Taxes and the costs of trading are a serious hurdle

This comes back to #9, but it's worth breaking down the basics. Here are the key terms to understand:

Short term capital gains tax — “Short term capital gains do not benefit from any special tax rate — they are taxed at the same rate as your ordinary income. For 2015, ordinary tax rates range from 10 percent to 39.6 percent, deductions on your total taxable income.” — TurboTax

Trade Commission — Charge to buy or sell stock.

Order Execution Quality — Many brokers sell high frequency trading firms the right to “peek” at your order and more or less screw you on your fill. This is called payment for order flow. Being $.01 or $.02 per share, poor fill costs can add up real quick when you trade less.

Out performing the S&P 500 in any given year is a feat in doing, but when you then take into taxes, commission costs, and research (those hot stock pick services, chat rooms, and the market won't come for free), the game won that much more difficult.

Lesson: When taxes, costs, and other costs of trading such as research are taking into consideration, the challenge of outperforming the market year after year as a career are Compounded.