Many interested in making a living online consider the online business models of blogging vs trading financial instruments like stocks, options, crypto, etc.
And if you are trying to decide which of these paths to pursue, I’ve written this post for you.
I feel like I’m uniquely qualified to compare these two career options because I worked at a hedge fund from 2015 to 2021 where the portfolio manager was a professional trader.
Besides working for a trader, I also traded stocks, options, and futures since graduating from college in 2014 and during my tenure at the hedge fund.
I still remember making $1,200 in profit in one day from an option trade I made.
I felt like a genius even though the success of my position was mainly due to luck.
(And I have since lost all that money in subsequent trades.)
For years, I wanted to make my living online, and for many of those years, I thought trading was the best way to do it.
I went deep down the rabbit hole of trading.
And I’ve made and lost thousands of dollars in the market.
I’ve also spent thousands of dollars on courses that (allegedly) teach you to trade.
Some painful trading losses, introspection, and other life experiences have finally helped me realize that blogging, not trading, is the way I want to make a living online.
And, in 2021, I was able to leave my position at the hedge fund to join my wife as a full-time blogger.
Since 2021, all of our income has come from our digital brands, the majority of which comes directly from display advertising on our blogs.
In short, I’ve been a trader and I am currently a full-time blogger.
Why Trading and Blogging Seem Like Great Career Paths
Many qualities of trading and blogging make them seem like great jobs to pursue.
These are some of them.
You don’t have to deal with people.
I know why trading might sound good to you.
At least, I know why it sounded good to me.
Trading seems awesome because you don’t have to deal with bosses, employees, dissatisfied customers, or any other relationships that can make a typical career challenging.
All you need is a solid strategy and some money to put to work in the markets and you can (theoretically) make a great living.
Instead of the messiness of a typical job, you’re just dealing with math, graphs, and assets going up and down.
This can also be true of blogging.
For instance, you can make a full-time living from display advertising or affiliate marketing on your blog.
That’s exactly how my wife and I make a living from our blogs.
And we don’t have to deal with any customers.
We simply get paid from an advertising network that places advertisements on our blogs on behalf of other businesses.
It makes for an incredible lifestyle!
Getting paid is straightforward.
Although trading itself is anything but simple, when you close out a successful trade, the money exchange is straightforward; it’s just sitting in your trading account, ready to be withdrawn or used in the next trade.
This is different than many work contexts like freelancing where actually getting paid by clients sometimes requires chasing someone down.
Similarly, getting paid for blogging can be straightforward too.
All you need is to get a certain number of regular visitors to your blog and you can join an ad network that pays you once a month based on the number of visitors your blog receives.
Trading and blogging seem simple.
Trading also seems great because of how simple it can be (in theory).
For instance, you may think that all you need to trade successfully is money in your trading account and a laptop, and then you can live anywhere in the world, trading in any market that fits your schedule.
Unfortunately, the reality is usually more complex.
Some traders end up being more successful in bull markets and unsuccessful in bear or sideways markets.
Other traders may only be successful trading stocks and not options or vice versa.
When you get into the weeds of being a trader, you often find out that many nuances to this path make it a lot less simple than you may have thought initially.
Likewise, blogging can get complicated sometimes.
But to me, blogging is actually much simpler than trading seems.
The upside is unlimited.
One of the most attractive qualities of trading is that your upside is seemingly unlimited.
Unlike most jobs that cap out at certain levels of income, trading has no cap on how much you can make.
And although technically true, a better way to think of this in my opinion is that your upside is unlimited but related to the money you put into trading.
So even if you earn a spectacular 25% return on your money, you’d still need to have a couple hundred thousand dollars to use for trading to make a 25% return enough to cover living expenses.
And don’t forget that you will need to withdraw living expenses from your trading account.
Thus, to grow your investable cash and ultimately, your upside, you need to earn a return that provides cash in excess of your living expenses which is difficult!
Also, the limit of your upside is tied to your downside in that any money you put on the line for trading can be lost.
In short, although your upside is unlimited, there are many caveats to this reality that make growing your upside challenging.
On the other hand, the upside of blogging is unlimited with fewer caveats!
The only real caveat I can think of to the upside potential of blogging is that you will likely never become a billionaire by blogging alone.
Billionaires typically build strong brands which require many other skillsets than simply blogging.
But you can absolutely become a millionaire by blogging, and I know of several bloggers who do it like Jon Dykstra who is making over $1 million per year from his blogs!
The Downsides of Trading and Blogging
Although trading has some benefits as a career path, it also has many downsides.
In fact, I think it has many more downsides than blogging which I’ll address below.
Requirements for Profitability
You can start your own self-hosted blog for $1 in your first year and ~$15/year thereafter.
If you’re reading this, then you can probably afford that.
The rest of what’s required to make money blogging is effort.
Sure, your expenses typically increase as your blog’s traffic increases.
But increased traffic almost certainly means increased income which should cover any expenses you have.
This is why blogging can be a high-margin business model.
And it’s one of many reasons why blogging is such an attractive business model.
On the other hand, trading financial instruments requires money.
In other words, you MUST put money on the line to make money.
This can be really stressful because a bad day trading could mean that you lose some or all of that money you put on the line.
There aren’t many jobs where you could lose money every day.
And blogging certainly isn’t like this.
You may not make money blogging.
But at worst, you’ll lose the time and the money you invested in starting the blog which can be as little as $1.00.
Likelihood of Success
There are countless examples of financially successful bloggers.
It doesn’t take much searching online to find lists like these of 50+ blogger income reports.
Of course, like anything in life, there is no guarantee of success.
However, blogging is one of those business models where time and effort are strongly correlated to success.
In other words, the longer you consistently create a high volume of high-quality content, the more likely you will have some degree of financial success.
Unfortunately, this just isn’t true with trading.
It’s very challenging to find successful traders over the long term.
Sure, some traders do great for months and maybe even a few years.
But very few traders make a lifetime career out of it.
And often, the ones who seem to succeed for the long haul (like hedge fund managers) actually make their money collecting fees by “managing” (aka trading) other people’s money.
For instance, most hedge funds have a management fee which is a percentage of the assets invested with them.
So if their clients have invested $100 million with them and take a fairly standard 2% management fee, they will make $2 million a year from their clients regardless of whether their trades are successful.
Of course, this management fee must cover costs like rent, salaries, and more, so it’s not like the fund manager gets to take home all $2 million.
But still, managers can often take home a large portion of the fee they charge.
The lesson here is that the best traders in the world charge a fee and don’t rely entirely on their trades for their income.
In trading, many of the brightest minds in the world are your competition.
Think of the countless scores of MBAs all over the world who go into investment banking so that they can trade financial instruments one day at a hedge fund.
These well-financed institutions and individuals are playing the same trading game as you are, but with someone else’s money and they collect a fee to do it.
This means they have access to better tools, more time to trade, and generally more opportunities for success.
Do you really want to compete with them?
On the other hand, many people still don’t understand blogs, let alone how they can pay the bills.
And even for those who are aware that it can make you a living, it’s just not as strong of a status symbol as a career in finance is.
For this reason, there isn’t as much competition in blogging as there is in finance, and there is, therefore, more opportunity in blogging.
Blogging has the opportunity to add value to people’s lives.
I know that my wife’s travel blog or my guitar blog isn’t changing anyone’s life, but we are helping people (and a lot of them) in a small way.
However, it’s questionable whether you are adding any value at all with trading.
I think most experience more career fulfillment if they are helping people.
So long-term, my guess is most would feel more fulfilled adding a little bit of value to others lives by blogging than potentially not adding any value to anyone’s life trading.
Likelihood of Failure
Failure in blogging typically just means giving up.
As I mentioned above, the longer you stick with creating high-quality blog content consistently, the higher the likelihood you will make money.
So usually, the ones who fail in blogging are the ones who give up.
But even if you give up, you likely will have learned much about technology, entrepreneurship, marketing, SEO, and more.
These are useful skill sets that you can leverage in many different career contexts.
If you fail in trading, you may have lost too much of your own money to continue trading.
And although you may end up having learned a lot about the mechanics of trading and about finance, at best, these skills set you up for a career in finance.
If you’re interested in making your living online, I’m guessing you are looking for a lower-stress lifestyle of freedom.
Finance is one of the least conducive industries for that.
I know because I worked in finance for six years!
But blogging can be an extremely low stress lifestyle.
In financial blogger James Altucher’s post about eight reasons not to trade, he lists suicide as one of them.
As a former day trader himself, he admits feeling suicidal trading.
This can happen when you put a lot of money on the line and lose.
Unfortunately, there are stories of traders actually committing suicide because of the losses they’ve incurred.
But I’ve never heard of anyone feeling remotely suicidal as a result of their blog.
Blogging vs Trading: Conclusion
I knew most of these cautionary pieces of advice before I got into trading.
But I did it anyway.
And you may be that type too where you won’t know if trading is for you until you actually do it.
If you are, I know this post won’t stop you.
And trading may in fact be the best professional path for you.
But I think the odds are much higher that blogging would be a more profitable and successful pursuit for any given person than trading.
Also, there’s another way to participate in financial markets without actively trading financial instruments.
You can passively invest in index funds and earn as much (and usually more) money with zero effort!
Countless outlets like the New York Times and other data sources have reported that less than 10% of actively managed funds don’t outperform indices over the course of 20+ years!
This means that you can just buy a low-cost index fund and potentially outperform almost all traders with zero effort!
This is what ultimately sold me on not pursuing trading as a career path.
Are you leaning towards blogging or trading to make money online?
Let me know in the comments!
And if you want to learn more about blogging and how it fits in the context of building a personal brand, check out my post about how I’m building my personal brand!