The 10% Rule

If you have a thriving trading account and you're making profit, congratulations on getting to that point. If you're trying to make a living as a trader, you should sit down and figure out a fair percentage of income to draw from the profits, all while retaining enough of that profit to reinvest and compound the value of your account. Just like every business, it's important to be profitable but it's also important to understand how much income one should draw from his/her account. Not only will this allow you to enjoy the fruits of your labour, but this will create a great habit of paying yourself first and slowly growing your net worth. We humans are very bad at taking action today, for a better tomorrow. We tend to think about the here and now much too often. So it's very important that you get in the habit of simply taking out at least 10% from your profits, every month for yourself. Open a bank account and name it "Financial Freedom" and every month, put 10% of your profits in there. Even if you only profit $100, take $10 out and deposit it in your Financial Freedom account. Over time, the deposits will grow and so will the balance. Don't wait for the magic day when you have "enough" money to start to save or withdraw profit. Do the same thing for $100, that you would with $1,000,000. This is the secret to building wealth and what many traders fail to understand, even when very profitable on paper. Pay yourself for your hard work and success and allow your savings account to grow along side your investment account. Patience is needed but this approach curbs the thoughtlessness we often have with money. Over time as the account grows, you'll be amazed at how phenomenal this concept truly is.