How do you pay yourself as a Forex Trader?
In this video:
00:35 – How should we pay ourselves?
01:18 – You need to reward yourself
01:50 – How much to withdraw and how often?
02:40 – The balance between needing the funds and your trading account total
03:20 – How to trade with free money – withdraw the initial deposit
04:05 – Multiple accounts and are you protected?
04:50 – Client makes consistent returns
05:19 – The 7th Birthday sale coming soon – register your interest
How do you pay yourself as a Forex trader? Let's talk about that subject and more right now.
Hi traders. It's Andrew Mitchem here, I'm the owner of the Forex Trading Coach and in today's video and podcast I want to talk about a subject that I've actually received two emails about just this week.
One's from Stan over in Australia, the other's from Alex in the UK. They both ask a similar question and they both also said, “Hey! Andrew can you just elaborate on the subject. About, how do we pay ourselves as Forex traders?”
How should we pay ourselves?
When do we withdraw funds from our trading account, how often, etc, because it's something like, both of them said, it's a subject that's not very widely covered. You really don't hear too many people talking about withdrawing funds from their account. You hear probably stories about bad brokers, about people finding it difficult to withdraw funds from their accounts and you definitely want to stay well clear of those sort of brokers, but you don't often read or see videos or hear about, good ideas about how you can withdraw your funds.
Not all your funds, but just partial withdrawal of you funds in order to pay yourself because to me it's something, to reward yourself is actually something that's really important.
You need to reward yourself
You should reward yourself as a trader. You know, you reward yourself for your good learning, for your good trading, for the time and the effort that you put into your trading and for getting good results. You have to reward yourself for that.
How do you go about it? Well I suppose it depends on why you're trading. If you are trading, let's say a relatively large account and it's something that you're doing as an investment and you can afford to take funds from that account, then definitely do so.
How much to withdraw and how often?
You really need to decide how much you're going to withdraw when, how often, etc., because you need to be really careful that you don't withdraw funds too often otherwise you start accumulating bank fees and too many bank fees, you know, you don't want to be paying the bank all the time just to try and get $100 back out of your account. That's pretty pointless.
What you need to do is maybe when you make a certain amount of money, or a certain percentage on your account, whatever it is that you're looking for, a certain amount that you need to live on, you then need to be withdrawing that as a reward for yourself and for your effort that you put into your trading.
The danger is, I suppose, if you withdraw too much or too much too often then any gains that you make, you're losing out on that higher account size and compounding of that higher account size. It really becomes a balance of why you want to withdraw that funds and how much do you need to withdraw those funds.
The balance between needing the funds and your trading account total
Sometimes I prefer to keep my account growing in terms of it's size and compound on those gains if I‘m not needing to withdraw funds. You know, it really depends on how much you have in your account, how much you are earning from other sources.
If you're purely earning all your money full time as a trader, then definitely you need to be withdrawing funds more often to live on. Another way of looking at this is, let's say that you had a $50,000 account and let's say over time you've withdrawn $50,000.
How to trade with free money – withdraw the initial deposit
Effectively what you're trading on now, if you're still at $50,000 is basically free money because you started with 50K, let's say over a year or however long it takes, you've withdrawn 50,000 and now you still have 50,000 left in your account but of course you've already withdrawn your initial deposit so you're basically trading from now on with effectively free money.
Sure, it's money that you've earned, but it's effectively free because you've already taken back your initial deposit. You've already got that back so you can't really lose from there on, so that's a fantastic situation to be in.
The other thing to bear in mind also, like Alex says on his account, he said do I open accounts like with more than one broker or do I have multiple accounts with one broker, because like Alex said, in the UK the financial compensation scheme doesn't cover beyond 45,000 pounds.
Multiple accounts and are you protected?
In other parts of the world, I think in Australia, New Zealand it's $100,000.
The US I'm not sure about but make sure that you know what's covered in case your broker goes belly up and things go wrong. You don't want to be losing all your account if your broker should go out of business. You need to see there's some form of insurance or compensation from your government for that. Just check that out as well.
Client makes consistent returns
The question from Stan was, he said, look he joined me several months ago, he's been consistently profitable for a number of months, things have gone really well with his trading and he said, really I'm looking to withdraw funds as an income.
That's fantastic but as mentioned, just be really careful that you don't withdraw funds too often and end up paying bank fees unnecessarily. Hope that helps with that question, because as mentioned, it's something that's not covered very often.
The other thing I just want to quickly mention is you may have seen that on the 9th or 10th of May, depending on where you live in the world, I'm holding a 7th birthday sale.
The 7th Birthday sale coming soon – register your interest
It's the 7th birthday of the Forex Trading Coach on that day, so for 77 hours starting at 7:00 AM my time on Tuesday the 10th of May, could be Monday the 9th if you live in Europe or the US, I'm holding just an incredible and crazy 7th birthday sale.
There will be a link on this page and on the text below there's a video to enable you to find out more information. If you're listening to the podcast, get onto the website, view the video and look at the text and you'll find there's a link there to find out more information about that sale.
Register your interest if that interests you and on the 9th or the 10th of May, depending on where you live in the world, I will be sending you an email with just an incredible chance to jump onto my course at a hugely discounted rate, never done this before, probably never, ever do this again. Find out by clicking on the link below this video.
This is Andrew Mitchem, the Forex Trading Coach. Have a wonderful weekend. Look forward to catching up this time next week.