Developer Earns $37,000 from Day Trading Tool

This transcript was generated from the episode audio and may contain minor errors.

[Music]

Hey, hey, what's up? This is Chris Guillebeau with Side Hustle School. Got a story for you today about a software developer who earns $37,000 from a day trading tool. This guy's always been a stock trading enthusiast, and when he invests his time into an app to trade more efficiently, the app becomes a hit with other traders around the world. I believe he's actually earned more than $37,000 from this tool, that was just last year's profits.

This year is on track to go much higher, and of course, I'll tell you how he got the idea, how he made it happen, and so on. But first, just a quick little investment disclaimer. As we begin today's episode, I'm not actually telling people to go out and become a day trader. There are some people who do that successfully, but there's also a lot of people who lose a lot of money in that business. So if you're interested in day trading yourself, I would recommend you only do it with money you can afford to lose.

Just my two cents, or $37,000, or whatever it might end up being. For a lot of people at least, the easiest way to make a small fortune while day trading is to start with a large fortune. Still, that disclaimer aside, it is a good story. It's got some lessons for us in how to focus on a product first, then build an initial user base, then make some improvements, and some additional marketing strategies as you go along to increase your income. All right, so stay tuned.

I'll tell you about this guy and what he does in just a moment. Quick little shout out to our sponsor first. [Music]

For software developer, Michael Sineja, stock trading has been part of his life for a long time. Back in the 1990s, Michael and his coworkers first became interested in trading. They'd spend large chunks of their work day watching the market, looking at the rise and fall of their favorite stocks, tinkering with their trades whenever they could break away from their work.

Being an attentive and patient person, Michael felt he had a knack for trading and his income began to grow. So much so that by the early 2000s, he was earning more from trading than he was from his day job. And shortly thereafter, he quit that job to become a full-time trader. Although he loved his new work, he also missed developing software. So eventually he found himself back with a full-time job.

But he didn't want to make this move at the expense of his trading income, so he began to look for ways he could make the process more efficient. Using what he'd learned from both stock trading and software development, Michael set about creating a tool that would help perform tasks that would take countless hours of human research, but could easily be run by a piece of software while he was at work. He called this tool Swing Tradebot, and he built it using the Ruby on Rails framework. If you're not familiar with Ruby, as it's known, it's an open source code that can be used by pretty much anyone to develop and create web applications. It's also time efficient, which allowed Michael to build the initial framework for Swing Tradebot in just 80 hours.

He did all of the coding himself, although he did get a helping hand from a co-worker on some of the design. And by the way, if you want to try and learn to code for yourself, Ruby on Rails can be a great place to start. There are lots of free courses and online tutorials to help you get going, and the language is designed to be accessible for beginners. Michael's tool performs two major functions. The first is to conduct technical analysis on stocks.

This means the tool uses an algorithm to look for repeatable patterns in a stock's movement, and allows you to plan for the future of that stock's life. The aim here is to help you make more money because you can better predict the future life of a particular stock. This algorithm can also help you identify potential new stocks too. The second is to alert people of anything that may affect the health of that stock. This can be based on market movements or recent news, anything that might negatively or positively impact the price of the stock.

You can then use this information to decide on your next steps. When the tool was complete, Michael invested $50 a month into a hosting account. He used a platform called Heroku.com, and he chose this platform because it allows for quick scalability. It meant his user's experience wouldn't suffer if he got a sudden surge in signups. This hosting fee was Michael's only startup cost, $50 a month.

He set the cost of this tool between $14 and $20 a month, which he decided upon by looking at his competition and then charging a slightly lower price. This helped him to quickly onboard his first users despite having a small following and not much social profile. Although Michael hoped for a huge surge of users, Swing Tradebot had more of a humble first year. It brought in $7,000. The money came from sales of the tool and banner advertising on the website, and of course $7,000 isn't bad, but Michael had higher aspirations.

Determined to increase his profit further, Michael began to look for ways to increase the number of users he brought in. To do this, he began offering Swing Tradebot as a freemium model with basic access for free users. This allowed them to use the fundamental aspects of the tool, and then Michael developed some premium features for subscribers only, like removing advertisements and adding in a daily roundup email that was specific to their stocks and routines. He also began to look at more marketing methods to bring more users to his website. One of the most effective tactics he implemented was sharing information about major stocks on his site.

This led to lots of coverage from websites like Yahoo Finance, who linked back to the information and predictions he made. With this strategy, he gained instant publicity, and the links helped improve his website ranking in Google. He also spent time building a following on stock-specific social media channels, like StockTwits, which is basically a carbon copy of Twitter for stock traders. Michael began to attract followers by sharing the free information about stocks on the page, and has worked his way up to nearly 40,000 followers on that platform. These tactics combine to create a surge in income.

Michael made $37,000 from the tool in 2017, and he's currently on track to make $90,000 in 2018. Combining this with the money he makes from actual trading, Michael has once again been able to quit his day job. Only this time, he can keep trading without hiding it from his boss. Looking ahead, Michael wants to focus even more on marketing to reach a larger audience, and is working on a mobile app version of the Swing Trade Bot tool. His advice to anyone looking to start their own side hustle is to hurry up and get started, but keep your risk low.

Don't quit your job until you know you can support yourself and your side hustle is mature enough to become a business of its own. So maybe just like Michael did, don't hesitate to get going, but then wait and see if your investment is going to pay off. [Music]

Are you ready for today's stock market report? That's right, it's a free bonus from side hustle school today, here we go. In today's market report, helium was up, feathers were down, paper was stationary.

Knives rubbed sharply while pencils lost a few points. Mining equipment hit rock bottom, balloon prices were inflated, and the market for raisins completely dried up. Unfortunately, I can't take credit for writing that, it came from somewhere on the internet, but I hope you liked it, just like I hope you liked the story. Now, what Michael did was interesting. First of all, with the investment disclaimer, I'm not telling people to go out and be day traders, but we can still learn a lot from his model because in this case, Michael focused a lot on the product.

He wanted to make sure he had a good product first, and then he built up an initial user base. Once he saw that it could work, he saw it could work a little bit, he made something like what was it, $7,000 in year one, then he made more improvements. Then he went back and said, "I think I'm gonna spend more time on this. I'm gonna create this premium model," which was really smart because then he could bring in a lot more people, and not all of them are gonna convert to paid subscribers, of course. In fact, most of them won't, but you'll probably get more people in on the front end, which is great.

And he also devoted more time to marketing in terms of sharing that public information, that sites like Yahoo Finance picked up, and then the social media, all that kind of stuff. And doing that allowed him to go from that $7,000 two years ago, $37,000 last year, and now on track for $90,000. So I often talk about how if you can get something, going, it's often not that difficult to improve it substantially, which is why, as he said in his advice, "You should get going, but don't risk everything." Isn't it interesting that someone who is a stock trader, like a professional day trader, is telling people to be a little bit cautious and be conservative and starting your side hustle? Or to be precise, he's not saying be conservative and starting, he's saying be conservative and quitting your day job, which I completely agree with. That's the whole message of the show.

And last but not least, he mentioned he's paying $50 a month for a particular hosting service. And for the kind of work he's doing, I'm not surprised he has to pay a bit more because he wants to make sure that website doesn't go down and it can handle a lot of users who are relying on it for their stock trading information. But if you don't have your website yet, you don't have to pay $50 a month. If you go to sidehustleschool.com/website, you can learn about the host that we use, and they have plans starting at just $5 a month. So once again, if you're interested in that, it's sidehustleschool.com/website.

Well, thanks again for listening today. As always, inspiration is good, but inspiration with action is so much better. This is episode 487, so our show notes for today are at sidehustleschool.com/487. If you've got a comment or question for the show, if you just want to say hi, feel free to give me a call on the Hustle hotline. That number is 8449 Hustle, 8449487853, or you can just send me an email at podcast@sidehustleschool.com.

I'll be back with you tomorrow. This is Chris Guillebeau for Side Hustle School.