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True Wealth is Your Income

As investors, we often look to the market to identify investments such as for stocks to increase in price over time. This centers around the thought of owning companies that increase in value over time will increase wealth. This is true – if it happens in time. But can you retire on the hope of a stock increasing in price? My argument is simply based on the theory of true wealth is the income you generate from your investments. You shouldn’t measure your wealth by the amount of assets, but by the income it generates.

To generate a great retirement, you will need an income stream to maintain the lifestyle you choose to live. It is income that pays the bills and gives you money for the vacation and travels you wish to have in your life. Simply, income is what you live on.

This can be achieved many ways such as owning dividend paying stocks, bonds and other investments such as rental properties. According to studies, dividends have accounted for about 43% of the performance of stocks in the S&P 500 since 1926. But don’t be blinded by focusing on the Wall Street pitch of this stock is the one!

At Get Rich Investment, we view income as the means to financial independence. We focus on generating multiple streams of income from various sources to diversify risk. We start with world class dividend stocks that raise their dividends to produce a growing income stream. Then, we may sell covered calls against these stocks to collect monthly premium income. Another strategy is to sell cash-secured puts to generate income on those stocks we have an interest in purchasing. We also create income from investing in closed-end funds (CEFs) that pay monthly distribution (and also diversifies type of investment classes).

You can guess what happens when your investment income meets or exceeds the amount for your lifestyle. Live the life you want. Get started generating more income today!

How to Retire a Millionaire

From your early entry into the workforce and throughout your working life, you are always reminded to prepare for your retirement. We all realize the need to have income for the day when we end our working career. This is based on the classic mindset of saving for retirement. Most regularly deposit a portion of income in their 401 retirement plan. There is nothing wrong with this strategy as long as you are prepared to wait for your “someday” in 30-40 years or more. Many are behind in the amount needed to fund a comfortable retirement.

A June 2015 Government Accountability Office analysis found that that average Americans between the ages of 55 and 64 have accrued about $104,000 in retirement savings. Sound like a lot? Not when you realize that sum would translate into a $310 monthly payment if your money were invested in a lifetime annuity.*

There may be another option to complement your retirement. At Get Rich Investments, we focus on developing multiple streams of income. The strategy is simple, continue building monthly income until your investing income exceeds your current income. At this point, you have a monthly income to support your lifestyle and retire without having to scale back your living. The sooner you start building monthly income, the faster you will produce significant monthly income.

You can keep contributing to your 401K as this will be one stream of retirement income. Another income stream will be SSI if it is still a viable option when you retire. Then, you might want to consider building additional income streams through our strategies. You can start with a small account and watch it grow over time to your ultimate income producing investment. Of course, this will not happen overnight or next week as there is no get rich quick scheme.

How do we create multiple streams of income? We sell options such as cash-secured PUTs and covered call trades. Based on the type of stocks we invest, this is a lower risk strategy than small cap stocks. We also like to capture dividend income from stable, world class stocks. And, we diversify our income streams by investing in CEFs paying monthly dividends.

The amount of income you achieve will depend on your investment capital. Hey look, if we all had millions then we would already be retired. With our strategies you can compound your income over time to grow your monthly income. You can start with a small investment like you would with a 401 and add to it over time. It can compound faster than most envision. As your account grows, you diversify into more income streams such as CEFs using several types of investments.

If you spread your investments across these multiple streams of income, it will lower your risk of not having the income you desire. This is why we call our program the Monthly Income Newsletter. Yes, you can retire a millionaire!

Get started building your income today.

Do You Have a “Kiss My Ass” Fund?

During my early education years, I earned a Masters of Business Administration from top ranked University.  When I entered this institution, I was delighted to have such an opportunity to attend a top 20 Business School.  My education here set the stage for a very rewarding career that has fulfilled my hopes of achieving lifelong success.  In fact, I probably would not be in this same place without it.  I encourage all young persons to pursue higher education that develops your skills and knowledge for success.

 This achievement banter was not why I decided to write about my education today.  I was reminded of something a professor discussed during an early class in my first year.  While discussing the expectation of a career in business, this professor stated something I have always remembered and passed on to others.  It was something like this: the first thing you should do when you land your first job is to start a “kiss my ass” fund because one day you will have to tell your employer to kiss my ass.  This is the ideology of the classic cold corporate world of being pushed beyond your limits or where you draw the line.  While the statement is over dramatic, it has an inherent meaning and purpose – be prepared.

Today, I think of this idea as one of those buckets we should be working to fill.  To prepare for your later years, you always should diversify your savings.  You obviously want an emergency cash account for unforeseen events.  Then, you want to take care of your retirement through 401 and other type of retirement plans as the 40 year company pension plan doesn’t exist today. Some may invest in real estate or businesses as a diversification of investments.  Then, where does the “kiss my ass” fund fit in with your personal planning?

I use the ole kiss my ass fund as my financial independence tool.  This is where I invest using income strategies such as the PCD strategy and other monthly income opportunities.  The PCD is defined as put-call-dividend. I sell a put option for income on a world class dividend stock until the stock is put to me.  Then, I sell call options on the stock until it is called away.  Finally, I also collect dividends while I own the stock shares.  In each of the three positions, I am earning income! I also invest in CEFs that pay monthly distribution because I can diversify across numerous asset classes. And, I have a higher risk option spread account to play poker with through fast moving swing trades.

Of course you know where the cash goes from these income strategies – into my “kiss my ass” fund.  Why? Because one day I will need the income generated from the “kiss my ass” fund to live the life I envisioned long ago! And to think – it all started from that one day in class that had a lasting impact on my life and I hope now your life too.

Join our millionaire investing group today.

Mailbox Money for Life

We all have a vision of the future about the type of life we have to live. For some, it includes a life of leisure which I must admit is very enticing. For others, it may entail relaxing into a nice life in retirement. Regardless your vision, you need a plan to get started today. I have this in mind with my personal investing and write my newsletter around designing strategies to produce the income to fulfill readers goals for their chosen lifestyle. It helps to start looking at the end goal (future state) and work backwards to your income investing (current state) to lay the foundation for growth. Here is an excerpt from a recent article published here.

One challenge to funding retirement is getting a handle your lifespan. And what we know now is this: You and/or your spouse are likely to live a long life. And many households are not planning to live as long as they actually will live.

Consider, for instance, recent life expectancy trends. Average life expectancy for a 65-year-old male rose from 84.7 in 1950 to 87.8 in 2010 and average life expectancy for 65-year-old woman rose from 86.6 in 1950 to 89.7 in 2010.

In essence, you’ll need to save enough – if you want the same standard of living in retirement as you had while working – to fund a much longer retirement than you might have anticipated.

One reason why Americans aren’t prepared for funding longer lifespans has to do with the difference between life expectancy at birth and life expectancy at 65, and the point at which people tend to start planning for retirement.

Now, human nature being what it is, many households don’t start to plan for retirement until late in life.

What can you do to prepare for the life you want to live? In my newsletter, we select various types of investments to create income. Why the focus on income you may ask. Simply, the development of income streams leads us to increased financial freedom as the income provides the means to living the life you want. While we invest in world class stocks producing income, we also sell options to create monthly income. When an investor sells an option, they receive the cash immediately in their account.

This is what I call “Mailbox Money for Life.” Get started creating your mailbox money by joning our Monthly Income Newsletter today.

Kick Off Your Wealthy New Year

Today, we say goodbye to 2016 and open the door to a fresh start in 2017. This is the time of year we embark on hairy ass new goals in hope of transforming our lives. Hey, I am one of you too. I have goals to improve my health, lose some weight and more achieve community related goals. Of course, the one constant is to maintain focus on growing my investing income. My foundation for income is the PCD Income Strategy.

I use put selling to create my favorite income strategy – the Put-Call-Dividend (PCD) Income Strategy. This is simple selling puts each month on a select stock to collect monthly income. If the stock gets put to me, then I sell covered call options for more income while also collecting dividends paid by the stock. I sell call options for premium each month until the stock is called away from me. Then, I will start selling puts against the stock again. This strategy is exactly why I only sell puts on stocks I want to own – world class, strong dividend stocks.

I view the PCD Strategy as an opportunity to collect up to three separate income streams from a single stock selection. I prefer this strategy compared to the buy and hold of owning a stock that only pays dividends every quarter and may have a capital gain in the future. This prevents me from having to time the market and wait for a return. I want to create monthly income so the PCD Strategy presents the best opportunity to achieve this objective regardless of market direction.

Remember this: Someone’s sitting in the shade today because someone planted a tree a long time ago. This is your year to get started growing your income tree. Join our monthly income plan to jumpstart your 2017 goals.

How to make $3K in Extra Monthly Income

The year 2016 was another stellar year of total returns and monthly income. Our perpetual covered call strategy was a big winner.  In this strategy, we create a covered call position to sell monthly call options for income and buy a long dated put option to protect our downside risk.  The put cost is spread across several months so the cost is low per month and will only slightly diminish our monthly income.

As we close out 2016 and reset for 2017, we are reviewing the results we obtained from the perpetual covered call strategy during the past year. In terms of total return as tracked in the monthly spreadsheets, the average across all positions was 27.8% during 2016. In the past year ending 12/17, the S&P 500 only returned 12.75% and the DJIA returned 16.8%. Therefore, we more than doubled the S&P and beat the Dow Jones significantly while generated significantly more income. The average monthly income across our open positions was $152 for each position with 100 stock shares! AND this includes the cost of having a long put to protect against downside risk on each position.

The average cost of 100 shares across all positions was $5,278 which generated an average of $152 of income each month. A $50K portfolio will generate an average of $1500 per month while a $100K portfolio creates $3,000 every month! This is proof our income strategy works. We target a 2-3% return per month on average.

We had no losing positions in our perpetual call portfolio in 2016. We had 3 positions with returns greater than 40%and all but one with returns greater than 12.7% of the S&P 500 in 2015.

The table below shows the results for each perpetual covered call position during 2016. This table is the same information as displayed in the monthly tables for each position (based on owning 100 shares of stock and selling one covered call each month). This is for portfolio tracking only as subscribers will own more than 100 shares and sell like size amount of call options for income each month.

2016-covered-call-results

 

 

 

 

 

 

 

Click to enlarge chart

Want to be a Millionaire?

If you’re hoping to reach millionaire status some day, there’s one small move you can make now that will virtually guarantee it: automatically save an hour a day of your income. At least this is the advice from David Bach author of “The Automatic Millionaire.” This is good advice to start a savings plan to move toward financial dependence which is what we strive for in our investing at Get Rich Investments.

Suppose you make $50,000 annually and you work a full-time job, 40 hours a week. You’ll be paid for about 2,080 hours of work in a year, equaling roughly $25 per hour. Bank that much each day, and you’ll be golden, according to Bach.

We like to take this advice a step farther than Bach. It is always productive to develop a habit of saving money. This money can be used to create wealth and ultimately financial independence. The majority of us started our financial journey this way. While saving is a starting point, how you invest this money can accelerate your timeline to millionaire status.

You need to create an emergency account to cover 3-6 months of income. Then, invest in world class dividend stocks that growth their dividends over time. Look to invest in some closed-end funds (CEFs) that pay monthly dividends. There are so many CEFs to allow the investor to diversify across different market sectors to include REITS, preferred stocks, bonds and other types of investments. And sell options to generate immediate income!

This is what we excel at in our monthly income plan. I use put selling to create my favorite income strategy – the Put-Call-Dividend (PCD) Income Strategy. This is simple selling puts each month on a select stock to collect monthly income. If the stock gets put to me, then I sell covered call options for more income while also collecting dividends paid by the stock. I sell call options for premium each month until the stock is called away from me. Then, I will start selling puts against the stock again. This strategy is exactly why I only sell puts on stocks I want to own – world class, strong dividend stocks.

This create a method to compound your returns as you rollover the options income to create even more income. If you’re hoping to reach millionaire status some day, this will accelerate your journey.

Know the Rules of Investing

In a recent interview, Tony Robbins stated he has coached a successful trader for more than 20 years. The person he is talking about is Paul Tudor Jones, one of the most successful investors of all time and owner of the Boston Red Sox baseball team. Robbins found Jones, and other wealthy, successful people like him, were constantly looking to learn more about money. He stated:

It isn’t about the money! That’s why I call it ‘MONEY: Master the Game, his latest book.’ It is a game. A lot of people get offended by that, like ‘Oh my God! How could he call it a game?’ It is. “The wealthiest people in the world know it’s a game, and the reason they succeed is they know it’s a game. They know there’s certain rules. If you know the rules, you can win and if you don’t you’re gonna lose. Rather than be pissed about it, learn. “

I agree in being successful requires knowing the rules of the game. In my perspective, the rules are the trading plan – designing a strategy and knowing when to enter and exit a trade. At Get Rich Investments, we focus on producing income each month. To be consistent, e follow a set of rules we have learned from over 20 years of investing. The markets are always changing due to events, direction trends and volatility, This is why our income strategy incorporates several options to be successful. These strategies allow our members to be agile and to profit regardless of market sentiment and volatility.

Some investors are comfortable earning a 3-4% dividend yield to meet their income needs. If you seek more return, then join our income plan to earn 10-15% in income each year. We focus on world class stocks with nice dividend payments. But we juice our returns by collecting option income in addition to dividends. This strategy works with all sizes of account amounts- you don’t need a million to started. And, the sooner you get compounded your returns the more income you can create each month.

Start learning the rules of successful investing.  Subscribe to the Monthly Income Plan.

Winning in the Year of the Improbable

The word “improbable” is defined as not likely to be true or to happen. Have you noticed how many events have happened in 2016 that were improbable? The Cleveland Cavaliers were trailing 3 – 1 in the NBA Finals but rallied to win the first world championship for the city of Cleveland. Last night, the lovable losers, Chicago Cubs, completed a 3-1 rally to win the World Series. It ended a 108 year drought in Chicago for the Cubs. Now, this is an improbable event. There have been others such as the surprise Brexit vote that tanked markets a few months ago. What’s next? Does Trump win the presidency?

The stock markets have pulled back in the last week due to uncertainty around the election coupled with projected FED interest rate increases. Today, a talking head on CNBC was calling for investors to sell everything as the market is ready to crash! I have seen these types before and they don’t scare me. I plan to stick to doing what my investors do best – sell options for income.

Yes, markets will pullback when they lack clear direction. But I have some downside protection by selling options and continue to reap income along the way. If I just sit in a long stock position, its value will fluctuate with the market. I prefer to create income each month regardless of the market direction. I sell call options on the stock I own for both income and protection. When the market rebounds, I will sell put options for additional income too.

With this strategy, there is no improbable event. You get paid when you sell the options and can continue to compound your income.

You don’t need to worry about the next improbable event – join the Millionaire’s Club today.

How Put Selling Creates Monthly Income

Why would an investor sell put options instead of just buying the stock? You already know my response to this question – to create monthly income. There are several reasons investors should include put writing as a portion of their investment portfolio. Here is my list:

First and foremost is to create income. In this case, we are looking to collect the cash premium from selling the put option and not necessarily purchase the stock. This concepts is very important to better understand. My initial objective is capturing the premium but I realize in some cases the stock will be put to me. This is why I only sell puts on a select list of stocks I am willing to own if put to me. I like to focus on world class stocks that have stable earnings, strong balance sheets, pay growing dividends and trade within a low beta range in the market. This is part of my success using this strategy as I can collect dividends and sell covered calls for more income if the stock is put to me.

Secondly, I can purchase the stock at a lower price or discount to its current market price. The cash premium I collect from selling the put option reduces the capital outlay to enter or purchase the stock. I have experienced periods where I would sell monthly puts on a stock for 6 to 9 months before the stock was put to me. The amount of premiums added together made the entry price of stock significantly below the market price. For example, assume I average premiums of $100 over 6 months of monthly put writing which sums to $600. I have just lowered the purchase price of the stock by $600 – this is buying stocks at a discount.

Lastly, I use put selling to create my favorite income strategy – the Put-Call-Dividend (PCD) Income Strategy. This is simple selling puts each month on a select stock to collect monthly income. If the stock gets put to me, then I sell covered call options for more income while also collecting dividends paid by the stock. I sell call options for premium each month until the stock is called away from me. Then, I will start selling puts against the stock again. This strategy is exactly why I only sell puts on stocks I want to own – world class, strong dividend stocks.

This is the best income strategy I use in today’s market. In the October expiration cycle, our subscribers made 1.6% for the month by selling put options. For the past 3 months, monthly returns range from 1.5% to 3.1%.  How would you like to an extra $500, $1,000, $2,000 or more in income each month? Learn how to create monthly income by joining our investment newsletter.

 

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