How to Become a Full-Time Investor

Use a third party to raise money on your behalf. This may be costly, but could be quite effective.

I used the first two methods to raise capital for LakeView.

Every market environment is different. In the current volatile environment, many investors are reluctant to part with their investment capital. On the other hand, some investors are dissatisfied with their current investment advisor and may be seeking a new perspective. However, this type of environment tends to disadvantage a start-up venture and favor an established manager.

Step 5. Manage Your Mindset: Making the transition from your current career to being a full-time investor, or money manager is not trivial. Unlike changing jobs from, say one company to another, changing your profession -- how you earn your livelihood -- has important ramifications for both you and your family.

To succeed, you have to be willing and able to devote the necessary time and again, capital. Highly motivated and hard working individuals are more likely to succeed than those who see this as only a 9:30 a.m. to 4:00 p.m. (typical trading hours) job.

For every success story like RealMoney's James "Rev Shark" DePorre, there are many trading entrepreneurs who fail. Here are three things to keep in mind:

Can you go from the certainty of a regular paycheck and income stream to the uncertainty of trading or investing for a living? It is highly likely that you will have to rely on savings for a year or more just to make ends meet and maintain the standard of living to which you are accustomed. Remember that you are about to confront the double-edged sword of needing your savings for investment capital, and needing that very same capital to sustain your living expenses. Also, you must explore other personal financial considerations, such as medical insurance and retirement planning.

You will need the support of your family to make this work. This may be the hardest part of your journey. Your family will be directly affected by your change of job and income stream. Consider both the emotional and the financial aspects of your new career, as this can impact the lives of many people for many years.

As I stated before, getting my spouse and family involved in the business planning of LakeView was most helpful. Initially, my wife was skeptical, but as the process evolved she learned more about the business and became more comfortable with my decision.

Are you willing to devote the time necessary to operate a full time business? While the markets may be opened from 9:30 a.m. to 4:00 p.m. (plus or minus time for premarket and after-hours activity), you will need to devote many more hours to become successful. Also, expect to expand your work week from five to as many as seven days.

Running your own business requires performing a multitude of tasks (described earlier). All of these responsibilities cannot be performed during standard trading hours or even during a five-day work week.

Be Prepared

In your transition to becoming a full-time investor, be prepared to devote a considerable amount of time and capital to the effort, knowing full well that you might be foregoing a steady paycheck and benefits for a period of time. The volatility of this business can take its toll on your wallet and your psyche.

Suggested reading: If you genuinely want to be full-time investor, Jim Cramer's account of getting started in the business in Confessions of a Street Addict is a must-read book.