This will be a four part series on the four most overhyped, most pernicious pipedreams sold to the public in the guise of a Be Your Own Boss (BYOB) dream, where I examine the many pitfalls these endevours entail and why they are not for everyone and unless you have specialized knowledge in the field, they should not be for you.

Those four fasttracks to financial ruin for the prospective self-employed are

1. Daytrading
2. Flipping Real Estate
3. Forex
4. Blogging

Self-employment seems an attractive concept to many people. Unfortunately some people enter the self-employment world with either unrealistic expectations or on a flawed premise. To the prospective solo worker, self-emloyment, if not properly thought-through and planned, may amount
to little more than a get-rich-quick scheme, or perhaps, get-rich-leisurely.

To those wanting to make the jump, there are pitfalls to be wary of, and here are 4 paths that are often billed as can’t fail, make money, no effort required fast tracks to be-your-own boss financial independence which are in reality potential expressways to financial ruin.

Part 1: Daytrading

The lure of the seemingly glamorous lifestyle of lounging around in one’s bathrobe, making millions daytrading can seem irresistable. How hard can it be? There are numerous “black-box” products aimed at neophyte daytraders:

no skill required, just buy when the box says buy and sell when the box says sell.

If it really worked like that, everybody would own one of the black boxes and we’d all be rich.

The fact is, becoming a professional daytrader is difficult. Very difficult. Unless you already have direct, hands-on experience in the equities markets, you should not even attempt it. Common mistakes non-financial professionals aspiring to become daytraders make include being under-capitalized and having unrealistic expectations.

Newbies expect 20%+ returns and start out with stakes less than 100K. They would be wiser to do some math. So you wanna become a professional daytrader?

Ok, how much money do you need to live on in a year? Include everything, food, shelter, clothes, car payments, etc. Let’s say it all adds up to $35K.

How big of a stake do you have to start? 100K? Where is the money coming from? Your savings? Or if you’re completely insane, borrowing?

What do you need to do to maintain your standard of living on your stake?

Well let’s say after mortgaging your house (yikes) and cleaning out your bank accounts you’ve come up with $100K and you need 35K a year to live on.

So you need to generate a return of 35% a year to maintain your standard of living, excluding inflation.

The best fund managers in the world, the ones who are paid millions of dollars to trade the equities markets, are absolutely thrilled if they can beat the major indices. Last year the DOW did 16%. A
hedge fund manager who did 16.5% probably got a million dollar Christmas bonus and a Ferarri for a stocking stuffer.

Warren Buffet, the second richest man in the world and regarded by many as the world’s most successful investor has managed an average of 29% compounded annually.

So if you want to daytrade your way to financial freedom, unless as I’ve noted, you already have oodles of real world experience, already designed and tested your own trading methodology, and are properly capitalized to the point where you could live off savings separate from your stake for awhile and subsist on less than steller returns: 3%, 5%, -10%, you should probably not walk this path.

Next part: Real Estate Flipping

Mark Jeftovic has been a self-employed internet professional since 1994, currently he is the founder and president of easyDNS Technologies Inc., the DNS hosting company and domain registrar. His personal blog is at http://mark.jeftovic.net