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Financial Independence, Retire Early with Passive Monthly Income

Many people are becoming part of the FIRE movement, which stands for “Financial Independence, Retire Early.” Americans across the country are dreaming of leaving the traditional workplace in their 30s and 40s by investing enough assets in the first decade or two of their careers so they can rely on this nest egg and its investment returns the rest of their lives. Financial independence, to many of these individuals, is the ability to leave a stressful job for a less lucrative one, even if it means making a few sacrifices along the way.

These participants use passive income to help them get to their goal, especially monthly dividend stocks and other income producing investments. They’re typically less risky than investing in individual company stocks but it takes longer to see growth. There is definitely no one solution that you should be in this proportion of stocks and bonds, nor should someone try to time the market. Be comfortable getting there slower through using compounding income.

Taxes are also an important component to planning for FIRE, and individuals looking for financial independence should leverage numerous retirement savings and investment vehicles instead of just one type. Some workers may want to take advantage of the high contribution limits of a 401(k) plan ($19,000 in 2019) as well as a Roth individual retirement account, which is funded with after-tax dollars and then grows and is withdrawn tax-free.

Increasing income in more traditional ways, such as through raises and new job opportunities, may have the greatest effect on how much someone saves for early retirement. They suggest staying competitive in the job market or asking for raises, but not necessarily juggling numerous jobs and burning out.

At Get Rich Investments, we strive to create monthly income from monthly dividend stocks, ETFs, CEFs, covered call trades and other investments. It is best to diversify your holding using multiple approaches.

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Beat the Market Pullback with Monthly Dividends

Here is the latest listing of monthly dividend stocks with high dividend yields. These investments can be used to create additional streams of income. remember, to diversify your investments across at least 5 or more stocks. You can conduct more detailed research into these opportunities before selecting the right stocks for your portfolio.

If wake of the market pullback, it is interesting to see what monthly dividend stocks performed the best. The S&P 500 is down over 6% in the past month due to the economic concerns around trade tariff and other issues. The list of EFTs paying monthly dividend below has performed the best during this period. As you can see, many are taxable bond funds which drives home the importance of having multiple monthly income payers diversified across several asset classes.

Don’t let the market volatility mess with your head. Income investors should continue to focus on dividends and buy more shares on these pullbacks. You should keep in mind the need to have diversification of assets and multiple streams of income.

Over the millennia, evolution has sensitized humans to danger. “Imagine that you’re a caveman and saw a horrible mauling by a bear on a certain path,” says Prof. Shiller. “That will stick in your mind and you will tend to think, ‘I’m going to avoid that path even if the bear isn’t there anymore.’ A path with delicious fruit will also stick in your mind, but that’s not as important to your survival, so it’s not as memorable.”

That doesn’t mean every investor will sell in a panic. It does mean investors who have witnessed a recent sharp decline are more likely to fear another in the near future.

 

CEFs with monthly dividend distribution 3

 

 

 

 

XAI OCTAGON FR & ALT INCOME TERM TRUST XFLT
FLAH&CRUM PREF INCOME OPPS PFO
COHEN & STEERS SELECT PREF & INCOME PSF
FLAH&CRUM PREF SECURITIES INCOME FFC
PIMCO CORPORATE & INCOME OPPS PTY
BLACKROCK TAXABLE MUNICIPAL BOND TRUST BBN
PIMCO DYNAMIC INCOME PDI
FIRST TRUST INTER DUR PREF & INCOME FUND FPF
GUGGENHEIM TAXABLE MUNI MANAGED DUR TR GBAB
PIMCO CORPORATE & INCOME STRATEGY PCN
MFS® GOVERNMENT MARKETS INCOME MGF
FIRST TRUST MLP & ENERGY INC FUND FEI
DREYFUS ALCENTRA GL CREDIT INCOME 2024 TARGET TERM FUND INC DCF

Three Steps to Early Retirement as a Millionaire

Notwithstanding a strong U.S. economy, only 25% of Americans say they feel financially prepared for retirement, according to a report just issued by the Certified Financial Planner Board of Standards. : Close to 80% of participants surveyed say they are not reassured that they have the best retirement savings strategies available to them. The good news is, three simple steps can help people build wealth and retire early.

While anyone can benefit from these action steps, they can be particularly powerful for financial independence and early retirement.

1. Pay yourself first

The single most important decision you’re going to make is to pay yourself first. This means, when you earn a paycheck, the first person who gets paid is you. Most people don’t do this even if they have employer matching funds. They focus on paying bills and other personal expenses without considering saving money.

2. Invest your savings

To be clear, simply saving a lot of money doesn’t make you rich. You have to have this money invested for growth. You cannot put this money in a money market or a CD, where it grows at 1% or 2%. You’ll never build wealth that way. We have created an investing plan to purchase monthly dividend stocks. These investments pay you a dividend check every month. Even better, we focus on yields above 10% to beat the market. How would you like 5, 10 or 30 checks coming to you each month?

3. Compound your wealth

When you receive your monthly income, reinvest a portion into new monthly dividend stocks. This grows your wealth over time, increases your income each month and offsets the impact of inflation. Also, this creates a lasting legacy as you are living from the dividends and not touching your capital.

The earlier you start, the better, thanks to the power of compound interest, which can cause your wealth to snowball over time. Yes, early retirement is possible as your monthly income exceeds your living expenses.

Create your legacy by joining our Monthly Income Plan today.

How To Manage A Covered Call Portfolio

We create multiple streams of income to achieve financial independence and early retirement. Learning how to get rich trading covered calls is what we do here.

The option income portfolio approach to selling covered call options seek to do the following:

  • To create options portfolios with the objective of earning consistent returns on investment throughout the stock market cycle;
  • To maximize options premium income, dividend income, capital gains potential and downside protection;
  • To increase long-term capital appreciation and income from stock ownership;
  • To minimize risk and provide diversification.

The option income portfolio is a continuous investment strategy.  Stock should be owned and options sold.  Dividend and option premiums can be earned and capital gains increased.  This is a key step in successful investing.

The more active you are, the greater you potential returns will be.  For example, when a sold call’s market value drops to 10-20% of the call premium received when initially sold – the investor should buy to close the call and then write a new call for more time value and/or at a different strike price.  This makes the covered call strategy more continuous and more profitable.

The experienced covered call investor will not panic when the stock price exceeds their call strike price.  They will buy to close the sold call for a loss and sell a new call at a higher strike price.  The loss will be covered by the additional call premium and the potential capital gain of the increased stock price.  The loss from the initial call buyback is a taxable loss for your income tax statement.  The loss is calculated by subtracting the cost of the buyback from the initial call premium received.  The investor should always keep a running log of these buyback transactions that result in a trading loss for income tax purposes. Like any losses over the allowable $3,000 in annual investing losses, they can be carried forward.

As an individual investor, you may not have time to manage a covered call portfolio like described above.  This is OK as you can still create a covered call portfolio for monthly income.  As you gain more investing experience, you can move in the direction of being more active in managing your covered call investing.

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You Can Help End Poverty

 

Close Trade for 76% Return

Monthly income seekers should close the position on KR as the stock has increased from the entry price of $24.12 to the closing price of $25.52.  Investors will lock in a 2.1% return in 10 days for an annualized return of 76%.

 

Sell Put on The Kroger Company (KR)

STRATEGY: Look at the May 2018 24 cash-secured put trade. For each 100 shares of KR stock you want to control, sell one May 2018 24 put option for a $0.70 debit per option or better. That’s potentially a 3.0% return on the cash-secured put trade.

A “Double Bottom” chart pattern formed on The Kroger Co (KR on NYSE). This bullish signal indicates that the price may rise from the close of 24.58 to the range of 25.30 – 25.50. The pattern formed over 18 days which is roughly the period of time in which the target price range may be achieved. The Kroger Co has a current support price of 23.48 and a resistance level of 28.01.

 

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.

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

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You Can Help End Poverty

Monthly Income from Option Trade

Income Trade Opportunity in JP Morgan (JPM)

For subscribers, we have been selling puts on JP Morgan (JPM) for several months. We consider this a perpetual income play by selling options for monthly premiums. In fact, we have collected over $1500 in monthly cash during the past 6 months! This is a great way to create investing income that exceed the typical dividend strategy.

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 13% annual return.

Stock: JPMorgan Chase & Co. operates as a financial services company worldwide. It operates through Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management segments.

We have identified a “Continuation Diamond (Bullish)” chart pattern formed on JPMorgan Chase & Co (JPM on NYSE). This bullish signal indicates that the price may rise from the close of 93.11 to the range of 105.00 – 107.00. The pattern formed over 143 days which is roughly the period of time in which the target price range may be achieved.

JPMorgan Chase & Co has a current support price of 91.28 and a resistance level of 93.19.

The RSI is above its neutrality area at 50. The MACD is positive and below its signal line. The stock could retrace in the short term. Moreover, the stock is trading above both its 20 and 50 day MA (respectively at 92.13 and 89.17). JPMorgan Chase is currently trading near its 52 week high reached at 94.51 on 06/07/17.

Strategy: We want to sell a cash secured put on JPM using the September 2017 92.5 PUT. For each 100 shares of JPM stock you buy, sell one Sept 92.5 PUT for a $1.35 credit or better. That’s potentially a 1.5% return in 41 days or 13.3% annualized return compared to a 2.1% annual dividend yield.

For investors wanting to take a long position in JPM, this lowers the stock price for entry as each premium received lowers your initial cost basis. You can continue to sell monthly put options until the stock is put to you. Then, you can sell covered calls each month for additional monthly income. And, you collect the stock dividend.

This is a great example of how investors can create monthly cash from these income producing strategies. This is an excellent way to create a side hustle income without consuming too much of your time each day. For others, they have built an income large enough to live on without being employed by the man. When your monthly income exceeds your living expenses, you have achieved financial independence.

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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!

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