Tag: Resources

Fuel Your FIRE with Real Estate: Ignite Your Path to Financial Independence

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There are many paths to financial independence, and in this blog post I’m going to discuss how real estate investing can offer advantages for those pursuing FIRE (Financial Independence, Retire Early). FIRE is a movement that emphasizes achieving financial independence and retiring at a relatively young age. The goal of FIRE is to accumulate enough savings and investments to cover living expenses, allowing individuals to have greater control over their time and pursue activities they are passionate about, rather than being solely dependent on traditional employment for income. The movement encourages frugal living, high savings rates, and intelligent investment strategies to accelerate the path to financial independence.

Your FIRE Number

The first step is to determine your FIRE number. Determining your FIRE number involves calculating the amount of money you need to accumulate in order to achieve financial independence and retire early. While the specific methodology may vary depending on your individual circumstances and goals, here are some general steps to help you come up with your FIRE number.

Start by determining your anticipated annual expenses in retirement. Consider factors such as housing, utilities, transportation, food, healthcare, travel, hobbies, and any other regular expenses you expect to have during your retirement years. It’s important to be realistic and account for inflation. Next, decide on a safe withdrawal rate, which is the percentage of your investment portfolio that you plan to withdraw each year during retirement. The commonly recommended safe withdrawal rate is around 4% per year (the 4% rule), although this can vary depending on factors such as your risk tolerance, investment allocation, and time horizon. Then calculate your desired income by multiplying your estimated annual expenses by your chosen withdrawal rate. For example, if your annual expenses are $40,000 and you plan to withdraw 4% annually, divide $40,000 by 0.04 to get a target portfolio size of $1,000,000.

Consider any additional factors that may impact your FIRE number. For instance, if you plan to have mortgage-free housing or expect significant healthcare costs, you may need to adjust your target accordingly. Conversely, if you anticipate additional sources of income in retirement, such as rental properties or part-time work, you might adjust your FIRE number downward. Also, don’t forget to factor in taxes. Account for taxes on your withdrawals from retirement accounts and any other taxable income. Depending on the tax rules and your specific circumstances, this can impact the amount you need to accumulate to meet your desired income.

Regularly review and reassess your FIRE number as your circumstances change. As you approach retirement, consider consulting with a financial advisor to fine-tune your plan and ensure your goals align with your financial situation.

Real Estate and FIRE investing

Real estate investing can fit into your FIRE investment strategy very well, and many individuals pursuing FIRE incorporate real estate as a part of their investment portfolio to generate passive income and accelerate their path to financial independence. Real estate offers several potential advantages for FIRE investors including, cash flow, appreciation, leverage, diversification, and some tax benefits.

Rental properties can generate ongoing rental income, which can supplement or replace traditional employment income. Positive cash flow from rental properties can contribute to covering living expenses and help achieve financial independence. Real estate properties also have the potential to appreciate in value over time. Property values may increase, allowing you to build equity and potentially sell properties for a profit in the future.

Real estate investing often involves the use of leverage through mortgages. By using leverage, you can control larger properties or a greater number of properties with less initial capital, potentially increasing your overall investment returns. Real estate provides diversification within an investment portfolio. It has different risk and return characteristics compared to traditional stock and bond investments, offering a potential hedge against market volatility. Real estate investments offer various tax advantages, such as deductions for mortgage interest, property taxes, depreciation, and other expenses. These tax benefits can help optimize returns and reduce tax liabilities.

Real estate investing does come with its own risks and considerations, however. Property management, maintenance costs, market fluctuations, and the potential for vacancies are factors that need to be carefully evaluated and managed. It’s important to conduct thorough research, consider local market conditions, and develop a sound investment strategy when incorporating real estate into a FIRE investment plan.

Resources for learning real estate investing

There are various resources available to help you learn about investing in real estate. Here are some popular and reputable sources that can provide valuable information and education on real estate investing:

Several books offer comprehensive guidance on real estate investing. Some highly recommended titles include the following. Note, the following book links are Amazon affiliate links, and we may earn a small commission if you purchase from Amazon after using them.

Numerous websites and blogs focus on real estate investing and provide educational content, tips, and resources. Some popular platforms include:

Podcasts are another great way to learn from experienced real estate investors and industry experts. Notable podcasts in the real estate investing space include:

There are also a number of online platforms and educational institutions offering courses specifically tailored to real estate investing. Some popular ones include:

In addition to books, blogs, podcasts, etc., attending local real estate investing networking events, meetups, or seminars can provide opportunities to connect with experienced investors, gain insights, and expand your knowledge through in-person interactions.

Conclusion

There is no single “correct” path to FIRE for anyone, and real estate investing is just one of many investment vehicles of which people may choose to take advantage. At the end of the day, you must decide where your interests lie and how you can invest in something that aligns with them. I hope you find these resources useful and that I’ve helped you ignite your path to financial independence!

Thinkorswim Paper Trading

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Paper trading, also known as virtual trading or simulated trading, is a practice in which individuals or investors simulate the process of trading securities without using real money. Instead, they use a simulated trading platform that replicates the actual market conditions and allows users to execute trades, track performance, and monitor the impact of their investment decisions. Paper trading provides a risk-free environment for individuals to gain experience in trading without incurring any financial losses. It is commonly used by novice traders, investors, and students to learn about the dynamics of the financial markets, test investment strategies, and practice executing trades.

In paper trading, users are typically provided with a virtual account balance, which they can use to buy and sell stocks, bonds, options, or other financial instruments based on the current market prices. The platform records the transactions and keeps track of the user’s portfolio value, giving them a realistic sense of how their trades would have performed if they were using real money. By engaging in paper trading, individuals can develop and refine their trading skills, understand market trends, analyze investment strategies, and assess the potential risks and rewards of different trading approaches. It’s a valuable tool for building confidence, experimenting with new investment techniques, and evaluating the performance of specific trading strategies before committing real capital (read, your hard-earned money!) to the market.

Does Thinkorswim offer paper trading?

Yes, Thinkorswim, a popular trading platform developed by TD Ameritrade (now part of Charles Schwab), does offer paper trading capabilities. Thinkorswim’s paper trading feature allows users to practice trading without risking real money. It provides a simulated trading environment where users can execute trades, monitor their portfolios, and test various trading strategies. With Thinkorswim’s paper trading, users can access a wide range of financial instruments, including stocks, options, futures, and forex. The platform provides real-time market data1 and a suite of advanced trading tools and charting capabilities, allowing users to perform technical analysis and make informed trading decisions.

Thinkorswim’s paper trading feature is particularly popular among both beginner and experienced traders who want to practice and refine their strategies before trading with actual funds. It allows users to gain familiarity with the platform’s features, test different order types, assess risk management techniques, and track the performance of their virtual trades.

The difference between paper trading and on-demand

Thinkorswim offers two distinct features for simulated trading: paper trading and on-demand.

  1. Paper Trading: Thinkorswim’s paper trading feature allows users to practice trading in a simulated environment using virtual funds. It replicates real-time market conditions and provides users with a virtual account balance to execute trades, monitor portfolios, and test various trading strategies. Key features of paper trading include:
    • Simulated trading environment: Users can trade stocks, options, futures, and forex using virtual money, enabling them to practice without risking real capital.
    • Real-time market data: Paper trading reflects live market conditions, providing users with access to real-time prices, quotes, and market depth.
    • Tracking and performance analysis: Users can monitor their paper trading portfolio, track trades, and evaluate the performance of their virtual trades over time.
    • Practice and experimentation: Paper trading allows users to test different trading strategies, explore advanced order types, and gain familiarity with the platform’s features.
  1. On-Demand: On-demand is a unique feature within Thinkorswim that enables users to access historical market data and replay it as if it were happening in real-time. Unlike paper trading, on-demand is not limited to simulated trading with virtual funds. Instead, it allows users to review and analyze past market conditions to refine their strategies or learn from historical price movements. Key features of on-demand include:
    • Historical data replay: Users can select specific dates and times and replay the market activity as if it were occurring in real-time.
    • Advanced charting and analysis: Users can apply technical indicators, draw trend lines, and perform analysis on historical data to study patterns and price movements.
    • Strategy evaluation: Traders can test their strategies on historical data, assess their performance, and make adjustments based on past market conditions.
    • Learning and education: On-demand provides an opportunity for traders to review historical events, study market behavior, and enhance their understanding of the markets.

In short, Thinkorswim’s paper trading feature focuses on simulated trading with virtual funds in real-time market conditions, while the on-demand feature allows users to replay historical market data for analysis, strategy refinement, and educational purposes.

Thinkscript

The best part about all of this is that ThinkScript indicators can be used with both Thinkorswim’s paper trading and on-demand features! ThinkScript is a scripting language developed by TD Ameritrade that allows users to create their own custom studies, strategies, and alerts within the Thinkorswim platform.

When using Thinkorswim’s paper trading feature, you can apply your custom ThinkScript indicators to analyze the simulated market data and test your trading strategies. The platform provides a built-in editor where you can write and modify ThinkScript code, and then apply those custom indicators to your paper trading charts.

By utilizing custom ThinkScript indicators while paper trading, you can enhance your analysis, identify potential trade setups, and evaluate the effectiveness of your trading strategies in a simulated environment. This can help you gain confidence in your custom indicators and refine them before using them in live trading with real money.

Thinkorswim Studies/Indicators

Thinkorswim Studies/Indicators

thinkScript is a programming language that gives the capability of creating analysis tools such as studies, strategies, watchlist columns, etc. By purchasing scripts from Trade For Me, there’s no programming required!

These Thinkorswim (TOS) indicators are easy to install and provide you the additional edge you need for trading.

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1. Real-time market data is available only with a funded account, and you must sign the exchange agreements first. Additionally, to remove the delay from your PaperMoney account you’ll need to contact TD Ameritrade support directly either through phone support or by chat.

Emotional trading can lead to losses. Tips to greater profitability

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The stock market is unpredictable and it’s unpredictable for a variety of reasons. Changes in economic factors such as inflation, interest rates, and gross domestic product (GDP) growth can affect investor sentiment and lead to changes in stock prices. The performance of individual companies can have a significant impact on their stock prices. If a company reports strong earnings or announces a new product, its stock price may rise. Conversely, if a company reports weak earnings or faces legal or regulatory issues, its stock price may fall. Political events such as elections, changes in government policy, or geopolitical tensions can also affect the stock market. These events can create uncertainty among investors and lead to volatility in stock prices. Investor sentiment plays a large role in stock market unpredictability. This, in my opinion, is one of the single most influential factors. If investors are optimistic about the future of the economy and individual companies, stock prices may rise. However, if investors become fearful or uncertain, stock prices may fall.

One truism about making money in any market is that perception overpowers reality. Even during periods of great economic growth, holding on to the stock of fundamentally sound companies may not make you any richer. If investors perceive that better profits can be made elsewhere, that is where the money is going to go.

Stephen Bigalow, Profitable Candlestick Trading (Amazon affiliate link)

I’ve said it before, and I’ll say it again. You need to write a trading plan! In addition, you should attempt to learn the art (or maybe it’s a skill) of trading without emotion. Trading without emotion can help you improve your odds of success in an unpredictable market in several ways. Emotions such as fear, greed, and panic often lead traders to make impulsive decisions that are not based on sound analysis or strategy. By trading without emotion, you can avoid making impulsive decisions and stick to your trading plan. It’s no easy task, and requires discipline and self-control. Traders who are able to control their emotions are more likely to stick to their trading plan and avoid making emotional decisions that can lead to losses. You’ll also be more likely to make more rational decisions based on objective analysis of market data and other factors. This can help you identify trends and patterns in the market and make more informed trading decisions. Emotional trading can also lead to overtrading, which can be costly for traders. By trading without emotion, you can avoid the temptation to make too many trades and focus on making high-quality trades that are more likely to be profitable.

Learning to put emotions aside when trading stocks can be challenging, but here are some tips that can help:

  • Develop a Trading Plan: I know…I said it again, again! Having a well-defined trading plan can help you make more objective trading decisions. This plan should include your trading strategy, risk management guidelines, and criteria for entering and exiting trades. By sticking to your plan, you can avoid making emotional decisions that deviate from your strategy.
  • Use Technical Analysis: Technical analysis involves studying price charts and other market data to identify trends and patterns in the market. By using technical analysis, you can make more objective trading decisions based on market data rather than emotions.
  • Manage Risk: Managing risk is essential for trading without emotion. This involves setting stop-loss orders to limit your potential losses and determining your risk tolerance for each trade. By managing your risk, you can reduce the emotional impact of trading losses.
  • Practice Mindfulness: Mindfulness techniques, such as meditation or deep breathing exercises, can help you stay calm and focused during volatile market conditions. By practicing mindfulness, you can develop a greater awareness of your emotions and learn to manage them more effectively.
  • Learn from Your Mistakes: It’s important to learn from your mistakes and avoid repeating them in the future. Analyzing your past trades and identifying the emotional factors that influenced your decisions can help you improve your trading performance over time.

Trading without emotion takes time, effort, and practice. By developing a trading plan, using technical analysis, managing risk, practicing mindfulness, and learning from your mistakes, you can become a more disciplined and successful trader. As always, I wish you the best and happy trading!

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Best Day Trading Books

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How to Day Trade for a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology (Stock Market Trading and Investing)

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From the author

Day trading is not gambling. It’s not an online poker game. To be successful at day trading you need the right tools and you need to be motivated, to work hard, and to persevere.

At the beginning of my trading career, a pharmaceutical company announced some positive results for one of its drugs and its stock jumped from $1 to over $55 in just two days. Two days! I was a beginner at the time. I was the amateur. I purchased 1,000 shares at $4 and sold them at over $10. On my very first beginner trade, I made $6,000 in a matter of minutes.

It was pure luck. I honestly had no idea what I was doing. Within a few weeks I had lost that entire $6,000 by making mistakes in other trades. I was lucky. My first stupid trade was my lucky one. Other people are not so lucky. For many, their first mistake is their last trade because in just a few minutes, in one simple trade, they lose all of the money they had worked so hard for. With their account at zero, they walk away from day trading.

As a new day trader you should never lose sight of the fact that you are competing with professional traders on Wall Street and other experienced traders around the world who are very serious, highly equipped with advanced education and tools, and most importantly, committed to making money.

Day trading is not gambling or a hobby. You must approach trading very, very seriously. As such, I wake up early, go for a run, take a shower, get dressed, eat breakfast, and fire up my trading station before the markets open in New York. I am awake. I am alert. I am motivated when I sit down and start working on the list of stocks I will watch that day. This morning routine has tremendously helped my mental preparation for coming into the market. Whatever your routine is, starting the morning in a similar fashion will pay invaluable dividends.

Rolling out of bed and throwing water on your face 15 minutes before the opening bell just does not give you sufficient time to be prepared for the market’s opening. Sitting at your computer in your pajamas or underwear does not put you in the right mindset to attack the market. I know. I’ve experienced all of these scenarios.

In How to Day Trade for a Living, I will show you how you too can take control over your life and have success in day trading on the stock market. I love teaching. It’s my passion. In this book, I use simple and easy to understand words to explain the strategies and concepts you need to know to launch yourself into day trading on the stock market. This book is definitely NOT a difficult, technical, hard to understand, complicated and complex guide to the stock market. It’s concise. It’s practical. It’s written for everyone. You can learn how to beat Wall Street at its own game.

About the author

An entrepreneur since childhood, Andrew actively invests in FinTech companies related to the development of AI for trading. When not busy watching the markets, Andrew enjoys trail running, climbing, skiing, and high-altitude mountaineering. Andrew is currently on a mission to climb the highest volcano on each of the 7 continents.

Dr. Andrew Aziz is a Canadian trader and proprietary fund manager at Peak Capital Trading, Forbes Council official member, investor and #1 best-selling author. He has ranked as one of the Amazon top 100 best-selling authors in the “Business and Finance” category for over 4 consecutive years (2016-present). His books in finance and stock market trading have been published thus far in 8 different languages (English, Chinese, Portuguese, Russian, French, Spanish, Vietnamese, and Japanese).

The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel

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Amazon.com Review

Among the library of investment books promising no-fail strategies for riches, Benjamin Graham’s classic, The Intelligent Investor, offers no guarantees or gimmicks but overflows with the wisdom at the core of all good portfolio management.

The hallmark of Graham’s philosophy is not profit maximization but loss minimization. In this respect, The Intelligent Investor is a book for true investors, not speculators or day traders. He provides, “in a form suitable for the laymen, guidance in adoption and execution of an investment policy” (1). This policy is inherently for the longer term and requires a commitment of effort. Where the speculator follows market trends, the investor uses discipline, research, and his analytical ability to make unpopular but sound investments in bargains relative to current asset value. Graham coaches the investor to develop a rational plan for buying stocks and bonds, and he argues that this plan must be a bulwark against emotional behavior that will always be tempting during abrupt bull and bear markets.

Since it was first published in 1949, Graham’s investment guide has sold over a million copies and has been praised by such luminaries as Warren E. Buffet as “the best book on investing ever written.” These accolades are well deserved. In its new form–with commentary on each chapter and extensive footnotes prepared by senior Money editor, Jason Zweig–the classic is now updated in light of changes in investment vehicles and market activities since 1972. What remains is a better book. Graham’s sage advice, analytical guides, and cautionary tales are still valid for the contemporary investor, and Zweig’s commentaries demonstrate the relevance of Graham’s principles in light of 1990s and early twenty-first century market trends. –Patrick O’Kelley

About the author

Benjamin Graham was a British-born American economist, professor and investor. He is widely known as the “father of value investing”, and wrote two of the founding texts in neoclassical investing: Security Analysis with David Dodd, and The Intelligent Investor.

Secrets of a Pivot Boss: Revealing Proven Methods for Profiting in the Market

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Secrets of a Pivot Boss offers the most comprehensive collection of pivot-related trading ideas and concepts available to traders. Whether you are a real-time trader, swing trader, position trader, or investor, you will find great value in this book, regardless of the markets you trade or your level of experience. Frank Ochoa has analyzed the market every day over the past 12 years and has cultivated the techniques in this book into a fine art using the best leading indicators available to traders. The concepts in this book will help you become a more knowledgeable and confident trader. Professional traders use tools that are based purely on price, which is a leading indicator in its own class. In this book, we will discover the best leading indicators available to traders, including the Money Zone, Floor Pivots, and the Camarilla Equation. While you may have studied forms of pivots in the past, Frank Ochoa provides a fresh perspective that can only be described as a truly unique approach to playing these amazing levels for profit. You’ll learn powerful concepts like Two-Day Pivot Relationships, Pivot Width Forecasting, Pivot Trend Analysis, and Multiple Pivot Hot Zones. Not only will you learn about incredible pivot relationships, but Frank will also divulge his best trading secrets, including Powerful Candlestick Setups, the Types of Trading Days, the Types of Buyers and Sellers, Powerful Setups, and Proprietary Indicators. Taking this a step farther, Frank also provides the actual code to each of the scripts that he’s written and covered in the book! Secrets of a Pivot Boss brings a fresh approach to these powerful concepts that you will not find anywhere else.

About the author

Franklin Ochoa is a twelve-year market veteran, system developer, and analyst. He has educated thousands of traders over the last decade through seminars, boot camps, trader conferences, educational DVDs, webinars, and private consulting. Frank is also the founder of PivotBoss.com, where he contributes daily analysis, education, and market insight. 

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