;
[02:47] portfolio. Now investing is not without risk.&nbsp; When I say on average you're getting 10% returns,&nbsp;&nbsp; that's an overall average. Some years might be&nbsp; 20, some years might be minus 10. So you will&nbsp;&nbsp;
[03:01] have losing years and you will have winning years.&nbsp; But over time, the market has generally done this.&nbsp;&nbsp; The worst part about investing is that you are&nbsp; investing for a retirement fund. Correct? So when&nbsp;&nbsp;
[03:16] you retire, you want to pull out your capital and&nbsp; live your life as you wish as a retiree. Either&nbsp;&nbsp; fishing or yaching or whatever, sailing. Now&nbsp; let's say there is a huge market crash the year&nbsp;&nbsp;
[03:30] that you want to retire. Your entire portfolio has&nbsp; then decreased and you would get out having less&nbsp;&nbsp; value than you did 2 years prior. This is where&nbsp; chance, unluckiness or just bad happen stance&nbsp;&nbsp;
[03:47] comes into play. The timing of your retirement&nbsp; is relevant and some people just get unlucky.&nbsp;&nbsp; Let's say you turned 65 in 2008, 2009.&nbsp; There was a huge housing crisis. Basically,&nbsp;&nbsp;
[04:00] your portfolio melted. It sucks. But eventually,&nbsp; 10 years later, it rebounded. But now you're 75.&nbsp;&nbsp; You see what I'm getting at here? Now, let's get&nbsp; into trading and if it's right for you. Trading is&nbsp;&nbsp;
[04:14] a very high barrier to entry. You need to have&nbsp; a large knowledge base and an extended period&nbsp;&nbsp; of time where you've practiced this skill set&nbsp; before you can prove to yourself that you are&nbsp;&nbsp;
[04:26] good enough to trade your own capital in the live&nbsp; markets. Now, the issue with this is that I've&nbsp;&nbsp; seen traders be in this game for years and years&nbsp; and years and yet they are still not profitable.&nbsp;&nbsp;
[04:40] So, I don't know if that's due to lack of&nbsp; consistency or strategy hopping or just&nbsp;&nbsp; a mismanagement of funds and getting overly&nbsp; emotional and not having a proper strategy.&nbsp;&nbsp;
[04:54] But I've seen it thousands upon thousands upon&nbsp; thousands upon thousands of times. And to myself,&nbsp;&nbsp; I think you shouldn't be a day trader if you&nbsp; hadn't practiced on a demo account and can prove&nbsp;&nbsp;
[05:06] profitability to yourself before you enter in&nbsp; real capital into the markets. Once you do that,&nbsp;&nbsp; the real capital that you are trading, you&nbsp; should be able to outperform the S&amp;P 500,&nbsp;&nbsp;
[05:20] that 10% annually, because of the amount of&nbsp; time that you're dedicating to your career,&nbsp;&nbsp; your job as a day trader, you should be able&nbsp; to outperform the market. Because if you can't,&nbsp;&nbsp;
[05:33] then it would be much more logical for you to just&nbsp; become an investor and have freed up a bunch of&nbsp;&nbsp; time versus spending 40 hours a week on trading&nbsp; because you're working at something to outperform&nbsp;&nbsp;
[05:46] the S&amp;P 500. Whereas, if you do nothing, the S&amp;P&nbsp; 500 gets 10%. On average, statistically over time.&nbsp;&nbsp; So, the thing that you really have to ask yourself&nbsp; is one, are you willing to put in the time,&nbsp;&nbsp;
[06:02] energy, and consistency that it takes to become a&nbsp; full-time day trader? If yes, the second question&nbsp;&nbsp; you need to ask yourself is, am I able to prove&nbsp; that I am able to outperform the overall stock&nbsp;&nbsp;
[06:17] market more than 10% annually? If so, by&nbsp; how much? And is it sustainable long term?&nbsp;&nbsp; Can I do this for the next 10 to 15 to 20 years?&nbsp; If the answer is no to any of those questions, you&nbsp;&nbsp;
[06:31] should probably default to just being an investor.&nbsp; This is something that has very little time input&nbsp;&nbsp; and you can still have a full-time job with it. So&nbsp; essentially, your job can pay for your day-to-day&nbsp;&nbsp;
[06:43] living expenses and your investment can be for&nbsp; your retirement or vacation money or however you&nbsp;&nbsp; want to allocate your funds in your personal&nbsp; life. This is just a quick food forthought&nbsp;&nbsp; video. Can you outperform the S&amp;P? If so, is it&nbsp; worth your time? Because at the end of the day,&nbsp;&nbsp;
[07:01] at the end of your life, you'll think, "How&nbsp; much time did I waste sleeping? How much time&nbsp;&nbsp; did I waste being hung over? How much time did&nbsp; I waste at my job? What could I have done with&nbsp;&nbsp;
[07:14] that time?" Because the time is a expiring asset.&nbsp; Like it goes away and you never get it back. And&nbsp;&nbsp; I would prefer that at the end of your time, you&nbsp; don't look back and regret time not well spent.