A guide to FIRE: Financial Independence, Retire Early 🌴

But with freetrade the costs are basically gone, other than stamp duty and PTM levy for large trades. You can trade in a size of £10,000 and only have 0.5% stamp duty and the spread to make up. Stocks swing 5-10% weekly, so it’s fair game to make a couple of hundred pound a week doing this.

Personally I do not swing trade, since I invest for dividends, but I could very easily sell my whole portfolio and start swing trading with £78,000 (which will not move the market whatsoever). I see a lot of £100,000+ trades on the LSE order book, must be the big banks doing this. But I and many others would be happy to collect a few percent off a £100,000 every week for sure.

I recommend also anything Howard Marks has to say.

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I really want to know why Freetrade didn’t focus on indexing. If their target audience is new investors, picking individual stocks is very dangerous. The only thing worse is options trading.

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But there are plenty of index ETFs, eg S&P500, FTSE100 etc to choose from. It’s down to what the investors do with their money, put in index trackers or go for individual shares.

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I don’t disagree with the spirit of what you are saying.

I suspect it’s possible to learn how to calculate the liquidation value of a company. I suspect not many people will bother to learn and apply it. Even though as little number it may be they may become too many.

I think there is a set of questions one must ask her/himself. Not me. Not you. Not s/he. One. Which one? Every one.

Can I beat Michael Jordan or LeBron James at basketball?

Can I beat Ronnie O’Sullivan or Stephen Hendry at snooker?

Can I beat Roger Federer or Serena Williams at tennis?

Imagine one buys a stock for £10. One week after it trades at £6. What to do now? How long will one be able to live with an unrealized loss?

And many other questions one should ask in order to self assess.

If one reaches the conclusion it can’t beat Jordan, Hendry or Williams in the fields where they are experts. And if one can’t sleep with price volatility (synonymous of risk and opportunity at the same time). And many other things… Then it’s ok. There’s no shame in it. Thankfully one can index. And by indexing one has been getting results aligned with the top 20% of professional money managers. Historically.

For most people indexing is a victory in it’s own right. A massive breakthrough.

Every once in a while the market misprices. Badly

We’re big fans of indexing & we’ve explained the benefits lots of times. We also want to give people a choice of investing in individual companies too, which they may choose to do because they believe in the company’s prospects / like their brand or for all sorts of other reasons. So I think that it’s overly simplistic to brand investing in individual stocks as ‘very dangerous’.

In the future, we’ll also add more tools to the app to enable users to see how well diversified their portfolio is, compare it with benchmarks etc. to help give people the information that they need in order to avoid taking too much risk.

In the meantime we’ve created a whole series of posts explaining the principles of investing, you can see them in our Introductory wiki 🐣.

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But not enough. Please go vote for the essentials!

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Let’s not forget that there are significant risks involved in doing this. If it was easy then everyone would but it’s definitely not a sure thing.

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New investors and seasoned investors are welcome

There’s room for everyone

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As you say, the question to ask is whether I can identify and exploit that mispricing. My feeling is that for the vast majority of retail investors (including me), the stock market should be considered simultaneously pretty efficient (from my point of view the stock market participants are LeBrons, O’Sullivans and Williamses) and random (I have no special insight into why prices are changing or what direction they’ll go).

If I buy Twilio (or Freetrade) and it goes up, have I been smart or lucky? Honestly, I can’t tell.

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For most people this would get very emotional :sob:

Wouldn’t that depend on what your reasoning was?

Are they exclusive? Can’t you be smart, and lucky? Or smart, and unlucky?

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You’re right, they can be both. I suppose I’m just wary of taking it as evidence of skill :slight_smile:

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Do you want to know what I really like about what you just said? It’s a rethorical question. I’ll tell you anyway: it seems to me you are well aware of the borders of your circle of competence and you navigate the waters within those borders.

Do you want to know a secret? Another rethorical question. In the realm of principle it seems to me you’re doing exactly what Warren Buffet does: staying within your circle of competence. And as long as you stay there the chances are you will succeed. And I hope you do. Specially with your Freetrade investment :wink:

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The BBC’s getting involved here, with a slightly questionable story -

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No YOLO call options for them. Would be funny if the BBC was promoting YOLO call options.

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Weekly Options is the quickest way to FIRE, but you will go broke 99% of the time trying that.

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Financial Independence - Yes
Retiring Early - No (when you enjoy/love what you’re doing)

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They made a documentary about this. Playing with FIRE.

https://www.youtube.com/watch?v=kD8uNm5ck0Q&t=28s

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Visual representation of a stop loss.

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