Passive income now is NOT a get rich quick scam!

Why Trading Stocks is Not Passive Income

by James on March 26, 2012

At my part-time job we were debating real estate and stocks the other day. One friend swears by real estate. He just purchased another small building that he’s going to renovate and then rent out the units one by one. He has always promoted the idea of investing into real estate to me.

Another friend chimed in by saying that he’s a huge fan of the stock market because it’s easy. He claimed that he makes easy money by being involved in stocks and day trading.

That’s when I froze. There’s nothing easy about investing in the stock market. I used to invest my money in the stock market when I first got into the idea of creating passive income. Then as time went on and I did more research, I took my money out of stocks and into other areas.

Why is trading stocks not passive income?

You have to be following the news consistently.

Anyone that wants to be a day trader needs to be an avid follower of the daily news. Trading stocks is not something you do on the side. You need to be on alert at all times. You need to keep up with the news and know exactly what’s going to happen. As soon as something happens, you have to be ready to make some moves. You might have to buy more shares or dump your shares before the stock tanks completely. All in all, all of the news that you watch will make stock trading pretty active. If you have a 9-5 gig, you won’t be able to devote the time and energy that it takes towards success in day trading.

You need to save up a ton of money to invest.

To even have enough money to make an impact or any real passive income with the stock market, you need to save up serious amounts of money. You need to build up enough money to play around with and allocate towards stocks that you feel are going to appreciate in value.

You need to take more risks.

When you sell an eBook or build a blog, you’re not going to take many risks. The only real risk is going to be your time. When it comes to day trading, you’re going to have to take some serious risks. There’s no guarantee that your money will be safe. There’s no guarantee of anything. Your putting your money into something that doesn’t exist. The stock can tank, causing you to lose a good amount of your savings. One could try forex. Foreign currency trading is similar to that of stock trading, however you are buying foreign currency in the (educational) hope that it will increase in value.

Could you handle losing your savings? I personally couldn’t handle the risk associated with stocks. This is why I got into other streams of passive income. I can’t sleep at night knowing that I could lose my savings. I work too hard for my money.

That’s why trading stocks will never fully be passive income. While I do feel that trading stocks can be profitable for some, it can cause most to go insane!

Have you tried investing your money into the stock market? Have you earned passive income from stocks?

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