How to Create Monthly Income from Investing

As we all know, when you work for an employer your time is not your own.  You are trading your time for income from wages.  Your vacation dates will likely be ruled by your employer.  While there is nothing wrong with working for a living, you should start preparing today for what you need in the future.  You can start investing for income part-time while you are still working for the man.
 
Here are some financial lessons to keep in mind when preparing for your future:

• No matter how good you are at work, you are expendable;
• The term job security can be an illusion;
• You are not likely to get rich working for someone else;
• Nobody cares about your money more than you do;
• Social security may be restructured or may not be available when you retire;
• The company pension is quickly if not already going away.

One source of income is just not enough in today’s society.  Each of us should take the initiative to learn how to create additional income streams by using your assets rather than your time working for an employer.  The end result will be more income streams, more financial security and more time to do the things that make your life more enjoyable to you and your family.

Here, we sell options, covered calls and cash-secured PUTs, to create multiple streams of income while investing in CEFs paying monthly dividends.

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Our investing plan starts by capturing option income on a monthly basis. You will learn this is easier than renting houses, creating a startup or delivering pizza for a side hustle on the weekends. You can make $1000’s of dollars each month to sustain the level of income you desire. We sell options on stocks that gives us premium income as soon as we enter the trade. Then, we will repeat this option trade over and over several times each month to increase our income. Let me start by telling you – you’re going to like how this money looks and feels in your account.

That’s like getting several Social Security checks in a single month or getting a paycheck every week without having to work a job for a single minute. Best of all, you can sign up to get these checks today regardless of your age, income or which state you live in.

All you’ll have to do is decide how many of these freedom checks you want, stake your claim in this massive payout … sit back … and watch the cash pile up. I’ve already shown a few people just like you how to grab checks like this.

Many have already made out like bandits. Here is the proof:

We have two more winning PUT trades to close out this week for big gains! To make this level of income in a few weeks is a great opportunity. We will release new trades in the coming week.

SSYS is now trading at $24.25 so close the position to lock in your 6.4% gain!

TRADE: Look at the January 2018 22.5 PUT trade. For each 100 shares of SSYS stock you want to control, sell one Jan 2017 22.5 PUT option for a $1.35 debit per option or better. That’s a 6.4% return on the PUT trade.

MTOR is now trading at $24.48 so close the position to lock in your 3.9% gain in 22 days!

TRADE: Look to sell a January 2018 24 PUT for about $0.90. This creates a return of 3.9% to expiration (29 days) or greater than 49% annualized.

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Investors have long looked to dividend stocks as a means to generating investment income.  For decades this has been an effective strategy to increase cash from investing. However, in today’s market investors are more uncomfortable on how to identify new income opportunities.  They should consider allocating a portion of their portfolio to selling options for premium income.  The returns can be as high as 5% or more in a single month using the stock breakout strategy.

In a recent article published in the Wall Street Journal, “Dividends are losing their allure due to rising rates”, there is a case that yields are too low in today’s market. Here is an excerpt:

A heated stock market rally combined with a sharp climb in benchmark interest rates this year is eroding the relative value of companies that pay out chunky dividends to their shareholders.

Low interest rates over the past few years have boosted the attractiveness of high-dividend stocks that offer up income at a time when bond investors were earning next to nothing. For some sectors, that was a key reason to invest. But recently that’s reversed.

As the S&P 500 has climbed, the share of investment gains coming from collecting those dividends has been falling. The S&P 500′s so-called dividend yield over the last 12 months was at 1.73% Tuesday, its lowest since 2011. 

Let’s exam what a 1.73% yield means to an investor.  This means an investor will earn 0.4325% each quarter or 0.144% each month.  Based on having $10,000, an investor would earn $173 per year or $14 per month. What can one do with $14 per month or $144 if you invest $100,000? Not MUCH!

For investors seeking monthly income, there is a better way to create cash with your investment portfolio.  At Get Rich Investments, we have produced returns of 5% or more in a month which is an annualized return of 60%.  You may ask if this is a risky investment to achieve such a great return.  While all investments have some level of risk, this investment rewards the investor with a significantly higher return.

We achieve these returns by selling PUT options (cash-secured) or CSPs on stocks trending higher due to stock breakouts.  By selecting stocks with upward movement, it decreases the risk in the investment. This is the secret sauce to high returns using option selling strategies. When the stock moves higher, investors can exit the trade to lock in profits. Then, compound their capital weekly or monthly. This is how investors can create a monthly income far greater than dividend stocks without the risk of chasing penny stocks.

Here are some recent trades producing high returns for monthly income:

We have a fast winner in $FINL as the stock had a big pop today – up over 12%. I suggest investors to buy-to-close this trade at ~$0.20 per option or less.  This gives us a nice 9% profit in 4 days or over 800% on an annualized return!

We have a another winner in $BEAT as the stock has moved higher to $31.75. I suggest investors to buy-to-close the 29 PUT trade at ~$0.20 per option or less.  This gives us a nice 3% profit in 5 days or over 200% on an annualized return!  There will be more trades moving into next week after the holiday.

The market was in a blast mode last month as it ran to record highs again. We had all winners this month with max income trades. And how about the monthly returns on the PUT trades – 4.8% on ARRY; 8.8% on TLRD; 9.6% on NL; and 8.7% on MDXG!!! This is a yearly return on some buy and hold stock investments in a monthly trade for us. We will look for more stock breakouts for PUT trades in our next newsletter.

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Covered calls generate income through call premium received and lowers the risk in the underlying stock position.  Obviously, the risk of owning a stock is the price you paid to purchase the stock.  Anytime the stock drops below the price paid to purchase the investor is now in a losing position.  If you purchase a stock that pays dividends, then dividends collected lowers the purchase price of a stock.  For example, you purchase FirstDividend stock (fictional name) for $30 that has a 3.0% dividend yield.  The dividend will be $0.90 per year or $0.23 per quarter. After the end of year one, your adjusted share price in FirstDividend will be $29.10 ($30-$0.90).  At a yield of 3.0%, your investment will double in 24 years just on the dividend without an increase in share price.

Now, let’s add a covered write to the stock each month.  For example, you can sell a $31 call at $0.75 that expires in 30 days.  Assuming that we don’t get called out, this will total to $9.00 at the end of year one if we continue to sell a call each month for the $0.75 premium.  This will drop the adjusted share price from $30 to $21 or 30% less than the price paid excluding your dividends.  This will double your investment in First Dividend in 2.4 years based on the call premium received each month.

If you combine the call premium with the dividend, then the adjusted stock price will be $20.10 at the end of year one.  This will further lower your time to double to 2.18 years.  This means that at the end of 2.18 years, you will have your total investments returned to you excluding any share price change or dividend increases and still own the stock.  This is a great benefit of selling calls against the stocks you hold in your portfolio.  In the first year alone, you will have received $990 in income for each 100 shares of stock you own.

The trade-off in writing calls against stock you own is that the topside is capped at the strike price of the call sold.  Therefore, you are at risk of selling your stock at the strike price which limits potential upside share price appreciation.  This should not be a problem for the investor that is seeking monthly income.  You must commit to writing calls for monthly as your chosen strategy to make monthly income and not be concerned that the share price will increase in a month.  Of course, if the stock gets called away then you can sell puts to get back into the position.  The put premium will serve to lower your adjusted share price just like the call premium in the example above.

You can continue the income cycle by selling puts to buy stock then sell calls when you own the stock.  Each month you are lowering your adjusted purchase price until you get your investment back and have a $0 cost in the stock.  All the while you are creating monthly income from your investment.  The end result is that you get your money for nothing and your stocks for free.

We continue to identify winning option trades to generate income and to exit early as the stock bullish patterns moves prices higher. Try our monthly income plan as you will definitely enjoy the extra cash.

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As income investors, we seek to create consistent monthly income by selling options to collect monthly premiums. This has been successful for our investors for years. Option selling offers another method to diversify investing strategies beyond traditional dividend investing. We have combined technical stock events with our strategy to identify high returns option selling opportunities. This income trade will generate a return of more than 160% annualized.

Stock: Intellia Therapeutics (NTLA), a gene editing company, focuses on the development of therapeutics utilizing a biological tool known as the CRISPR/Cas9 system. The company develops in vivo programs focused on liver diseases, including transthyretin amyloidosis, alpha-1 antitrypsin deficiency, hepatitis B virus, and inborn errors of metabolism programs.

Chart: We have detected a “Head and Shoulders Bottom” chart pattern formed on Intellia Therapeutics Inc (NTLA on NASDAQ). This bullish signal indicates that the price may rise from the close of 21.51 to the range of 25.50 – 26.50. The pattern formed over 22 days which is roughly the period of time in which the target price range may be achieved. Intellia Therapeutics Inc has a current support price of 19.18 and a resistance level of 22.12.

Strategy: We have an opportunity to sell options for income with NTLA as the stock should trade higher in the coming weeks. I recommend to place your trade and exit when you have locked in profits due to the stock price moving higher. Our goal here is to make income short term so we can exit and compound capital into another trade.

For medium risk option trade, look to sell a January 2018 22.5 PUT for about $1.50. This creates a return of 7.1% to expiration in 16 days or greater than 162% annualized.

For a conservative trade, you can setup a covered call trade. You can purchase 100 shares of NTLA and sell a January 22.5 CALL option for about $1.25 for an assigned return of 7.3% in 16 days for a 166% annualized return.

We continue to identify winning option trades to generate income and to exit early as the stock bullish patterns moves prices higher.

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While there are many factors that determine option prices, stock option premiums move in unison with the underlying stock price.  The most popular method for determining option value is the Black-Scholes Model.  There are six factors in this model:

1. Stock price is the most important factor in an options price as changes in stock price affect the price of options on the stock;
2. Strike price has an affect on option price through intrinsic value, time value, delta and other factors;
3. Time to expiration is the time remaining before an option expires.  Due to time decay, option values can decrease at a faster rate when the option is closer to expiration;
4. Stock volatility is the standard deviation of a stocks price variations over a fixed period of time.  The more volatile the stock, the more likely its price will move and the option price will increase with high volatility;
5. Interest rates have little affect on option prices but they are part of the Black-Scholes model;
6. Stock dividends also have little affect on option prices since they are already included in the stocks price by market forces.

There are other forces that can affect the price of options that are not included in the Black-Sholes model such as:

• • Supply and demand for the stock
  • Liquidity or volume of the option
  • Markets expectation of future events such as earnings, etc.
  • Markets expectation of future price direction of the stock

I have created an investment that achieves higher monthly returns while managing stock risks in the trade. You may be skeptical of this concept and should be when you hear something like this introduced into your trading plan. To explain, let’s look at what must happen to a stock price for a successful PUT selling trade. To keep the premium from the PUT sell, the stock price must be above the PUT option strike price at expiration. To increase my percent of winning PUT trades, I invest in stocks with price momentum moving higher. This increases the probability of the stock price closing above the strike price – giving us more winning trades.

How do I identify these winning trades? I combine the fundamentals of a stock with its price performance on its stock chart. I find securities that have a positive change in price that creates upward price momentum. You may have heard about price breakouts and other upward biased chart patterns. This introduces a concept of technical analysis into our trading plan.

Technical analysis uses stock price movements and trading activity as the basis for drawing a conclusion about where the price may be headed. It is based on the premise that prices move in trends that tend to continue until something changes to affect the balance of supply and demand for the stock. These changes can be detected by analyzing prior changes, looking for recurring patterns that indicate a price trend, or indicate areas of support and resistance that may influence the price direction.

We continue to identify winning option trades to generate income and to exit early as the stock bullish patterns moves prices higher.

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The year 2017 was another great year of total returns and monthly income. We had a call yield of 21% for our portfolio. You can’t get this level of yield from a dividend payment.

In terms of total return as tracked in the monthly spreadsheets, the average across all positions was 37% during 2017. In the past year ending 12/15, the S&P 500 only returned 20%. Therefore, we almost doubled the S&P while capturing significant alpha return. The average monthly income across our open positions was $132 for each position with 100 stock shares. If you own all positions (100 shares) you would capture $953 dollars of income per month. And if you double up you can capture $2,000 per month. You get it – $4,000 per month is achievable.

We had no losing positions in our perpetual call portfolio in 2017. We had 8 of 9 positions with returns greater than 20% and all but one with returns greater than 20% of the S&P 500 in 2017.

The table below shows the results for each perpetual covered call position during 2017. 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.

I have created an investment that achieves higher monthly returns while managing stock risks in the trade. You may be skeptical of this concept and should be when you hear something like this introduced into your trading plan. To explain, let’s look at what must happen to a stock price for a successful PUT selling trade. To keep the premium from the PUT sell, the stock price must be above the PUT option strike price at expiration. To increase my percent of winning PUT trades, I invest in stocks with price momentum moving higher. This increases the probability of the stock price closing above the strike price – giving us more winning trades.

How do I identify these winning trades? I combine the fundamentals of a stock with its price performance on its stock chart. I find securities that have a positive change in price that creates upward price momentum. You may have heard about price breakouts and other upward biased chart patterns. This introduces a concept of technical analysis into our trading plan.

Technical analysis uses stock price movements and trading activity as the basis for drawing a conclusion about where the price may be headed. It is based on the premise that prices move in trends that tend to continue until something changes to affect the balance of supply and demand for the stock. These changes can be detected by analyzing prior changes, looking for recurring patterns that indicate a price trend, or indicate areas of support and resistance that may influence the price direction.

SEE THE RESULTS FROM THIS MONTH…

The market was in a blast mode as it ran to record highs again. We had all winners this month with max income trades. And how about the monthly returns on the PUT trades – 4.8% on ARRY; 8.8% on TLRD; 9.6% on NL; and 8.7% on MDXG!!! This is a yearly return on some buy and hold stock investments in a monthly trade for us. We will look for more stock breakouts for PUT trades in our next newsletter.

Sell Put on Array Biopharma (ARRY)

STRATEGY: Look at the December 2017 11 cash-secured put trade. For each 100 shares of ARRY stock you want to control, sell one DEC 2017 11 put option for a $0.50 debit per option or better. That’s potentially a 4.8% return on the cash-secured put trade.

Actions: ARRY is currently trading at $10.82 so the 11 PUT we sold is ITM. Buy to close the PUT before expiration if the stock price is below the strike price of 12. If stock above 12, PUT will expire.

Sell Put on Tailored Brands (TLRD)

STRATEGY: Look at the December 2017 16. cash-secured put trade. For each 100 shares of TLRD stock you want to control, sell one Dec 2017 16 put option for a $1.30 debit per option or better. That’s potentially a 8.8% return on the cash-secured put trade.

Actions: TLRD is currently trading at $19.46 so the 16 PUT we sold is OTM. Let the options expire on 12/15.

Sell PUT on NL Industries (NL)

STRATEGY: Look at the December 2017 12.5 PUT trade. For each 100 shares of NL stock you want to control, sell one Dec 2017 12.5 PUT option for a $1.10 debit per option or better. That’s potentially a 9.6% return on the PUT trade.

Actions: NL is currently trading at $13.30 so the 12.5 PUT we sold is OTM. Let the options expire on 12/15.

Sell Put on Mimedx Group (MDXG)

STRATEGY: Look at the December 2017 10 cash-secured put trade. For each 100 shares of MDXG stock you want to control, sell one Dec 2017 10 put option for a $0.80 debit per option or better. That’s potentially a 8.7% return on the cash-secured put trade.

Actions: MDXG is currently trading at $12.25 so the 10 PUT we sold is OTM. Let the options expire on 12/15.

On Dec 5,subscribers sold PUTs on US Steel (X) for $1.24 per option.  Our stock chart indicator identified an Ascending Continuation Triangle in the stock.  This is an indication the stock had positive momentum and was ready to break out.  Our strategy is to sell PUTs on the breakout and buy to close the PUTs to lock in profits.  This allows subscribers to close out of trades early (locking in profits) to compound your dollars into more trades.  The more compound trades increase the total monthly income.

So how did the trade work out for investors?

On Dec 7 (yes only two days later), subscribers bought to close the PUTs on X for $0.30 per option.  X was trading at $29.84 at the trade entry but jumped to $33.00 per share in the following days!  We closed the position to lock in fast cash following the stock breakout trade.

This resulted in a gain of $94 per option sold in only 2 days.  If you had sold 10 PUTs, you would have made $940 in 2 days on one trade.  This is a 3.3% cash return in 2 days or 600% annualized trade.

Join the newsletter for only $29.99 is the best deal for making monthly income.  Let’s see, spend less than $30 to make $940 on one trade and a few $thousand each month in extra income!  Join the Monthly Income Newsletter to create your income monster.

Here is the details of the US Steel (X) Trade shared with subscribers on Dec 5:

Stock: United States Steel Corporation (X) produces and sells flat-rolled and tubular steel products primarily in North America and Europe. It operates through three segments: Flat-Rolled Products (Flat-Rolled), U. S. Steel Europe (USSE), and Tubular Products (Tubular). The Flat-Rolled segment offers slabs, rounds, strip mill plates, sheets, and tin mill products.

Chart: We have detected an “Ascending Continuation Triangle” chart pattern formed on United States Steel Corp (X on NYSE). This bullish signal indicates that the price may rise from the close of 29.84 to the range of 33.20 – 34.00. The pattern formed over 29 days which is roughly the period of time in which the target price range may be achieved.

United States Steel Corp has a current support price of 27.10 and a resistance level of 30.21.

Strategy: We have an opportunity to sell options for income with X as the stock should trade higher in the coming weeks. I recommend to place your trade and exit when you have locked in profits due to the stock price moving higher. Our goal here is to make income short term so we can exit and compound capital into another trade.

For medium risk option trade, look to sell a December 2017 30 PUT for about $1.00. This creates a return of 3.4% to expiration in 10 days or greater than 124% annualized.

For a conservative trade, you can setup a covered call trade. You can purchase 100 shares of X and sell a December 30 CALL option for about $0.90 for an assigned return of 3.4% in 10 days for a 124% annualized return.

We continue to identify winning option trades to generate income and to exit early as the stock bullish patterns moves prices higher.

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Join the Monthly Income Newsletter voted the best value for option income trading.

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