Day Trading 101: A Beginner’s Guide to Financial Growth with Erin Thompson

Welcome to today's episode on the wealthy after 40 podcast. I'm excited to host Erin Thompson. She is a learned about day trader, also a financial coach and I'm excited for her to share a debt free story and also how to become a day trader. So welcome to the show, Erin. Hi. Hello, Dailene. How are you? I'm so good today. So good. Good. Good. It's really great to be here. Thank you for having me on. Yes. Yes. So for listeners, just share with them who you are, what you do and how you do it. So my name is Erin Thompson. I call myself a financial freedom architect because I have an engineering background and I'm all about Designing and building the life that you want and planning out all the steps that it takes to get there and helping to coach people, not only to put the plan in place, but then working the plan so that they can get there themselves. I love that. I love that. I also focus on financial freedom so I can definitely relate to that as an artist. Engineer. Nope, I don't do that. I do numbers. So, kind of, kind of sitting side by side with you, but I love that. So, yeah, share with us, I noticed on a post, how you talked about getting out of credit card debt twice. How you've done that with your family. So, share with us that story. I'd love to learn more and share with listeners, you know, so that they can be inspired to do it themselves. Yeah, so the biggest thing that I can say about like monthly finances and getting yourself out of debt is that it's not knowing the right things to do, necessarily, it's your habits, honestly, and that really was what got us into trouble the second time but to kind of back it up. I graduated from college right before that big recession in 2008. So I was out on my own trying to figure out how do I do this adult money stuff? Like, what should I be doing with my money? And oh, by the way, here's a huge recession that's coming and like, ah, what does that mean for my money and student loans and all of that, right? So as an engineer, I had like a hundred thousand dollars in student loan debt when I graduated. So. That wasn't nothing, right? And I did have a couple credit cards. My husband, at that time, we were just dating, but, you know, we ended up getting married and he also had a little bit of credit card debt and lots of student loans. We met at engineering college, so just pile on the student debt. But we had a plan and we worked the plan and got ourselves out of all of our credit card debt. And we were at the point where we were putting away about 40% of like a total or bring home every month. And we had a really nice nest egg built up at the end of that. And that was of course, before the children came. Once we started having kids, we actually wanted to move back to Michigan, which is where we're both from. We're in Virginia right now and just the move. And like, we went down to only one of us was working and things that made sense on paper. But then, you know, you, like, life happens and we bought a house that we thought was going to be our forever home, but it needed some renovations that we really hadn't budgeted in, and we were used to living on an income where we were stocking away 40 percent every month, right, so we could go out to eat whenever we wanted, and, and, completely changing our lives to then only having one income. It was a huge wake up call and I don't, it took us a while to get with the program, but we kind of got to the point where we had burned through that whole nest egg and we're like racking up all of our credit cards again. And you, you get to that point and you're just like, I knew all the right things to do. Like we clawed our way out of this. How in the world did we get here again? And it's, So insidious how it sneaks up on you, but but yes, we we got big into that again And we actually ended up moving back down to Virginia and we put a plan in place and just kept working the plan We actually did We called them budget party little bunch of parties that we would have every Friday. We had a spreadsheet and it was kind of nice to get together and touch base every week. Just it's sort of like gamifies it, right? Like, Ooh, what did we do this week? And what are we going to pay off or put money on this week? And it just helps keep you excited for the process. And we, the second time around, we paid off, it was like 50, 000 in debt that we were able to pay off, so, that was nice, and like, right after that happened we were kind of in a nice situation where then I was able to walk away from my job because we didn't need the extra money to be paying off things like that, so. And then that's when I got into day trading. I love it. I love it. Before we jump into day trading, I want to go back to like the budget parties, which I also call them money dates money. They're part of my money routine. I teach my clients. So working as a couple, who was the who was the instigator or the one that kept the motivation going? Or was it the both of you? I would love to hear more about that. It was kind of the both of us. We were both excited about the budget party every week. It's interesting when we first got together he was the spendthrift and I was like super frugal and over time the roles have almost reversed which is weird. I wouldn't say that I'm a spendthrift. I'm still really frugal, but I'm, if he wants something, I'm like, Oh yeah, sure, babe. Just whatever, whatever, you know, whatever you want. But in retrospect, maybe you should say yes to some of those things. But yeah, when it came time to like, all right, we need to tackle this. It definitely helps to be a team for sure. And to both be excited about it. We realized when we were looking through some of the expenses, because the Amazon account was under his name. And so looking back through things, he was like, I think I got an Amazon problem. So, it was. Like raw and emotional sort of at that point when he's realizing like, Oh my gosh, I got to lock it up. And we knew like, wow, we go out to eat way too much. Okay. So we had some hard realizations. But you know, we're a team and we, we just said, let's do this, let's tackle it together. And so we went through many, like no spend weekends and just trying to stockpile as much and throw it at the debt as we could to get it gone as fast as we could. I love that. I, you know, definitely with debt, it is so important to realize what is adding to it. What is maybe the contributor? I think a lot of people are looking for not necessarily a quick fix, but a plan because they feel like they just can't keep up anymore. And so they'd want to do, you know, the he locks or refinance on their homes. And I just think, okay, but first you got to figure out what's wrong and then fix that. So yeah, I love that you shared that. So, Yeah, we did do a debt consolidation loan when we first got back down to Virginia and both of us are like, oh, never again. Just because it was such a large monthly payment once you put everything together. Yeah. It, in theory, it like was less, right, than all of the individual things, but then you just have this huge thing and it just seems like it's impossible to get rid of it. It just takes forever. Yeah. Yeah. So, so what was your What was your plan of attack for that second time? So you did the debt consolidation first. Obviously you were not going to choose that the second time. How did you approach it that time? So the first time we did not do a debt consolidation loan, but the second time we did. So once we got debt free and out from underneath that debt consolidation loan, we were like, okay, never again. Again. Yeah. Just need to do basically what we did the first time and just make a plan. And because we, unfortunately, we had kind of gotten into the debt consolidation loan before we did the budget party spreadsheet stuff. So it was just a fact of life at that point. But I think, you know, if this was ever to happen again, which I hope that it would not, but if it was, then we would just go budget party spreadsheet the whole way and never look back. I love that. I love that. for sharing that. So as you were saying, that point in your life, you got into day trading. Yes. Yeah, like, how did you find it, do it, and all of that? Yeah. So actually, my husband was the one who found it first, and I was kind of Going to be jumping into one of these online businesses and the he was like learning about it and I was kind of in the background and I'm we were having discussions about it and I'm like super introvert, right? So I'm seeing what's going like what it's going to take for me like emotional resources, social resources like of my reservoir to do the online business and be like, You know, a face on the internet type of thing. And he was like, wow, yeah, with this over here, there's none of that , you know? And I'm like, oh, I can make money and I don't, I don't have to talk to people or go anywhere or, you know, be out in front of anybody Like this is amazing. So that kind of piqued my interest. And then just, you know, being an engineer, I'm a total nerd and love numbers. I don't think that you need to be that to be into day trading, but. I just was like hooked from the beginning. Like, this is amazing. So we definitely invested in some courses. Cause I realized this was back in like 2020. So it was sort of the wild, wild west with COVID. Like I know at the beginning of COVID things were downtrending, but then it really recovered and took back off. And so you almost. didn't even really need to know what you were doing at that point to make money, which is scary looking back. When we got to the point where I was able to walk away from my job, I knew like, okay, I really, really need to, to get some more training because I think before I was just getting lucky, like I really need to know how to get good at this. And so for the last few years, that is, that's what I've been focusing on. I love it. Yeah. And when we chatted prior to this you've really got me. Peaked and I'm ready to do it. Hopefully when life settles down, I can dive into your course. So share with us a little bit more about how somebody can learn more from you, whether that is through your course, or I know you also have a free group. I do. I have a free group. So my, my brand is called invite money into your life. So in Facebook and groups, you can search invite money into your life. To find my group. And then I do have a new course that I have just opened. My website is invitemoneyintoyourlife. com or to get to the course, it's just slash LRDT dash blueprint. It stands for low risk day trading and I'm excited about the blueprint. It, I have a quick start guide, which shows you like the basics, everything you need to know to get started safely. But the blueprint, like, really dives into how do I, now that I know how to do it, like, how do I get good at it and really start to grow your money in the way that it can with day trading? Yeah, so how, what does it look like for a beginner starting out, you know, when they, they're interested in day trading, maybe they grabbed that quick start guide, what does it, what does it look like and feel like for them to, you know, start this? path in this journey as discovery. Maybe they're just curious and maybe it doesn't end up being something full time, but what does that look like for them in beginner stage? In the beginner stage, I'm definitely encouraging everyone to start small, which is great because some people are like, I don't have a lot of money to use here. But you really can start very small. I, I'd show you even if you only have 10, how to get started with just 10, but always keeping your money safe. Throughout the process. I think that's really important because there are people out there who don't know what they're doing and they just sort of dive all in and they're, you know, gambling essentially their entire account size every time they make a trade. And so when they lose a trade, which does happens all the time, right? Like not even the algorithms are 100 percent win rate on their trades. So that's something that I talk about in the course is just Accepting that because a lot of people feel like they're bad or they're a loser if they lose a trade But there are you will lose trades. That's just a fact of life So what my course teaches you is like getting into that mindset where we know it's a possibility And so now how do we plan for that and properly set up our money? Risk wise so that we're only ever risking Like just enough. How do I want to say this? We're only ever risking as much as we want to lose or are willing to lose So if that's only 10 bucks for you, you know, like maybe, maybe you have 100 to trade with, but you really only want to risk 10, then I teach you how to set everything up so that you are only ever risking what you're comfortable with. Yeah, and I know that you shared that when we connected, and I was just, like, fascinated by the fact of, you know, because I, I love the stock market, obviously, that's where I've had all of my funds and, like, 401s and things like that, and I really know that over time it'll grow, but to play around with, like, a 10 risk is just so intriguing to me. Or the 100, putting it in safe, whatever that looks like is just so, I don't know, I find it a challenge and I'm like, Oh man, this is something I can learn and grow and it's all about, you know, segmenting yourself and where you want to go next. So for listeners. If they are curious about day trading, like what type of personality, what type of person would be good at day trading? I personally feel like introverts are really well suited, especially like if you have an analytical mind, if you enjoy puzzles or you have really good pattern recognition. Most of day trading, you might think that you need to be good at math and that's not the case. There are calculators and all kinds of things within the tools that do all that stuff for you. So really you just, like, a little bit of an adventurous personality, like, to try, like, do your own thing. You know, you don't have to do what the masses are doing. You want to try something new. That can be just for you, you know, and you make it your thing and be successful with it. So that adventurous personality, but also like I said, pattern recognition. I find because I'm introverted and I kind of retreat within myself and I have the analytical brain and I'd like to think through things. If you, if you are that way, it will absolutely be a delight for you. But yeah, just somebody who is. willing to risk a little, you can't be so risk averse that you're not willing to risk anything, right? Because like I said, there are losses. We will keep them very small though. But people who are like in tune with themselves who can listen to their inner voice, because there's a lot of. Emotions that you have when you're trading and some of them are kind of similar to emotions you might have when you're gambling. So the big thing that separates trading from gambling is having this, this risk plan mapped out already before you get into the trade. If it does this, I'm doing this. If it does this, I'm doing this. And you know exactly what you're going to do to try to not let those emotions get the better of you and make it something that is, you know, not as low risk as it would be if you followed your trade plan that you set up in the beginning. I love that you shared that because, you know, I can see definitely how this could become an addiction and, you know, former coworkers of mine were heavy into crypto and I'm not against crypto or for crypto. I'm just going to say it's something I haven't explored. So just like that, and just like with day trading, you've really got to start out and educate yourself. So I would love for you to share a little more about the steps you took on your journey. And why, why you are such a you know, proponent of this and why you want to teach women how to become day traders. To me, the thing that got me really excited about day trading as opposed to other things, because I'm very into growing long term wealth, right? I, I have my money in and want to put even more money into long term vehicles. But the thing that's really nice about day trading is the way that it, your account can compound. Is much quicker than with traditional investing where it's only gaining eight percent a while I should say only where it's gaining by eight to ten percent a year. It can grow bigger faster than that with day trading so it's kind of exciting. I was in these These programs where people were like becoming millionaires At young ages and, and I'm not, I can't, you know, promise that that will happen for everybody, but I have done a simulation just because I'm a huge nerd and I love that kind of thing. And really putting some pretty conservative numbers on paper, like assuming only a 60 percent win rate. And, you know, when you win, it's only up to 10%. And when you lose, you're trying to keep your losses small. So you're never trying to lose more than 5%. And Doing a simulation like that, you can turn a thousand dollars into tens of thousands of dollars in a few years. So it's kind of nice because you can build an account that is like a retirement account size, but you can do it in a fraction of the time. Again, I don't want to make income claims or promise anything, but the way that it because you're doing it every day and you can be growing your account every day, as opposed to like looking at the yearly average percent. It's just very exciting the growth that you can experience so, but when you do start out I'm, I'm. Very much trying to keep people small because you, any missteps that you make, you want to be doing that when the stakes are low, when you don't have a lot of money at risk. And then, like I said, mathematically, I have shown that if you just keep stacking up these small wins 60 percent of the time, you will make really significant gains in just a few years. So that's, it's exciting. Oh, I love that. Yeah, my, one of my former bosses, he He never really got into specifics, but he's like, I think I have a formula that will do really well. So when you were talking about that, it sounds very similar to him. And I'm like, we lost connection because he was let go before I left the company. And I was just like, oh man, what a very intelligent man. And you know what? I would have to agree. I believe he is an introvert. I'm also an introvert. So this is a shout out to all introverts. This is your jam. This is, and not saying extroverts cannot but you know, you really have to be somebody who can sit with what is going to happen or thinking it through instead of acting off of emotions, which, so if you're somebody that has an addictive personality, I would be a little more hesitant and be, like you were saying, put on a lot of those rules into place. I do that when I help my clients try to figure out what they're going to do with quote, what I call windfalls, right? This is bonuses and extra overtime tax returns, like have your plan in place before it comes because it's so much easier to plan ahead than when it truly happens. So I love that. I love that. So. Erin, do you have any last words to share with listeners to invite them to become a day trader? And maybe, like, at what step in a financial journey this would best fit? Is this for somebody just out of college that has student loans, that has, you know, hasn't quite figured out bills and all of that? Or is this for somebody who's already got their long term investments in place? Where's the best fit for this? I feel like Having your monthly finances going okay is kind of an important first step. I will say there's, there are a lot of women in my group who are like struggling financially and I wouldn't recommend it for people who are like, Oh, I'll just day trade and that'll help me make this bill this month. Because when you come at the market from that kind of place of desperation, You tend to make more emotional decisions and not stick to your plan and your rules. And so I'm sure that there can be success there, but I would recommend, you know, if you are doing pretty well, you have your, at least a plan. You know, you're working the plan. It's, I'm not saying that you have to be completely debt free, but you definitely don't want to be looking at today trading, like I need this to make my bills this month. But it can work. There are people, there are one of the millionaires, he was in college still when he made like his first half a million dollars, so it absolutely can happen for you then. There are also people who are older like my dad is has actually taken my course and he is retired now And he's likes to dabble a little bit every day. So he I in my facebook group I not the invite money facebook group, but in my day trading facebook group I put up the tickers that i'm watching for the day And so he's always checking out the market and I think it's a great thing to do. I did not mention One of the reasons that I love it is because I really only spend about an hour a day doing it. There's a little bit of research for like what stocks you should be watching. But then in terms of actual trading, it's like 15 minutes to a half of an hour that I spent doing that. So it's really nice at this stage of my life when I have kids, cause I homeschool, I have five kids. I actually have an alarm that goes off at 10 AM. That's like, okay, stop trading and switch gears and now do homeschooling with your kids. So it's nice for, for moms who are at home with kids who want to be able to have that flexibility. Okay. For one hour, I need to do this. And now the rest of the day I can do whatever. And if you are retired, like for one hour a day, I'm going to do this. And now I can, you know, do whatever else and have freedom in my retirement and not be, you know, chained to a computer all day. So. Yeah, I love that. Oh, thank you, Erin. And again, let our listeners know how to connect with you, how to get started with working with you and If they really are desiring to become a day trader. Yeah. So the easiest way is through my Facebook group probably, which is invite money into your life. And my website is also invite money into your life. com. Or you can email me at erin at invite money. com and yeah, let's, let's chat. I would love to, to talk through any of the questions that you still have after this interview. Yes, I love it. Thank you so much, Erin, for your time. So excited to find another subject that we have not yet covered on this podcast and give people means to, like you, Company is called, invite money into their lives. I think that is so important. It is an invite. It is a relationship. We need to keep it positive. So I love that. So any last words before we close? Just my, my best wishes to everyone and like positive vibes to everyone that is like working through debt issues. I've been there twice, right? I know it's tough, but I am, I'm super proud of you. You should be super proud of you because it is tough, but it's not forever. And you, there is a light at the end of the tunnel. It may not feel like it wherever you're at in your journey. But you can get there. And then when you're out of that situation and you have extra money, maybe day trading can be a really exciting thing that you can add to your, your portfolio. That way you have many different ways that your money is growing for you. Ah, thank you, Erin. Thank you for those positive words. I love that. And yes, we can all get to a really good side with money. Thank you for taking the time, Erin. I appreciate you being here. Absolutely. Thank you so much.