There’s No Fast Track to Financial Freedom
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From the Ramsey Network, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm here with my good friend, George Camel. Good to have you here, bud.
Excited to be here. Thanks for having me, Jade. Now you have a lot of options. Thanks for choosing me.
It was nice to invite you on today. That's a lie. Well... We're here to take calls. It's a live show. 888-825-5225 is how you get involved. I hope you do. Talking about your life, your money. Let's get right to the phone lines. We've got Amir in Irvine, California. What's up, Amir?
Hello.
Hey, what's up? How can we help?
Hey, guys. I'm a big fan. It's really nice to be on the show.
Glad you're here. What's going on?
Yeah, so I'm in a bit of a unique spot. I'm 18 years old, and I trade futures. I'm a day trader, and I've recently started making a pretty large amount of money, and I just want help managing it correctly and making responsible choices.
When you say you've been making a lot of money, tell us real dollar amounts.
Well, I've been averaging about $15,000 a week for the past five months. The past week, I made $25,000. Wow.
What did you start with?
So how I actually trade is I'm a funded trader. I'm actually treated as an individual contractor, and the firm provides me with capital to trade with after they've evaluated me. So really, I just paid for that evaluation fee, which was only $150.
So you're not investing your own money?
No.
How do you get paid?
So they take commissions off my trades and then they give me the rest.
So what's the rest? What do you get?
It's a 90-10 split. I get 90%, then they get 10%.
Wow. Listen, lucky ducky. That's wild. Lucky ducky. And I say that on purpose because I feel like this is sheer luck going on right now. And I only say that because a lot of the statistics show that day traders, I mean, statistically, it's like less than 5%.
97% of day traders who persisted for more than 300 days lost money. So you are, you're not at the 300 day market. And truthfully, I have no ill will. I hope you keep making money, but the key that I would go is like, if this was Vegas, we'd all be around you going, dude, cash in the chips and walk away. All right. You literally, it's like you just won the lottery and now you're playing with other people's money, which does lower your risk. You're not putting your own money. But my bigger question is what are you doing with this $300,000 you've made in the last six months?
Uh, well, I've got most of it sitting in my bank account. Um, I still live with my parents, so I really don't have many living expenses. I'd say I probably only spend about maybe 1500 a month. Okay. I've just been saving it up and, uh, I've been planning on buying a nice car, but I don't know if that's the responsible thing to do.
I would have like a house before you put all of your money in depreciating asset to impress your friends. And trust me, they would be impressed. What's less impressive is invisible wealth where you're like, well, it's in the equity of my very reasonable home.
Have you ever lived on your own before, Amir?
No, never. I actually recently just turned 18.
Okay, so I might differ with George only on timeline. I think it's a good idea to buy a house, but maybe not yet. If I were you, my first goal would be like, listen, I'm going to get out of this house, my parents' house, and I'm going to go rent for a while. And I'd probably park that $300,000 in an index fund. Look at your projection and say, okay, do I want to be a homeowner in the next four years, in the next five years? Whatever that is, if it's five years or less, I'd probably... put it in a high yield savings account. But if it's more than five years, I might park a good portion of it, you know, just in some sort of index fund and just wait until you're ready to do something. I like George's idea of doing real estate. But if you do buy a vehicle because you need one, just buy something that's modest. Like I would not use this money as an excuse to inflate my lifestyle into such that's not real long term yet. If that makes sense. I think you'll be a successful guy. We just don't know if you're going to make $300,000 a year from here on out. Does that make sense?
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