Why Stock Trading is the Ideal Business for Solopreneurs

Disclaimer: financial information is not financial advice. This post is for informational purposes only.

What is a Solopreneur?

A solopreneur is an individual that runs and manages a business on their own, without partners or employees.

Solopreneurship is different than the traditional entrepreneurship model where a business might have multiple employees, partners, and stakeholders.

The solo entrepreneur independently handles all aspects of the business — from ideation, business strategy, marketing, finance, and operations.

By leveraging modern technology and tools, the solopreneur is able to scale and grow their business in today's digital age.

The appeal to being a solo business owner is the flexibility and direct control over every facet of the business.

Stock Trading and the Solopreneur

Stock trading is a fitting and viable business model for the solopreneur due to its inherit flexibility and independence. Here's how stock trading offers a unique opportunity for solopreneurs:

1. Minimal Overheads: Unlike traditional businesses, stock trading requires minimal setup costs. The barrier to entry is low; a trader just needs a computer, internet connection, and initial trading capital.
2. Flexibility: Stock trading allows you to set your own hours and work from anywhere in the world.
3. Independence: Business decisions are made by you. No need for scheduling meetings or planning with a team.
4. Scalability: Traders that trade smart and have the right trading strategies are able to start small and scale their stock trading business as they gain experience and capital.
5. Diversification: Stock traders have the option to diversify their investments across industries, sectors, and global markets, which reduces risk.
6. Technology & Tools: Modern trading platforms, tools, and technology make it easier than ever for traders to access global markets and make smarter trading decisions.

Minimal Overheads and Low Startup Costs

To start trading stocks, you don't need to raise money or financing to fund your trading business. Minimal capital is needed to start trading.

The minimal capital required to start trading varies on several factors:

• Day Trading: If you are day trading stocks, in the U.S., the Financial Industry Regulatory Authority (FINRA) requires a minimum of $25,000 in a brokerage account. This is known as the Pattern Day Trader rule.
• Options / Futures Trading: Minimums vary across platforms, but some accounts can be opened with just a few hundred dollars.
• Swing Trading / Long-Term Investing: Swing trading and long-term investing can be started with a much smaller capital, even as low as the price of a single share of stock.

Traditional businesses typically have higher operating and overhead costs like rent, inventory, staff, marketing, financing, etc.

With stock trading, no such overhead costs exist. You don't need a team to market your business, no need to run marketing campaigns, no paid promotions, no business loans, no inventory to purchase, and no office space renting.

Flexibility to Work When and Where You Want

Stock trading gives the solopreneur the ability and flexibility to trade in different global markets any hour of the day.

The freedom to trade whenever you want allows traders to set their own schedule and be their own boss.

Aside from working when you want, traders are able to work from anywhere in the world. All you need is a computer, an internet connection, a trading account and some initial capital.

Independence and Control Over Business Decisions

Stock traders have the independence of making trading decisions without having to consult a team or plan a meeting to discuss business decisions.

The solopreneur that treats stock trading as a business gains the benefit of making quick decisions, which may lead to potentially rapid gains.

Scalability to Grow Your Stock Trading Business

Trading as a business doesn't require complicated business bureaucracy, technical infrastructure, special financing, overhead costs, marketing campaigns, and employees, which can all contribute to a reduction in the scalability of a business.

Because stock trading is solo venture, it is ideal for the solopreneur. The ability to scale your trading business is dependent upon your trading skill.

Diversification by Trading Multiple Stocks

Ideally, a trader doesn't put all of their eggs in one basket. By diversifying your investments and trades across multiple asset classes, sectors, and industries, a trader reduces their risk.

A properly diversified portfolio may lead to optimal growth while simultaneously reducing risk.

For example, if you imagine two different trading strategies, where one has higher risk and the other lower risk, and they both expect to return 10% a year, then the one with lower risk (due to diversification) is better, because it may achieve the same result with less risk.

Technology & Tools

By leveraging technology and tools, the solopreneur stock trader becomes more efficient at trading.

Online tools and resources exist, which, if properly leveraged, make trading easier.

With the right stock trading tools, traders are able to make better business decisions and trade smarter.

At Stocksift.com, we provide free and premium stock trading tools to help retail traders make smarter trade decisions.

Conclusion

In closing, stock trading is the ideal business model for solopreneurs because it offers them flexibility, independence, scalability, low overhead / low startup costs, and easy access to tools and technology.

If you are considering a path in stock trading, it is important to note that proper education, money management, risk management, and trading strategies are needed.