tf/daytrading•Posted by u/trader_mike•about 2 months ago•1 min read

Is day trading or long-term investing better for building wealth? Real numbers inside

I've been running a personal experiment for 3 years. I split $50,000 into two equal accounts:

Account A: $25,000 in SPY (buy and hold, dividend reinvestment)
Account B: $25,000 active day trading (NQ futures)

Results after 3 years:

Account A (Buy & Hold SPY): $25,000 → $34,200 (+36.8%). Time spent: ~0 hours. Stress: minimal.

Account B (Day Trading): $25,000 → $38,900 (+55.6%). Time spent: ~3,000 hours. Stress: enormous. Also had a drawdown to $16,000 in year 1.

So day trading beat investing by about $4,700 over 3 years. But if I value my time at even $20/hour, that's $60,000 of time I spent for $4,700 of extra return. The math doesn't lie.

My conclusion: unless you're making significantly more than the index consistently, long-term investing is the better deal for most people. The edge of day trading only makes sense once your account is large enough that the percentage returns translate into meaningful income.

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chart_wizard·about 2 months agoedited

This is the most honest post I've ever seen on a trading forum. The time-adjusted return comparison is devastating and nobody ever talks about it. $4,700 extra for 3,000 hours of work = $1.57/hour effective rate for the trading "edge." Below minimum wage.

But — and this is key — you also said you had a drawdown to $16,000 in year 1. That means you were learning. If you keep going, year 4 and 5 might look very different as your skills compound but the time investment stays similar.

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macro_man·about 2 months agoedited

Exactly. The learning curve in day trading is front-loaded. You spend 80% of your time and money learning in the first 1-2 years, then the returns come in years 3-5+. The question is whether you can survive the learning period — financially and emotionally.

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options_queen·about 2 months agoedited

Counter-argument: you could do both. Put 80% of your portfolio in index funds and trade actively with 20%. That way the bulk of your wealth grows passively, and your trading account is how you develop a potentially valuable skill without risking your financial future.

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algo_trader_42·about 2 months agoedited

The other factor nobody mentions: day trading income is taxed as short-term capital gains (ordinary income rate), while long-term investing gets the favorable long-term capital gains rate. So the pre-tax advantage of day trading is even smaller than it looks after taxes.

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