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I would like to supplement my disability income. I have about 5k to play with and was thinking of trading stocks as a way to earn some extra cash. I have time and I largely spend my days in front of the computer anyway.

If 5k is too little to do anything with I could take from my IRA, where I have $165k invested in Vanguard VTINX. Being disabled I can withdraw from that w/o penalty. But that is basically an emergency fund that has to last until I die (I'm 57), so I'm reluctant to rob from it (and it would be taxed).

What might I need to consider before I proceed?

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    Most day traders lose money. What do you know that they don't? – zeta-band Mar 14 '18 at 20:44
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    It's estimated that 85-90% of day traders fail within the first year so your best chance of making a million dollars by day trading is to start with two million dollars. It would be extremely unwise to attempt this, even more so with your nest egg. – Bob Baerker Mar 14 '18 at 21:30
  • I'm not expecting to become a millionaire. I'm thinking I could develop deep knowledge of one or two vertical markets and buy shares in selected companies. If I could earn $500-1000/month I would be satisfied. Is that unreasonable? – Chance DG Mar 15 '18 at 6:31
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    @ChanceDG: It is indeed very unreasonable to expect to earn $500 per month if you are only planning to invest $5000. – BrenBarn Mar 15 '18 at 7:22
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    If you can sit in front of a computer, there are ways to earn money. I would reference Clark Howard for legitimate ways to earn money online. You might even be able to get a full time job that pays more then disability payments. – Pete B. Mar 15 '18 at 11:44
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The most important thing you need to consider is that you should absolutely not be doing this with money that you can't afford to lose.

Pulling money from an IRA. If it is taxed (You contradict yourself as to whether it is) then between that and transaction costs for trading the odds are exceedingly high that you will not be only fail to make a profit, but you will lose money.

Even if you were successful, making a return on $5K that would be considered a significant income supplement would make you extremely lucky of a financial wizard.

Bottom line: This sounds like a horrible idea.

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  • I think with regard to IRA withdrawals he means it will be taxed as income (as all traditional IRA withdrawals are) but won't be subject to early withdrawal penalties. – BrenBarn Mar 15 '18 at 7:21
  • Correct BrenBarn. – Chance DG Mar 15 '18 at 22:30

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