Get Rich - Stay Rich - Investing for Monthly Income

Archive for the ‘Investing Strategy’ Category

The Dirty Little Secret of Option Trading

secret-to-option-selling

Options are a like a ticking time bomb in your hand.  If your preferred method of trading options is to buy calls and puts, that’s like telling the market to just take your money and pay you back “someday, maybe … if you feel like getting around to it.”

The truth is, every second you own that option contract is like the second hand of a bomb counting down to zero… blowing up into a useless piece of paper.  Why would anyone want to trade options when the deck is stacked against them?  Most options traders think of buying options as having “Stocks on Steroids” in their trading accounts.  The sad reality is, they continue to cling to that hope, even while they continue to lose money . . . trade after trade (after trade…).

What Happens to All Those Losing Trades, Anyway?

You know that for every option trade, there are two sides.  Buyers can’t buy without sellers.  If the options you buy aren’t making you money, you can be certain that the sellers are PROFITING CONSISTENTLY from your losing trades.  It’s time to turn the tables … literally. When you move to the other side of the trade, you put those odds squarely back in your favor.  That’s how the pros trade . . . taking your money every single time you buy a call or a put.  But by becoming an option seller, too, you will understand why the pros prefer their strategy. For starters, you’ll probably quickly get addicted to collecting COLD, HARD cash upfront on every trade.

And, the “secret” to selling options is that you enter a trade that has a 99% chance of winning. They’re practically GIVING MONEY AWAY on the exchanges. It’s true – the market pays you to make your trades!  Not quite sold on selling yet?  If watching your account grow practically on command isn’t enough, let’s look at how simple it is to keep the returns flowing in. …

Generate a Paycheck for Life …

You can sell option contracts again and again and again … for as long as you need or want to collect a monthly “bonus” without working harder — or at all!  Consider this . . .You could continue to fight the system and trade options in hopes of the next big MONSTER TRADE (the lottery ticket).  Or, you COULD pay yourself FIRST – bringing in $500 each week (or more).  Why not turn the tables in your FAVOR . . . and sell options like a PRO?  Stop trying to hit home runs by “buying options,” and start hitting singles and doubles to score more runs over time.

Join our Monthly Income Newsletter

Why Don’t More People Write Covered Calls

It is hard to understand why more income investors don’t use the covered call strategy more often.  Once you sell the call you have an automatic income amount set for you.  Perhaps the biggest reason more people don’t write calls is they are not aware of the strategy.  Unless you stagger upon the strategy or research it online, it is difficult to understand.

Most financial institutions do not mention covered calls as a strategy to their clients as they may risk losing business if clients pursue this strategy on their own.  These advisers are being paid commission on the amount of funds they manage so they have a conflict of interest with their clients.  Simply, they make money on the products you buy from them.

There is a certain amount of fear involving the trading of options.  Some resources lump together all option strategies as being too risky for an individual investor to use in their own portfolios.  Yet, these same “experts” will suggest you buy a small cap growth stock trading at a 100 price to earning ratio.

By producing cash flow from an asset DOES NOT increase the risk of owning the asset.  think about this: all investors should seek a return on their money which is cash flow.  Of course, if you are in the nail business you always recommend hammers!  You must realize that your interests are different from the financial institutions.  And you are the only one to focus 100 percent on your needs.  However, financial advisers make money when you do and when you don’t!  Your biggest decision is to rely on their advice or handle your own investing.

This blog believes in the individual investor and his ability to generate monthly income from writing covered calls, selling puts for premium and owning monthly dividend paying stocks.

Join your journey to independence today.

Covered Calls for Life

There are many different styles of covered call writing.  Some people never do more than write calls on stocks in their portfolio to generate additional income.  Other people buy stocks only for the purpose to write calls then sell them. Covered call strategies include active trading for directional moves, for traders with long-term time horizon and those seeking low-risk or limited risk trades.

For the conservative investor, you can write calls that are deep-in-the-money which limits the amount of risk in the trade.  This is a good strategy for those who are fearful of losing money.  For the lazy investor, they should look to a longer call time horizon that is many months out or even sell a leap call.  For the monthly income investor, they should sell calls at-the-money which expire during the next month.  This serves the purpose of creating a monthly income that is updated at the monthly expiration date.

The conclusion is that you can utilize the covered write strategy that best suites your income needs and personal investing style.  Or you can use more than one strategy to mitigate your risk level in income investing.  I sell calls when the market is reaching over priced levels for downside protection.

Join our community to generate monthly income using options strategies like covered calls.  We now have new spots open for new members.

Passive Income Investing

Passive income is defined as “income generated with minimal work through your investments such as interest, dividends, or option premiums but also includes any income system that generates income for you!”
In order to increase your quality of life, the only realistic strategy is to increase your income, and reduce the amount of hours you work to earn income.  How do you do this you might ask? By using time tested wealth creation strategies and investment techniques to create, increase and maintain your passive income.

Passive Income Investing

The easiest way to make passive income is to earn interest or dividends on bank accounts, stocks and electronic-traded funds (ETFs).  This is one of the safest strategies when you own the right securities.  Many ETFs pay monthly dividends that can be combined to create a significant number of passive income sources or checks each month.  More on this later.

One of the best ways to leverage your investment capital is to use stock options. There are literally thousands of ways to use options, both as a trading tool and as a way to protect or hedge your investments.  But options can also be used to create passive income through becoming an option ‘writer’ instead of a ‘taker’.  Here, you get paid a premium when you sell the rights to an option.  This premium is your passive income source.

The optimal strategy is to combine investments that make you rich with investments that keep you rich.  I refer to the former as your “get rich” account and the later as your “stay rich” account.  Basically, you make passive income from your get rich investing and store it in your stay rich investments.  It really is that simple.
Get Rich Passive Incomes
The following is a list of passive income generators you will receive in each Passive Income Investment Report.  These investments are what you will use to get rich by investing in these instruments each month.  You will receive a number of trades for each category but you decide which types of passive incomes you are comfortable investing in your account.
  1. Covered calls on stocks you purchase.  We have a proven system of identifying conservative covered call investments that can generate 3-5% return each month.  You can select from our list or invest in all recommendations.  Our system focuses on selecting stocks with the right volitility so you don’t get burned by high-risk investments.
  2. Cash-secured PUT trades to enter a position.  When you find a stock you want to purchase, then sell put options on the stock to lower the purchase price and to collect option premium for cash.  Do this monthly for income until the stock is put to you,  Then, sell covered call options on the stock.
  3. Dividend investing for cash.  This is a simple investment in world-class dividend stocks and CEFs that pay monthly distribution.  This also provides a way to diversify your types of income by using various CEFs investments such as alternatives such as REITs, bonds and many other funds.

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 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 covered call strategy and other monthly income opportunities.  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 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.

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.

Put Your Money to Work

To start on the road to financial dependence, you must save some money. Most people start with an emergency fund, retirement account such as a 401K and maybe buy some real estate for rental income. Then, smart investors start creating additional streams of income. At Get Rich Investments, we like to buy world-class dividend stocks, CEFs paying money distributions and sell options for premium income. In today’s investing environment, you can no longer keep your money in near zero savings account or certificates of deposits.

“The only reason to save money is to invest it,” writes Grant Cardone, who went from broke and in debt at 21 to self-made millionaire by 30. “Put your saved money into secured, sacred (untouchable) accounts. Never use these accounts for anything, not even an emergency.”

While always subject to a degree of risk, investing is one of the most effective ways to earn more money. As Ramit Sethi writes in his bestseller, “I Will Teach You to Be Rich,” “on average, millionaires invest 20% of their household income each year. Their wealth isn’t measured by the amount they make each year, but by how they’ve saved and invested over time.”

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.

This is how I put my money to work. Join me in creating multiple streams of incomes to live the life you desire.

How to Develop Multiple Streams of Income

To achieve financial independence, you must create a level of income to cover the lifestyle you desire. There are many ways to accomplish an income to fund your life experiences. Many work during their life to save money for this purpose. Some are entrepreneurs that start businesses usually with hired managers to carry the workload to create their income. Others invest in passive investments such as rental housing. Here is a look at investing strategies to increase your earnings and create multiple streams of income.

In author Thomas C. Corley’s five-year study of self-made millionaires he found that many of them develop multiple streams of income: 65% had three streams, 45% had four streams, and 29% had five or more streams.

“Three streams of income seems to be the magic number for the self-made millionaires in my Rich Habits study, but the more income streams you can create in life, the more secure will your financial house be,” he writes.

I apply Corley’s thinking to my investment portfolio by identifying several streams of income. One passive income stream is collecting growing dividends from world class stocks. These stocks have a strong financial position, competitive market position, known brand and growing dividend history. I also invest in closed-end funds that pay monthly dividends. This create a diversification opportunity as I can add fixed income, preferred stocks and other types of investments. Lastly and probably more important, I sell options for monthly premium income. This includes selling cash-secured puts and covered calls. I love this strategy and have created a consistent, growing stream of income.

Join me in creating multiple streams of incomes to live the life you desire.

Are You a Penta Millionaire Yet?

Have you heard about “Penta Millionaires: the New Rising Class” it discusses families with net worth over $5 million as a fast growing class in America. While this is correct about the changing of wealth, it still separates the wealthy from the other classes. While we all strive to attain our definition of success, the media continues to focus on the upper class. Let me share a secret with you, you can still have a productive and fun-loving life without being in the top income bracket. This is why we write a monthly income newsletter – to help those wanting to better their life and create a sustainable monthly income.

Here are some excerpts from the articles:

It is fair to say that at no time in history have so many Americans become so rich—or amassed their wealth so quickly. When John D. Rockefeller took title as the country’s first billionaire, in 1916, it was as rare an event as sighting a white whale, and seven decades later, the number of billionaires had still only reached 44. Since then, however, the ranks of the megarich have surged ahead with a caffeinated velocity.

At every level of the wealth pyramid, according to Penta’s research partner Boston Consulting Group, the ranks of millionaire and multimillionaire households have expanded. Last year, for example, there were 492 U.S. billionaires, meaning that 100 new billionaires were created in the past five years alone. But the most interesting trend is a little further down the pyramid: The number of households with more than $5 million in investible assets just crossed the one million mark.

Flash forward to recent times. The rank-and-file rich have grown by just 5% a year recently, but this steady if modest climb over seven years has actually delivered better results. We now have a million-strong army of very rich emerging from the ho-hum, low-inflation economic growth that has been coupled with robust capital markets. Many have, in this calm environment, quietly sold off their private business or cashed in their stock-option windfalls.

At Get Rich Investments, we focus on creating stream of income to improve life and become financially independent. Once you learn how to create monthly income, you now control your own destiny. We have several investing strategies focused on low risk trade such as covered calls and buying monthly dividend CEFs and collecting dividends from world-class stocks. This is the way to increase your wealth on a monthly basis.

One strategy is the Covered Call Dividend Strategy where we sell sell covered calls for income while collecting dividends. This creates three income streams from a single investing position. This positions the investor in a low risk position as you can continue to create option income each month by selling calls on the same stock. If the market goes up – you make income. Same for when a stock pulls back – keep selling options for income. It is like collecting rent on a rental property each month – without the hassles of a tenant.

I can’t promise you will be a Penta Millionaire, but you will definitely create more income and move toward becoming financially independent.

Learn more about getting started on your wealth journey today.

Get FREE Stock

Get FREE Stock - No Trade Commissions

Subscribe for FREE Trades

Subscribe for FREE Trades

* indicates required
/ ( mm / dd )
Archives
PopAds