Get Smarter
about trading
Get our 5 min weekly newsletter on what matters in option trading.
$40,000 is a great day trading salary and, in most cases.
A 40k day trading salary is a bit below the United States average average. The nations average for a full-time worker in 2022 was reported as $56,420.
This means, that $40,000 is still below the nation average income.
Let’s break down a 40k day trading salary so you know your earnings by the day, week, and month.
Please note that this net wage is calculated based on only federal taxes since state taxes differ.
Let’s assume you’re a single filer with no dependents, and will take into consideration only federal tax bracket of 22%.
A day trader salary gross income of $40k equals out to be:
Here’s a breakdown estimated Net Income after federal tax.
You can find a decent room or place, but it depends a lot on your other monthly expenses such as:
Remember things like internet, insurance, trading software tools, or discord communities. It all adds up, so it’s essential to budget for these costs before you workout your available cash for rent.
You’ll need to look at your monthly income after tax. With that said you should be able to afford between the range of $750-$900.
The range above is based on a 25-30% of your monthly take home, after taxes.
At these prices, you’ll have to be open minded about location and/or if you want to split with a roommate.
Splitting rent will help you keep your living expenses below your means, and allow you save more for other bills or for trading.
Yes, you can buy a house a with a 40k salary, but it requires a lot of your work on your end. For example, you’ll need to save up big enough for a downpayment.
That being said, if you have a big enough deposit of 20% down payment, you could get a house that cost $140,000 – $165,000 with a 40k salary; and that’s using the 25-30% monthly payment rule.
The truth of the matter is that a 40k salary as a day trader is not enough income, and you’ll need to find ways to make it work.
Here’s a quick list of tips to help you stretch your day trading income a bit further.
As a day trader making 40k salary, you need to have other forms of income. If you have any other skills, consider monetizing them and providing them as service to help with any of your losses or just to increase your 40k salary to maybe 50k.
Here’s an article that list 10 side job ideas for day traders: 10 Side Jobs Ideas for Day Traders (alfatoro.com)
Although this is a difficult task, as a day trader with a 40k salary, you must manage your spending and live below-your means.
By sticking with a budget, you’ll be able to save up enough to have a deposit for a house.
With a 40k salary as a day trader you’ll need to shop wisely and go to budget friendly stores.
For example if you’re going to buy groceries, consider Aldi or Lidl as they are budget friendly.
Also, cut out monthly entertainment services or bills you do not need. Your pocket will thank you later.
So, is 40k a good day trading salary in the United States? We’ve established that it really depends on a few other variables such as location, and other monthly expenses you may have.
If you’re attempting to support a family on this day trading salary, it may be challenging.