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The Option Genius Podcast: Options Trading For Income and Growth
19 minutes | Sep 13, 2021
I Want to Give You a Billion Dollars - 109
When was the last time you let yourself dream really big? I mean, really, really, really big. Most of us, I think, you know, "we live lives of quiet desperation". That quote, I don't remember who said it, but I believe that quote is so true. Most people are just going through the motions. So what would you do if gave you a billion dollars? A billion with a B? Right? If I just gave it to you, or whatever, you woke up one day, and boom, there's 1 billion in your bank account. You can do anything you want with it. What would you do? I mean, obviously, a lot of us, we probably start spending it, right. I mean, there's no strings attached. It's not stolen or anything, it's your money, do whatever you want no taxes, debate and anything like that? Start spending, what are you gonna do? Right? You gotta buy maybe the nicest house in the state. Maybe you buy eight or nine, fancy sports cars or luxury cars, whatever you can think of - Bentley's, Maseratis, whatever you can think of. Maybe you buy a jet or two. Maybe you get your own private island. That's pretty big. Maybe you get all the clothes you can ever think of, eat out every night, you know, some jewelry for the spouse or something, gifts for the kids, maybe a pony? I don't know. But a billion dollars is a huge amount. And for most people, they probably still have a lot left. I don't think any normal rational person can spend a billion dollars in their lifetime. It's pretty hard. So what would you do with it? And then the real question is, what would you do with the rest of it? Right? Eventually, you're going to realize that the money is not going to bring you happiness, all the stuff. Stuff is not important. When you die, it don't come with you. Right? The houses you can buy them, but they're not really yours. You know, stop paying property taxes and see who really owns all the houses. The cars are gonna eventually fall apart, like clothes are gonna get eaten by moths and go out of fashion. Ponies probably gonna die eventually anyway. So that stuff doesn't bring you happiness. Significance! That's what it's all about, right? Having some significance in your life, having a sense of purpose, being able to do something that makes you feel alive. What is that for you? Do you even know? How do you generate significance? How can you generate more significance? I mean, dream big, think big. Is there an injustice that you've experienced that needs to be solved? What did you want to do as a kid when you were little think back? Think back to when you were little? What did you want to do? Be? Accomplish? Before the world said no, that's unrealistic. Can't do that. What gives you the greatest excitement and wonder? There are some deep questions. For Elon Musk, Jeff Bezos, you know two of the richest guys in the world. For both of them it's the same thing. They want to get humanity, mankind into space. I mean, think about it. These two guys, billionaires, top two richest people in the world. They're both, both of their passions, both of their purposes, is to get humanity into space. And so that's why they both have companies where they give billions of dollars to that have pushed the frontiers much farther than NASA has gone, faster, cheaper, more sustainable. So what's your purpose? Do you know what it is? Or are you like most people just going through the motions every day? living day to day. You know you get up you go to work, get stuff done, accomplish, some things here and there. Then you're "Oh, I'm tired" "Oh, it's five and six o'clock, all right" Time to head home. You get home you take care of the kids. You hang out with the spouse, you cook you clean, you do some stuff and then maybe you relax a little bit and hit the hay. There's all time to do it all again tomorrow. Is that what life looks like? Are you in a rut? For most people, they say that they cannot live their purpose because they don't have enough money. Or they don't have enough time. Or there's something stopping them. "Yeah, I can't do this because I have kids right now". "I can't travel the world because I have kids". "I can't go and become a teacher because I have all these bills to pay". "I can't do this, because of that" or "this person won't let me" or my spouse this, or my mother this or my mother in law that. Right? I think it's just sad. And I mean, I don't blame you, if that's you, because I'm in the same boat. You know, I have always wanted to travel. And I wanted to see the world but we have three little kids. So can't do it. Right? Because they have to go to school, they have to learn stuff, we can't just, it's dangerous out there in the world. And we could be traveling in some third world country and get taken hostage or get sick or get hurt. And then you know, all the medical stuff and it wouldn't work and blah, blah, blah, blah, blah. I was at a seminar where I was talking to this guy. The the head of the seminar, he was like this personal trainer, not treating you physically, but like motivational speaker type guy. And I asked him that question. I said, "You know, I don't know what to do". I don't know. But I want some more purpose. What do I, how do I know what my purpose is? Because what I want to do as I want to travel, he goes, so why don't you travel? It's pretty simple questions. Like you want to know what you want. Why did you do it? Well, because he's like, is it money issue? I'm like no, not money issues. Health issues? No, not health issues. Okay, so what's wrong? Well, I have little kids. And he goes, Okay, so what school you want to give one school, you want them to learn stuff? But yeah, that's, that's, that's the problem. You know, we can't take them out of school for that long. They miss. If we go traveling for a year or two, or whatnot, you know, homeschooling for me - that's not gonna work, neither for my wife. It's not our thing. We go nuts. We'd kill the kids. So he said, yo, you know, he goes to me, he says that he lives on a ship. Yeah, this guy actually lives on a cruise ship. There's a one particular cruise ship, I think they call it "The world", I think you can look it up. There's one cruise ship, that you can actually buy a cabin. It's like a condo, or like a private condo, you buy the cabin. And you could live on the cruise ship. And it travels all around the world. And docks in different places. And the people who own like, all the people want the little cabin, they, you know, they get to vote and they get to decide where they want to go next, and where they want to stop and all that stuff. And if you want to get off well, then you know, you get off at a stop and then you fly wherever you're going. And then whenever you want to come back, you find out where the ship is going to be you fly to that city, and then you get on board. So that's pretty cool. He goes, Yeah, there's actually a couple families on the ship. And I'm like, really? He goes, yep, there's one family indeed. There is a family that have three little kids just like yours. I'm like, how do they do it? He goes, Well, they hired a nanny, and a teacher and an au pair, or whatever they're called, I don't know what they're called. He hired some tutor to come and teach the kids. So they're traveling around the world. They're seeing the sights, they're seeing everything, but they're still learning. In fact, they're learning better than probably what my kids are learning. Because when you go to school, most of the time is not spent learning. Most of the time that teachers spend, you know, telling other kids to be quiet or, or having them go to lunch or line up on joining the proper line or dealing with discipline issues or announcements and all that kind of stuff. So most of the time is not spent teaching anyway. So they have a tutor that teaches them for a few hours. And then imagine what they learn when they get off at all these different places around the world. Now that's truly an education. So that opened my eyes. It's like Wow, man, I'm just making excuses. I'm really making excuses. So it's not that my kids are stopping me from travel. It's my own limitation. It's my own small thinking. My purpose, if that's my purpose of traveling, it's not strong enough to get me to figure out how to overcome the situation overcome the difficulties that I am seeing, which are not really difficulties. So if you've been listening to this podcast for a while, you've heard how we make money out of thin air by selling options that we don't even own to make obscene amounts of returns. All this without being brain surgeons or rocket science. You know, we're not scientists, without starting with millions of dollars and without spending years and years and years to learn this stuff. So I want you to be living your purpose, whatever it is. And at that time, I realized, Hey, you know what my purpose probably not is travel, it's not traveling, and I don't want it bad enough. So I'm still looking for my ultimate purpose. But I think for now, what my purpose is to spread the mission of passive trading. To spread the word to help other people, just have them experience what I'm experiencing. The joy, the freedom, and that's my purpose. For now. I don't know how long it's gonna last. Eventually, I'm gonna say, you know what, I got another itch, I want to go do something else. And I already have something in mind. And I guess I could share with you guys, I want to start something else called "Mortal Heal Thyself". Basically, it's I don't know what it is yet, I haven't really put any too much thought to paper yet. But it's, it's a way it's information to help people to heal their health issues, without taking massive pharmaceutical drugs, or having to see 100,000 different doctors and all that stuff to keep us healthy, naturally, before we get sick, and then even when we do get sick, to do everything that we can, without more, you know, or is taking as little pharmaceutical drugs as possible. So that's, that's kind of like what I want to do. So eventually, I'm going to maybe do that. But for now, I'm focused on this particular purpose, which is to help you achieve your purpose, to help you achieve three freedoms that we talk about - Time, Money, and Choice. Okay, so I want you to be living your purpose, whatever it is. Now, if you don't know what your purpose is, or even if you do, but something is stopping you, I know that you can figure it out. If you spend enough time on it, you can figure it out. And for some of you, you might need some help. And if that's the case, we can start with our high probability trading live event that's coming up soon. It's a two day event training coming up on September 17 and 18th, we'll be talking about this, we'll be having exercise on this and going through it. And I can walk you through the process that I've found that works really well for a lot of people. Or if you're listening to this, after that date, and it's already happened, you can email us and ask us how to get the recordings. Because if you want to find your purpose, if you want to find your why I think that is crucial to your success at trading, if you don't know your why. I don't know if you can be as successful in trading as you could be. So I think it's very, very important. That's why I talk about it at this event. So at this event, I'm going to be spending some time to help you determine your purpose, your why, and how that is so crucial to your success. And then we spend the rest of the two days on strategies to free you from any money constraints. Right? I don't want that to be an issue. "I can't afford it" - no, we're going to take care of that. Okay. We have many, many students that have been through this event in the past. And the first time we did it was not that long ago. But they but it was less than a year ago. The first one it was in January of 2021. No, yeah. 2021 sorry. It was it was earlier this year, January. We have many students who have attended this event. And they are already on their way to replacing their income with their gains from trading. So that was that thing that they decided they said, "Hey, I want to replace my income", boom, they're already on their way. And for others, they decided, hey, I want to add to my income, so they're on their way. Others decided, hey, I want to use this money to go give back and to help other people and so boom, they're on their way to do that. So some of these people had never traded options before. Others had traded but with very limited success. So we were able to help them overcome their limitations, their limiting beliefs and to figure out "Okay, what is it that stopping you?" What is it in in your in your thinking that's stopping you and then what is it in your trading? What are the skills that you need in trading wise to be able to turn the corner and start making more from your trades? And it worked. And that's one of the things I'm so super, super excited about. And that's why we're doing this event again, because we are to help so many people the first time and the second time. So I mean, I can't wait for it. We have so many success stories, so many people that are getting so excited and thankful after this happens, that I just can't. It's I mean, I'm really excited for it, I hope you'll be there. So join me live for two days. And while I don't actually have a billion dollars to give you I would, I would love to give it to you, if I had it, I don't. Helping you figure out your purpose and your why is actually worth a lot more than a billion dollars. And you think about it, even if I had it, I probably wouldn't give it to you. Because I would just spoil you. She is more much, much more fun and much more -- you feel so much better when you when you earn it for yourself. So let's do it together. Okay, go to OptionGenius.com/live for more details and to get your ticket. Spaces are limited even though this is a virtual event. We're still restricted on the number of people that can be there at any one time. So get your ticket today, OptionGenius.com/live, I hope to see you there we'll be there live for two days, you can interact with me ask questions, the whole nine yards we'll be going through a lot of material. It could be a life changing event for you. I don't know how many more we're going to be doing these. I want to continue them. But we have so many other projects that are really, really exciting that are coming down the pike that we might have to suspend this and work on those instead. So if you are looking to make a change, if you're looking to get out of the rut or start trading or stop making excuses, this would be a amazing way to do it. Okay, so get your ticket while tickets are still available. If you can't make it live, there are recordings that will be available so get those but really you want to be there live to get your questions answered to to feel the excitement and to really get motivated. And you know, there might be some questions that you have like hey, how can I do this and this and this or this is an issue that I've had in the past? I'm seeing this over and over again. What do I do to fix it? We can talk about those and we can discuss it and answer your questions live. So go to OptionGenius.com/live get your ticket today and trade with the odds in your favor. LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.
22 minutes | Sep 1, 2021
The Greatest Investment - 108
The question asked was: "Allen, what has been your greatest investment?" I was asked this by a coaching student recently. And I told him, I have to think about it and get back to him. Right? Well, I have thought about it, and I want to share the answer with you as well. So when it comes to success, at anything, really, there are three major components. Okay, number one is the skills, you got to know what to do. And then you got to get good at it. And that's doing the thing. Now, whether this is trading, whether this is parenting, weightlifting, anything, there are certain skills that you have to be able to perform. And the best way to learn those skills is by investing in education, something like a book or a course or something like that. Right? Now, these are basic skills. So when it comes to trading, you have to know some stuff, you have to know what is a stock? How do they go up? What do they go down? What is an option? What does it call? What does it put? How do they work that you go, and you get from a book you get from a course or a video right? Now, most of the questions out there that you want to know, you can get the answers for free. From about skills, you can get the answers for free at the library, in a book, and now maybe even on YouTube. Now YouTube's a little sketchy, because you don't know exactly who's making these videos and how good it is. And if the answer is actually going to legitimate how old this stuff is, I mean, I've I've tried some things on YouTube that were so old, they didn't work anymore, and you can't tell. But at the bookstore library, you know, the skills, the basic skills, hey, I want to learn fundamental analysis, I want to learn technical analysis. 90% of what you need to know, you can learn by a book or a course, that stuff is out there, there aren't that many things that are secret out there. And that's like a myth, right? Everything you hear about is like, oh, the secret method to do this the secret to do this, oh, they that person got so rich, because they have a secret. No, the skills are the same trading, the skills are the same, you got to know how to chart you got to know how to look at a stock, you got to know how to read the direction, you got to know how to put the trade on, you have to understand how the trade works. Right, you have to know probability of profit, you got to know when to get in when to get out, follow a trading plan, you got to have a trading plan. These are all skill-based things. Because the skills are just the basic level. That's like the entry level. Right? That's the first things you got to learn the skills. And some people they spend their whole life working on the skills. But that's why they never become successful because they don't do the other two components. Getting good at the skill does not guarantee success. There is a lot more to uncover. Just because you know, this skills or your book smart doesn't mean you're going to be successful. Knowledge is not power. I don't know why people say that. So I've heard that before. Knowledge is power. Knowledge is power. No, it's potential power, if you use the knowledge, right. But if you only have the knowledge, that's not good enough. If you know some of the skills, you could do some of the things that will get you some success, but will not get you the ultimate success that you're after. Okay. So I know a lot of people that are very smart. You know, they went to Harvard, MIT brainiacs, you know, everything. They're like a walking encyclopedia, but they struggling to pay the bills every month, because they are missing the other two components. So now, component number two is the habits, the discipline, the work ethic, these are all based on character, right, you have to have the right character. In order to succeed, you have to have discipline, you have to have work ethic, you have to be able to get up when you get knocked down. You can only get that one way. By doing the thing over and over and over. Like they say, practice makes perfect. But then again, there's no such thing as perfection. Because there is always another level, there's always a way to get better, there's always a way to achieve more to improve more. So you never get to the end goal. So there's no such thing as perfection. But you still got to practice and you have to have it internally. It has to come from inside. That's the only way to have the discipline and the work ethic you have to work on that everybody's not born that way. You know, you look at take a look at Arnold Schwarzenegger or the rock, Dwayne Johnson. They got bodies like crazy, I'm never gonna have a body like that, because I don't have the discipline to be in the gym for six hours a day. That's not me. That's not my thing. I don't have that discipline. Right. And so I might have the skills, I might know how to lift weights, I might know how to be a personal trainer or whatever, but I'm never going to look like them because I don't have that work ethic or that discipline or that desire. So whatever it is you need to master, if it's trading, you gotta follow the trading plan, you got to follow the rules, you got to have that discipline, you got to be able to take a loss, you have to be have your emotions in check. That's all character, that's the second component. Now these character traits like habits, you can have them by working on themselves on yourself, if you're lucky, you might be able to do it on your own. It's not easy, but it is doable. The easier way to do it, the shortcut is to do it with somebody else. So they can see where you are falling behind. Okay, so they can help you, they can motivate you, they can point out certain things that you might not be able to see, they can push you, when you fall down. When you don't want to go, they can give you that nudge, that encouragement. If you do what somebody else, the habits, the character traits are easier to develop. Does that make sense? Okay, now, number three, the third component, this might be the one that's the biggest one that people miss that that causes them from having the ultimate success that they're looking for. They might have the skills, they might even have the character traits and the habits. But if they don't have the belief, it's not going to work. And not just any belief, they have to have the right belief. And that is the toughest one yet. Because if you have the skills and the habits, but you're not achieving what you desire, then it is because your beliefs are not right. Now you already have beliefs, you already have some, they might not be the ones that you need to get to your goal. Now, for most people, the reason is that they believe something that is not accurate. They have what's called false beliefs. And the crazy thing is that we often don't know what we don't know. We think we know. But what we know, is the thing that is blocking us. Does that make sense? I'll say it again, we don't know what we don't know, we're blind to it. We're the guy in the forest, you can't see the forest from the trees. We think we know, we already have beliefs we think we know. But that thing that we think we know, the thing that we know, is the thing that is blocking us. That's the false belief. Now, like Einstein said, or maybe he didn't say, I don't know, he said, the quote is the thinking that got us into the problem won't get us out of the problem. And for the longest time, I couldn't understand what that meant. Right? But when you're in a problem, and then eventually you have an epiphany, you have an AHA moment you have like, "Oh, my God, why don't I think of that", that is a change in thinking to get you out of the problem to show you the solution. Okay, now, for example, in our credit spread mastery program, the hardest thing I have to do is to get students to break their false beliefs, the ones that they already have, when they come into the program. They understand the system, they understand how to find trades, place trades, all that that's easy for me to teach. But then they keep trying to use their own beliefs, and their things that they learned into the new system. They're taking their old skills, trying to apply it to a new system. And that's why they don't have the success that they could have. That's what causes them problems and losses. Now, the students that have the most success, are the ones that are new to options and just follow the program. They just take what I say at face value and just do it, you know, it's like run Forrest run, just do it be like Forrest, just do it. And the results for them have been crazy, amazing. I mean, so good that you won't even believe them if I share them. But they're not my results, right? They're the results of students. And there are so many of them that are getting similar results. Because they're doing the three steps. They're believing what I tell them, they get developing the skills, and they're developing the work ethic, the character. Now, on the other hand, we have the students that have been trading for a while. They keep trying to do it the way that they've learned to do it, and they keep struggling. Right now they still make money, they still end up doing well. But they're not doing as well as they could. And that's where they get frustrated. They see it in front of their eyes. They're like, Man, this is working. This is working. It's working for other people. Why isn't it working for me? If you ever had that problem, if you ever felt that way that oh, my God, this thing works. I see it working for others. It's not working for me. It's because there's something wrong with the belief level, or maybe even the character level. But most likely, it's the belief level. If your why is strong enough, if you really, really, really want to make it work. That's your character level. But if the beliefs are wrong, it's still not going to work. Okay, now this is crazy to me, because I do the same thing. I'm preaching to you about it. But I do exactly the same thing. So don't feel bad. But if you want to succeed at something, this is a shortcut, I'll give you the secret, the best way to do it is to have someone who has done it before you who has the success you want, and then have them point out the beliefs that you have that are holding you back, basically, get some coaching. Hire a coach, and that person will tell you why you're being held back if they're any good. Okay, now, I heard a podcast today where a guy, the speaker, the guy doing the podcast, he said he hired himself a coach for $30,000 an hour. 30,000 an hour, and he had to buy for hours. He had to pay $120,000 for a coach. Now that's freaking crazy, right? That's amazing. But for him, it was worth it. Because this guy's already making according to him, he already makes a couple 100 million dollars a year. So for him $100,000, $120,000 no big deal. But, I mean, it is still a big deal. I bet you still a big deal. But he's looking at it in a different lens. He's not looking at like, Oh my God, that's 120. He's looking at it, like, what can I get out of this? What can I make from this? Like, what is my return going to be? What is my value going to be? Okay, the answers that he got, were worth a lot more to him than the $30,000 that he had to pay for one hour. He was able to go to the source to somebody who had already done what he wants to do, and got the answer from the horse's mouth. He was able to say, Hey, this is my problem. What do I do? This is my thinking. I'm thinking about doing this. Should I do this? Yes, no, why not? Oh, you did it before? Oh, it didn't work for you. Okay, that makes sense. What about this? Oh, I see that now. Oh, my God, I didn't think about that. I didn't know anything about that. What does that mean? etc. So not only does he know what to do, but he knows what not to do? What not to waste his time on what not to waste his money on. Right? He's saving his time, which is a lot more valuable to somebody who's making 200 million a year, than the $120,000 that it cost him. Now it's the same with most traders online, I see it every day. They said that they would never pay to learn to trade. Oh, yeah, I'm not going to pay to learn trade, I'm going to figure it out myself. I'm going to do it myself. That's great. If you want it to take forever, do you really have forever to learn? I mean, think about it. Let's just say it takes you five years to learn how to trade to be successful to be profitable consistently. Okay, that is five years of profits that you never get back. So either you have two options, right? Let's do you can do it yourself is gonna take you five years. And in that five years, you get some winners, you get some losers, you lose some more, you get some you kind of break even. But after five years, you know what you're doing. Awesome. trader number two, trader B goes and hires a coach takes a mentoring program. And he learns it right away. Like let's say he takes credit spread mastery, and he learns how to trade in three months, and it becomes profitable. And so after three months, he's profitable for five years. Whereas trader A is still breaking even after five years, because he's learning it on his own. He didn't want to spend the money for the coaching. Okay, that's five years of profits that trader a could have had, but he'll never have, he doesn't get it back. The years of profit could compound into millions of dollars. That's what these guys don't think about. They don't think about long term they don't think about they're just thinking about the short term like, Oh, I have to pay for coaching right now. No, it's not worth it. But they don't look at the long term compounding image 10, 20, 30 years down the road. Right? Now, I'll give you an example. I put aside $20,000 for each of my kids, in their IRAs for them, three kids 20 grand each. Okay, now, when my oldest turns 65 when he retires, and he can take money out of his account, even if I don't add another penny. And if I only leave it in an SPX index fund, like an index eval, put in the index fund, it matches the stock market. I don't touch it. We don't add anything. We don't do anything. It's just that 20,000 just growing, growing, compounding, compounding, when he's 65. He's gonna have over a million dollars in that account. That's pretty good, right? I mean, the kid is 10 years old. He's gonna have million dollars. He's a millionaire. That's amazing. You know, hopefully he'll thank me. Might not be around but hopefully he'll thank me Like, oh, yeah, my Dad was a great guy. I don't know, hopefully, right? Fingers crossed. Now my youngest, my youngest child, I also put 20,000 aside for her, when she hit 65. Same thing, no extra money, no touching it just index fund, her account, her 20 grand will turn into over 2.5 million. What? One kid gets 1,000,000, 1 kid gets 2.5 million? What's the difference? Well, they're six years apart in age. So the oldest, he's got six years less of compounding. And that means over a million dollars difference in account size. Six years of compounding means over a million dollars. So yeah, when you try to learn something on your own, you're gonna pay for it, you're paying, you're paying a lot more than it costs to hire a professional to teach it to you. Let that sink in. You're still gonna pay, you pay this way you pay that way. One is harder, takes longer, and you got to pay more. The other one, you get to learn the right way quicker. And you have somebody on your side, and you profit sooner. So what was my greatest investment? Investing in coaching. It had to be the greatest return on investment of anything I've ever done. Okay, I mean, I read a lot. I've read lots and lots of books. I've been to seminars, I've watched videos, but nothing can replace that in-person coaching, where somebody is talking to you looking at your situation, looking answering your questions, it made a complete world of difference. There was one program I joined three or four years ago, I think was like four or five, a four year five years ago, not sure how many, it was for $8,000. And I was like, and I don't know, if I want to spend $8,000 for this. There's a lot of money. It was for business marketing and business development stuff. And I paid for it. I was like, Alright, you know, I'm gonna plug it in, I need some help. I'm gonna do it. In the first, very first session, I went up to the main guy, and I asked him a question. I said, Look, man, I have this specific problem. It has to do with my technical stuff that we're using in my business, my systems, my software, what do I do? I have a problem. What do I do? Okay. And his answer, he looked at me, he goes, "Oh, that's simple", you know, in our business, and this is him talking goes in our business, we use this system, we set it up this way. This is the guy that sets everything up for us. So why don't you talk to him, I'll introduce you, you talk to him. And he'll set up the whole thing for you. Now, I'm getting a referral from somebody who's doing millions and millions of dollars in revenue, somebody that I look up to somebody that I paid to coaching to teach me because I want to be where he is. Right? And he's telling me to use this software that he uses, and to use this guy that he also uses to set everything up. Is that not the ultimate shortcut? I mean, that paid for the 8 Grand right there. Just that one introduction. Okay, that was it. One sentence, I followed his advice, I hired that guy. And guess what? That guy was an idiot. a total idiot. It was a waste of money. And time, he promised to do something he tooks part of the money. It took him a year and a half, and he still hadn't done it. But what it did was it got me on the right path. It got me that software, it got me thinking along those lines of how to improve my systems and my processes. And then eventually, I did find somebody to finish the job. I got to find somebody sooner if I wanted to, but I was still being cheap. And instead of hiring somebody else and firing that guy, I was like, No, no, he's gonna do it. He's going to do it. I kept pounding and pounding and kept pounding. Finally I gave up. If I'd given up a year earlier, I would have been done a year sooner. So I found somebody else to finish that job. And then that helped me reach my goals in that particular area for Option Genius. That one sentence, that that coach told me, not one cent is telling me what systems they use was worth the whole price of the program that $8,000 that I paid for them. But I still get value from that program in other areas. Even years later, I was still looking at some of my notes the other day from that program, and it's still giving me ideas. I'm still helping me out. Okay, so save yourself the frustration of learning things yourself. If I could start all over again, which I can't go back. It would be cool, right? If I could start all over again. That is the thing that I would change in my own life. I would have found somebody who was trading profitably the way I wanted to and paid them to be their apprentice or be in their coaching program, or whatever, and then followed exactly what they say. That's the biggest thing. Yeah, we can pay people. But when we don't follow them, we don't believe what they're telling us. We bring our own misconceptions and our false beliefs to a new system. It doesn't work. So you need those three things. You need the skill, need the character traits, and you need the right beliefs. All right, folks, that's it for this episode. Much love to you and trade with the odds in your favor. LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... 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48 minutes | Aug 26, 2021
How Nelson Makes 10% A Month With Credit Spreads - 107
I have the pleasure of introducing you to Nelson Wennerlund. I call him Wonder Man. And you'll see why his results and his accomplishments have been amazing. So, without any further ado, let's just get into it. Nelson, how you doing? Nelson: I'm doing great today. Allen, how are you? Allen: I'm wonderful. I'm happy to talk to you. You're one of my one of my favorite people to talk to you. Nelson: Oh, good. Yeah. Allen: So I know a little bit about you know, you share a little bit about you know, who you are and what you do. But for our audience, once you once you tell us, you know, give us some background into who is Nelson, and how'd you get to where you are today. Nelson: Well live outside of Nashville, Tennessee, newly retired officially about five years ago. But I've been keeping busy with doing this, that and the other and volunteering. And in some of the stuff that I've wanted to do that I hadn't had time to do spent 25 years in the restaurant business, I spent 15 or 20 years, almost 20 years in the financial services business. And when I was 60, I decided that I'd had enough. And I retired with my wife's blessings. And so I've been kind of just volunteering and doing stuff since then. So trading, what I've been doing as far as trading back in the 90s. I started, I got a thing in the mail from a guy won't mention his name that was gonna teach me how to make tons of money. Trading commodity futures. Allen: Mr. Roberts. Yes. Mr. Roberts? Nelson: Yes Allen: Yeah, I got a quote. I had it. I don't know where it is now. Nelson: Yep. And so actually, I won and lost a few small fortunes for me at that time doing that for about I mean, I dabbled in anatomy for about 15 years. Wow. So, you know, I would I would lose, and then I would, you know, get all excited, you know, I'm gonna do this again. And, you know, I had a few small wins than that, you know, get over excited and make a dumb move and all that. Yeah, you know, same story, you know, so, and so I, but I did, you know, I, I did enjoy doing it, actually. And so, and then, but in 2010, I stopped and focused on the business I was part of and, and then I got something else in the mail about selling naked puts options. And I had been on the periphery of options, but it was just, you know, I didn't understand them. And it was confusing, seems like a sucker's bet to me, and all this kind of stuff. But I didn't do any research in it, that did research for this kind of bought this course and started doing just some naked puts, and actually did really well at it, you know, identifying stocks and this kind of thing, following this certain method and this than the other and so, I thought this option thing one so bad, after all, I can make some money at it. And I wanted to be able to do something in my retirement years that would bring extra income. Nelson: We had enough to live on wasn't really done it to, you know, have to put food on the table, but wanted to, you know, help grandkids with college and, you know, that type of thing and give to causes that we like and, and help people out and that type of thing. So we wanted to so that's really what I've got into it for. Discovered Option Genius, actually, by just wanting to get into option trading, and just went on the internet and started, you know, looking at, you know, I just counted all the guys who were getting on big airplanes, and, you know, like, they owned them, you know, and stuff like that. And so, you know, I figured that that was, I didn't want something that was get rich quick, I knew that that I'm smart enough to know, that didn't work, that doesn't work. You know, um, you know, the turtle won the race. And so I wanted something that was understandable, was consistent, was slow, was high probability, all that that's fits my personality. And when I ran into you Allen and just listen to some of your stuff, and all that, and, you know, that fit with my personality, I'm sure there's some other one good ones out there. But there was a lot of adjusting and doing this and doing that and day trading and, you know, all this kind of stuff. I don't want I didn't want to do that. I don't have time to do that. I have other stuff going on. So that's how I kind of, you know, options fits with my personality and doing the passive trading the are already owned about some pretty good positions about 10 stops. And so I just started doing covered calls. Allen: And this was in your retirement account? Nelson: Yeah, yeah. It's all in my retirement account. I don't have a separate account. Allen: Okay. So everything stays in there? Nelson: It stays in my retirement account. I've dabbled with another account. But, you know, most of my money's in my IRA. Plus, I don't have to pay any capital gains tax on anything in retirement funds. So that helps to, you know keep a little bit more. So that's, you know, with naked puts with an IRA, you know, it's there harder to do so, and yet about the full amount. So I don't, you know, don't do as many of those unless a stock is getting close that I own that I want to buy more of, and that really hadn't happened much lately. So.. Allen: Now, you said you were in the financial services? Or what do you do this? Nelson: I was a, I started out as a loan mortgage originator like you used to do. And then I was offered a partnership in a mortgage company. And I took that and then we got gobbled up by big fish and I retire. Allen: Oh, very nice. So is that how you were able to retire? I mean, cuz you did it at 60. So that's a little bit earlier than most people? Nelson: Yes. So I was able to.. my partnership was, I was rewarded handsomely. And, and we were a successful mortgage firm, local mortgage firm. And we did well. And so I was rewarded. And I'm very grateful for that. Allen: That's awesome. Cool. Yeah. So in your spare time right now. So you've been retired? For what? like five years? Six years? Nelson: Hmm hm Allen: Yeah. Okay. So basically, you're, we're looking for something to do. Yeah. And that's, that's how you stumbled upon and say, Oh, let me let me see what this is all about kind of thing. Nelson: Yeah I wanted to build residual income, not to actually, you know, to live on day to day, but to just supplement some traveling and stuff. Without I mean, you don't know what the future holds. We don't know if, you know, I don't want to be I mean, obviously, my wife and I don't want to be a burden to our children when we get older. And so we want some of that stuff built in, you know, that we would have enough money in our retirement funds that if we had, you know, to go into assisted living or something like that, and there would be money for it. And so, and that's really what we wanted to that, that that was my main aim just to build grow over time. So if that happened, we would be covered. And if it didn't happen, we would have something to leave our children. Allen: Sweet, nice. I mean, it's, it's rare to see people in that position. Most people are the other way around, you know, they're becoming part of the sandwich problem, I guess they call it you know, where the, the kids are taking care of their own kids and then taking care of their grandparents or their parents. And it's the they're getting squeezed on both ends. Nelson: Well, when I was in the mortgage business, just quickly, when I was doing loans for people, and I did over over 2000 loans at a 10 year period. It was shocking how many people had little or no, nothing in the retirement funds at even 40+, and they had a company that would match. And they just said I can't afford it. I couldn't afford it. But yet they had $800 truck payment. Allen: And they're buying a brand new house. Nelson: So I mean, it was like I you know, right there I'm thinking that's not gonna be me. Yeah, so, yeah, this is another thing that motivated me to, you know, find something that would build on my retirement cuz you don't know what's going to happen. And you know, that retirement fund can go quick. A six figure retirement fund can go quick. You may not think so. But it can. Allen: Yeah, no, I mean, one heart attack. So that's right there. Nelson: Right. Allen: So now you're, help me out here. You're you're over 65? You are 65? Nelson: I'm 65. Allen: You're 65. So technically, you can take out money from the IRA? Nelson: Yes. After 59 and a half, I could. Allen: Oh Okay. Okay. So basically all the money in the IRA that you're trading is growing, no income tax, no, nothing. And then you can take it out for like you said, your travel and your charity and all that stuff. Awesome. So you like the best of both worlds? Nelson: Yeah, well, that's my plan. Yeah. Allen: Cool. So did you try anything else before that you haven't mentioned yet before Option Genius? Nelson: I've dealt with in a couple other folks. I don't remember their names now. But they were they were very educational and everything. But you know, the more I got into it, the more confused I got quite honestly. And they started talking about like, and I'm sure if I studied it, it would be fine. But like butterflies and doing this and taking this off and this and that and the other, like I don't kind of want to do all that. Okay, I'm not a day trader and I don't want to, I don't want to be that involved. I want to be a passive trader. I want to get on my computer 15 minutes every day. Unless it's you know, trying to do a, you know, doing some research on a trade, I wanted to check my trade, take 10 minutes and go do what I want to do. And you're the one that offered that. Like, I mean, I could have done it with the others, but I would have probably lost all my money. Because, you know, again, they're, you know, listen, if you want to do all the adjusting and all that stuff, that's fine. But if I've got a great trade, I don't want to have to adjust. You know, I know you have to sometimes, obviously, but yeah, you know, and I had to last month, but still, you know, yeah, I don't, I wanted something simple, strategic, easy, high probability, you know, just prod along, if I can be, if I can, if I can go in the right direction, you know, which is up, just incrementally 3 to 5% a month? I'll make, I'm gonna make millions. You know, 5 percent a month. Allen: Right. A per month. Yeah, yes. Yeah. Nelson: And that's, you know, quite honestly, your course. That's easy. I mean, to me, it is so.. Allen: I mean, you've proven it, right. Yeah. I mean when I first got started, when I, you know, options and stuff, I really was like, "Oh, yeah, you know, the adjustments" because you do a trade. And then you can, if it goes bad, you can adjust it, oh, man, I'll never lose on any trade, I'll just be able to adjust my way out of it. And you learn really quickly that the adjustments, they you know, they add more risk to it, because you're adding more money most of the time. And then if it keeps going against you, then the loss just ends up really much bigger than you anticipated in the beginning. And then, you know, I guess the older I get, and really the the more assets I have, the less I want to be sitting in front of the computer, and the less I want to be worried about adjustments, and hey, what am I going to do tomorrow? Is everything okay? And being stressed out about all that time, so I totally hear where you're coming from. So I'm sure everybody's wondering. So what have your results been? Nelson: Well, in 2020, despite I will mention this number, despite losing $92,000 in about 45 minutes on that Tuesday after the COVID Allen: On the COVID crash? Yeah, the COVID bear market? Nelson: Yeah you know, they've taken that hit, I still was up 24% for the year. And so, and this year, so far, I'm up about 56% through the first six months. Allen: So 56% in six months, right? Nelson: So I'm sure I'm gonna break the 100%. thing, and I'm gonna get my award from you. Allen: I'm still working on that. We haven't come up with it yet. But yeah, definitely want to, I definitely want to get you one. So what strategies are you doing? How do you get the 56%? Nelson: Well, I just I do just almost exclusively, I do make some money on covered calls. I'm very conservative, because I like my stock. And I don't want to be I don't want to call the way unless I want it called away. And so that's only happened once this year. And so that's really, you know, otherwise, I'm just, you know, between that I'm just trying to lower my cost basis on my stocks, covered calls and in reinvesting the dividends. And so but I do just vertical spreads almost. And, you know, this summer, I'm doing iron condors because that's what your training told me to do. So I like to do, I'm learning more about them. And so mostly I just do vertical spreads. I'm also, I also do weekly and daily spreads on SPY. Allen: Okay Nelson: I use a high probability 90% Delta, or 10% Delta, I should say, I'm an optimist so I always say the 90%. 10% Delta and, you know, I've had an occasional loss, but that's really helped also with my return, but my bread and butter is still the monthly vertical bull that really a bull put spreads is what I've been doing this year. So far. I haven't seen a whole lot of really great call spreads, but mostly put spreads from a $5 put spreads with, you know, 82%, 83%, 84%. Making 10% just doing it over and over and over, you know, on the monthly and I haven't had a loss yet this year on that. Have on the daily and weekly. Allen: But okay, say that again, you've been doing these like these, we call them layups, right? So the layups, you've been.. Nelson: Yeah, yeah. Allen: Since January. Is that when you started with the layup? Nelson: No. Well, I've been doing. I mean, I had been in the course. Allen: Okay. January 2020. Allen: Okay, so you've been doing them. If you were in the past year in the passive trading formula program in the course. And so you were that in January 2020. And then from April 2021 that's when you join the layup mastery program to.. Nelson: Yeah the credit spread Allen: Right, the credit spread mastery and then since then you have not had a losing trade at all? Nelson: Not on my vertical spreads. I have on my daily head a couple of my daily and one of my week Allen: Right, I mean the but those are obviously those are riskier. Yeah. But that's amazing. How many of the monthly trades have you done? Nelson: Oh, gosh you asked me that. I'm probably I averaged about five a month, five to six months. I would say 50 to 55 spreads, I'm guessing. Um, That's not right. You know, 30? Probably around 30. Yeah. But in June, I only did one because I was doing those iron condors so. Allen: Okay, so you're not counting that. Okay. All right, but that that's phenomenal. That's amazing that you've had so much success with that one. Simple trade. Right? Yeah. That's cool. Kudos to you, man. That's amazing. so on. So you said in 2021, first six months, you're up about 53%? Or 56? I don't remember.. Nelson: 55% Allen: 55% Okay. And then in 2020, even after the big market crash, the bear market and you lost a ton there. You still were up? 24% for the year. Yeah. So before you got or you found option genius, what were your returns then that you remember? Nelson: Oh, gosh, they were really super hit or miss, I was basically breaking even. But I was only trying, I didn't have scaled up trading. You know, I mean, like I do, you know, I was really basically trading two or three contracts when, instead of, you know, 40 and 50, like I do now. So.. Allen: I mean, I wouldn't blame me if you if you don't have confidence in the system, right now, if it's hit or miss, or it's when a couple of times, and I lose, and then I win, and I lose, it's there's nothing there to give you the ability to say, you know what this works, I'm gonna start putting more money at risk. Nelson: Right. And that, this, that this strategy, I mean, it was a good knowledge base. But I didn't care for the I just didn't care for the strategy. It didn't fit my personality. So it was a little half flying, you know, doing set, you know, doing 30 deltas. And that's just too risky for me, and then adjusting out of that in, in the couple times, I paper traded all that and adjusted, I still lost money. Plus, I'm not a guy that wants to keep a losing trade a loser and try to eke out a few dollars. That's just my personality. I rather let it go and move on to another trade. So yeah, but yeah, that's just me. That's just my personality. Allen: Right yeah. Because if you come in, you know, 30, delta, even sometimes 25, you're gonna end up adjusting a lot more than if you come in much lower. It's rare that you won't have to adjust if you come in at that high. So, yeah, okay so.. Nelson: I don't need to actually, I don't need that action to make me feel like I'm a big time trader or anything. That makes sense. Allen: Yeah, I mean, some people they have that mean, and some people they actually get addicted to the, to the, you know, all the madness and watching the talking heads on TV all everyday looking for ideas and being in the chat rooms. And, oh, what do I do now? What about this? Oh, that's the craziest thing I see. You know, people, they put trades on. And then they go to like a Facebook group or something online forum, they're like this My trade, I'm in trouble. What do I do now? And then they just get advice from who knows who on the other end? You know, people that maybe have never put a trade on before they're giving them advice. Oh, you should do this. And you should do that. It's like, Ah, no, that's not how you do it. Nelson: That's what I think it's great that you Allen, one of the things is that if I have a question, I can shoot you an email and you'll answer back. So and and that's one thing that you don't get with other folks. I mean, you might get somebody answering you back, but you don't know who got out. Allen: Yeah, I mean, that's why we you know, we try to keep our system smaller so that we can actually give that one on one attention and so I can like right now I'm handling all the trade questions, you know, so anything that comes in. Now we do have somebody that we're training to help take off some of the load but for any member, any student they get a direct answer for me so that's something that I want to keep doing. Okay, so what was it that really turned the corner for you? Was it just that you found a strategy that work that fit your your your style or your your personality or was it something else that helped you go from hit or miss to wildly consistently profitable? Nelson: Well, I really, the way he does class, Utah in the in the course materials and stuff, were super understandable to me, and, and so you know, I'm a guy that, like I made some rules not and so when this happens do this I'm that's sort of how I'm wired. And you know, I don't I'm not a guy that's gonna look at a chart and sit there with angles and all this kind of stuff, I can get a lot of support and resistance and, you know, the simple stuff like that and moving averages, and, you know, but it's really, you gave me a sense, and a confidence that if we do this, most of times, you're going to come out as a winner, or you're going to be profitable, and you're not looking. You know, if you're looking for 10%, monthly, month after month after month, and you know, and even if you make less than that, that's okay, you know, and so I mean, you don't go into it, like, Oh, you know, you're gonna make 80%, you know, and, you know, some unrealistic expectation where people do they just end up quitting, that's not the goal, the goal is to, you know, figure out a strategy. Nelson: And one thing that you taught me is that, you know, you can look at a chart and stuff, and it's really incomplete. You know, it's incomplete, because you don't know what's gonna happen tomorrow, perfect example, is this past Monday. I mean, you went from Friday to Monday, that just crashed red, now it's up, you know, you know, a whole, you know, for its back even so, you know, you just don't know. And if your eye tells you, they know, they're lying. So you know, so you don't know. So you have to take that information, and make in take what it says to you. Make an informed decision, and then you just have to put the trade on, I learned that from you. And that revolutionized how I did things because to me, I always was thinking, "Okay, is there something else I need to know?" "Is there another indicator that's gonna make me feel all warm and fuzzy?" and you know what, there's not one. And so I take a few things that I look at that I think it's going to continue in that direction, it may not. And then I'll make a high probability bet that it's going to, instead of a low probability bet that it's going to end so. And that's an edge and a strategy that totally fits me, I can do a trade that's got a 85% probability of winning, I mean, if you can go into a casino, you'll own the casino in about 4 hours. Allen: Yeah, they won't let you get away with that. They're either beat you up, or they put you in jail or something. Nelson: You go into the back room. Right, so that, like, you know, that I was I monitored in statistics in college. So that made a big sense to me, like, you know, I know that, that I'm going to lose some time, it's inevitable, but the probability that I have a greater probability of winning than losing, and so that's a strategy that's an edge that I think works for me, you know, once it's passive, it's passive. And so, you know, I think that that right, there is what made me turn the corner, and in your credit spread mastery course, showing that over a period of time, how well you did with your count, through ups and downs was a real inspiration for me also not tucked up for real inspiration for me to think, you know, a regular person could do this. You know, you don't have to have an MBA from Harvard, or some somewhere else to, or something to do all this. So a regular person who is serious and, and can do the same strategy that works over and over, can really build upon it, and, you know, reach their financial goals. Allen: Yep. And I mean, I'll tell you the truth, like, you know, you took the rules, you took the system, and you've done better than I have at it this past year. Seriously, you know, you're from what you said, you have a losing trade, I haven't had losing trades. So, you know, it's like, maybe I need just need to give you my money be like, Hey, can you manage this stuff for me? But um, so now that you have a decent size portfolio, so you have a bunch of stock that you've had for a long time, and you do and the spreads, and then you're also doing some dailies and weeklies, so how would you break it down in terms of percentage? How much do you do in each? Nelson: So I would say 50% of my IRA is in 10 Stocks. Allen: Okay Nelson: Maybe a little bit higher that but less than 60%. And then the rest, I just keep keeping, you know, I keep it in cash, but it's cash that I use to trade spreads and then I have backup, you know, reserves that I have for emergencies and stuff like that you know, reserve fun or rainy day fund or emergency fund whatever you want to call that so I have a really even have a savings account so I can because I can get this money out in a day, right? If I had to so I have a non that something I'm not going to touch that you know and then I have the rest of it. I really considered cash that I will invest in my spread trading. Allen: Okay, and how much do you do monthly versus weeklies or dailies? Nelson: Most of my I would say 60% of my that I do and or maybe 70% I do in monthlies Allen: Okay. Nelson: Okay, and then the rest I will do in three day-a-week, I guess the dailies, and then the rest of would be on the weeklies Allen: And do those take a lot of time, the weeklies and the dailies. Nelson: No I have a system that I sort of go by, but I, I use the same system for the monthlies as I do for the weeklies and the dailies. Really, it works. I mean, I use a higher Delta, Delta. And so and I don't make you know, 10% obviously, I make three to 4%. But, you know, that compounds over, you know, every week, so.. Allen: Definitely, yeah, yeah. So now, like once you turn that corner, right? And once you started doing well, once you started getting confidence and scaling, what was something that surprised you about the whole process? Nelson: The process and how we do it is scalable. That's what I was sort of surprised, like, you know, I never, I didn't think that, you know, I figured out what I had to, you know, maybe have a new strategy by now that maybe this didn't work over a longer period of time. And it's a surprise me that it actually, I mean, I know, yeah, and I know, you've said this, but, you know, nothing lasts forever. And I figured I'd have to be switching strategies or something. And I will, if there's, you know, a long program, or you know, long bear market, you know, I'll have to be doing more calls and puts, obviously, and all that type of thing. But the rules still apply, I would think it's pretty much it's the same strategies, just the other side is the opposite. So I'm thinking, you know, I'm always tweaking I'm, I mean, I'm always evaluating, I should say, you know, the strategy, you know, I mean, I'm always paper trading lower deltas to see, you know, how I would have done at the same trade, you know, and I mean, in this market, even at an 80 or 20, delta, you know, I'd probably still doing really well, but you know, I don't want to own up I would say on the weeklies, but and then on the monthlies I always paper trade them as if they were 30 Delta, just to see how would go and they haven't been that great on a 30 Delta. But they've been, so I'm thinking, why would I do that, like, I'm not going to put my account at risk over a few more $100 or so you know. So again, I'm I want something that's consistent, sustainable over the long haul. And I'm not looking to get rich quick. I'm not trying to, I mean, I'm doubling my account, I'm going to double my account, if you're just by doing regular stuff, not by going, I'm gonna double my account. And so I'm going to take, you know, unnecessary risk. And so I'm just not going to do that. I don't want to have to tell my wife like you had to tell your wife that "Oh, I'm sorry, honey, but our IRA is gone". Yeah. Like, I kind of want to have that conversation. Allen: So okay, so on that on that note, like, what are you doing in terms of like a hedge? Do you do anything to see like, okay, hey, if stuff goes bad, do you have I don't know, like a process or something that you Hey, this is what I'm gonna do? Or do you do you know, buy long puts or something to hedge you? Or? Nelson: No, I don't I haven't gotten into that. I'd love to learn more about that. I do, I plan every one of my trades completely before I get in it. Okay, I'm going to exit this no matter what, you know, for in the course and I do this at 25%. I'm getting out. You know, but I haven't explored the, I've heard you talk about it. I don't I haven't done the time, or taking the time to try to understand, you know what that's about? And I mean, I do understand it, but I just haven't done it. So but I'd love to learn more about that. But I haven't had the need to really learn a lot of it. Does that make sense? Allen: Yeah. Yeah. I mean, from what I know, you have already stuff built in, you know, with the stocks you like you said he even if they go down 20 25% you're still gonna hold them? Yeah, you still want them, you still want to get their cost basis down to zero. So you're gonna keep doing that no matter what happens with those, you're still gonna be cash flowing them, you know? Nelson: Exactly, exactly. Allen: With the spreads, you have a certain number, a certain percentage of your portfolio, it's not the whole thing. And you have your you know, when you're getting out, right? Nelson: It's non negotiable to, you know, I'd get out at that time. You know, I've gotten out before and had it turned around on me, but you know what, but I don't you know, I don't worry about that, almost. If I do everything I know I can do, and do it by the rules. And, you know, I know that I'm going to win more than I lose. And I'm, you know, preservation of capital is the rule for me. You know, I don't, I don't need to prove myself right or wrong. You know, when it's out. It's out. Yeah, get out. Allen: So it seems like you do have a plan in place. You know, it's not like you're just doing whatever And not even thinking about it. If stuff happens, if things go bad against you, then you you already know what you're going to do. I mean, that's pretty good enough, I don't, you can go further with it. And you can say, yeah, I'm gonna hedge it this way, or I'm gonna start doing pairs trading. And, you know, there's so many different ways that you could hedge yourself. You know.. Nelson: Maybe that's extra work I don't think I need to do right now. Allen: Yeah. And there's always a cost involved, right? So either time and money, or one of the other or so cool. I mean, as long as you're, as long as you're able to sleep at night, then and you know what to do, and you're safe, then that's cool. So, when you when you first got started, what was one of the biggest challenges that you had getting started? Nelson: Pulling the trigger to do a trade, I didn't have the confidence. I mean, listen, I know I did, I've done a lot of paper trading, and it's not the same. And so that $100,000 in that paper trading account is not real money, and, but my $100,000 in my account is in so and so I, you know, pulling the trigger really was, you know, was the hardest thing to do. But once I did it, and once I knew that I didn't have to know everything, before it started, and that there was a possibility to lose, and I was able to accept that loss, because I still believed in the strategy. You know, for an occasional loss, then that helped me move on in because, you know, and, and not be worried, you know, if I've done something dumb, in lost, that would have been bad, but if I follow the rules, and still lost, you know, and then that's just going to happen, and that's just life, and that happens in business. And that happens, you know, in life. And so, you know, in trading is no different, you know, my egos not tied to my trading. And so.. Allen: That's a big deal. That's a big, that's a big distinction. Nelson: I don't have to be right, you know, and, you know, because sometimes I'm not right, and that's just life. And so I don't, I had that problem, at first when I was trading commodities. And I just had to be right, you know, and, and I wasn't some of the time. So.. Allen: Well, that's the thing with the way I mean, if you're buying commodities, or buying stocks or buying options, you have to be right. Otherwise, you lose money, you don't have a choice, you know, but with our way, it's like, yeah, you know, I could be wrong on this direction, and I can still make it, you know, it'll still might work out, it doesn't have to be like you said, if you take incomplete information, make your best educated guess on it. And then you put the probabilities in your favor, and then most of the time is going to work out, even if you try to screw it up. Nelson: Well, that's a great edge that you taught me, not only myself, but you know, the other students that that that gave me some coffee, that gave me a lot of confidence to go forward and pull off trades. And that gives me confidence in scaling up my trading also, you know, we're, um, you know, you know, I'm up to you know, trading 50 contracts on each spread. So, and that's, you know, that's, that's a lot of money. There. But, you know, it's, it's just is what it is, you know, I mean, I've got the confidence that it that, you know, you put up high probability trading in your favor, you're gonna win most of the time. Yep, if you have to get out and it should, whatever it is. Otherwise, it probably turns into a low probability trade. Allen: Yep. And so, as you've been through the process, as you, you know, you started out learning and you implemented now you've, you've been doing well at it, what are some of the takeaways that you would want to share with our listeners? Nelson: Well, I tell you, my biggest takeaway would be that follow the rules. That's my biggest takeaway. I mean, you're the person that's done it. And so just bumping this takeaway is just follow the rules. If you just follow the rules, and do things that like you've taught us, then you're going to have a high probability trade, it's not coming, you're always going to win, but you're going to have a high probability trade, people get in trouble, and they do things that go against what we teach, passive trading, you know, betting on the next high flying stock, and, you know, and it goes up, and then goes down, and, you know, you're out of money, you know, that type of thing. And so, you know, that that would be one one of my takeaways. And, you know, the other thing is that this course is easily explained. And it's, it's easily understood. And, you know, for someone who's not even brilliant, you know, I was able to take it and fit it within my personality. And I guess the last thing that my biggest takeaway, too, is that, you know, you, Allen and your team, you care about your students, you know, and I've told you that before, that's no new news. But, you know, like, I know that if I send you if I have a question for you, you're gonna answer Or some, somebody on your team is going to answer me. And so to me, that's, you're committed, and your team's committed to my success. And as I said, it's not a tag word. I mean, that's, that's, I've felt that from day one. And so that inspires a lot of confidence in me, that I know that you care about not only my success, but you care about me and how well I'm doing too. And, and that's, that goes for all the students that I've seen you interact with. Allen: Yeah, I mean, we we try our best, right? I mean, we make mistakes, but we do try our best and we do care, everybody that comes in, it's like we want to do whatever we have to do to help you succeed. You know, one of the things we're looking at is we're having more customer service issues, you know, like, "Oh, I need my password", or what program should I get? or stuff like that little questions here and there. And we're thinking about bringing on somebody to take over that position. And we looked at different things to think, well, we could go, you know, overseas, we could hire somebody in the Philippines or something like that, and they get, you know, three $4 an hour and full time they're happy, you know, that's the going rate over there. They'd be more than happy at a job like that. But then there's still that disconnect, you know, and so we decided, no, you know, we're gonna keep it in house, we're gonna hire somebody here locally, that is working with us in the office. And I think I've made it a rule that everybody that works for us has to trade, like, they have to go through our programs, and they have to understand the trades, and they have to know what they are. And whether they do it for themselves or not, that's up to them. Right now. Everybody's doing it, and they're loving it. But if somebody says, Hey, you know, this is not my thing, but that's fine, but they're gonna have to know how to do it. Right? If they don't do it for themselves, that's different, which I don't know why they wouldn't, when they see, you know, they're all the results. But that's one of the things that we want to because even for employees, it's like, you know, I don't want you just working, I want you to better your life as well. So, if we're doing it for customers, and clients and students, then you should also be benefiting from that as well. So that's something we've implemented that I'm proud of. So Nelson: That's great. Allen: Yeah. Cool, cool. Cool. So what do you think the future holds for you now? Nelson: Well, I'm, I'm going to keep slowly, and hopefully, I'm going to still be successful, I'm going to keep, you know, scaling up my trading slowly, you know, I mean, I have a certain I have a certain amount that I want to have in my account, by the time I'm 75. And so I need to, you know, keep compounding it and, you know, keep trading and, you know, keep just scaling up, I guess, you know, I still believe in the, you know, I can't see the strategy changing unless some fundamental part of the market changes where you can't do options anymore, or something, you know, I'm gonna, I'm gonna keep adding on, I'm going to keep it, just add on some more, you know, the stocks that I own, I'm gonna keep adding shares, as they, you know, as they become, you know, available at a good price. And so, you know, that's my long term goals. The other is to really feed that, you know, that type of thing is to buy more stock, and, you know, and that type of thing, so that that's really what's, you know, I'm on a, hopefully, I'm still going to be involved with passive trading and doing that in the community. That's another great thing. I mean, we have an awesome community. And that's, you know, duty. I mean, yeah, but an easy Allen, for you to say, other courses over, I'll see you later. Good luck, you know, send me an email if you need help. But, you know, the zoom calls, and we've been continuing and have been great. And it's great to be in a community of people who are like minded, who want to progress and are serious about trading and who, you know, it's, it's good to bounce off ideas. I think we've got a pretty decent group. You know, and so, it's been great to meet, you know, get to know those guys over the last few months, guys and girls. Allen: Now, I want to thank you, too. I mean, you're, you know, you're a very beneficial source in that group. You know, I mean, especially like, you took Roberta under your wing, kind of, and you kind of coached her through it. And she, you know, she put on her I've been after her for months to put on a trade. And you just, you know, you kind of gave her a little pep talk. It didn't even take that long. Hey, she Next one. She came back and she's like, yep, I did it. I did it. You know, I made money. That was like you we have no clue how big an impact that can have on somebody. You know, we've been emailing back and forth so.. Nelson: Okay, all right. I'm trying to get her here. Second one now. Allen: Cool. So I mean, I'm so I'm a bit a little bit confused, though. But do you like your living expenses, how do you that comes from another source or you take it out of your trading account? Nelson: Well I'm on Social Security, I took it, okay, now I said, I'm waiting, I get a really decent amount of Social Security, my wife still working, but we don't have any debt. So and, and all my kids are out of the house and, you know, rolling on with their own lives. And so we don't, we don't have a ton of expenses, the only, like we're going to we're planning some trips next year that we're going to, you know, use some of this money for but nothing extravagant or anything, but, you know, it's taken some trips, some places, so that's what you know, stuff like that. And then we help in help our, I don't, this, I know this is gonna be popular, but instead of giving our grandkids gifts for Christmas, and all that stuff, we just put some money in there for 429 Program, which makes their parents happy. They're not super excited about but you know, what's one less present when you're getting 20? Anyway, so you know that that's one thing that the.. Allen: Oh, the 529? Nelson: Yeah 529, the college savings program. So we just put Birthday, Christmas and everything all in there once, of course, and then take a tax deduction for that. That's how you make your grandkids birthday party. So I've been saying, Yeah, I stay busy. So, you know, I do some consulting restaurant wise and stuff like that, that keeps me busy. But, you know, so I, that's kind of in the future, maybe that, you know, I look forward to, you know, doing more trading and, like, I love doing it, like, it's fun, you know, doing it. But I think if I was like doing a day trading thing that would just wear on me, you know, and, you know, I'm kind of like, you know, I check in at about 10:30 in the morning, and about 10 minutes, and I look at the PNL just like he taught me. And if it's doing well, I just click off of it. I don't watch any of the you know, news programs or any of that noise. Yeah, I used to get up in the morning and check the futures you know, and we all weird about it and everything like that. And, but I don't you know, anymore, so. So you are like the poster child for passive trading. I took you seriously, Allen. Allen: Yeah. And so far, it's been working, right? Nelson: Yeah. Well, that's how, you know, I know, guys that are my age and have portfolios, like mine have stocks, and they're checking them every hour. Like, that's gonna make a difference. Like, they're not gonna sell them anyway. So, you know, they're checking them all time and always talking about them all that stuff. And, you know, that just bores me. Allen: Yeah, yeah. But I think part of it is also fear, because they're not in control of it. Right? Exactly. They don't know how to like, once they retire, they don't know how to generate more. Nelson: That's right. Allen: Because they've been just okay, if I go to work, I'll make money. And so I'm safe. But when I stopped working, and that paycheck doesn't come in, now, it's all this money that's, you know, in this mystery place that somebody else is running, and they have no control over it. So they lose a big part of that certainty in their emotional makeup. And it can be very, very scary. Nelson: Well, I had my money when we had our IRA course, to somebody and, you know, in 2018, I got my statement, you know, when was a great year for the S&P and all that I got my statement in my account had gained 1.18%. Allen: Okay Nelson: I said, All right. You know what, I can do better than that. I'll be a blind squirrel finds a nut every once a while, I can invest it in myself, and make 2%. I know it. So that's what I rolled it all over to self-directed, I rate myself, and I'm glad you had to, but, you know, I got that that got killed me on fees and stuff. Allen: Yes Nelson: And wiped me out. Couldn't believe it? Yeah. Allen: Every time they do something, there's a fee for something. But so Okay, so would you would you recommend Option Genius to other people? Nelson: Absolutely. Of course, it was, you know, it's been worth every, I mean, it's been the return on investment. It's almost incalculable, you know, on what I've paid for, what I paid, and just the time that you've invested back into me, it's been unbelievable to me, you know, so, I mean, I really can't even put you know, a figure on it, because what it's meant to me, be part of community to be coached, you know, to be almost mental word in some ways, you know, because if I hadn't gotten involved in Option Genius, you know, I'm sure no one myself I'd be at some other deal doing something and pulling my hair out, you know, with gains, losses, gains losses, and never had the confidence So I would recommend it to anybody from the beginner to the seasoned veteran who's just so stressed out because of their strategy just stresses them out, you know, and I don't want to live stressed out, I, you know, I spent 25 years in the restaurant business, that was nothing but daily stress, you know, so I don't I don't want to do like, I don't want to live like that. And so it's great that I've been able to be profitable, but I wouldn't learn this system if it weren't for y'all, because no one else is teaches this system. I mean, I've looked, and, you know, it's, most of them are, like, get rich quick schemes from from what I see, you know, in in, and the ones that aren't, aren't teaching, high probability method and even a passive method. So I would say, for, you know, a low stress trading system, that over time bills and bills and bills, you know, through incremental gains, you're the best. Allen: I mean, I gotta tell you 50% a year, that's not that's not incremental. There, there are people on Wall Street, they'll give their right arm for one year of 50% gains, and we're just halfway through. So we, you know, Nelson: I don't know what the second half of the year is going to hold Allen but.. Allen: Well I mean, even if you take the second year off, it's 50. For a pretty good year, you got bragging rights, Nelson: I will have to correct myself, I think that I did have a small loss on a put no, a call spread. Because you told me I need to be more diversified. Yes. Allen: So that was my fault. Nelson: So I tried to be, but I did take like a $200 loss, I think on that trade. But I'm not blaming you really. Allen: You just did. Now, okay, so now you did tell me that you did want to you had a message you wanted to share. Nelson: I did want to share for any of y'all out there that or maybe you're, you know, retiring, or you have to retire, you know, you don't want to work till you're 70 or 75, or whatever, you really can start with this method. And build your nice retirement fund or nest egg or inheritance that you want to leave your children or grandchildren. Because this system, even we even with a small account with incremental growth over the years, will get up pretty quickly. Compound Interest is the eighth wonder of the world. And compounding time after time, after time doing safe trades. So if you have a small amount, and you are 60 Plus or even 55 Plus, and you haven't done a good job of funding your 401k or IRA, for whatever reason. Doing this will get you back in the game. You know, if you follow the rules, and you think clear headed and you invest clear headed, you don't try to all make it in one swoop. This right there, this right here will be the key to doing that. And with Allen and his team that's committed to your success, you know, you almost have to try to go wrong. Allen: Well said Yeah. And then you know, the other thing I was looking at it and you said compound interest. And you can go to any calculator on the on the web, and you can say, Okay, if I put this much money, and I make this return, and if it sits there for 20 years, you know, you compound it, it turns into like a huge number. But most of those calculators, they compounded on a yearly basis, right? You know, so it's at the end of the year, in a year. So 20 times, you know, 20 years later, you'll have a big number, but that's 20 periods of compounding. But like, you know, you told me, you're doing this, the monthly trades, right. And so every month, your account is now bigger. And so you have more money to compound it. So you're compounding it on a monthly basis. So that number is just totally off the wall exponential. So it's it's x, you know, like, whatever, whatever your return is gonna be like, you know, cubed or quadrupled or whatever. I don't know how to explain it, but it's a can be so huge. So definitely, I totally agree with you, you know, you got to you got to start, right, even if you can't just give up and part of the thing is the more I study this I've been looking into longevity studies, and the science and the advancements in technology and health. And they're some crazy, crazy stuff coming down the pipeline that is almost ready to be unleashed on the world, where it's not going to be unusual for somebody to say yeah, you know, I'm 140 years old and they'll still be in control of their faculties you know, I myself, I think my one of my goals is, Hey, I'm going to live to 120 you know, and from what I'm reading and seeing in the, in the research in the companies that are coming out and, and COVID really, really really, you know, supercharged this movement, because before I was reading somewhere where you know, you go to the hospital, and about 5% of the visits were virtual, then you got COVID. And it went, it jumped up to like 80 90% visits were virtual. And so now everybody's, you know, more familiar with the technology. And the government was the bureaucracy of getting new stuff approved for experiments and trials. That was one of the biggest holdups. So what used to take 10 years during COVID, took two months, because everybody saw that there's a real need for this stuff. So we're gonna see in the next handful, maybe five years, we're gonna see some really radical new treatments and technologies coming out that are really going to push longevity to the future. So even if you're behind now, in your retirement funds, you know, you get started and you're going to have time to catch up. Nelson: Well, if you have $100,000 account, and you average 5%, which is totally doable in this system, in 10 years, you'll have $50 million. Allen: But that's per month. Nelson: That's per month, per month, you gave me the confidence that I could do that. With this system. Allen: Where'd you get that number? Five? 100,000? How would you say 50 million? Nelson: $100,000 and 5% compounded monthly will be 50 million in 10 years. Allen: Really? Nelson: Yes. Allen: Wow Nelson: I put it on a compound calculator Allen: And you're doing that right now you're doing that? Well, you're you got a head start. Nelson: That's assuming a 5% every month, you just don't know. Allen: But yeah, no, I mean, you can't, you're gonna have losing months but still. Nelson: Just have a little bit of that. Allen: Yeah, you don't need to I don't think anybody needs.. Nelson: So it is possible. And again, II think if you break it down 3% either. So you start with a 10,000 and a 5% and you're gonna have $5 million. So you know, it's, that's that's a lot of I mean, I can live on that. Allen: And that's 10 years. Nelson: Yeah, that's 10 years. Allen: That passes by like this. I mean.. Nelson: Yeah so 2% would be compounded is a little bit over, it's almost 3 million. So you, you know, 2% you can do 2%. If you had some stocks you could do you know, you could almost get 2% on covered calls a month, you know, and just keep on every month. Keep on and keep on keep on. And then you're right. It's at a certain point, it just starts going crazy. Allen: Snowball. It just goes faster and faster. And then you have to do anything. It just doesn't by itself. Nelson: That's right. And even if you subtract nearly 3% inflation out of it, still a ton of money. Allen: Yep. Big time. Big time. Nelson: But but so you don't have to put on 20 spreads every month, you know, to do that you really can, you know, you really can do a lot less than that. And, you know, and if you make 10% you really can do that, like you teach. Allen: Well, thank you so much, Nelson. I really appreciate your time. I know this is gonna be very beneficial for a lot of people. And you know, it's wonderful having people like you in the community. You know, you're so selfless and you help other people and you're an inspiration. I really can't thank you enough. Nelson: Oh, no problem. I'm happy to help any way I can. Allen: Alrighty. Take care. Take care. Bye. 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14 minutes | Aug 21, 2021
A Thing About Scaling Your Options Trading- 106
I'm going to call this episode, a thing about scaling. And when I'm talking about scaling, I'm talking about scaling up your trading in terms of trading larger amounts and larger quantities of contracts. So this comes into play, because we have several students who are going through one of our, I guess, our credit spread mastery program. And we teach them the fundamentals, we teach them how to do the trades, we work with them, we show them how to do it. And then at the end, after they've had really great success, and they're ready for it, we talk about scaling, how to go from, you know, one to two to three contracts to 510 50 100 or more, depending on the size of the account. And so, we've been having these discussions, and that's why it's in the top of my head, and I noticed something recently, that I wanted to share with you. Now, I tell everybody, and I've said this many times on that podcast as well. trading is 80% Mental 20% Physical, right? So whatever you do, the thing, the analyzing, the research, the clicking, the monitoring, the trading itself, the stuff that you do with your hands on their broker, and moving money around all that stuff, that's 20% of trading. 80% is what goes on in your mind, and how you process how you handle things, your emotions. And when it gets to, when it comes to scaling, that really, really starts to play a bigger role, the emotions, how to handle those things, that is really important to have a handle on before you start scaling. Because otherwise, you're going to have issues. And those issues are going to be very expensive. So one of the things that I noticed recently, is I was doing a I had a $15,000 trade on. And it was a normal spread that I had put on, and it had hit my goal, which was 10% for the month. So it's like a great, you know, $1500.. not bad for a trade. I'll take it very nice. And so according to my plan, I'm supposed to take the trade off, I'm supposed to finish it exited, take my money and relax, right? Or move it to another trader or do whatever. But as I'm looking at this trade, it was not in my regular brokerage account, it was in a different brokerage account. And so the way that trade looks is different. Maybe that's why I felt or felt differently. But normally, you know, most of my trading is done in thinkorswim. This one was done in a different account. And so it looked like I said it looked different. It felt different. And so maybe that's what what threw me. But when I looked at the trade, it showed me that oh, I had made 15 $100, which was great. But there was plenty of time left. There was still another maybe another week, week and a half left in the trade. And I could have made another I think $600. I said "huh this is interesting. I made 1500, I got my goal, but I can make another 600. Now 600. That's a lot of money, right? I mean, I just have to sit in it for maybe like another 10 days, the stock is really far away from from my short strike. What are the chances of this trade going bad, pretty little probabilities on my side time is on my side, you know, data is gonna pick up and every day I stay in the trade, I could probably make another 100 bucks. Do I want to do that? Or do I want to stick to the rules? Now normally, I've gotten to the point where it's not even a question. I just take the trade off. But something caused me to pause. Something caused me to think about it like $600 that's a lot of money that give me for some people that's maybe not a house payment, but that's definitely a car payment. Right. Hmm, interesting. So I paused and I thought about it. I'm like maybe I can stay in it. Maybe I can stay in it. Now here I am. violating my rules. My rules is you get your gain, you get your 100% your your 10% profit and you get out. That's it. There's no ifs, ands or buts. You get your money get up. But here I am thinking about it. Eventually, I did get up. I took my money and I got out. But it really bothered me that I was sitting there thinking about it and trying to try to reason with myself. Oh, maybe I can stay in one more day. Maybe I could stay until the weekend. Maybe you can stand on Monday. You know get the whole weekend time decay. Yeah, maybe you could do that. How much can I make? Oh, and I kept like I kept going back and forth and thinking about and checking the trade over and over again when I didn't have to. And it just was not normal. And so that's what I wanted to share with you. It's like, Yeah, when you scale, you do the same things, you know, you press the same buttons, you do the same analysis, the same stock, same trade, same strategy, everything is the same. But emotionally, it's very different. Because the numbers get bigger. The numbers get bigger, you just add more zeros to it. Now, yes, technically, depending on how much you're trading, I have to tell you that you should probably do more in hedging, and you should probably change it up a little bit your trading. So that the trade is a little bit different, maybe you're hedging a different way, maybe using different strikes or different underlyings to make sure there's plenty of volatility and liquidity and all that stuff. So yeah, it varies a little bit depending on how much you scale and what strategy you use, and all that stuff. That's way beyond this episode. But my point here, is that while you're scaling, you got to have a handle on your emotions. And it's really important that you stick to your game plan. Now what happened with that trade? It expired, I could have made the extra money. But I'm happy that I stuck with my plan. I didn't let my brain in my emotions and all that get a better of me my greed, basically, right? the greed of wanting to Oh, that extra $600 could go far, you know? Nope, I had my gain, I heard everything. Now, normally, if this was a small trade, you know, maybe you would be like, Oh, I can make an extra 60 bucks, that wouldn't be a big deal. Okay, I can get out of my trade, no problem, I'm gonna, you know, I'm a good boy, I'm a good trader, I'm sticking to my plan, I'm following the plan getting out. But when you get to taking it off, and there's still $600 left on the table. $600 leaving on the table, that feels different, feels really different. And when you get into those extra contracts, you know, that that commission adds up to then, you know, what about if it's not 600? What if it's 6000? Right? bigger numbers. So that's why you have to have a check on your emotions. And when you scaling, you know, we don't want to go from five contracts to 50 contracts, we want to go from five contracts to maybe eight, I don't even I wouldn't even want to go double, I'm gonna go step by step slowly, slowly, slowly, until you get the hang of it. One month, you maybe go to five, then 10, 15, 20, 25. As long as you're staying consistent, as long as you're staying true to your trading plan and trading by the rules that you've already set out. Right? Eventually, you'll get to the point where hey, I'm increasing this, maybe I need to tweak my rules a little bit, maybe I need to hedge myself a little bit more, maybe I need to change what my goal is, instead of making 10%, I'm going to try to make 8% and use 2% for insurance. Or maybe I'm going to change the underlyings that I'm trading in in my larger, larger trades, I'm going to go into some underlyings that are very liquid. So you change things up. Right. Now that comes with experience. And if you're one one of our programs, we can talk about that when you get to that level. In the beginning. Of course, you don't need to worry about that man as much. In the beginning, you stick to the plan, that's the biggest thing, focus on the plan, understand the plan, understand how the trade works, put it on, take it off, put it on, take it off over and over again, make it methodical, make it consistent, so that you're doing the same thing over and over again, so that you get consistent results. And then once you're consistent once the money is coming in, we can tweak it, we can improve it, and then eventually get to the point where Okay, now it's time to scale. And at that point, it gets emotional. So be careful for that when you're scaling. Be careful. And big plan here. No matter how big you get, no matter how much you're trading, you got to stick to the rules, no matter how much money is being left on the table, because you got to remember, hey, look, I got my goal. I got what I wanted. I'm playing it safe. And the more money you trade with, the more you have to keep it safe. Because I heard somebody going again on another call. And you know, this guy was talking on the podcast, he was talking to a billionaire. And a billionaire had a different mindset about investing. That billionaire was saying that, hey, when I invest in something, and they're talking about real estate, when I invest in a real estate property, I don't care as much about how much money I can make. I am more concerned with getting my capital back. I'm more concerned with return of capital, then return on capital. And so when you get to that level, when you get rich, right, when you get to multimillion dollar status, then your mind shift changes, your goals change, everything changes. So as you're scaling, when you get to that point, it becomes really I got to make sure that my money comes back. And then if my goal changes, maybe I don't need to make 10% on every trade. Maybe you make 3% maybe you make 2% even 1% on a lot of money is a big deal. Because eventually we know we've talked about this in the past that after you get to a certain level of net worth, you know, adding more money doesn't make you happier. It allows you to do more things, you know, your, your nest egg gets bigger, and you're, you know, you can buy more toys if you want to, but eventually, that stuff doesn't really make a difference in your life. At this point, we're talking, you know, maybe $30 million or higher in terms of net worth, you know, very few of us are at that level, eventually, I want to get there, you know, hopefully you get there too, and we can get there together. But for now, you know, we focused on scaling, focus on trading on a plan and getting our goal and getting out. Because the less time we're in the market, the less bad things can happen. Yes, we're leaving money on the table. But that's okay. Because I got the lion's share. You know, I got what I wanted, I'd be happy before I got into when I got into the trade was like, Okay, what would you want this trade to do? Well, I wanted to get my next goal, which is 10% for the trade. If I get that I'm happy. Good. So when you get that you should be happy and get up. Forget about whatever's left on the table. Let somebody else have the scraps, we got the lion's share. So when scaling, remember, you got to stick to your plan, keep your emotions in check. If you have any issues, you can reach out to us, we'll help you out. But I wanted to give you this quick lesson. This is something I noticed doing myself. And you know, I think mainly it was because that I was trading in a different environment. I was trading in a different software. And so what I was accustomed to seeing was different. You know, normally if I'm on my thinkorswim, I look at you know, what's my margin? And then what's my profit and loss on the trade. And if it's 10% of that I just get out. I don't even look at how much is left. But on this particular software, I couldn't see that. And so I had to figure it out by myself and like "Okay, did I get my 10%?" Yes, I did. Okay. Oh, wait, there's a lot of premium left. Oh, okay. Yeah. And so it gave me pause. But eventually I'm going to get used to it. And so hopefully, it doesn't bother me and I can stick to my emotions and stick to my plan. So I hope that helps. I hope that's something that you can keep in mind as you scale up. Again, trade with the odds in your favor, and we'll talk to you next time. LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.
35 minutes | Aug 15, 2021
How Charles Betz Trades The Wheel Options Strategy - 105
Allen: Passive Traders, welcome to another edition of the Option Genius Podcast. In this episode I have the pleasure of introducing you to a fellow passive trader, Mr. Charles Betz. He is a passive trader and he is gonna talk about how he got started with a small dollar account and how he is using the Wheel Options Strategy to generate some very significant returns. I think you're gonna enjoy this one. Stay tuned. Allen: Cool. So tell me, tell me about Chuck, tell me about Mr. Betts, you know, what do you do? Who are you? How'd you get into trading? Chuck: I'm a high school teacher, I teach math and physics. It's a second career. My first career was in the restaurant industry. And you know, things just didn't really work out for me there. So then a teacher for then going into my 10th year of teaching. And the whole reason I got into trading was when I looked at the retirement system, the pension, everything that teachers can earn, it's like one of the few professions that still has a pension, I looked at how old I was going to be when I was going to be able to collect a decent income. And I thought, wow, I'm not sure I want to work to be that old one. I'm still working and retire at that age, like, how much am I going to have left? Who knows? So I started looking into other things that could maybe do to dial that number back. And I met with a buddy of mine, I have a real estate license, that's one of the things I got into while I was transitioning careers. He's he owned a, he ran his own little brokerage for a little while, and I was thinking about maybe, you know, selling some homes or listing some homes in the summer or on the side while I was teaching to make extra money. And he told me about options. He's like, you got to check this out. This crazy thing, like, and I'd heard of them, I'd looked into different types of trading, trading currencies and, and trading stocks. You know, that's one of the things I teach in one of my math classes was investing, you know, stocks and what are they and all that stuff. Just the basics, though. And I had never heard of options. So that's how I found out about options was through my buddy knows about two years ago. Allen: So okay, only about two years. All right. Chuck: Yeah. Allen: Cool. So instead of telling you to "Yeah, come on board and you know, love you sell houses for me", he just, he put you in a whole different direction? Allen: Well, he did offer to, you know, give you some leads, I could follow up on his real estate leads. But having done real estate full time in the past, I know how much time and effort and energy it takes to be successful in that industry. Yeah. And as a teacher, you know, I already had a few years under my belt, and I, I love this job. I love what I do. But I just don't want to do it forever. I couldn't see doing real estate and then teaching. At the same time, it just I don't know where I would find the time to do both. So I thought I'd look into options or something to do with the financial markets, because that's something that can be done without as much time to invest into it, you know? Allen: Yeah. What state are you in? Chuck: I'm in California, in Southern California. I live in the city of La Mesa is just outside of San Diego. Allen: Okay. And so they're unionized teachers there? Chuck: I was teaching at a school that had a union I was part of the Union have since left that school for.. Now, I teach from home. I was another thing I reason is because I had more time, I didn't have to go drive and be in a school building all day. I work with homeschool kids Allen: Oh, interesting. Chuck: It's homeschool them. And, you know, they get to that point in their schooling where they're like, I can't help you with that math, or I don't know how to teach you Physics. So that's where I come in. But we aren't part of a union. But we do still pay into the State Retirement where we get our funds from public schools. And from you know, the same way public schools do we are a public charter school. We're just not part of a union. So, that's the only difference. Allen: Okay, so I think you might have touched on this, but besides the money aspect, what drew you to trading? Chuck: I just wanted to not have to work until I'm in my late 60s. And I knew that if I could somehow increase our income, and put that into retirement savings. You know, we're we're starting to fund our Roth IRAs, and we're starting to give money to our 403B's. And we're, we also, you know, my wife's a teacher, too. So, you know, we're starting to we pay into the 403B is like a 401k. But.. Allen: ..for teachers Chuck: For teachers, right. And I was thinking, well, gosh, you know, it'd be really cool if we could just build up our investments faster. That way, we wouldn't have to rely on you know, that number they're gonna give you when you reach that age, it's all this calculator and this crazy math, and they tell you, well, if you teach this many years, and you're this age, we'll give you this much money. And I was like, that's all great, but I don't want to be 68 when I retire, how can I dial that back? So yes, it was about the money, but it was more about how can I start coming back from 68 and make it more like 65 or maybe 62? Or maybe even younger than that, you know, so yeah, that was really the goal was to not have to work until the 68 and how does your wife feel about that? She is on board like this whole thing is just been a huge eye opener. You know, I've kind of been a sucker in my life for all of these crazy money making schemes and it's something I learned from my mom growing up she got into all these crazy money making schemes and and you know, I've met a lot of really bad decisions and so it took a while for me to realize that no, this is legit like this is real. This works this this is not a scam it's not an overnight get rich quick scheme but but it's a legitimate way to increase your income and to reach that goal of financial security a lot faster than you normally would. So she's totally on board. Allen: That's awesome. That's really, I mean, I would say it's becoming more common. But in the.. Originally when a lot of people come to us, you know, they're like, yeah, you know, I want to do this, but my wife, she's totally against it. And she just thinks, like you said, you know, she just thinks it's another one of those things that I'm getting into, that I'm all excited about, I'm gonna spend money on course, or whatever. And then, either it's not gonna work, or I'm not gonna do it. So we have that pushback a lot from a lot of people, and I get where you're coming from. Because I mean, when I was little, you know, I've done it all to you know, network marketing, you know, real estate, sales, all that stuff, everything that I could think of, I even did those chain letters. I don't know if you ever did that, where no, you get a letter.. Chuck: I know what you're talking about. Allen: You get a letter, and it has like, 10 names. And you're like, Okay, you got to send $1 to each people on the name. And then and then you change the last and you put your name there, and then you send out 1000 letters, and then all those 1000 people are supposed to send you $1, and on and on and on. And yeah.. Chuck: Oh my gosh I totally remember those. Allen: That was cool. I think I got like, $1 back. Chuck: Yeah well growing up, you know, my mom bought into, I don't know, if you remember Carlton sheets, you know.. Allen: Yup, we got his programs Chuck: She was into Amway and selling Avon, and, you know, she was always trying to find that, you know, that next thing and, and so that's kind of the mindset I had growing up. But, you know, I just didn't really learn any financial literacy from her, you know, it was, it was kind of a struggle, really. So when I, when it found this, I've always, you know, when I got older, a little bit older in life, I started to realize, like, I don't have a whole lot of good financial knowledge from growing up. So I need to be a little bit more cautious about things. So I kind of made sure that this worked before I introduced it to my wife. And once she saw that it was working, she's like, Let's go, this is great. Are you kidding? Wow. Allen: Okay, so how did you so you said, you made sure that it work? How did you do that? Chuck: So we had a brokerage account that I had just bought some stocks in, we opened it up when our daughter was born, we had a few thousand dollars in there. And you know, just it was just sitting there not really doing anything and never really appreciated and value never went up. It was you know, over the years, when I was in real estate, some of the guys in the office, we're doing penny stocks, and maybe have a couple $100 of that. And, and so over the years, there was a total of a couple grand in there, I read that a little over 3000. And so when I first found out about Options, I used that because she really didn't even know about that. It was like this account that she barely knew.. Allen: She forgot about it.. Chuck: Whatever, it's no big deal. And so I used that to figure out, is this legitimate? Is this going to work? Or is this another one of those things where I'm just going to be like, oh, there I go again, making poor decisions about things don't really work. And at first, it didn't, you know, one of the the the program and the education program that my buddy introduced me to, the thing they used to get me into it was buying options, which totally went against everything that I heard from you, and from another podcast person that I listened to where all you guys talked about as being a seller of options. But the way they presented the course and all the information, it made so much sense. There was logic and you know, a program and a trading plan. And so I put that in, in motion with my little small account and lost a third of it over the course of about four or five months. So that's my start into option. Yeah.. Allen: Yeah that's pretty common. A lot of people go that route because it I mean, it's more appealing because oh, if you buy an option, you can double your money, triple your money 10 times your money overnight, you know. And it's great, because they have plenty of examples, you know, they can show you Oh, we did this trade. And we had this trade we did this trip, they don't show you the other 99 trades that didn't do well. But they show you the few that did. So great. So how did you find out about option genius? How did you get started with us? Chuck: I was looking for more education, more information. You know, I watched tons of YouTube videos about what options are. All the Greeks and all the details and all that stuff. And I go out, mental part of my daily routine is to go out for an hour long walk, walk about three miles every morning, I'll put my earbuds in and I started listening to podcasts about investing and and then eventually trading and now options. And yours was one of the few out there that I could find there aren't that many people doing consistent podcasts about options trading. So between you and this other one that I was listening to. Again, both of you were primarily talking about selling options, and here I was over buying options and like something is.. I'm not doing something right. I'm losing money, and these guys are talking about doing something different. I gotta get this figured out. So that's how I found you guys was through podcasts. So thank you for putting out the podcast. Allen: Okay, no, you're welcome. It's been a it's been an interesting journey for the podcast. So what was the the first product that you tried with us? or what have you had? Chuck: So I went to your website, I signed up for your emails, just your basic emails, here's what we do that kind of stuff. And you sent out a scholarship request, you were offering a scholarship for your passive trading program. And, you know, like I said, I didn't have a whole lot of extra money on the side, I was using a really small account, you know, to buy a program is like, Oh, I'm still not sure about this stuff. But you offered a scholarship and your your introductory video for what you want. And you're like, you know, I've offered this before, like, nobody's ever really done anything with it. I was really kind of disappointed by all the people who, you know, I've given the scholarship to I haven't really had any success stories. So maybe you can be a success story. And I'm like, Yes, that is me. I want to be that guy. So I put together my video and I sent it in and you emailed me, congratulations. You know, we're awarding the scholarship, and I just about my head exploded, it was fantastic. So I watched all the courses. I take notes on all the courses that you teach. I have my little options notebook here that I write everything down, like, word and awesome. And just right when it all was over started, started working the plan. So that's how I found you guys. Allen: And how how's it been? so far? That was about two years ago. You said? Chuck: A year and a half ago.. Allen: Year and a half. Okay. Chuck: It was actually February of 2020. Good Time to get started, right? Yeah, I started placing my first trades, and my first few trades were profitable. I hit my profit margins, just like the plan says everything was going great. Oh, my gosh, let's keep going. Let's do the next month beginning of March, you know, open up my trades, and then Coronavirus, right. And so everything went south, but I could see like this is working. I totally get that this works. We just had this huge adjustment in our market based on what was going on. So I just kept going and going after that. And it's been going great. Allen: But you had the hope, right? Chuck: Oh, yeah, no, I can see that it worked. That was the thing I saw the results, I saw that this new strategy I'd never used before. It works. What all of these guys talk about books that I've read, talk about selling options is the way to make money. It works. It was the first time I had ever sold an option. I was like, Oh my gosh, this stuff works. Kind of like how you talked about in your story where you're like, man, I was losing money. And I looked at the this one option. And it was the one I sold. And I was like what it was like a light bulb moment. Right? Allen: Yep. Yeah. So So how did you handle the the Corona bear market? Chuck: You know, I lost some money, but I just got right back in. Like, I think it turned around within a few weeks. Like actually, as it started going down, I start I just flipped to the other side of the options chain, you know, and started taking advantage of it on that side. And okay, because I could see, okay, we're gonna go down for a few days, or maybe a week or who knows how long but that's the beauty of options is, you know, if there's a clear trend and what's going on, you can jump to the other side. Allen: Awesome, cool. Cool. So how have your trading results been so far? Chuck: Um, I'm keeping track. So that account was so small, and I really wasn't doing what I wanted to do based on what the passive trading formula, you know, they're the three main types of trades and you break it all down by account size and my accounts, I was so small, and I wasn't having as much luck with what the one strategy to build it up. So I rolled over my 403 beat from my previous employer to my current brokerage as a rollover IRA and got it approved for options and started trading there. That was October of last year. Allen: Okay. Chuck: And since October, it's up 26%. Allen: Okay, so what does that like nine months or so? Chuck: Yeah, yeah. And also, if I, if I look at the graph, because most math people would like to graph things. As I look at the graph, I should be right around 30 to 35% on a year over year basis. So using using that strategy. Allen: Sweet, very nice. So what strategies are you using? Chuck: Right now and selling puts to get into positions.. Allen: Okay. Chuck: And once I'm in that position, I do covered calls, and I'm doing them a little closer to the money because I don't really care if it gets called away. As long as I'm, you know, not negative in that particular option, like position, I should say, I look at each position like a little business, right? If I'm going to put this money out there, I want to make me money. And as long as I'm profitable in that position, if it gets called away as long as I've made money on it, you know, when it's all said and done, perfect. So that's what I've been doing. It's just kind of been bouncing back and forth right now. I don't I'm not holding anything right now. I might get assigned this Friday. We'll see depending on where that put closes. So yeah, that's what I've been doing. Allen: Then what type of stocks? Are you doing this on? Chuck: Actually, I've only been using ETFs. Allen: Okay Chuck: So I found that stocks dip, you know, they move a lot I've been I've been looking at, I've been doing credit spreads a little bit like, you know, you're taught to do credit spreads. So, I've been doing a couple of those here and there, I'm starting to get back into trying those out and making sure I can figure out I know what I'm doing. But I like doing it on ETFs. Because I feel like you know, an ETF isn't going to go bankrupt, an ETF isn't going to go down to zero. So I've been using, you know, smaller ETFs, some of the different ETFs that have smaller, you know, price per share points. So that, because my IRA account isn't that big. So, you know, but and I don't want to put all my eggs in one basket, I don't want to do all of it one trade, so I want to spread it around. So I've been using just this list of ETFs that I found that, you know, fit all the criteria you mentioned in the course and just keep selling puts on them until I get assigned and then doing covered calls. And if it gets called away, then I just go back to selling puts again, and it just keeps going around around around. Allen: Awesome. So that puts your selling in the covered calls, they are what weekly every two weeks, three weeks a month? Chuck: They're on mostly I'm doing monthly, most of the time, I'm looking for like a 30 to 35 days till expiration, put to sell all of the ETFs do offer weekly options, you know, I want to make sure that fit that criteria of having weekly options. And there's lots of liquidity, you know, not that you necessarily need it if you're okay with being assigned. But still, you know, if there for some reason you wanted to get out of a trade, you got to be able to get out of the trade. But there is one where I've been doing it a little bit more like just testing out this idea of trying it every like two to three weeks. So I've been doing puts where they'll expire anywhere between 18 and 24 days instead of 30 to 35 just to see what the results aren't, you know, playing around with things and right, keeping tracking data and keeping track of everything to see if it offers any edge whatsoever. Allen: Right. And you're not and you're not keeping the stocks too long. So you're not really worried about the dividend? Chuck: No, not at all. I mean, I'm hoping to build, you know, to get to that point. And like you say in your program where it's like, Okay, you got this host of really good stocks, you get your dividends that are coming in, and then you're just doing calls on top of that to help juice those returns. So but my accounts not quite there yet. Allen: Okay, no worries. Chuck: Or size goes. Allen: Yeah, no, that's awesome. So okay, so you're doing like basic butter, I mean, bread and butter covered or naked puts, get some premium, maybe they expire, maybe they get assigned. And then you turn around right around and you do what like at the money covered calls are a little bit out of the money or.. Chuck: Depending on how if I do get assigned, you know, it depends on where I got assigned at. So if it did go through a couple of dollar drops, let's say it was trading at $40 a share and I sold that put and and then it drops to 38. You know, I'll make sure that I sell the call. So that I'm above my cost basis. I want to make sure I'm not losing money on the position. So sometimes it's a little further out of the money. But most of the time, I'm trying to sell it pretty much right at where I got it sound. Okay, awesome. and collect the premiums to build my account faster. Allen: That's cool. Yeah, I mean, congratulations. I mean, you're doing better than most people out there and a lot of Professionals. Chuck: Yeah it's amazing. I'm floored I really am when I started plotting everything and looking at the returns. I was like, Are you kidding me? This is crazy. Unbelievable. Allen: How long does it take you in the day to do this? Chuck: Oh, not long at all. I do in the morning. You know, before my workday starts or some sometimes before I go out for my morning walk. You know if it I'll look Monday or Tuesday. Okay, let's sell another put in, I just got my list of ETFs that I look at and I say okay, how much did that one expire? Cool, I've got some more money in my account. Let's sell another one. Did I get assigned? Okay, let's look at the chain where where do I need to do my covered call at. Okay, let's do it there. And then I go on with my day. That's it. It's I love it because it's so low maintenance during the school year, my days are unswamped. Like I don't have a whole lot of time to sit here and stare at a screen of the markets and go through and look at charts and all that. So this plan really just fits what I'm looking for. Allen: Okay, so okay, now, I don't know if you've done this. But if you extrapolate and say, okay, you know, I'm doing about 25-30% a year, if I can do that every year, which you know, with the style that you're doing, you should be able to do somewhere close to that, right? Does that help you or does that? Have you done the numbers and be like, Well, you know, I could probably retire five years earlier, four years early or something like that. Chuck: That's been a moving target. And it's really been hard to nail down because all of this is just so recent. It's also very recent, and you sent out that email. I don't remember like a month or two ago. What's your number and you linked it to that article. where, you know, that guy offered to give you as much money as you want you write a number down? How much money would you need to never work again for the rest of your life. And I'm going to ask for other people. And whoever gives me the lowest number wins. I thought that was amazing. Because then I got me to think, what is my number? I never, I mean, I know that this whole thing was designed to dial back my my want to work till 68. Right. But what would this get me if I were to project this out? Could I stop teaching at 62? Could I stop teaching at 59, I really need to look at all of the pieces of the puzzle, to get a clear picture of what that's going to look like and when. But it's very exciting. This is exciting stuff to get to do, you know? Allen: Yeah, I mean, you know, I mean, if you, if you're still looking at that way, that's great. But I would like you to look at it from a different point of view as well, now that you've already seen, you know, that it works is power behind it. Now, let's figure out okay, how much do you need every month to pay the bills, so that we don't need to worry about what your big number is in the, you know, in the big number in the sky? Think we need X dollars every month to pay the bills? How much do I need in my account? To cover that amount? Right? So if you want to, you know, like, let's say your monthly expenses are five, six grand, and you know, as an example, well, hey, if I can make that much five, six grand from my trading account every month doing these simple trades, boom! I can retire today, you know, and then it's up to you. It's I could do I want to keep teaching? Yeah, that's great. Or do I want to go volunteer? Or do I want to teach for free? Or, you know, it, the sky's the limit at that point? So, you know, definitely, I don't want people to think that they have to wait till 6568, they could do it a lot sooner. And when you look at it, from that point of view, that's another like, aha moment like what really that possible? Yeah, it is. And it doesn't take as much as you would think, especially when you're, you know, bringing in like, one 2% a month. If you can build it up, then. And once you take a look at it, your expenses. I mean, you're in California, so maybe a little bit higher with the taxes and whatnot. But if you structure it in a different way, it might be a lot less than you realize. Chuck: I think I'm going to do that. Just knowing that, you know, I haven't done a full year, I think once I hit that October deadline, where I've been doing this a year, and I see that number, and I know that it works, that's a really good opportunity to say, hey, how much would I need in my account? In order to do this and live off of it, like pay my bills, pay my expenses, and not have to worry about going to a classroom every day during the school year, or teaching zoom classes or planning lessons or grading papers? Or you know, any of that just, you know, then what would I do with my time? No, I could, like you said, volunteer or tutor for free or do something else. Just Yeah, that's a that's a really interesting thought. Allen: I mean, I wouldn't want you to leave teaching because I know we need our teachers. But you know, just the fact of not having to worry. Like we've had multiple, multiple people that come into our system, where they get to that point, you know, where hey, yeah, I'm making as much as from my job as I am from my trading. But I love my job so much. I want to keep doing it. Yeah. So it feels really good. your self esteem goes up the way you think about yourself, the way you carry yourself all that changes, because now you're like, wow, you know, I'm in control of my own destiny. Chuck: Yeah I can see that I just just from the success I've had, I can kind of see that mindset shift for me, you know, what my thoughts are about the future and, and what's possible. Allen: Like, I know, like, you know, recently after Corona, we've had this really great bull market, you know, things have been going up things have been doubled, tripled since when they from the hit the bottom and they went up. So a lot of people have made a lot of money, especially the buying option, guys, right now they're walking on water, because they're like, oh, everything that every option I buy, it goes up, every call option goes up. So they're making money, but the thing that you're doing, it works in a bull market when things are going up, but it always works when things are going sideways. And it works really good even when things are going down. You know, so if you came to me and said, Oh, yeah, you know, I've been buying options, and I made 40% or 30% this year, really Congratulations, but you're not gonna be able to do that year after year after year. You know, but what you're doing, yeah, it can be done year after year after year. And then you start compounding that eventually, very quickly, within three, four or five years, you know, that number every month of what you're bringing in just exponentially grows and grows and grows and it gets huge. So I'm really excited for you. So it's like the, you know, future looks really really bright for you. Chuck: It really does. It's it's just an having come to you know, financial stability, I will say at a later age in life and thinking about okay, when I got into teaching at least I will be able to retire at some point, you know, even though that was 68 and then stumbling into this It just blows my mind. Because, you know, I wish I had found it sooner just like teaching. I love teaching. I wish I had started doing this earlier in my life. But yeah, the opportunities that trading opens up are limitless. This has just been amazing. And I can't thank you enough because you guys offered me the scholarship. And here I am. I'm loving it. Allen: Yep. Okay, so now we've talked a lot about the good stuff, right. But what now what was maybe the most challenging thing to get you started to doing this or achieve some success with this? Chuck: I think well, two things. One was the account size, small account to start with. But the second was more of a mental thing. And again, I don't know if it had to do with all of those horrible schemes, those money making schemes that I've come to in the past to really just trust and believe in this and know that it works and trust in the process and click Submit on that order and just watch it work. But I think the mental part of it was probably the hardest thing to get over. And I hear so many people that I listened to and read about talk about that aspect of what it is we're doing, where the mental part of trading is probably one of the most important things, because anybody can do a strategy. And anybody can come up with a trading plan. But if you don't have the right mindset about that plan, it's not going to work for you. It's just not. And I think that was the hardest thing that when it clicked for me, it was like, Oh, my gosh, why did it take so long? But I think getting the right mindset was probably the hardest thing for me. Allen: Okay, and how did you go ahead and get that mindset? Chuck: Knowing that there's limited risk, like what we do you limit your risk? You know, the, when there are certain things that you know, people talk about options, I have a friend who used to work in the financial markets. And I was asking him if he knew anything about options, because oh, man, I don't know, the only thing I know is those are really risky. But what we do you define your risk, right? You You have a, here's your maximum loss, you are willing to lose, you're not going to lose your house and your life savings and be destitute living on the street. There's a and you can make that as small as you want. And I think that helped comfort me a little bit and just saying, Well, look, if it doesn't work, this is what I'm going to lose. Am I okay with that? Yeah, that's not going to make a big deal in the long run. So let's give it a try. So that part of it really helped me get over the mindset of losing, or the fear of losing being greater than the fear of opportunity, or the the actual idea of opportunity. So yeah, just the mindset thing that really took a while for me to wrap my head around, and just do it. But I again, reading so many people talk about it, and great examples of how to get over it. Just, it's I'm so glad I did. Allen: Awesome. Awesome. Cool. So let's say if we have a listener who's in your shoes, where you were about year and a half, two years ago, what would you tell that person? How would you tell? How would you advise them to get started? Or what should they do first, second, third? Chuck: Educate yourself. Definitely, you know, I spent several months just educating myself as much as possible with from reputable people. Like I said, I listen to your podcast, I listen to podcasts of other people, I read books, watch the YouTube videos from reputable sources, you can kind of tell the snake oil salesmen out there, so I would always just kind of tell them, you know, ignore those. But, you know, there are plenty of valid sources of free material to educate you about what options are and how they can work for you. So first, make sure you know what you're doing. But then second, get yourself a somebody who knows what they're doing to help you out. This has been such a helpful community that you've introduced me to everybody in our Facebook group, you offer all of the support, you know, it's just been so helpful to know that there are people out there doing it with me, even though I'm here alone in my office, you know, watching the screen or doing what I'm doing, but definitely somebody who's new - educate yourself, find somebody who's going to help you, and then just do it. You just be okay, with losing a couple 100 bucks. Trust me, I think most people have probably spent a couple 100 bucks on something useless Anyway, you know, and so, I think it's worth it to see that this works. And that'll just be a complete different, a complete mind change for you. Allen: Cool. Okay, so now thinking back to the program that you were in the passive trading formula, give me like maybe two or three takeaways that you know, when you went through it, it really hits you and you're like, Okay, this you know, this makes a lot of sense. This is good. I need to start using this stuff. Chuck: There are rules for everything. You have everything there is a template, it's a pre determined, this is how you do it. This is what you look for this is when you see this go. And as a math teacher math is just rules, right? And what you do when you know there are rules for every type. Math. So if you follow these rules, you'll get the right answer. So if you follow that trading rule, you will get the desired outcome. You know that I think that was one of the biggest takeaways from your entire program was that there's a template, it's laid out for you, you know, here, here's what to look for, here's what to do when things go wrong. Here's what to do when things go right. Here's how to be successful at this and then just do it. That's it. That was the beauty of it is how simple it is. And the fact that I don't have to be glued to my computer screen all day. It's perfect. Allen: Mm hmm. Cool. Okay. Chuck: I hope that answer your question, I hope. Allen: Yeah, I did. Yeah, it's up to you is whatever I mean, you know, everybody looks at it from a different point of view. You know, when some people start asking the same question, it's like, some people they talk about, oh, yeah, you know, I'm gonna be able to do this. With like, some people have certain disabilities, and they can't, they can't work or they can't focus, or they can't do some some other things. And they get drawn to this. Other people look at it. And their takeaway is like, Oh, you know, I'm coming at this from like, let's say, a real estate background, we have a lot of real estate investors, they get involved in options, because it makes sense. You know, you're you're buying a house, you're renting it out, you're cash flowing it, well, you could do that same thing with stocks, you know, your covered call is cash flowing your stocks. So it's kind of the same thing. And so different, like I love your answer is great. Everybody looks at it from a different point of view. So I just like hearing what attracted and what people took away the template thing, you know, that that's something, I've heard it but not not too much? And I think it is, it's one of the things we like to do is just keep it simple, you know, you can, like you said, there are other people out there, they're teaching this stuff. But what I find is that they make it so complicated, that it stops people in their tracks from like, oh, man, I'm never gonna understand this stuff. What is he talking about? i? Geez. So that's what we kind of, you know, especially this program is like, yeah, this is really simple. You know, like, just get started, start with one foot, start with another foot, you don't have to go running, you just start walking a little bit, and crawling a little bit, and eventually you'll, you'll get the hang of it. So.. Chuck: Yeah, it's been great. I think the other thing that hooked me the most was you use the analogy of insurance a lot. And that really was like another lightbulb moment. For me. There was a book I was reading, where they talked about it from being an insurance company perspective. You've talked about it from that perspective, I used to work for AIG selling life insurance back before they had to get bailed out. That was an interesting time. But insurance for that perspective, and selling options totally makes sense to me. And being able to define your risk, you know, what insurance market Do you want to go into? Do you want to be a reinsurance company where you're going to handle all the crazy insurance that nobody else will touch? Or do you want to be a super conservative insurance company, that's really what trading options is, you're, you're out there taking on a little bit of risk and collecting some money and just do it month after month. And it's amazing. It's just amazing. And that so that whole insurance analogy just really clicked with me. So between that and and the step by step, here's the template, follow this process, and let it fly. That those two were the huge takeaways for me. Allen: Okay, cool. Awesome. So based on your experience, would you recommend Option Genius to others? Chuck: Oh, yeah, I already have! A buddy that I mentioned, options to he used to work for the wealthiest guy here in San Diego County was the guy manages several billion dollars worth of investments. But you know, his portfolio kind of shrank over the past several years, and he's just looking to hang it up. So he got laid off. And he was the one I asked if he knew anything about options, and he could get all freaked out, oh, they're risky. And I said, Well, you should look into this guy, you should, you know, go listen to some of his podcasts. That's how I was introduced. And if what he's saying makes any sense, you know, I'm happy to turn you on to what they're doing over there. It's It's amazing. It really is. And so, I don't know if he's, I haven't talked to him. I don't know if he's listened to the podcast and ran with it or done anything with it. But I'll probably check in with him here before I go back to school next month. Allen: I appreciate that. Yeah. I mean, you know, everything that we can do to get the word out there, because the situation for.. I mean, you're you're lucky that you're a teacher, and you have that built in pension, you know, it's kind of I've learned a little bit about it, but it's like your teachers are kind of in that situation, or better often. Most companies are most people that don't have that fallback plan. A lot of people are really, really and you have the other thing, I don't know if you, you're in high school teacher, right. So I mean, if you were unionized, I've seen these, it's harder to lay off a teacher. Chuck: Oh, yeah. Allen: But we have so many, so many people that come to us and say, you know, I was a high level executive. I was making a couple 100 grand a year, but then they decided to lay me off and they brought in somebody that's, you know, doing the work cheaper. And now I can't find a job that will pay me the same amount I was making so my family's used to a certain lifestyle. I can't provide it anymore. Yeah, I wish I had found this stuff so much sooner. And so that's why it's like I'm out there like man, you know, we really need to get this stuff out there. People need to hear about it. Chuck: I agree! Allen: Even if they're doing just the basics, you know, just, you know you already have, most people already have a stock portfolio, they already have their indexes, just, you know, just sell a few options every few years, every month, you know, not even every month, they can do it every few months, they can still make a little bit more than they're making now. And in the long run, it'll add up and workout. So Alright, last question for you. What do you think the future holds for you now? Chuck: That is completely up to me. You know, I've always been a believer in that, that I kind of control my destiny and my circumstances, don't necessarily, I'm here because of who I am. So, but I feel like my future has just, it's wide open. It really is I daydream a lot more. I think about the opportunities and the possibilities a lot more. You know, it's like you said, What if 5, 6, 7 years from now, this could replace your teaching income? Would you continue to teach, you know, or would you do something else? And those are the thoughts that I have. And I just, like I said, haven't really committed it to paper and, and, and talked it over with my wife to figure out okay, if I could, you know, would I? Or could I? Or should I, and what would I do? You know, what would I deal with all that time? But those are the, that's that's what I see for me and a future is just so many possibilities. You know, there's so many things that I thought I would have to wait to do until I'm much much older than I am now. And, and the thought of being able to get to do those sooner rather than later. It's really exciting. Allen: Yeah. Is there anything that one thing that you've always wanted to do that you're like, yeah, I'm gonna give it a shot? Chuck: So interesting story. My last job in the restaurant business, I was a brew master. And I worked for a company called rock bottom breweries. There used to be one I know you're in. In Texas, there was one in Houston for a long time. I don't know if it's still there or not. But I was a Brewmaster for the rock bottom breweries, and I absolutely loved it. It was a fun company. It was a fun job, that beer community, the craft brewing community, and this was back in the late 90s. No, this was before everything blew up like it is now. So and I had to get out because of a workplace injury. Well, you know, so many of these little tiny neighborhood breweries are opening up where it would be super easy to manage on my own and just do it part time, B 4 days a week, I've seen people do that business model. I think that would be a fantastic thing to do with my time. Just make some beer for the local community sponsor, some little league teams and some softball teams and just just, you know, work part time and have a great time. Allen: That sounds awesome. Yeah, yeah. So what are you gonna do it? I know, I'm pushing you here. Chuck: I know, I think I should I really do. I think if that's the one thing I could do, if I got out of this, what would I do with my time? I think that's what I would do. I really do. Allen: Sweet , cool. I like it. I like it. It's a good plan. I mean, I wouldn't want you to stop teaching but you could do this in your afternoons. Chuck: Tutoring is an option. And with tutoring, you can set your own hours tutors get paid fairly well, you don't have to, you know, be locked in a classroom for six and a half hours or glued to a computer screen teaching three or four hours a day. Tutoring can just be Hey, an hour here an hour there. And you know, you're still helping students out you're still passing down that knowledge that you know, and, and being a part of the education journey, you know, somebody who's who's never been, you know, to college, or whatever it may be. But at the same time, having all my other time to do other things that I want to pursue, like, like running my own brewery. Allen: That sounds interesting. That sounds like a lot of fun. Yeah, I mean, I'm in Houston. Well outside of Houston. So I don't remember that one. But there are several here. And like, I've been to a couple of them. There's one called St. Arnold. I think they they sponsor, you know, the MS. Ms. 150, which is like a bike race. They're big sponsors of different charities and stuff around. I don't drink, but it's just the vibe when you go there. And it's just a whole it's, it's just different atmosphere. So yeah. Chuck: Oh, yeah. And that's what drew me to it was the community, you know, as a job. It's just a job here. You know, it's pretty physical manual labor to run one of those breweries. Yeah. But it is more of the community, you know, sponsoring local events and just reaching out, you know, giving giving money away cuz brewing beer is like printing money. The cost of the materials to make that stuff is next to nothing. And they're selling it for four or five, six bucks a glass that's, it's like printing money. It's crazy. So you know, I would just love to be a part of my community here and give back. Allen: Yeah, I've always thought to get into something like snow cones or something like that. You know, you're just selling. Chuck: Yeah. Oh, my gosh, those used to come to my daughter's Elementary School. Same thing. Yeah. You know, just putting a little flavored syrup on a cup of ice and you're charging four bucks for that. Oh, my gosh, yeah. Allen: Fun thing. Cool. All right. So thank you so much for doing this. Thank you for your time. I'm so happy and proud of your success. Had you really, you know, you took that scholarship, you ran with it, it was all on you, you know, I mean, we we did what we could we supported you however we could, but it takes, like I said, you know, when you saw the video, there are several people that have been through that program, and they start everybody starts out fresh and excited. And you know, but then life happens and they kind of fall off. But not you. I mean, you took it, you ran with it, you're actually doing it. And I think that's the biggest thing, you know, you want to change your life, you have to set your goal, you have to set it and this is something that I'm going to do. And then you just do it month after month you keep at it and you work on it, like you said you had, you know, you lost a little money in the beginning with the different program, and then you found something that made sense. And that's like, the biggest thing is, oh, this makes sense to me, okay, I press this, I do this, I do this. And that happens. Okay, let me try, you tried it, it worked. Allen: And you're like, Okay, I could do this. And then you just kept building on it and building on it. And like you said, Now you're getting you know, you're trying to do the credit spreads, you're learning a different strategy, you're getting a little bit more creative and more advanced. You don't really have to, you know, you've had great success, you know, if the S&P was doing 30% every year, like, we'd all be billionaires, we wouldn't have to do any of this. But it does it. But if you could do that year after year, I mean, you'd be you know, you could be starting your own school and your own Brewmaster school or whatever you want to do. You'd be starting up pretty soon. So I'm really excited for you. I appreciate you. Thank you for taking the time to apply for that scholarship, and then just taking and run with it and doing it and it just makes me so, it makes me so happy. You know, it's like, yeah, you know something, I'm actually doing something that's making a difference for somebody. Chuck: I can't thank you enough, Allen, for extending that, for offering this all the support, you know, for the past year and a half that I've been part of the program, you know, the the coaching and the support community on Facebook, and just, you know, just putting that information out there and sharing your knowledge and your belief in other people. So I just want to extend that thank you to you personally, because I will be forever grateful. Allen: You're welcome. You're welcome. And I mean, you've made me come to the decision, that yeah we want to offer this scholarship again this year, you know, in the past? I don't know, man, is it helping anybody? We just wasting our time? But no, I, you know, I think we need to even if it helps out one person like it's, I think it'd be worth it. So normally, we do it around Thanksgiving. So those of you who are listening, if you're interested in the program, you want to wait till Thanksgiving, I wouldn't advise it. But hey if money's tight, then maybe that's what you got to do. Right. So we're on Thanksgiving, we'll probably come out with a scholarship again, for a limited number of people. But yeah, thank you so much again, Chuck. This has been awesome. Appreciate it. And we'll talk to you soon. Chuck: All right, thanks, again, take care. Allen: Uh huh. Buh-bye LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.
15 minutes | Jul 27, 2021
The Difference Between Future Options and Stock Options - 104
Before we get into this episode, I did want to remind you that we have Futures Options Live coming up July 30, it's going to be an all day seminar, virtual Zoom event where we're going to be teaching and talking and answering questions all day long. It's gonna, if you haven't been if you don't anything about futures options, and this episode will be great to listen to, to get some understanding a little bit, but we're gonna go deep, deep, deep on Friday, and tickets are going really fast. Hopefully, there are still tickets by the time you hear this. But if you go to FuturesOptionsLive.com that's where you get more information, FuturesOptionsLive.com, and the link will be in the show notes. Now, let's hit the music and on the other side, we're going to be listening to the difference between futures options, and stock options. So what are the difference between futures options and stock options? We get this question a lot, because I do have a Oil Trading Program and oil is a futures. And I talk about it a lot, because it's one of the favorite ways to trade. But really quickly, I wanted to go over and there are several reasons I'm going to give you the top three, you know what now I'm going to give you the top four, let's give you a bonus, right, the top four differences between futures options and stock options. Now, I do still trade stock options. And I probably always will. But by adding futures options to it to my investments, and to my portfolio, to my strategies, it's really been amazing. It's given me really, really great diversification, it's given me a lot more fun in my trading. And it really adds another element and another way to generate income and passive income really, that, well, let's get into the differences and you can see for yourself. So number one, the numbers are bigger when you're trading futures options. And there's a couple of different reasons for this. And the numbers being bigger. I mean, they're all all the numbers are bigger. Number one, there's more leverage. Okay, so now, when you're talking about stock options, you're talking about a regular trading account, they have something called portfolio margin. So this is for those traders who have over 100, 130, 150, I don't know how much the limit is. It varies by broker, but you need somewhere over $100,000 in your regular trading account. And you have to have a lot of experience in order to qualify for something called portfolio margin. Regular margin accounts, you know, when you buy stock they give you, if you buy, you know, you have the money for one stock, they'll let you buy two shares, that's 50% margin, that's what normal accounts are. Portfolio margin - they'll give you five times. So if you have you for buying one stock, they'll give you the the let you borrow the money to buy five shares. So it's like five times bigger. Now, that in stock world that only happens if you have portfolio margin. In the futures world, they have something called span leverage, which is very similar to portfolio margin. And everybody gets that right off the bat. So you have more leverage, right when you start. What does that mean? Well, it means that the premium for every option is higher. So you can make a lot more money per contract, than you can in the stock market world for the same amount of risk. And secondly, you can spend less time in each trade, because you can hit your goals much faster. So if you have a profit goal, hey, I'm gonna make 10% when make 15% whatever it is, you can hit that way, way, way in advance. Okay, so in my Oil Options account, my goal is to make 10% on the account every single month, and whatever trades I put on, I'm usually in and out of them in two weeks. So compare that to my iron condors. Right? I'm also trying to make 10% on my iron condor, but I'm usually in there for 30, 35 days, sometimes 45 days. So it's much sooner, much quicker, because the numbers are bigger. The other difference where the numbers are bigger is that the amount controlled by each option is just one futures contract. Okay, so it's not 100 shares to one option, like the stock it's one futures contract is controlled by one options contract. And then that how much control that futures contract has depends on what commodity or what future you're trading. So if you're talking about oil, it's barrels, you know, you might be doing 10,000 barrels per futures contract. That's a lot of money, right? 10,000 barrels, you're controlling a lot of oil with just one options contract. With soybeans, it's the number of bushels. Corn is, you know, bushels. Wheat - same thing. With gold, it's ounces. So the numbers are bigger because you're controlling thousands and thousands of dollars worth of the commodity with each contract. So that's the first thing, numbers are bigger. And that really is awesome. Because you can make a lot more money, you can lose money, too. So it goes back and forth. Right? But if you have the proper strategy, and you have the proper risk management in place, you can take advantage. Secondly, trading on futures options is almost 24 hours a day. So this is great for people who maybe they work a full time job, and they can't trade during market hours. So they come home, and they can still trade the same markets. Yes, it is less liquid. But it's still tradable. And when we teach you the way we do it, you know, it's pretty simple, you could put some trades on and it works great. This also is great for our overseas friends. You know, if you're in a different country, besides the United States or Canada, you can be trading the same markets when you're awake, you don't have to wake up super early to to get the opening bell in the United States. Third, the futures markets, they protect their traders in a way that the stock market does not. So if there are really big moves, there are two different things that the futures market does, that changes what you're allowed to do as a trader, to help you protect, right to hedge yourself to be where you have less money at risk when the markets are crazy, volatile and wild. Now, I don't have time to go into all that because I don't want to make this a three hour episode. But we will be covering those at the at the futures options live. We do cover it in there. And so we'll be talking about those different protections. But just know this, that the futures options markets protect traders better than the stock market. And then lastly, our bonus one - commodities and futures are actually easier to trade. Because they're easier to predict. Right? Somebody comes to me and says, Hey, what's the stock market going to do next month, next year? Nobody knows. Nobody can tell you with any certainty, or any even close to being correct. Unless they're just very lucky. In futures, it's a little bit different. And there's several reasons why. So number one, technical analysis, if you're good at that, if you understand Fibonacci, or if you understand support resistance, if you understand basic moving averages, you'll do better trading futures, than in stocks, the technical analysis just works better. Because most futures options traders, and most futures traders, they use technical analysis a lot more. There's not as much fundamental analysis used, there's not as much valuation and all this other stuff that people use to trade stocks. So that the technical analysis, all those signals and indicators, they are more effective, and they work better. Number two, the trends stay longer intact. So if there's a bullish trend, you know, in a stock market, it might last maybe a month. In a commodity is gonna last a lot longer. So for me, I love trend following, I love trading trends, you know, that takes away a lot of risk for me in my book. So when when there's a trend, I wanted to stay consistent, I wanted to stay long, I want to I want this trend, just keep going and going and going so that I can extract as much money as I can from it. Three, demand and supply is a lot more important and prevalent. Okay, so in the stock market, you know, demand supply, it's not really that relevant, because companies can increase the supply or decrease the supply of the stock whenever they want. They could do a stock split, there's more supply all of a sudden, right? They can issue more shares, oh, all of a sudden, more supplies. The owners could sell their stock if they want to up more supply if the stock on the stock market. So they can dilute or liquidate or play games with their stocks. And how many shares are outstanding, and that affects the price. With a commodity like, you know, wheat, you really can't do that. You can't just snap your fingers and make more wheat. So how much wheat there is in supply and how much is there in demand that makes a big difference in the price. And there are ways to know what is the supply going to be? What is the demand right now, there it's much easier to understand and so supply and demand is a huge part of understanding futures and how they work. So if you are, you know, if you have a good head on your shoulders, you understand basic economics, it really helps you a lot in the in stock, you really can't tell, you know, but you have to try to guess, if a stock is gonna go up or down, but you never know, right? stock has wonderful earnings, they have earnings report, they really knock it out of the park, they're making a lot more money than they expected, and the stock goes down. That's totally counterintuitive of what common sense would be okay, if the company is making more money stock should go up. But no stock went down. Or sometimes stock is the company's doing horrible, and they're like, Oh, no, we're losing so much money. Oh, we're hemorrhaging money, but the stock goes up after earnings. So it's really a crapshoot a lot of times. Futures, they don't have that, and they don't have earnings, right? So that's another thing they don't have. They don't have a quarterly report that can mix up your whole trade. There's also no insider information. And any commodity, everybody knows what's going on. There's no insiders that are selling their shares, right? There's no lockup periods. There's no way for the company to dilute shares. There's no way for the company to cut the dividend, because there are no dividends. And there are no earnings surprises. So I just, you know, went through basically four differences between futures options and stock options. Now, futures options is not for everybody. Right? Can you trade them in your IRA? Yes, you can - we'll talk about that on the event. So whatever's stopping you from trading futures options, if you are doing halfway decent at stock options, you should look into futures options. It's not for everybody, I'll get that, you know, but looking into it, it's not gonna hurt you. You might find that you love it, like I did. Alright, so that's the end for this episode. Again, if you have any comments, you have any questions, you can always get me Help@OptionGenius.com. We'd love to answer them. And if you're more interested, check out our website. Thank you for listening. Trade with the odds in your favor. LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.
14 minutes | Jul 21, 2021
Taxes For Options Traders - 103
If I were to ask you, what your largest expense is? What would you say? You know, what is the thing? The one thing that costs you the most money? Is it your mortgage? student loan payments, car payments, credit card? health insurance? What is it? Well, if you saw the title of this episode, you probably guessed that I'm talking about taxes. And, I mean, you can name them right with all the different types of taxes that we pay. It adds up, we got income taxes for federal and for state, we got payroll taxes, we got property taxes, we got estate taxes, we've got gift taxes, we've got sales taxes, on and on, there's a lot more that I can't even think of. I mean, it is estimated that most Americans pay somewhere close to 50% of their earnings on taxes. Now, I'm guessing that if you're the one that pays the bills, that's not shocking to you. I mean, maybe the 50% is kind of like eye opening, like really? Is it that much? Yeah, unfortunately, it really is. But in this episode, I wanted to talk about taxes and options, and one simple change that you can make to lower the taxes on your trading games. Now, let me start off with a disclaimer, I am not an accountant, I'm not a CPA, not a professional on taxes, nor do I want to be. So make sure that you talk to your tax person about anything that you hear. Right. Now, when it comes to federal income taxes, there are two types that deal with options trading. Now, here we're talking about, you know, your gains on your trading. So if you're making gains, there's two types of taxes that you could pay. The first is regular income taxes. And the second is capital gains taxes. So capital gains is normally the tax that you pay, when you have held an asset for a year or more. And then you sell it for a profit, you would pay capital gains tax on any profit. So if you have a stock, and you own it for over a year, when you sell it, that's the tax that you would pay capital gains. Compare that to if you held the asset for less than one year, then you would be taxed at your regular income tax rate, whatever that is. Now, capital gains is usually much lower as a percentage. Okay, I don't want to go into the actual percentages here, because they keep changing depending on who's in the White House and all that other politics. But for our purposes, capital gains is lower, and is preferred, because of course, it's less. So, of course, the best way to deal with taxes is to not have them at all, to not have to pay them at all. And those of you who are trading in your Roth accounts, will never have to pay taxes on the gains. So if you can, that would be preferable to trade your options in your IRA so that any taxes that you have will not be taxed, you don't ever have to pay taxes on those. So that's really cool deal. Now, if you have a regular IRA, you will have to pay taxes when you eventually withdraw the money, but you don't have to pay it now. And if you're trading in a in a regular trading account, then yes, you will have to pay the taxes depending on your tax situation, quarterly or year. Okay. Now, there is a piece of the tax code that most traders don't know about. That actually helps options traders pay less taxes. It's called section 1256 of the IRS code. Now securities regarded as 1256 investments include non equity options, foreign currency contracts, regulated futures contracts, dealer equity options, and dealer securities futures contracts. Okay, so now what's the difference between section 1256 and non section prophetesses? Well, every section 1256 security, if you have a gain or loss, it is treated as being 60% long term, and 40% short term, no matter how long you own it. Now long term means that your cap is your capital gains tax rate. Okay. And the 40% short term means your personal income tax rate. So, for example, if we have a Joe Schmo trader, he makes $1,000 on an options trade, okay, and if this was a section 1256 security option, then his capital gains tax is 15%, let's just guess. And his personal tax rate is 22%. Okay, for this example, now, he made $1,000 on his trade, right, so 60% of that would be long term 40% of that will be short term. So long term, he would be paying $90 for taxes, and short term, you would be paying $88 for taxes. So for a total gain, or total tax of $178, on his $1,000 game, okay, so he's paying about 17.8% total, on $1,000. But if this was a non 1256 Options trade, and he still made the same $1,000, he would be paying 22% in taxes, which is his personal return rate, and he would be paying $220. So he would have saved $42, which doesn't sound like a lot, but that's just one trade, you got to add it up. But if you look at it percentage, it's 4.2%. So he actually kept 4.2% more money in his pocket, because he's trading 1256 options, instead of not 1256 options. So just by simply switching, you can save or you can keep about 4%, more than you already do. This is money that you've already made. But you didn't have to pay the government. Right. So if you trade for a whole year, let's say, and you make 10% for the year, well, a big chunk of that goes to taxes. This way, you're actually saving 4% of that of the total that you would pay. So instead of paying maybe, you know, 22%, you're paying 17%, or it could be less depending on your personal situation. Or it could be more, though most of the larger traders that we have in our in our movement, in our coaching programs and whatnot, they're usually trading with a lot more money. And so the percentage might be the same. Or it might be more because their income tax rates are different, are probably higher, right? So their tax rates will vary, that amount will be more, but the dollar amount increases significantly when it's non 1256. So now that you know what that is, now that you know what the benefit is, how do you make the switch? Right? How do you go from non 1256 to 1256? And how do you know which options are which? Well, most stock options are non 1256. And by most I mean the options in any company that you trade, or any ETF that you trade. So if you're trading Apple options, IBM options, Microsoft, whoever whatever company option that you're trading is going to be non 1256. ETFs are also non 1256. So if you go into the GLD, the USO, the IBB, any of those ETFs are non 56. And you'll know by looking at the name of it when you're going to try and trade it if it says ETF, it's non 1256. Okay, the main ones that get the 1256 treatment are indexes, and futures options. This is one of the reasons that I have moved a large portion of my trading funds over to my futures options trading account. Because when you trade in size, you know the savings are enormous. So I've been moving more and more money over to my futures options trading account so that I can pay less on taxes even if I'm making the same amount of money. So I do have a special announcement on that. If you are interested futures options and the way I trade them and what I do, we're having a one day live event called futures options live this month, on July 30. So one day events going to be live, it's going to be a lot of fun. You can get your tickets today at www.futuresoptionslive.com. And if you're listening to this episode close to when we publish it, there should still be tickets left. If not, maybe you can, if you're new, we're still interested, maybe you can email us. And if we have the recordings, for sale, or available, we'll let you know. At the live event, I'm going to be going over exactly how futures options work, how they're different from stock options, you know, taxes are just one of the many benefits that they have, and how you can get started with them. Okay, so hopefully, I'll see you there. Now, the other kinds of 1256 options that I mentioned, the ones that I trade are also they're called Index Options. So these are cash settled options on the actual indexes, like the S&P 500, the Russell 2000, the NASDAQ 100, and others. These also get the 60-40 tax treatment. Okay, so if you're a member of our Options Genius advisory, you'll notice that we trade SPX, and we trade rut every month, those are indexes. Those are SPX is for the S&P 500. And the RUT, the rut is for the Russell 2000. You can trade those with ETFs. But the indexes have much greater benefits, taxes being one of them. And so you'll notice that any hedge fund that is doing say iron condors on the s&p 500, or they're probably trading the Russell or the NASDAQ or whatever, if they're trading options, if they're a large trader, you know, they're a hedge fund. If they're a money management fund, if they're Warren Buffett, they all trade the indexes. tax treatment is one of the benefits. Okay, the other benefit I mentioned, there's that they're cash settled, meaning there's no early assignment, that can be a big one, depending on how much you're trading or what you want with your strategy. There are also many other benefits that we are going to cover in a future episode. So stay tuned for that. So let's say right now, if you are trading SPY, if you're trading IWM, for trading QQQ, if you're already trading these, these are ETFs, they don't give you the 1256 tax treatment. So you can do the same trade in an index. And immediately start saving on your taxes. Okay, now, the index options, the S&P or the SPX, the RUT, those are obviously much larger than the ETFs. And so it helps if you have a little bit larger account. But most traders can make the switch today, you do have to get approved by your broker. So you do have to have a higher level, the highest level that they allow. But if you have a track record, that shouldn't be a big problem, you know, you can let them know that, hey, I'm becoming more sophisticated, I want to try these indexes, I want to get the tax treatment, I look at my trading history, I know I can do this. And they'll they should allow you to trade indexes just not much of a big difference. Okay, now again, there are many other benefits to indexes or ETFs. We'll cover those in a future episode. But as you saw in our simple example, with Joe Schmo trader right trader example, just by switching to 1256 options instantly helped the guy make 4% greater returns. And I said, like I said, the larger you trade, the more you're going to save. And this is like free money. I mean, it's just it's, if you don't know about it, you're gonna pay it. Right. If you don't know about 1256, you're just gonna be paying the money in taxes, and you're never even gonna think about it never even notice that oh, my God, I'm paying too much. Unfortunately, most CPAs don't know about this, they have no clue what 1256 is, because most of their clients are not options traders. So you might have to go to your accountant, your CPA, and educate them. And you might have to tell them, hey, these options are 1256 options, and they're not regular options. So they need to be taxed differently. Now, it does mean more work for your accountant, so they're not going to be very happy about that. Truth be told, they might try to take some shortcuts and group them all together. So you have to be very on top of it. And that's why I'm doing this episode so you can realize that there is a difference. And, you know, if you're trading futures options, then it's a little bit easier because you will get a separate tax paper for any futures that you trade and futures contracts themselves or 1256, as well as futures options. Okay, now, mostly all the time, I'm only trading the futures options, not the futures themselves, because there's, there's differences. But if you trade futures or futures options, you will get a separate tax paper at the end of the year, that pretty much lets you know it says it out. These are futures, these are 1256. So that's easier for your broker. But if you are mixing SPX and SPY trades in your regular trading account, you're going to have to separate those and make sure you tell your broker or your CPA, what the differences and how it's going, Okay, because they might not always catch it, they might not know about it. So you have to let them know. I hope that it saves you some money. And I hope to see you at futures options live, the live event that we're having on the 30th. All right, have a great day trade with the odds in your favor. And I'll see you next time! LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.
8 minutes | Jul 8, 2021
Layup Spread VS Credit Spread
Hey Passive Traders. Welcome back to another episode of the Option Genius Podcast. I'm gonna switch things up a little bit today, we get a lot of questions via email or on Facebook from our people reaching out to us. And I wanted to take this episode and to take one of those questions and to answer it. So the question that I am answering on this episode, and I want to do this for future episodes, so if you do have a question, something about related to options, or trading, or anything really, in that realm that you think I can help you with, go ahead and email us at Help@OptionGenius.com, send us an email, ask your question and you never know if we get enough people to ask it, we might get it on on an episode. Now, you know, we'll definitely do our best to answer your question via email when you send it in. But if we get the same question over and over again, for multiple people, then we'll try to answer it here so that it helps more people. Because if you're thinking of something and you have a question, there's probably like five or six other people out there, or probably more depending on the question that had the same question, can't find the answer and your question might help them as well. So go ahead and reach out to us, let us know. And I'd like to be doing more of these episodes where there'll be a little bit shorter, not too much in in length as a regular episode. But we'll get the questions answered in a brief period of time that would help you out. So this question is, the question is basically, what is the difference between a layup spread, and a credit spread? We get this answered a lot. I mean, we get we get it a lot. Because there is a difference. Even though the layup is built on the credit spread, the layup is different, it's a different way of doing it. And so that's what I'm going to be answering on this episode. The reason I am doing this is because lately, we've had a lot of interest in a program that we called credit spread mastery, where we teach the layup spread, as well as other methods of trading, credit spreads. And so because we've had so much interest, we get this question over and over and over again. Now, that particular program, we've had amazing, amazing results since we started it in January of 2021. Incredible results, really, we're with the second batch of students right now. And what we've been doing is for three months, we have one batch and then to the break, and then three months for the second batch. And you're not allowed, nobody's allowed to come in during the class during the batch, right? So we are thinking of opening up a few more spots. Because I do know and I do think that the market is going to get a little bit more volatile, coming up this year. And so it's going to help a lot of people to have someone to bounce ideas off of to get coaching from to see how they are trading through the volatility. So I definitely think that this year, it's gonna be a little bit different from last year, it's not gonna be so easy to make some money. And so that's why we're opening up some more spots in the credit spread mastery program. If you're interested, all you got to do is reach out to us, we'll get you some more information about that, and how you can join up if you're interested. And if you qualify, because everybody doesn't qualify, you have to be able to take advantage of it. So with that in mind, let's cue up the music. And then on the other side, I'm going to answer the question, what is the difference between a layup spread and a credit spread? Take care. So what's the difference? between a credit spread and a layup up spread? They seem very similar Allen. What's going on? What's the difference? Let's go and talk about it. But before we do, I gotta show you our trusty disclaimer. Remember, don't trade with money you cannot afford to lose. You don't want your spouse kicking you out of the house. I love that. I think I'm gonna say that every time from now on. Sorry. It's like so unprofessional for me. Alright, but hey, you signed up for this it you gotta you got to put up with my corny jokes. Alright, to put it simply, the layup is a type of credit spread. Okay, the layup takes the best features of the credit spread and then improves on them by stacking the deck in your favor more and more and more. Okay, so if the credit spread is your strategy. The layup is the trading plan is going to tell you exactly the best way to find the trade, the best way to enter the best way to manage your trade. And obviously, the best way to exit is part of the management process. But remember, the credit spread is the strategy. The layup is the details. You know, how do you find the stock? How do you find the Options that you're going to trade? How do you know if it's a good trade or not? How do you know when to get out? How do you know what to do? All that stuff is the details of the layup. And that's what the layup gives you. So the layup is time tested through bull and bear markets with real trading results. So we've been doing it this way, for years and years and years. And so we know that over time, this process works, right. And if you follow the layup rules, then you're going to be on your way to being a consistently profitable options trader. Because we've already done it, we've done it for you, right, we've done it in the past, hopefully now again, obviously, the disclaimer is there. And past results do not equal future performance. We get that, right? So I can't guarantee that it's going to continue to work. But until now it has been working. And if it stops working, I'll let you know, right? But as of this recording, the layup does work. And it's a way not only to help you be more consistent, but it's a way that doesn't take a lot of time. And that's what I really enjoy. That's what I really like the fact that hey, this is part of passive trading, because it's very simple to do. I can put my trades on, boom, boom, boom, I know exactly when to get out. And I don't have to mess with it. And the fact that we stack the odds in our favor in so many different ways. It's not just probability of profit. You know, anybody can do that. Anyway. Oh, yeah. Find a find a 20 Delta, find a 15 Delta, find a 10 Delta. Okay, I gotta probably profit. No, it's not that simple. Right? That's one way. That's one thing. But that's not enough. You got to look for other things. And we go with me. And we do that in a different video where we tell okay, exactly how are we going to stack the deck and also in different different different different ways? The more ways you can stack the deck in your favor, the more the odds are in your favor? LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.
38 minutes | Jun 28, 2021
Investing in Real Estate Funds with Doug Smith - 101
Allen: All right, Passive Traders. Welcome to another edition of the Option Genius Podcast, we got a real treat for you today. I have one of my long, long time friends with me today and we're actually doing something special, we're going to do a video as well as audio on the Podcast, we will be having some slides, but when we show the slides will describe to you what's going on in the slide so those of you who are listening will not be missing out. And the video will also be on our media channels and YouTube channel. So you can catch it there if you need. I want to introduce my guest today He is Mr. Doug Smith of Hawthorne Funds. Doug and I go back, man, we go back, like over what over a decade or so. But yeah. Doug: 15 years. Allen: So Doug is Mr. Moneybags himself, Mr. Real Estate, you know, he's been doing real estate for years and years, he launched a very successful company called MyHouseDeals.com where if you are a real estate investor, you can go and find all the deals that are not on the MLS. So it's pretty cool. And that site has made a lot of people a lot of money. But today, we're gonna be talking about Doug's newest venture, this is something that he's been doing for a few years now. And you know, whenever you get together with friends, you talk and "Hey, what's up?" "What are you doing?" And we would share stories of what we were doing and, and Doug A few years ago, came up to me, and he's like, yeah, you know, I'm doing all this stuff with land and doing this and doing that. And I was like, Wow, man, you're making a killing. And he made such a big killing that he just like, he just has to get out. And he's like, Alright, we need to do this on a bigger scale. And so Doug went and figured out how to do a investment fund. And so that's what we're going to be talking about today. I know back in Episode 94, it's called "How I Invest". I shared that one of my investments is in a real estate fund. And that is Doug's fund. And so I asked Doug, to come on and answer some questions and give us some highlights about what investment funds are, how they work, what to look for, when you're choosing one, making sure that your investment is safe, and all that stuff. So Doug, hopefully, I covered everything. If you anything you want to add, please go ahead. Doug: More or less, you covered all the stuff that makes me look good. So we'll just skip all the other stuff. Allen: Yeah, I didn't want to tell all your dirty secrets. Doug: It's good to see you again, Allen. And thank you so much for having me here on the call. I'm really looking forward to sharing everything I can to educate people help you out. Allen: Yeah, I appreciate it. Appreciate it. Thank you for having us. So tell us what are you doing at Hawthorne? Doug: Oh, my gosh, well, I work all the time, which was so funny, because when you and I met, I was like a lifestyle guy. But yeah, for those considering starting up a private equity firm, just know that it will consume you. We buy and sell land outside of Houston, Texas. And so we're buying about a million dollars a month worth of land, sometimes more. And we're selling maybe $2 million a month worth of land, it really just depends on the month. But that requires a lot of people and a lot of emails, a lot of phone calls, a lot of Excel spreadsheets, there's just a lot going on, there's 20 or 30 of us that make all of this happen. So there's always something kind of vying for my attention as it pertains to mining selling land and raising people's money and investing that money properly. Allen: Yep. And so one of the things I do want to point out that Doug, you are doing this for yourself before you started the fund? Doug: Yes, that's right. So not only that, I have my house deals calm going on, I was buying and selling houses, I was selling those on owner financing. And then my business partner and I switched over to land in 2016 started buying that and selling on owner financing. And it was just, it was very profitable, requiring a lot of my capital. And sometimes that capital would take a year and a half or two years to come back. And I was wanting to do more deals as opposed to just sit on sidelines, right and wait for money to come back. So that's when I started the fund around 2018 or so started taking other people's money on as well. Allen: Okay, so you had one iteration, and then now you're in the second iteration, right? Or the second fund? Doug: Yes, there's the first time that was an equity fund. And then we formed a debt fund, I guess a few weeks ago at this point, maybe a month or two ago and took on 5 or $6 million into that second fund. We've taken out about the same amount into the first one, but there's, they're structured differently, but they The end result is pretty similar for the investors and for us. Allen: So can you give us a difference between debt versus private equity? Doug: Yeah, sure so that's one thing you said we're gonna talk about on the call is like, what would you want to look for if you're looking at investing in a private equity fund, and the majority of those funds out there are equity funds, and so that means that they're probably buying one or more assets like multi multifamily apartment complex. For example, and they are going to leverage up with maybe 75 or 80% bank money. So that's debt. And then you as an investor, you're a limited partner in these deals. So you're now you're the equity portion, the 25% equity, and whatever it appreciates, you know, force appreciation or just natural appreciation over time, you benefit from that. But that can be a little bit risky. If there's a downturn in the market, or the property's not managed properly, because equity holders can get wiped out, or at least have a lot of their money, kind of like, you know, wiped away. So a debt fund is when you invest in a fund, and that fund becomes the lender against something. So they are now in the bank's position in that first example. So let's say you, Allen, or your friend is wanting to buy a house for $100,000. And you lend him $50,000. Well, he totally mismanaged the project, and you have to foreclose on him, he's not paying you, well, you're gonna become the owner, you're foreclosing become the owner of that house and be able to resell it on the open market, and, and almost certainly recuperate your $50,000, because the house would sell is worth more than that. So that's kind of like a simple way to explain the difference between an equity and a debt fund. Allen: Okay, so now on the first one, the equity fund, you said that they go out and they borrow 75% of it. And they in the investment funds are 25%? Doug: I think there's a fairly typical kind of split, right, equity funds. There are some equity funds that don't take on debt, but the majority do, and that's why they're able to pay out at, well, sometimes the ends up being maybe 15%, internal rate of return over time. But there's, you know, there's some risks, there's some negatives, those are projections, you never quite know how it's going to shake out. Yeah. And your money would be locked up for usually about three, five or seven years, depending on the fund. Okay. And what if you wanted to get out sooner than that? What would you Is there any recourse? For most funds, you can't. Allen: No, just you can't give it to somebody else, or they won't help you facilitate it change or.. Doug: It might help you, but they're not obligated to do so. The latest fund that we set up, there was finalized one or two months ago, you can get it out. It's an evergreen fund, it is a lot more liquid. So that's one of the advantages of it. Allen: Okay, so now you said yours is a debt fund, right, then and so you are using the funds money to go out and buy the land? Doug: Yeah, so let's say like, let's say we're about to buy some land, and it's gonna cost a million dollars, we're able to borrow from the fund and the fund be a lender on that deal. So my entity that I own - Hawthorne land LLC will borrow. And it's all at the courthouse. It's documented from Hawthorne Income Fund, LLC, which is where all the investors are as members. Allen: Okay, so, okay, so basically, you created your own bank? Doug: Yeah. Here's the deal. Most banks, they do not like to lend on anything that is slightly outside of this cookie cutter box. And what we're doing buying raw land outside of the city, subdividing it and proving it and selling on honor on owner financing there, they've never heard of that most of them. And they're like, we don't know which box to check here on this form. So maybe you can go talk to this or that banker, but we did find bankers, and we saw bankers that will mind on it, but they're a huge pain to deal with. They take weeks to process alone. And there's all these requirements. It's just very, very bureaucratic, so much red tape. So yes, we created our own bank. Allen: Okay so basically, you borrow the money from the fund, and then the fund gets a set percentage. Doug: Yes, it doesn't get any of the profits or anything. No, it's just the lender. It's very clean. So it's kind of like, it's kind of like a lot of people all they know is about investing in some sort of index fund. And then maybe they'll put some of their money in bonds. And so this is like a lot of people that invest with us there. They're familiar with other strategies, like they might invest in other private equity funds that are a little riskier and maybe they're an equity fund, and they will treat us as if we're like, the bonds. So we're the lower stable like steady investment that they feel like if all the crap hits the fan that we're standing Allen: And so say you're paying 10% and that's paid out every month Doug: It's every month or people can check a box and have it automatically reinvested in compound. Allen: Awesome, sweet. Okay, yeah, cuz I know the first time we had it, we had a, that wasn't a possibility. So actually into our investors who wanted that. Yeah. So you're actually growing and learning at the same time. So that's awesome. Doug: Yes. Allen: Awesome. So who is able to invest in your fund anybody or accredited or how's that work? Doug: Accredited investors, and the minimum is 100,000. So who knows? Maybe 95% or more of American population can invest unfortunately. But those who can enjoy it. Allen: So now accredited, that means what 200, I think it's 200. Doug: If you're an individual, you need to be making 200,000 a year or more if it's a married couple 300 or you need to have a net worth of a million dollars, not counting the equity in your house that you're living in, Allen: Okay. And the minimum to put in is 100. And there's like you said, there's no tie up phase. So somebody come in, and then if they need it six months down the road, they'd be like, hey, I need to get out. Doug: That's correct. So we have provisions that if anybody's trying to get their money back at the same time, there's a slow process of giving it to everybody. But in general, people get their money back fairly quickly, if they need it. We've not even had our first requests yet, everybody, they're putting their money with us, because they want it to be with us not because they want to pull it, pull it out. But it would take a few days to, who knows a week or two to get someone's money back to them on a typical scenario. Allen: Right. And I mean, this is real estate. So people understand that this is not liquid, you know, most times you go buy a house, it's going to take you two months to sell it anyway. This is putting it in a fund that's invested in real estate. So that when if they need to, it takes time. So.. Doug: Yes, but with a structure, it is pretty liquid. Allen: Okay. Okay. Doug: Like it could be the next day, we get their money back to them, but I cannot go. Allen: So, I mean, I wanted to go over some of the reasons for our listeners, why, you know, why I invested in Doug in the first place. And, you know, this was one of the first investments that I actually made in a fund. And, you know, he came to me and said, hey, look, I've been doing this, and I'm starting a fund. And if you'd like to invest, you know, go ahead, these are the parameters, and this is how much we're gonna pay out. And there's risk involved. Of course, there's risk involved all assets, and all investing and trading and whatnot. Doug: My attorney made me say that. Allen: Oh, yeah, there is. So you know, you don't want to have somebody come in and be like, Oh, man, I'm gonna get rich. And then, you know, it doesn't happen. Doug: We do sell for about double what we buy for. So it's just like, with the margins like that, it's kind of hard to mess up. Allen: So I came up with some criteria, I was like, Alright, so number one, you know, who is actually doing or leading this fund, righ? And in this case, it was Doug. And I've known Doug for 10 years, and those of you guys know him, you don't know this, and you can't tell because he, you know, he looks like a really nice guy and everything on the in the video. That guy is I mean, he's a stickler, he, I mean, I only know this because I've known him for so long. But he tracks his net worth on a regular basis, he accounts for every single penny, in his business man, every single point 001% he knows what's happening and where it's going. And this guy is meticulous on his numbers. And he was not somebody that plays loose and fast, you know, he's got every dotted eye, every T is crossed. And so that was really something that gave me a lot of confidence. Like, you know, this guy, he knows what he's talking about. And he's been doing it on his own for a while. And the numbers just make sense. And so, you know, a lot of times people get attracted to these investments, the only thing they know about is Oh, I can make 10%, I can make 50%, I can make 25% in maybe some cases where, you know, it's, it's, it's more of a scam than anything else. There was like a lot of people investing in this crypto stuff. You know, there are crypto funds that I've seen that are like, oh, we'll pay you 30% a month, a month. Wow. And so you get money for a month or two, and then it folds and it goes out of business because it was a big Ponzi scheme. But in this case, you know, I knew Doug, and I trusted him. And that's what one of the things that led me to it. The other thing was, you know, his experience was there. And then the second part was, does the investment makes sense, is like, What is he doing? Or what is the investment. And in this case, it was something I had never heard about, it was pretty unique, where he's buying hundreds of acres of land, and then he's subdividing them into smaller pieces. And then when you subdivide it, and you smell a smaller piece, you get to sell it for a lot more money. So I think some of the numbers were you were buying it for four or $5 a square foot, selling it for $10-$12 a square foot originally. And like you said, it's pretty hard to go wrong with those kind of numbers. This was not like a apartment complex in some other country that we're going to Airbnb it and hopefully people want to go there and stay there. And maybe maybe it's run properly. This is something that he was already doing. The third thing was, what is my risk? You know, I'm going to put my money into this thing. I want to own that land. As an investor, what's my risk? And I was looking at, I think, well, this is raw land. It's been there for hundreds of years, it's not going to go anywhere. If it's not going to burn down, it's not going to go out of business. You know, he can't take it and run away with it. The only thing that might happen is it doesn't sell, you know, he'll buy it, it doesn't sell it'll sit there and maybe 5-10 years from now we'll sell it. To me that was like the only risk is like if the lead doesn't fill. It's just gonna sit there. No, I don't get my return but leaves my money is still safe. And so all those aspects, I was like alright, let's go. Let's do it, you know, and so that's why I feel comfortable. And those are the three aspects, I would look for investing in any other fund. Is there anything, Doug that you want to add? Like, you know, what are the things people should look for when there's questions I should ask? Doug: I can go into that a little bit. So one of the main problems with a lot of private equity funds that they have this projected internal rate of return. And the majority of funds do not meet their projection, really don't say like 15 to 20%, or whatever, but you can, but here's, here's what you do. So that'll be based on a certain amount of appreciation of whatever asset they're holding, you like reduce that appreciation by just .5% per year or something, and that projection all goes to crap. And the reason that it's so effective is that there is some debt ahead of you. And so you're just dealing with that little thin equity margin. So you play with that a little bit and that's a high percentage of your potential return that can be taken away from you. So that's kind of like the main problem. But yes, I do invest in other funds. And you know, private equity funds can be a good way to invest your money, right? Probably just a mix of right, different things like that. You could be doing Options Trading, like maybe you've got some like long term, like buying hopes, maybe you've got one or 2% of your money in crypto, whatever. But it can certainly be part of your strategy. So that's like the main problem I see with certain private equity funds, the less common one is that they're a scam. You'll see that maybe more like if there's like a crypto fund, okay, maybe like that could kind of like maybe be a scam. Oil and gas is kind of notorious for some guys that come and go with a little scam. They're gonna go drill some wells here and there on the wells and of dry or maybe they run off with your money, but pretty notorious. But for the most part, people running private equity funds do not want to go to prison. Like they're not super incentivized to run a scam. But I'm more than happy to tell you about a story where I was scammed recently in a private equity fund. Allen: No way. Doug: Yeah, I mean, if you want me to go into it. Allen: Yeah, yeah let's go. I'm sure people will be excited to hear about that. How the Mr. Smart Guy got scammed. Doug: Yeah, that's crazy. Well, looking back, I can see like, now I can see how the scam and where I went wrong. So like I said, I like to kind of diversify a little bit of my money away from these land deals, not because I'm worried about the land deals, but it is nice to dabble in other stuff. I think we're a bunch of like business people, entrepreneurs on this call, right? So like, when somebody comes to us with something, it seems like "Oh, just plop 100 grand, or whatever it is, and your fund, and you're gonna pay me. Sounds great". So there was this guy, I was at this competition where veterans were pitching their business ideas, and we're all investing in some of their businesses. And there was a guy in the audience, and he actually ran a private equity firm himself, which he was on his maybe 6th fund, and each fund was like only a year. So that's kind of a shorter duration than his normal. So that was a little bit atypical from the beginning. And then his first fund got a return of 63% in a year. And so it's like, of course, like, my eyes lit up. “Oh, my God. Wow, that's awesome”. Like, well, what about your second one? Oh, that was 45%. What about these other ones? And and it was I talked to one of the person who had invested with him, and they were, like, fairly happy at the time. And so I went out and I.. Allen: What was he doing? Doug: Yeah, that's a good question. Well, I'll tell you what he said he was doing. He said that he and his team are going out there and buying mineral rights from individuals and then aggregating those, and selling them to companies that were looking to buy larger chunks of minerals into like, they like direct mail and stuff. So that like, you know, old Sue, she's like eight years old, and heritage minerals, she didn't even know about it. And she gets a little direct mail piece from his company saying that they'll buy her minerals, I'm sure at a discount. doing that for a lot of people aggregating them and then selling them in a package. So it kind of made sense, you know, aggregate and sell for a higher price. And so but here's the deal, I'm not an oil and gas guy. And so I was not able to properly vet the investment. I was just sort of going off these other investors seeing kind of happy to seems legit. I went out to his office, and I met with him and his staff out there. He's got like, all these people with firm handshakes and strong like backslaps, you know, like, and I'm just like, maybe a team of 15 or 20 people there are a lot of them were rice, MBA, Rice University MBA graduates, and it just seemed, it seemed kind of legit, you know, the, and here's the deal. They're all almost all veterans. It was a veteran owned and operated business. So like, wow, you go in there. And there's like all these like, swords on the walls and stuff like, you know, and flags. And just like, this guy seemed like Miss Captain America. Like, I was like, you know, 15 years ago, I was running an internet business and this guy was out there like killing terrorists or something. It's like, okay, I was like really looking up to this guy and a lot of other people were too and so over time, he took on maybe 60 million from people over the course of five years or something like that. And ultimately, we found out through an email from him like two months ago that he had squandered almost all of our money and that he was basically using fun money to pay a staff which you cannot you cannot do that the fund money has this very designated purpose, which is to invest in whatever asset you're investing in and had just basically raped and pillaged the the bank account for the fund. And it's very hard for like 30 or $60 million, because I think ultimately the losses were 30 million. But for me, it was like, almost all of my money. The early like first two funds, they mostly got their money back. But beyond that it was it was scam time. Allen: Oh, wow Doug: And so yeah, so like he was holding this managing the funds. And we still don't know if he ran off with some of them on his own. Or if he was just trying to pay his employees and save his company and make desperate business moves to sort of save things or salvage things. And the oil and gas has been going downhill. It's been in a, I guess, a trough over the last year or two. Maybe it's doing better lately? I think it is. But that really hit him. Just, I guess maybe when the pandemic was starting and maybe.. Allen: Yeah it was, you know, oil went in the toilet pretty much. Doug: Yeah. So I kind of like, we're like, he'll go to prison, which I don't know why in the heck, you'd want to do something that would lead him to prison. That's crazy. Like any sane private equity fund manager, their main goal is not to go to prison. So then what do you? How do you not go to prison? You don't do anything illegal? Yeah. Tell that to made off? Yeah, it's crazy. So anyway, so but looking back, I've got some insights as to why I kind of got scammed there. I understand it more now. Allen: Okay, tell us tell us. Doug: Basically, if anybody's really like his disguise themselves, it's like a Veteran Business or Christian business or something like that. That's usually a little bit of a red flag, because they're trying to make themselves seem like a very reputable, or moral and principled, and all that, it's like an overreach. Allen: And they're taking credibility from another organization kind of thing. You know, they're tying themselves to something else. Doug: Yeah. So that's one. I mean, there's many things that came together, when you go on his website, which are websites probably even not even there anymore. A lot of his team members, they had various positions, but their background on LinkedIn, and all ends up being sales. Like they were all in sales before, like the Geologists was in sales. So that was kind of a red flag. He had a huge overhead, like, he's, obviously all these MBAs, I was like, maybe this is a red flag, but I wasn't so sure. And here's what I messed up doing too, is like, I know, his professor at Rice, or that was his professor. He is one of our fellow members. And I could have asked that guy because I asked him later and he said, “You didn't know that was a scam? It was pretty obvious”. He came in here. And every time they were raising money for something, he was dropping $20-$30,000 at a time, everybody else was dropping, maybe 1000s. So I thought, well, he's probably just dropping all the investors money. You see what I'm saying? I was like "Oh I got it". And he was, uh, yeah, he seems like he's maybe trying to compensate for something, make himself look a little bit better than he is. And then I got to know another investor in the oil and gas business later. He's like, "Oh, we've known that was a scam for the last 12 months", just the types of returns he's been paying out are not feasible in this industry. It doesn't make any sense. Allen: Oh wow. Doug: And so basically, I mess up by not asking those two guys before I invested, I just asked that the the satisfied investor that I knew. And actually when I asked him right before I invested, he said he was less satisfied with the fund, and that he would not recommend it. But I went against his advice, because he could not give me a firm reason as to why I should not invest. It was more like a gut feel that he had. My own brother who ended up investing had a negative gut feel about it, too. So basically, in the future, if I get some of these red or yellow flags, I'm just gonna sit on the sidelines, and I'm gonna sit out of that deal. Another problem is like he was, I'm 40 now and he was my same age. And so like, I'm thinking, Okay, this is a guy, like, I've had, like, 20 years of business experience at and so but I'm not sitting across from another guy with that amount of experience, even though it's just it kind of felt like it because he was in the military 13 or 15 years. And so that's life experience, for sure. But like, as far as like business, this guy was green. I'm throwing a bunch of money at this guy that's green and so as everybody else so that's a red flag especially in oil and gas. I think they need to be in the industry for like decades because that's that can it's very tricky, complicated industry and, and very volatile. And a lot of fortunes have been made and loss. I don't want the guy that's like new to the industry. Right? Yeah. So yeah. And also I messed up. I should not necessarily be investing in stuff that I don't understand very well like oil and gas. Unless I'm willing to put the time into that. So the outrageous returns were red flag. Anybody saying we're gonna get you 60 something or he didn't guarantee that but right. I don't know. It's just like, that's not super realistic. I mean, it can be done, I guess. But red flag. Allen: Yeah, I mean, our traders they can get it but We don't run a fun doing that, you know, they can do it on their own. They hear the trades, he learned how to do it and go for it and do it. And some markets, you do it in some markets, you don't in some markets you lose. But when you have a fund, you obviously have all these expenses, like you said, you know, the staff and the work involved and all that information, all the lawyers that you paid, I remember you telling me, you know how much you paid to the lawyers to make all the documents and the accounting and the photos and all the auditing. And that's done on a regular basis and all that stuff. Yeah. So it takes a lot of money to put this stuff together and actually run it. Doug: Yeah, totally. Oh, here's the company. Here's a couple more things about him. Like, he didn't let his investors mix and mingle. So I never really met any other investors besides that one guy like, there's other guys that run funds, they'll like even sometimes do lunches and dinners or like a group events for the investors because they have nothing to hide, let the investors check. Allen: This, I mean, if you're legit, if you're legit, you want that, you know, you want the happy people to mix with the new people. So the new people are like, Oh, yeah, are you doing it? They're like, Yeah, I do. It is great. You want that to happen if you're legit. Doug: Yes, totally. And we never got any documentation like showing which minerals we owned and what was sold. Like, I want to see like legitimate notarized documents, stuff that was filed somewhere like, so that's the problem with some funds, too, is like they're not obligated to show you all that stuff. Like, who regulates all this stuff? sec. sec. That's not I was thinking that may see that maybe needs to be something that maybe at some point becomes regulated. I hate to like, I don't I'm not like a fan of more regulation. That might be actually kind of handy. You know, like, it's crazy like the if you want to be a scammer with a private equity fund, you can. It does not end well, though. So you're not incentivized in that. That's when I shocking to some people would want to do it. You go to freakin jail. Allen: Yeah, Oh, I mean, you take the money and run to another country and live in it. Doug: There's like international police now. They'll get you anywhere. Allen: You can't go to like some island that doesn't have extradition or something? Doug: You'll be like the only white guy or whatever. Yeah. Allen: Head on down to Cuba and you'll be the king. Doug: It baffles me that anybody would want to do what he did. But I again, I don't think that's the norm. I asked a couple of attorneys. I said, How often do you see this? And they said not very often? Allen: No, because I mean, I know with your stuff ever since we'd invested with you. It's like, we get regular emails, we get regular update, since like hey this, look, we bought this land and hey, we bought this property. And here's the address. And here's the photo. And and before we before we even invested, I mean, you took us on a tour, like, you know, Doug: Yeah, we were actually on the land. Allen: Yeah, we saw the land we saw where it was subdivided. We saw, you know, people that were there, you know, that purchased other plots already. And they were building stuff. So I mean, it was everything was on the up and up, and it's still on the open up still, you know, if you want access, you call Doug up, and he'll explain everything. And if you want to go see it, he'll give you all the details and you go take a look and check the deeds are whatever you want to do. Doug: Yeah we'll send our statements or deeds, whatever. Also, some people if they are hesitant about investing in a fund, like for us, we're willing to sell people the notes that we generate. So like, they can get about a 10% return if they just own the notes, but it's a little bit more volatile. Because every now and then you might have a borrower that defaults, and you have to foreclose and then resell, so like investing the fun is just simpler. But if you're one of those people that just like I don't trust like somebody else having control over my money, there's other ways to get the same return with what we've got going on. That's why we changed our name from Hawthorne funds, the Hawthorne capital, because we sell notes, and you can lend against notes or you can invest in the fund, the fund is just the easiest. Awesome, cool, cool. How do people find out about you or talk to you about this? shoot me an email at Doug@HawthorneCapital.com That's D-O-U-G Doug@HawthorneCapital.com Allen: Alright, I'll put that in the show notes as well. And you know, one of the questions that I got after I did that episode 94 was like, you know, if you're making so much money in the stock market in an options, why are you investing in real estate or something else. And right now, at least in this market in this economy that we've had, you know, the stock market is doing amazing, it's doing great. I mean, this year, not so much. It's kind of, you know, going up a little bit last year was really good. But still as Options Traders, were making a killing. And I see my investments in my accounts in there, you know, just increasing and getting bigger and bigger and bigger. We're at the point now where I mean, it's got to end sometime, you know, and it's time for if you have a bunch of gains in your accounts, it's time to be diversified, especially with you know what they're saying with inflation coming down the road that's gonna be coming pretty hard. Land is a good thing to invest in when you have inflation because you can automatically just raise the price. Things lost more when you have inflation so. Doug: Well for us you know what the way that's affected is land has gone up in value. Big time over the last year, which a lot of us didn't see coming. We thought just you know, in a recession with our heading into a big recession, that would just decrease the value of a lot of stuff. We used to, we used to buy land for about four, or $5,000 per acre. And now we're buying it for eight to $10,000 per acre. Wow, no, we sell it for a lot more to so we're kind of in the flipping game we buy. And then a few months later, or sometimes it's maybe a year, we sell the little pieces because we buy a bunch and we chop it up a little pieces. So we'll sell those, but then we sell them on owner financing. So we collect on my income income stream over about 15 years. But we've seen that the market moving inland for sure. Allen: So who's buying these little pieces from you? Doug: Blue collar individuals who live in the city and want to be able to go out to the country on the weekends and enjoy time with their family and their dogs. And maybe they want some get some animals out there and maybe have a little swimming pool or something like that. They want to be on the country and there was already such a demand for that pre-pandemic, but it just exploded here with the pandemic. But our model works like pre pandemic during pandemic post. It doesn't really matter for us. It just, it changes some of the numbers a little bit like if we have to buy for more than we sell for more. Right, the demand is there. And we just we do a lot of advertising on Facebook to sell our ranchettes. And we also are on MLS and all these other places. But with Facebook ads, we're able to we spend about $2 per lead, and we're able to ramp that budget up or down and get as many ranchette buyers as we want. So it's just a matter of the sales team handling all those leads. Allen: Really? Doug: That was that was true before the pandemic, we didn't need the pandemic to make our business work. Allen: And what about the land, finding the land? Doug: We look on the MLS, there's a website called lands of Texas, there's one of those for just about every state. So we look at a bunch of land, and we try to get a deal on when we can but usually maybe the best we can do is about a 10% discount. No, we're looking for land that has access to roads on a couple of sides that we can chop it up into where each little ranchette it will have access to a road. So normally we'll buy one or 200 acres at a time, for example. And these are all over different parts. It's not like one all together, it's the subdivision. And yeah, so then we'll chop it up. And we need to give each of those little pieces access to road because it costs a lot of money to build roads. And that would make our deals a lot less profitable. If we had to do that. Allen: Ah, I see. So you buy the properties that already have roads, and you add the utilities or? Doug: Yes, we bring in we'll put in a water well, that costs about $6,000, maybe seven, and they will put in fencing usually cost about 5000 put in a gate for maybe another 1000 culvert driveway. Every now and then a pond that we bring we bring in power can cost one or 2000 per ranchette. So like the typical like 10 acre ranchette, we will have bought for about $80,000. And we will put about 20,000 and improvements into it. So now we're in it for 100. And they will sell it for maybe 180. Allen: Hmm, okay. Doug: And the fund lens as we do these things, it lands on the land, and then it lands on the note that we generate. So that's kind of the margins we're dealing with lately actually are probably selling for more than 180. Actually on that scenario. Allen: And how long do you think this will last? This will run? Doug: I don't see how it would end. Allen:There's plenty of land out there? Doug: Yeah, there's plenty land, plenty of buyers. I've got a lot of investors investing with us. And once a.. Allen: So you're not closed or you're not you're not full, you're still taking investors.. Doug: Okay yeah, that's good question. Fund to opens and closes as needed as so we took on about five or 6 million last month. And we close it because we have to deploy capital for new purchases, because as soon as we take it on, we have to start paying our investors. So we're not going to take on like 10 million when we can only deploy five. So as we're about to buy more land, so we'll open it up, temporarily take all that money and then close it. And we'll just accept a certain amount of money, whatever we need at that time, whether that's 2 million, 5 million, whatever it is, then we'll close it. Allen: So you have basically like a waiting list. Doug: Yes. Allen: Awesome. Cool. Cool. Cool. All right. Okay, I think we've covered everything I had all my questions. Is there anything else that you wanted to share anything else our listeners and our watchers need to know before they go out and invest funds? Because there's a lot of funds on now that you know, with the crowdfunding and all that stuff? What do you think about that? Doug: I think some of the inferior funds are going that route because if you've got a solid fund, you really pull a lot from your own network. And so you don't have to go like I don't have to go like list my fund on some sort of like fundrise or realty mogul or whatever. Because I get all my money just from my like word of mouth. Everyone just talks right. And that's how most like well operated funds are because they will take a cut of whatever you raise and so you get sometimes like slightly newer operators or they don't have. They don't have a network, or maybe there's not as good of word of mouth or something. So I'm not like a fan necessarily of investing in that kind of stuff. There is a cool website that came out called Vera Vest. It's fairly new, and they research, they do this sort of a background check on certain private equity funds. And so you can kind of go and make sure that they're, you can ever be fully sure, right, but make sure they're probably not a scam. But those operators are paying very best a fee. I don't know if it's like a monthly fee or what, for them to be like gold verified, or whatever it is on that website. And then so if they are, they're showing up high on that website, and they get a lot of new business from investors, or even a new investor capital. I say it's kind of like the BBB, you know, the Better Business Bureau where you have to pay them for drinking. To get the young people, people still believe in it. They're like, Oh, well, I mean, not too much anymore. I don't hear about it anymore. But people before were like, Oh, yeah, yeah, I'm gonna go check the BBB. I'm like, okay, but, you know, if we pay them, they'll say good stuff about us. That's kind of on my other business My House Deals with, we had had 42,000 something paying subscribers at the time, and we had five complaints in the BBB, that's five out of like, 42,000 something. And these are people that had never even raised the issue with us. First, they just went straight to BBB, because they wanted to refund or whatever. And the BBB gave us a D or F rating. And yeah, we went in there. And they basically said that we were like, poorly operating our company, I said, five, I'd like for you to say here's our list, I printed out like this huge stack, here's all of our customers, by people complained. And they said that basically, we need to pay them some more money. And then we would be like A-Rated. That's like, this is a racket. It is a racket! Allen: It is, it is. Doug: So luckily, nowadays, people can just look at Google Reviews. And those can be manipulated a little bit too. Like if the company is like sending all their customers to leave reviews or.. Allen: For something free. Like they're giving away a free service or something. Doug: Yes, they do that on Amazon too. Like.. Allen: Oh, Amazon full of fake reviews. I mean, they buy the reviews, they don't even give you know, it's like they'll there are companies out there you can hire and they'll just go out and give you like, Yo you want 20 fake reviews, okay, pay us. And we'll go and our people will go and, you know, they have all these fake accounts and everything. And they just yeah, Amazon. I don't I don't trust anything on Amazon like I have. It's super hard to know if the reviews are good. Doug: Yeah, they need to do some coding to kind of look for that. But there are certain plugins you can install. Like if you use Chrome as your browser, like a fake spotter review, and they'll analyze, see whether that they think that Amazon review is legit or fake, and I'll give it they'll give it a rating. That's pretty cool. Allen: Interesting. Doug: Yeah, at least we have that we don't have to depend on the BBB anymore. Allen: Yeah.Yep. Cool. All right, Doug, I appreciate everything you've shared with us. Again, Doug's email is Doug@HawthorneCapital.com Doug: ..or email my assistant Ellen@HawthorneCapital.com. Allen: Okay. Doug: We'll put you on the email list. So like maybe every, every four, six weeks or so you'll get an update that shows what we're doing. So if you even if you're not looking to invest now, it's fine. Like maybe three years from now, you've been getting our updates, and you've been getting educated and seeing what we do. Then if you felt like investing you could. Allen: Yup and full disclosure, I am an investor. I was in the first fund and we were over the money into the second fund. But yeah, so you know if you're, if you're interested in getting into a fund, do your due diligence, please, you know, this is you turning over your money to someone else, hopefully, they have experienced hopefully, they have a track record and they know what they're doing. And they'd like, you know, most of them most of these funds are not scams, because they do take a bunch of money to put together and investment to start up and they have something to show for it. I think the bigger fear is, you know, if the investment goes south, you know, how much of your investment Can you lose? Can you lose all of it, etc? Doug: Yeah, that's gonna be case by case each fund is going to have a different risk reward profile. So you really got to look at that. Allen: Yeah, yeah. How would you know? Doug: Well, ideally, either you're in that industry kind of like sort of like or you have a friend who is okay, you people that you want to run it by people and really get to know the operator, maybe talk to a couple different people who run you know, similar types of funds if it's more it's pretty common as multifamily apartments. Of course there's some commercials there's some office buildings and stuff that has been beat the heck yeah, I was talking to somebody at the gym that he put a put a bunch of money in a fund that invested in hotels. He put in his money and right before the recession. He got hammered. Allen: Oh, boy. Yeah. So do they like do those funds, then they go out of business and then they everything gets foreclosed? Hmm. Doug: The lender forecloses on the fund because the fund has borrowed money. Allen: Okay, so what can the individual investors do and when that happens? Doug: They get whatever's left over after the bank gets paid. Allen: So they can't sue,they can't do anything? Doug: Well, if there was like fraud committed, yes, but a lot. Some of that there was no fraud. It was just gonna be a poor investment. Allen: Oh okay, yeah if you guys do your due diligence. Make sure you know. Alright, Doug I appreciate your time. Thank you so much. We’re gonna put this up to everybody and you know, at least my recommendation is that Doug is a stand-up on his guy, most of the time and again, I’ve known him for years so yeah. Thanks Doug again and talk to you soon! Doug: Thanks Allen! Allen: Alrighty, bye bye Doug: Alright, bye
55 minutes | Jun 9, 2021
The Best Of OptionGenius First 100 Episodes
Passive traders, welcome to a very special episode of the Option Genius Podcast. This is episode number 100 hundred. No, it's not a hundred hundred. It's just 100, but yeah, it's one zero, zero. We made it to triple digits, which is a pretty good feat. They say most podcasts don't even make it for the first 15 episodes. So to get to a hundred episodes, I think it's been like two years and to have hundreds and hundreds of thousands of downloads and people listening to every episode? Wow. I am so humbled. I continue to be so humbled. I've said it before, but it's like, I can't believe it. You know, I never thought that anybody would want to listen to me that much, um, much less, several hundred thousand people. It's insane. I did want to do something special for this episode. We did go ahead and let's go be kind of like, uh, the best of, you know, so I looked at all the different episodes, see which one got the most downloads, which ones are the ones that most people email us about and ask questions about. And I went through and I said, you know, which ones do I want to highlight? Meaning that they're so good that I want to, you know, make you listen to them again, take the best things and be like, okay, we don't need the whole episode. Just need little snippets, right? Little pieces of it. So that it reinforces something that maybe you've forgotten, or maybe you didn't know, or you missed it the first time. So things that I thought were really important to get through, things that will definitely help you. And so that's what we did in this episode. So I went through identified eight episodes that I thought were really, really good to re go back and rehashing and go back into them. And then we cut and pasted the most important parts. So each episode might've been my 28 minutes or 30 minutes or 20 minutes or whatever, but there was, but three minutes worth of four minutes worth that really just summed it all up and, you know, hit the spot kind of thing, no stories. Cause I know sometimes I can go on and on with the stories, but I think these stories are important that people say they enjoy that. So there you go. But I also want to take this time to appreciate everybody for sticking with me and for all the wonderful comments and for all of the wonderful reviews that you guys have posted over the years, the last two years or however long we've been doing this, I read every single one. I really appreciated all those reviews. They do help other people find the podcast. They do help tell the different podcast services that, hey look, people like this and it should be shown to more people. And if you have not left a review, please, please go do that right away. It really, really helps. And I appreciate it from the bottom of my heart and it really helps other people because deep down it's about helping to me, you know, I could go out and trade for my own and I don't need to do the podcast. You know, we don't make money from a podcast. We don't have sponsors. We don't, it's just something that we do to spread the word, spread the message and say, hey, if you're stuck in life, if you need to make more money, if you want to have more free time, if you want to have less stress, if you're looking for something and you know that you can do better, then this might be something that would work for you. So come check it out. And if you like it, then we can tell you more. If you don't like it, that's fine too. But even if you just listen to the podcasts, like many people have, they just listen to the podcast, it gives them a little boost and then they go out and they keep doing it. So that's the whole point, you know, it's a motivational home and some people complain. Oh, why don't you tell us all the different strategies and how do you adjust, uh, Forty-five day Iron condor trade that's in the money and all this stuff. And it's like, that's really, really specific. And I think maybe in the future we'll get into those. But I think that that information is already out there in many different sources, right? Many different places. And if you want, and you have to get visual and you have to do a video where you can actually see the trade and all the different details and whatnot. So I try not to get into the more complicated issues on the podcast. The podcast is really about mindset. It's really about getting you to see what's possible, giving you that extra boost of momentum, letting you hear from other people who are doing it, who have done it, we're doing it. And me sharing the things that I wish that people had shared with me when I got started. And that's the really, the big thing about it. You know, we were doing the high probability trading live event this weekend, and there was something that we went through. We went through all of this different content with, through two days of content. And when I was going through my slides and my notes beforehand, I realized that my god, there is really, really good stuff in here, you know, but the person that he's new or the person that is not ready to hear will not notice all the depths that is in the session. And we had several sessions, some of them were pretty basic. Some of them had a lot of content in them. So it was me talking with slides and I just get going on and on and on the surface of it, if you weren't really paying attention, it's like, oh, this is basic. But every single line in there was put there for a purpose. So if you were coming at it from somebody who was on the low end of the option continuum where you're just brand new to options,I put it in a way where it wouldn't confuse you and you could get understand what I'm talking about. If you were in the middle of the continuum, I put it in a way where he could tell you, okay, this is the next step that you need to take. You know, you need to do this and you need to do this. And these are the things that you need to focus on. And then if you're on the upper end of the continuum, you could have really gone really, really deep because I shared stuff in there that I've learned, and he took me 20 years to learn. And I've never seen it anywhere shared anywhere before. I've never seen videos on it. I've never seen any other gurus talk about this stuff because most Gurus don't last for 20 years, to be honest, unfortunately, they're good marketers; they're not really good at trading. So most people don't last 20 years, I've been able to luckily and Option Genius has been around for, I think, 11 years now. So we've been doing this a while. We know the same thing over and over and over again, and it just works. And so I appreciate you guys. It's been a long journey. But we are making a difference now. And I see it every day. I see it from the people that came to the live event. They were the comments that they made, the emails that we got afterwards, the way that they're excited about learning to trade options. And they're excited about what their lives can be like, because they have hope, it really makes life worth living when you can go out and help other people. And I think that is the whole basic of it. So really, if you are listening to this podcast, I want you to understand, listen to it, learn and go take action and go do the things and go do the trades and go make the money and then go help the other people. Cause that's when you'll feel really, really good about yourself, you'll feel good when you eliminate the stress and the, and the bills and all that. And you're doing well and you're feeling successful about that, but you take it to the next level when you're starting to help other people in different ways. So thank you for listening to my little lecture there, but now let's get into the episode. So for the very first episode, I have a clip from Episode 74, which is the Passive Trading Manifesto. And I came up with this, I said, what is a passive trader, you know, define passive trader. Describe what I passive trader is thinking is doing, is feeling, and that is what I came up with for the manifesto. And it's just very, it's very short, but it's something that I think you will see yourself in at least part of it. And you'll be like, yeah, that's me. I fit here. This is the group that I belong to. This is what I want to be doing. That describes me. And I can't wait to get more. So let's listen. A passive trader is a new breed of investor. Smarter, confident, relaxed, and free. Passive traders are winners. They keep the odds on their side, take calculated risks, and make consistent profits over and over. Passive traders are flexible. They know how to adjust when the market does and still be profitable. They play their own game and use wall street’s secrets to their benefit. Passive traders are independent and can think for themselves. They know that no one cares about their money more than they do, so they manage it themselves, and better than the experts. They do not rely on financial planners, mutual funds, or robots to charge insane amounts of fess while providing below-average yields. Passive traders are patient. They sit back and let the gains come to them by keeping things simple. Passive traders are determined. They know their “why” and it pushes them to stay focused and never give up. If you asked a money manager they’d tell you that passive trading is impossible – the little guy is not supposed to beat wall street. Yet it is happening every day. Passive traders know that life is a gift and should be lived to the fullest. Money is not the end goal. So passive traders make their money work for them, generating an income 24 hours a day, 365 days a year so that they can spend their time doing whatever makes them happy. Passive traders are in control of their destiny, their finances, their emotions, and in turn, their lives. Passive traders… Define their own destiny March to their own beat Make the world better Live their ideal life Passive traders are motivated knowing that the odds are in their favor. I AM A PASSIVE TRADER! Okay. So for our second clip, we have one of the most popular episodes that I've ever done. It is episode number 26, which is called the Ultimate Options Trading Strategy. Now, there are lots and lots of strategies to trade options. Many of them work. I can't say all of them because I have tried all of them, but I know the ones that we teach, they do work. And if you only do each one individually, if you only do covered put, covered calls or they get books or credit spreads or condos or butterflies or calendars, or if you gonna do any of those or any variations you can do very well. If you're good at, and you practice, you only need to do one, but if you do more than one, that's fine too, depending on what you need. So in this episode, I break down. What is the ultimate, the ultimate options trading strategy? With our account balance what do we want? Do we want up and down roller coasters? No, we want slow and steady increase. In order to have that you have to be trading in a way that is actually boring because you know what you’re doing, that’s why it’s boring. You’ve mastered it, because you’ve excelled at it. The alternative is to do what you’re doing right now jumping around from strategy to strategy. I know what you thinking. Say, “Hey Allen, what about diversification, don’t I need to diversify? If I have maybe some earnings trades over here or maybe I have some naked calls over here or maybe I have some box spreads over here.” Yeah, you should diversify if you have an account that is well over six figures and you are already consistent and profitable. That’s it right there. If you are over six figures, and I’m talking about mid-six figures; $400,000, $500,000, more than that, and you are already consistent and profitable then you can diversify as much as you want. If you’re on the top end of the continuum, level’s nine, level 10, then you are making money so you are going to stick with what you know automatically. You’re going to go to the bread and butter and you’re going to do those every month or every week or whatever your timeframe is. Then with a little bit of extra cash you’re going to try other stuff. That’s the smart way to do it. If you don’t have over six figures, if you’re not consistent, if you’re not profitable already, then forget about diversification. Until you can make money with one strategy month after month, trade after trade. You have to be consistently profitable before you add another strategy to your arsenal, are you getting this? Is this sinking in? Yes? Hope so. Anybody that tells you otherwise is full of it and probably just wants to sell you something, that’s the truth. Stop all the noise, stop listening, stop jumping around, because the noise is there, the offers will always be there. If it’s not options, it’ll be Bitcoin. If it’s not Bitcoin it’s going to be marijuana stocks. If it’s not marijuana stocks it’s going to be sports betting, that’s the newest thing that’s going to come on, right? The Supreme Court just announced on Monday that states can now make it legal to bet on sports. Well, guess what? There’s going to be stocks on sports betting and they might even have options on sports and betting and all this stuff. Who knows what they’re going to come out with in future? That’s going to be the new hottest thing. If you keep jumping from one to another, to the nother, to the nother, you’re never going to get good at anything, you’re never going to be profitable, you’re never going to be consistent. Go back to the basics, back to the fundamentals. Choose one strategy and work on it until you know it inside out and you are profitable because that is the name of the game, that is the goal. That is the only thing that matters. I don’t care what strategy you use, I don’t care how you do it, I don’t care when you do it. If you are profitable you are winning. That’s the only way to know if you are winning, I don’t care how much you know. I don’t care if you know more than me, I don’t know if you know more history than me, I don’t care if you know more math than me, more about statistics, more about options, more about everything. If you are not profitable it doesn’t matter so go back to the fundamentals, go back to the basics, one strategy. You focus on it, you work on it, you back test it, you paper trade it, you real money trade it until you are profitable. That’s it, that’s the answer. Now, if you can’t figure it out, if you already tried, you tried your best and you can’t do it, then reach out to me, maybe I can point you in the right direction. Maybe I can work with you like I did with Simon and we can identify what it was that works best for you or that makes the most sense for you, and then how to actually implement it. In the beginning you don’t need complicated stuff, you don’t need complicated indicators. You don’t need complicated chart patterns, you need a strategy that you understand, that makes sense to you and you need toThen if you can do that then you tweak it. Then you work on it. Then you look at, like Simon did, you look at the entrance of the trade, you look at the management of the trade, you look at the exit of the trade, and then you improve your percentages. That’s how it works. Right now, Simon, like I said, he’s only doing one strategy and, yes, he is well over six figures in his trading account. That’s okay, it doesn’t matter. He doesn’t need to be doing anything else. I know people who only do one iron condor every single month. They do it on the same underlying, they do it on an index, and they trade literally over $100,000 worth of one iron condor every month. That’s the entire trade, that’s the whole strategy, one iron condor, six figures in that condor, every month. I hope this makes sense, I hope this is sinking in. I hope you got to this. Then finally, no matter which strategy you choose, whether it’s the condor, the credit spread, the ratio, the butterfly, I don’t care what it is, whatever it is, no matter which one you choose, make sure that the odds are in your favor. Peace. Okay now let's get into some serious topics. Okay. This is episode number 96. It's called how fast can you start trading for a living? And really the basic here is that I got an email from one of our students. He got laid off and he needed to know what to do to get up to speed as fast as possible. And this was the advice that I gave him. Just an update for him - he did take the advice he is doing it. He did happen to go back and get a job. But his trading is on par to be doing very, very well. So there's always hope, right? Like it says this too shall pass. So whenever you're in a bad situation, whenever you think everything is falling apart, just remember that everything works in seasons. You know, winter comes and it's hard and it's tough, but then there eventually is a spring. There is a summer and things get great again. So just all you gotta do is get to it, get through it, use the people that want to help you, take advantage of their help and do the best you can to get through it. I got an email from one of our members and I wanted to read it to you because he just got laid off and he wants to know how he can replace his income with trading. It's crazy that we get so many people in this same situation. It's great that when you have a job, right, you have an income source. You want to get into trading. You don't really like the job or you don't really like your business or whatever. You're like, oh man, I wish this trading thing could work out. I could get it. And you know, you, you invest in one of our programs and then you don't really follow through because life gets in the way. And I know how that goes. You know, it's, it's really the why. Right? Your why about trading? Wasn't strung out until something happens. Any jars you can. It's like, you know, it's like you, you might be driving along the street and you're not really paying attention to the road. And then all of a sudden the car comes out of nowhere, almost hits you. So here's, Todd's email. It says CLO Allen, I'm going through a life change. I want to get your opinion. I'm currently a member of your programs. I joined almost a year ago, have not been able to devote enough time due to work and family obligations. Totally understandable. I'm an engineer and work in the construction industry for a healthcare organization or read your book, listen, all your podcast sessions, at least once while going to work. Thank you for that last week. I was laid off from my job. And now I'm trying to decide my next moves. My wife works full-time and we have funds to carry us along for a couple months, but I will need to replace my income fairly soon and relieve the stress on my wife as an aside. Yes, that's very, very, very important because you are not, you know, when you get laid off, you're not the only one that suffered the whole family suffered, especially the other spouse, because that person has to carry the load, right? They're not used to carrying the full load. Now they have to carry the full load, and then they also have to worry about you and your mental status and the pressure on them. You also have to work off, so you don't want to add divorce to your problems. So be very, very careful about how your spouse is handling the situation. Make sure you give them enough time and enough attention to leave their pressure, take some of their work, you know, their homework or whatever other work is off their plate while you can. And if you're looking to go into trading. Discuss it with your spouse, explain what you're doing with them. So they don't think that you're just sitting at home, doing nothing all day playing with computers, watching TV. Okay. So that's a really important point. So let me continue. He says, I'm trying to decide if I should jump back into the construction rat race again, so I can draw a salary and benefits. Assuming I can find a job fairly quickly. Otherwise I would really like to immerse my time into your programs and start trading. I realized I have to get up to speed and take some time to learn your methods and develop my own trading plan. My main concerns are being able to learn your program soon enough and be able to replace my income. I was making 120,000 a year, but need to replace approximately 5,000 a month. Take home. I plan to start paper trading this week and scale up as I learn more, eventually I will have $250,000 in capital that I could scale up into an account. How realistic is it for me to replace my income with this size of an account? I would appreciate your opinion and any comments. Thank you. So that's the email I want to read to you what I wrote to him. And then I want to give you my thoughts on this and a little bit going a little bit more detail. So I told him, you know, Hey, I'm sorry that this happened to you. Very, very, sorry. My first thought was, Hey, you know, you need to get out of where you are. I know where he is. He's in a different state where things might be slowing down. So I'm like, Hey, you know, get out of there and get your butt here to Texas, because we can't find enough people to do construction, but that might not be possible. Um, so I don't think the issue here is if you can generate 5,000 from 250,000, the issue is how long it will take you to get there. And from what you wrote, this is me talking to you from what you wrote, you would be in your best interest, I believe for you to get out of the job for now as a fail safe. Okay. Maybe not a full-time thing, just something to bring in some guaranteed capital and keep the health insurance, if possible. Cause that's a big. Concern for a lot of people trading when you are super stressed out and you have to win is super hard. Trading already is very hard, but doing it with one hand timing on your back, it's much harder while you are looking for the second job, or even after you get the part-time job, spend three to five hours a day on your trading. Do that with the courses and programs you already have. You should be able to have the skills to do it full time in a few months, but having the skills is different from being emotionally ready. So you're going to have to overcome that aspect as well. So if you can start with a smaller goal, say 1000 a month on a a hundred thousand dollar account, that would be a great place to start. And then you can scale it up from there. And then I told him, because he's in the programs, I want to see you on the coaching call on Thursday. I want to see you and your paper trades, you know, groups. I want you to posting that. I want you to get a critique. So I want you to get my opinion, my advice. And I want you to send me a man told him, Hey, I want you to send me your training plan and a concrete plan of how you expect to get to 5,000 a month, including your asset allocation. And this is covered in one of the programs that he's already fired. You can do it, but having a job would relieve a lot of the pressure, but even with a job three to five hours a day, learning and trading, because enough is enough. Screw these jobs. It's time to learn how to make it from trading. Okay. Here's clip number four. This comes from episode 87 - How to Scale Up Your Trading. So now let's say you've already been doing trading for a little bit. You've been pretty safe. You're being conservative and now it's time to get big, right? You're you're feeling good. You're feeling confident. How do you go from where you are now to the next level? And it's, and it's not what you think. It's not about more strategy. It's not about more complicated stuff, more trading or more analysis or more software. It's all mental, it's all mental scaling, all mental 90%. There might be some things you need to do a little bit different because you're playing with bigger numbers and then there's less there's limitations to what you can do at bigger, bigger, bigger, bigger numbers. You know, we're talking about in the millions, but when your individual and you're scaling up 99%, I would say is mental. So take a listen. This is the question I get often and got this question recently from a listener. The question says, the one thing I struggle with is constantly being scared out of the market. I have a trading plan with iron condors and credit spreads and failed to follow it by not trading frequently enough or with enough size. How is the best way to scale up your trading to make a bigger income out of it? Basically, the fellow is saying that he does trades, mostly spreads, but he’s hesitant and scared to not do it enough and not do it with enough money when he does do it. He’s thinking about how can he scale up his trading to be better at it or make more money from it? The first thing you need to realize is that fear is not always a bad thing. I mean, it’s there to alert you to danger, right? That’s why we get scared, something dangerous happening, but it’s also there to alert you to opportunity as well. We look at fear as a negative thing, but fear is just a common response, right? It doesn’t have to be something that is bad for us that we are afraid of. Anything outside of our comfort zone can be scary, but that doesn’t mean that it’s bad for us. A lot of people are scared of placing their first trade. They’re scared of investing money in the stock market because they’re afraid to lose it, which is one possible outcome. Yes, but you can mitigate that and you can protect against that. When you look at it and you say, look, there are trillions of kazillions of dollars, whatever invested in stocks around the world, what do those people know that I don’t, that I’m afraid to put my money in the stock market? What are the people that are trading profitably and consistently? What do they know that I don’t know that I’m not consistent? That’s why I’m afraid of making trades or making bigger trades. How much do you actually want to make? If you’re trading too small to hit your goal, right? If your goal is a thousand dollars a month, but you’re only doing one trade that can only make a hundred dollars a month, you’re never going to hit your goal. Then the goal will help you scale because that’s just mad. You’re like, oh man, I can’t get my goal. Okay. I need to do more because I need to get to my goal. The other side is to have confidence. That comes with doing the trades over and over and over and over. If you use real money, it can take years as you go through the different markets, right? You go through a bear market. You go through a bull market. You go through a sideways market. You go through a correction. You go through a dip. You go through all these different things. It takes years to understand how to trade through all those different environments. Now, as passive traders, we have the odds on our side and the trades are built in to withstand these shocks, but it can still impact us. The biggest impact is on us mentally. Number one, like I said is you have confidence in your trading plan. If you’ve put on a whole bunch of trades and you’ve seen them work, you’re going to have more confidence. If you are trading with a group or other people are doing it, or if you have a mentor that’s been doing it and he’s telling you, hey, look, this is the way we trade. This is how it’s going to work. If you’ve seen it work, then you have confidence. Number two, if you have experience doing the same strategy hundreds or thousands of times, that’s basically how you get the confidence in the trading plan. Then step two of scaling is to increase your position sizing, obviously, right? Yeah. I want to scale. Okay. Step two. Step one that we talked about was, what did we talked about? Step one, being able to control yourself. Step one to scaling is being able to control yourself. Step two is to go ahead and then do it to increase your position sizing. Now remember, remember how you thought about going to school or training for whatever you do now for a living, for your job, right? Do you remember getting trained for that? If you had to go to college or get a certificate or go to a seminar or whatever, you did all that, you put up with all that because you were training. You were learning and it took time. It’s the same thing here. Trading takes time to learn, but this puts you in a real life seminar and you are paying your dues every day. The time that you put in, you’re paying your dues. You put your trades on, you monitor them, you debrief them at the end, right? What happened? What went wrong? What went right? What did I do right? How can I change it? How can I make my results better? You rinse and you repeat. You got a good plan, keep doing it over and over and over again. As your account size gets larger, you can go from one contract to maybe two, then maybe to three, then to five, then to seven. You go at your own pace. There is no race. There is no time limit. As long as you’re doing constantly better, you’re being consistent like I said earlier, the account will grow in size and you’ll get more confident and you can trade more. It’s up to you. You want to go from one to five? If you got the money and you’ve had the experience, okay, fine. I wouldn’t advise it. I’d go from one to two, two to four, four to six, six to 10. Take it small jumps. It doesn’t need to be overnight because there’s no rush. It’s not like, oh, my next door neighbor just bought a Mercedes. I got to buy one too so I need to do a hundred trades this month. No, forget him and his Mercedes. Who cares? Right? Be confident with who you are and what you have. Don’t rock the boat. We don’t want to take unnecessary risks we don’t have to. For most people, it’s better to move from say three contracts to four contracts, to six to 10 small increments because there’s no such thing as missing out on the trade of the century. There is no trade of the century. It’s like, oh my God, if I don’t invest now, I’m going to lose. I’m never going to get this opportunity again. No, it doesn’t happen. There’s no such thing. They said that before years ago, 20 years ago, 10 years ago, six months ago, they’ve been saying that forever. As long as you get in and you can consistently make money, you’re fine. It’s just going to grow. Everything is the same. You don’t need to put all your money in one trade when you’re not ready to do so. Okay. Now, step three to scaling. Once you have increased contract size, you need to increase the account size, or maybe you need to do this in the account size before you do the contract size. Either way, but one usually comes after the other. You do this obviously by adding more money to the pot, put more money in your account. Right? Now, you can do it the other way and you’d be like, you know what? I’m just going to grow the account, and whatever I make, I’m going to keep it and just scale that way. Or you can say, hey, look, I’ve got the confidence. I’ve got my emotions under control. I got a good strategy. I got a good mentor. I feel confident to be able to go to the next level so I need to add a few thousand dollars more into my account so I can go from say, two contracts to four or four to eight, right? I’m going to go incrementally higher. I’m not going to go from two to 10. Don’t do that. Two to four, two to five, slowly, slowly, build it up. Go to the next level, trade there for a little while, get comfortable. Then you can go again to the next level. It’s like going up steps, right? Once you’re adding more money to the pot, you can do something or you can add something to your account that’s called portfolio margin. What portfolio margin means is that you get additional leverage and you get the ability to make money quicker where less money tied up actually. For most brokers that I’ve seen, portfolio margin starts at $125,000. If you have that in your account, you get portfolio margin. Normally, when you open an account and you apply for margin, they give you two-to-one margin. If you put in $10,000, they’ll let you buy $20,000 worth of stock, but they charge you interest on the money that they lent you. We don’t really advise that. Right now, when you’re passive trading, you need to have a margin account. If it’s a non-retirement account, if it’s not an IRA, then you got to have margin enabled so that you can do spreads. You can do naked puts. But we don’t borrow the money. Portfolio margin is a little mix of both. Portfolio margin, I believe it’s like four to one or five to one in terms of margin. If you have a hundred thousand dollars, you can actually trade with $400,000. Big difference. You could buy a lot more, but I’m not telling you to buy a lot more. I’m telling you to do it because on your trades, they can charge you less in margin. What I mean by that is if you do a naked put that is very, very, very, very far away from the money. If you have a regular margin account, they might charge you, I don’t know, they say $3,000 in margin to do that trade for example. I’m just making it up. Okay. If you have a portfolio margin account, they look at it, they calculate that margin differently. They look at the actual risk of the trade. Because they can tell that you’re so far away from the money and that the odds are so far in your favor, there’s not a big risk of you losing money and so the amount of margin that they’re going to charge you or hold for doing that trade is going to be a lot less. It might be, say $500 compared to 2,000 or $3,000. With a regular account, they’ll charge you $500 a margin for a portfolio margin account. What happens there? Well, I can make a much greater return percentage-wise on my money. Right? Dollar-wise, they’ll be the same thing, but then I can decide, hey, what? Do I want to do two of these or three of these instead of one? Because I can, right? Because I have more leverage. I can do that. If the trade goes against me, of course, I’m still going to end up losing money and I’ll lose more because now I have three contracts versus one. I need to be able to know and be good with that. That’s why they only give it to you if you have over a hundred or $125,000. But that’s what I did. Right? For myself, when I started scaling, I went horizontally. I’m going to lay it out, two different types of scaling. What I did, I went horizontally, meaning I put small amounts into many different accounts. I had a Roth account. I had a regular IRA account. I had one each for my wife. I had a SEP account. I had a corporate account for the company. I had a couple of personal accounts. Then I would do different trades in all the different accounts, so I got a little bit, a little bit, a little bit in all of them, right? Yes. I have a lot of money in the market but they’re spread out in all of these different accounts. That’s what I call horizontally. In hindsight, the process worked and now all of the accounts are fairly large, but it took a lot longer than necessary because each account did not have enough money in the beginning to do everything I wanted. I was limited in the trades I could do. I was limited in the strategies I could do in the beginning because each account did not have that much money. If you have, let’s say a hundred thousand dollars, right? You put it in one account, you can do certain things with it that you can’t do if you open 10 different accounts with $10,000 each. That makes sense? What I’ve done now is I still have those accounts, but I went vertically right now. That’s how I’m scaling right now. I’m going vertically. I’m working on growing just one account to a certain level. Okay. Episode number 64 is next. This is our 5th episode. Title is called Selling Puts Versus Owning Stock. Now I brought this one up because when I first started in options, selling puts wasn't very enticing to me. I really didn't understand it. It wasn't something that I practiced. It wasn't something that I did. It wasn't only until years later when I actually understood the power and the reasoning behind it. I mean, I always understood the theory behind it and why you should do it and why people do it, but it wasn't until I actually started doing it where it came and fell in place. When I came up with the whole passive trading situation and the whole brand and the whole formula and you know, the fact that, yeah, I don't want to be trading all the time. I want to be just relaxed, less stress free and not having to be stuck in front of the screen all day. And for that, the naked put works really good. So in this episode, I compared selling naked puts to versus owning stock and see how we did. So I am finishing up the book called Passive Trading. Has been taken me I think over two years, but I’m finally getting close to completion. My editor told me that it’s probably better to add a few examples of trades that I’ve done in the past and some examples of the different strategies that we’re talking about. So I was like, “Yeah, that makes sense.” So what I did was I decided to go into the past and pick a stock and say, “Okay, this is a stock. What if I did what I’m telling everybody to do? How would it work out without knowing anything about the future or anything like that?” The example was for naked puts, selling naked puts. That’s one of the strategies I cover in the book. I talk about it, say how to do it, this and that. And I said, “Well, what would happen if I take my strategy, how to do it, and go and apply it in real life?” So I picked Walmart because Walmart is not a stock that I own. I don’t follow it on a regular basis. It is on my watch list because it’s a good company and it pays dividend. It might be one that I want to get into, but up till now I don’t own it and haven’t traded it very much. So I said, “You know what? Let me go into Walmart. Let me try it and see.” So 2018, January 2018, Walmart was trading at $98.59. That was really good because in 2017 the stock was up 42%, so had a great year in 2017. What’s it going to do in 2018? I don’t know. I don’t remember. And I haven’t traded, so I don’t know. So what I decided was I am not going to own the stock. I am only going to sell naked puts on it. If I get assigned on those puts, then I will see what I have to do there. Maybe I will sell the stock and keep selling more puts or maybe I will keep the stock and start selling covered calls. Either way, I’m going to have to do something, but I’m not going to roll. That was the decision. I wasn’t going to roll my putts. I was just going to take the stock. So I started on the 2nd of January, okay? First trade I did sold some puts, made 3.6% because the puts expired. Nice. Did another trade in February after that one expired. After the first expired, I did it in February. That one also expired. 3.2% gain. Then I did do one in March. 3.54% gain. Did one in April. 5.54% gain. Geez. This is easy, right? All I’m doing is selling naked puts on Walmart away from the money and I’m getting really nice monthly gains, and I’m not having to watch it. I’m not following. I’m not adjusting. I’m not doing anything. I’m selling the put, waiting till it expires, and then selling another one. That’s all I’m doing. Then, May came. Those puts expired. 2.83% gain. June, 1.85% gain. July, 3.9% gain. August, 2.53% gain. September, 2.75% gain. October, 4.89% gain. And November. Oh, November I finally get assigned. So on December 21st, Walmart closed at $87.13, which was 37 cents lower than my sold strike, so I had to buy the stock at $87.50. Now, you might be thinking, “Oh wow, Allen, yeah, anybody can make money selling naked puts in a bear market.” Walmart went up 42% the year before. It probably went up close to that in 2018 when you were doing it, right? Well, yes and no. 2018 was a year when Walmart traded from $98.59 at the beginning of the year. That’s when I started trading. It went up to $109.55, so it did go up. But then once it got there, it turned around and went down all the way to $82.40, and then it ended the year at $93.15, which means that the stock was actually negative 5.6% for the year. So if you had owned this stock, if you had bought it on January 2nd, first day of trading in 2018, and you held it to the end of the year, you would’ve lost 5.6%. Now, you would’ve gotten the dividends, so maybe it’s an even, but still that’s dead money. You’re not making any money on this stock if you are only buying it and holding it for the whole year. But if you had done what I did and you had sold naked puts the whole way, you would’ve made 34.65%. Let that sink in here. I was selling naked puts on a stock that went up and down and up again and closed down. So this was not a stock that just went up in a straight line. This stock lost money on the year. But because of the naked put strategy, I made 34%, okay? This is without owning any stock. I didn’t own the stock until very end of the year, until December 21 when I actually had to buy the shares. Until then, I didn’t own any stock, and I didn’t really spend much time on it. I just put the trade on, let it expire, and then put on another one every month. Takes literally five minutes or less. Didn’t watch the news on Walmart. Didn’t care about earnings, or announcements, or what they were doing, or how the stock was doing. Doesn’t matter. Didn’t care. All I did was sell a naked put every month. Let the one expire, sell more, let it expire, sell more, let it expire, sell more, let it expire, some more on a stock that went up or down. Now, I understand if this was a stock that had just gone straight up, then yeah, you could say, “Oh, yeah. It just went straight up. Of course you’ve made money.” True, but this was not that. This was a stock that went up and down, right? The next one's gonna be a little bit weird. This was episode number 54. Learning to trade is learning is like learning how to snorkel. It's like, what snorkel did he say snorkel? Yeah. I said snorkel like snorkling, you know, you put the little two with your mouth, you put the goggles on and you go put your hand in the water and bring it through the tube and you look at all the grass or fish or whatever you could see down there right? So this was a video actually that I shot in Cancun when I had gone with my family and my boys and I, we were, it was an all-inclusive place. So they give you circling equipment if you need it and whatnot. So we took it and were snorkeling, and really, they were learning. I had done it once before, but I had forgotten about it. So I was trying to get used to it again. And then I was showing them how to do it. And they both loved it and it was awesome. It was a great experience. But while I was watching them learn, I kept thinking to myself, oh my God, the stuff that they're saying, there's stuff that the behaving new traders do the same things. And so I saw the parallels and I said, okay, how do I get them to up on how to get them to be successful at it? And at the same steps that you need to take also work when you're learning how to trade. So take a listen and maybe you'll learn how to snorkel, enter it at the same time. I just wanted to shoot this quick video podcast to let you know that I learned something yesterday that I wanted to share with you guys and it’s really … Right behind me in the water, we took our kids snorkeling for the first time, the seven year old and eight year old boys. Sorry about the squinting it’s really sunny today, but we took them snorkeling for the first time and I don’t know if you’ve ever been snorkeling, but you get a little mask you put on and you get a little snorkel and you breathe through the snorkel and you look down in the water and you see whatever’s in there. Now, there wasn’t much to see out here. There was some fish. You go a little bit further over there, there’s some seaweed and stuff. There were some pretty cool fish, a couple of big fish actually. They were really excited about that, but when they first started, I had prepped them ahead of time before we came on the trip. I told them, “Hey, we’re going to do snorkeling. It’s really cool. It’s really cool. You put this thing and you can see all the water and all this different world, all that stuff.” They were all excited. They were wanting to go. When we got here, it’s kind of like trading, right? You hear about it, you picture it in your mind. It’s like, “Oh my God, this is so cool. I want to do this. I want to do this. Yeah, I’m going to be awesome at it.” Then you get your equipment, you get your mask, your snorkel, you get some instruction. “Yeah, this is what I’m going to do.” Then you go do it for the first time and you totally freak out because it’s not easy and it’s not normal. You’re not used to it because you’re not breathing with your mouth anymore. I mean, you’ve got breathing with your nose, you have to breathe with your mouth. Then if you get a little water in the top of your snorkel, then drinking water and then the water is coming in your mask and your eyes are burning from the saltwater. Believe me, we had that same experience. Basically, we walked them through it. It’s the same thing with trading. The first thing you have to do is you have to put your mask on, cover your nose, get used to breathing with your mouth. Open mouth breathing, breathe with your mouth. Once you got that done, you put the snorkel on. You got to make sure it’s all tight and snug and then you have to breathe with the snorkel. You’re just breathing with the snorkel. Once that’s done, then you stand in the shallow water, you put your head down and you just look around, focus on your breathing, don’t even worry about what you’re looking at, just focus on your breathing, making sure all your technical aspects are right, making sure you’re following all the rules, making sure step-by-step you’re not making any mistakes. Then once you have all that done, then that’s when you get into the water and you go deep and you start floating and then you can go a little bit farther. First time is going to freak out. You’re going to … It’s going to be like, “Oh, it’s not happening. It’s not happening the way exactly that I planned in my mind.” There’s a fish and you’ll freak out or there’s a piece of thing, something touching my foot. All that stuff happens, especially in trading. It doesn’t go exactly as you want, but if you go back and you stick to it, eventually you end up like my boys. I mean, they loved it. They loved it so much, they want to go again today and they want to go … There’s some shipwreck off the coast of the Island. They want to go over there. It blew me away how I couldn’t get them out of the water. I couldn’t get the snorkel off their faces because they were like, “No, no. More, more, more.” There’s nothing to see here, but they were so excited and that is how I want trading to be for you. Whatever your issues are right now, if it’s not going well, if you don’t know what steps to take, if you don’t know exactly what instruction you need, it’s there where it’s available. You just got to take the simple, simple, slow, slow steps, right? Get your stuff, get all your equipment, practice the easy things. Practice putting on paper trades. Getting on the trade, putting it on, getting out, putting it on, getting out. Practice finding trades. How do I find a trade? What do I go through? How do I make it streamlined as possible? Right? Because I don’t want you to just put on your stuff and just jump in the deep water right away. That’s what most people do. That’s why they get burned. I have a lot of people, a lot of students that told me, “Oh no, I don’t want to do paper trading. I’m going to put … I got $20,000 I’m just going to let it ride on one trade.” You’re freaking crazy because you’re going to lose a lot of money that way and they do. Then they come back and they’re like, “Yeah, I should’ve listened to you.” Well, that’s too late now. You just learned a very, very expensive lesson. Let’s not do that. Let’s do it snorkel time, right? One at a time, because in snorkeling, you mess it up, what happens? You just stand up. You drink some salt water, no big deal, but what could have happened and what almost happened with my second son is that he almost gave up. He tried it the first time. “Oh man, daddy, I don’t like it. This is horrible. I don’t want to do this anymore.” He threw the mask down and he threw the snorkel down and he just stormed away. That’s what we cannot have happened to you because if it does, then you lose out on a passive income stream that has the power to change your life. I mean, take a look around. I’m here on a weekday in Cancun, enjoying with my family and my trades are still working, right? I mean, you can see … There are not there many people here, right, because this is a private beach for a private resort. There’s not going to be a lot of people here. This is not like the cheapest resort on the place as you can imagine. That’s what comes with from trading properly and passive trading and the ability for you to be able to take vacations, not have to worry about your trades as much. I mean, I checked on my trades this morning. It’s actually the same time frame here in Mexico as it is back home for me. I checked on my trades this morning and they’re fine. They’re doing great. I’m making money, my options are … They got [inaudible 00:06:13] going on everyday so I’m not worried. I checked it. It’s all done, but I got to take the chance and the day, or at least a few hours, to teach my kids a skill or have an adventure with them that they are probably going to remember for the rest of your lives because I remember the first time I went snorkeling and it was with a school trip. It wasn’t with my parents, but they were here with their parents and I think they’re going to remember that for the rest of their life, which is pretty cool. All right, for our next clip, I am going to say something maybe a little controversial, maybe, maybe not. It depends on your perspective. Now there's a lot of people out there talking about FIRE, which is financially independent and retiring early. This one is coming from episode 47, where I talk about the same thing, but I talk about it with options. And I talk about why the fire thing sucks the way normally it's taught to do and why using options makes it so much better. You get the same result, but you have a lot more fun and you live a lot better until you get to the results. So if you're interested in retiring early, this one is a really good one for you to listen to. The title of this episode is “FIRE”, which is Financially Independent Retire Early. That is a new movement. It’s not really new, but it’s a movement that has become popular lately, and you can read articles about it, and people are writing books about it, and blogs and there are even podcasts about it and everything. It’s basically retire early, become financially independent. They call it FIRE. Cool. Okay. This is especially big amongst millennials, because I guess they don’t want to work for the man, and they don’t want to work till they’re 65 years old. But it’s really cute, though, how millennials think that they create things that have been around for generations. It’s like the desire to retire early. It’s like, “Yeah, this FIRE thing. It’s cute that you gave a name to it, but you guys didn’t create this. People have been wanting to do this since the start of time, really.” Anyway, according to the tenants of FIRE, you have to do three things. You have to earn as much money as you can at work. You do have to work. You have to earn as much money as you can. And, you have to get a side hustle. A side hustle, just another name that they gave to a second job. Whether you’re working online, for yourself, as a freelancer or you actually have a second job, or you do something else like trading options, you have to have a side hustle to make as much money as you can. The second thing you have to do is you have to save as much money as you can. And they do this by basically living as paupers. That’s what they tell you to do. Live like a poor person, like a homeless person. You don’t need a car. You can ride the bus to work and take a bike, because that’s healthy for you. Eat less food. Don’t eat so much. Don’t go out to the movies. Watch Netflix at home, all these kinds of things, where you’re trying to save as much money as you can. And then, with that money that you save, you invest it in something like index funds. You put it away, let other people manage it, and that’s the cycle. Earn as much as you can, save as much as you can, invest it. Now, if you follow that formula, it works. There are people in their 30s that have enough money saved that they can live off the interest off of their investments. Their investments or whatever they invested in is making money, and they can live off of that interest, which is awesome. They don’t have to work. Most of them don’t have kids. Even if they did, they still have to live frugally, of course. Because even in your 30s, even if you’re making $100000 a year as a job, you’re still not going to be able to save that much that you’re going to be earning a lot of income, or a lot of interest from your savings, from your investments, to live middle to upper class. These folks, they have retired. They’re not working, but they are living low to middle class, somewhere around there. That’s cool if you like that sort of thing. I don’t. I think you can have your cake and eat it, too. I want you to retire early and still be rich. That is doable, if you take control of your money. Now, I agree with the “make as much money as you can” part. I agree with that part. I agree with the “save as much as you can” part. Now, I don’t think you should live like a pauper. I think you should enjoy your life, even now, while you’re working, and you’re saving. I love driving. I love my car. I’m never going to give that up to save a couple hundred bucks in gas and insurance a month. But if that’s something that you want to do and that will get you to your goal faster, then do it. But your side hustle should be to learn to grow the savings you have as much as possible, instead of losing control of your money inside of a mutual fund. Does that make sense? Your side hustle, you have to make as much money as you can. You go to your job, you get your income, you save your money. What do you do with that money? Well, you can give it to somebody, index fund, mutual fund, and let them do it for you, and hopefully the market goes up or maybe it will go down and then pay fees for all that information and whatever. Or, you spend your time, and you learn how to do it for yourself, because there are people out there that will charge you to manage your money that are not going to do anything that you cannot do for yourself. You can actually do it much, much better. That’s what we’re all about. That’s what we’re trying to teach you. That’s the point of this podcast, to help you to learn how to do that. Take advantage of your own future, instead of giving it to somebody else, and then you can fire yourself much faster, years and years sooner. I did some calculations to prove my point, here. Over time, the stock market has averaged about eight percent a year, eight percent yearly return. That’s pretty good. But when you sell options like we do, we have the ability to make 10% a month. A month, not a year. Stock market, 8% a year, options 10% a month. Hmm. Which one is bigger? I don’t know. You could sell options one month out of the year, make 10%, and then take the rest of the year off if you wanted to. But these trades and these option selling I’m talking about is very high probability trades that can make you at least 10% a month. Ten percent, that’s my goal. That’s what I try to make every month. But I know traders that do a lot better than that every month. It’s definitely possible. Now, look. I know right now that might seem like a bit of a stretch to you, maybe if you’re not making 10%, or you don’t understand the strategies. Ten percent is a lot. That’s 120% a year. That is fabulous. If you asked me, “Oh, nobody every does that, Alan.” Uh, yeah. I do. I’ve done it before. It’s not impossible. But let’s be a lot more conservative. Even though 10% is possible, let’s just aim for 5% a month. That’s 60% a year. Still, very, very impressive. There are guys on Wall Street that will chop off their right arm if they could make 60% in a year. That’s really good. If you start with a $10000 account … Let’s say you start off with $10000 in your trading account and you’re making 5% a month, in 5 years, you would have over $186000. Five years from now, $10000 to 186000. That’s really, really good. What could that kind of money do for you? What would your life look like? Would you have a new car? Or maybe a new bike for you FIRE people? A new house? a new plane? I know, okay, okay. Maybe 5% seems a little high right now for you, maybe because you’re new to options and maybe you’ve tried to make it work before, and it didn’t work for some reason. All right. Let’s say you screw it up, and you don’t make 5%. You only make 3% a month. Let’s cut down our expectations. Do you think you could do that? If 5% is possible, and the odds are in your favor, do you think you could make 36% a year? That’s in addition to whatever you’re making on your stocks right now. You take that, and you add it to the 36%. That would be really good, right? Would you be happy with just 36% a year? That’s really good. I’d be happy with that, because in 5 years, if you have a $10000 account, your account goes from $10000 to $59000 in 5 years. That’s almost six times what you started with. We’re still talking about life changing money. It would be awesome, right? But I get it. Okay. Maybe 3% is a little high. How about if you totally, totally screw it up and you don’t even get 3% a month. What if you only get 2% a month? That is 60% less than our goal amount. But that’s still 24% a year. How would your account do, then? Making 2% a month? That would triple your account in five years. Your $10000 account in 5 years goes to $30000. And then, in another 5 years, from $30000, it goes to $98000, because it compounds. Every year, it’s just going to compound and compound and compound. Remember, we’re only starting with a $10000 account, here. $98000 in 10 years, that’s fire your boss money, right there. That is actually 2% a month is more than what Warren Buffet has made. He’s averaged 22% over his life. If you can do 24%, it’s possible you can do better than Warren Buffet. Now, he started with millions of dollars that other people gave him. I’m not going to compare that and say you can be the second richest man in the world, or whatever. I’m not going to say that. But you can do better, have better returns, than he does. These are all hypotheticals. Now, let’s look at a real example. Let’s figure this out. For most people, a really good average income would be about $100000 a year. Is that fair to say, you think? Would you be okay with that, if we used $100000 as an example? Let’s say we want to make that. We want to make $100000 a year income. That is $8334 a month, $100000 divided by 12 months. I’m going to leave taxes out of this, otherwise it’s just going to get too complicated. But first, what we need to do is we need to figure out how much money our account would have to be worth, because we’re trying to make $8334 a month. How much money would we need if we were making 2% a month, to be able to make that? That number is $416700. If you have an account that size, $416700, and you make 2% a month, you would be making $8334 a month. You would be making $100000 a year. We need an account of that size, $416000. But we don’t have that right now. Most of us don’t. You don’t have it. Okay. I get it. No problem. Right now, let’s say we only have $50000 in our account. I think that’s more normal. I think most of us have at least that, or maybe more, maybe a little bit less. It’s okay. But let’s just say we have $50000, and you can make 2% a month. If you have $50000, and you make 2% a month, question. How long do you think it will take you to get your account to be able to give us an income of $100000 a year? You start with $50000, you make 2% a month. How long will it take to get to $416000? You think it will take 20 years? You think it will take 30 years, 40 years, maybe? Well, I did the math on investor.gov. It’s a website. They got all these nice financial calculators that you can play with. It would take just nine years. Imagine that. If you’re 50 years old right now, you could be making $100000 a year in income before you hit 60. When you actually do retire, you’ll still be getting your Social Security, your pension and whatever else that you have in your investments. Sounds like a really sweet retirement to me. Am I right? If you have $50000 right now, and you only make 2% a month without any stock appreciation, in 9 years you would have a 6 figure income from just the income from your option trades. Oh, and on top of that, you’d be working about a couple hours a week. I think that’s the kicker. Oh, yeah. I forgot about that. We’re going to be working hard? Uh, no. Now, for some of you, you might not have the $50000 right now, and that’s okay. This is an example. You could start with a lot less. We have traders in our community that are starting with less than $5000. When you have a smaller account, it just takes longer, but you can still do it. Trades are the same, strategies are the same. Everything is the same. But the important thing is that you need to start now. Can you imagine it? No more credit card debt. No more worries about college costs. No more worries about not having enough money for emergencies. That’s pretty cool, right? I think so. It is. It’s an amazing way to live. You could lose $80000 a year and not even be mad about it. My wife got mad, to be honest. She did. I told her it was going to be a slam dunk. I was like, “Yeah, yeah. It’s going to work. It’s going to work,” and then we lost the money and she got mad. I didn’t get mad, but she did. All right. But what if you are super, super new to investing, and you’re just awful at trading. You’re the worst. And you don’t even get 2% a month. What if you only get 1% a month? That’s 12% a year. How many of you guys would be happy with 12% a year. I would. I think so. That would mean that your $10000 account, in 5 years, increases to $18000, and that’s without any stock appreciation. That’s just the income from your option trades. Even if you’re only making 12% a year, 1% a month, it’s still significant money. It’s still better than what you can do in the stock market, because you put your money in the stock market … Stock market is getting 8% average, sometimes 7. Some people say seven, some people say eight. I just went eight. But if you calculate all the fees, all the commissions you pay, you’re going to be looking somewhere around 4%, 4 and a half percent is what most people get out of the stock market. If you can make 12% on your own, and you compound that money month, after month, after month, after month, because when you look at the stock market and when you put your money in an index fund or a mutual fund or whatever, that money doesn’t compound every month. It compounds every year. When we’re doing our option trades, these are monthly trades, sometimes less than a month. If you have $1000 in your account, or let’s say $10000, to keep it simple. Let’s say $10000, and you make 10% in a month, well now you have $11000. The next month, you’re not playing with $10000 anymore. You’re now playing with $11000. It compounds every single month, and that’s why it can grow so fast, much faster than in the stock market if you put it in an index fund. Does that make sense? Good. Because that’s what I want for you. If you want to retire early, if you want to be financially independent, you don’t want to live like a pauper, like a poor person, like a homeless person, then the best thing for you to do is follow the plan that I just laid out. Number one, try to make as much money from your job as you can. Number two, you’ve got to have options as your side hustle. You’ve got to be selling options. You’ve got to be trading options, selling them, not buying them. Number three, save as much money as you can. If you don’t need to go to that five star restaurant, don’t. If you don’t need to go to the movies, get Netflix. It’s fine. You’ll watch the same movies later on. Once in a whi
8 minutes | Apr 27, 2021
How Badly Do You Want It - 99
80 miles. If you go on a car trip or road trip somewhere and drive for 80 miles, it takes a little bit over an hour. But on a bike 80 miles, whoo it can take all day long. Yep. So last week, I actually biked for 80 miles. Now I didn't do it on one day, I did it over three different days. But with the wind in my face, going up hills, down hills going out about 10 to 13 miles an hour, it took a long, long time. So this week, I didn't do 80 miles. I did 60 miles so far. And I am hoping to do another 35 miles on Sunday. Why you ask why am I putting myself through this? Well, there is a charity ride ride coming up in a week and a half that I have registered for and it's called the MS 150. Normally, it's 150 miles to over two days. But in 2021, because COVID they've changed it. So they made it a one day ride. And you can either do 70 miles, 80 miles, or 100 miles. I opted for the 70 mile one because well, I'm not exactly ready. Last time I did 35 miles in one day, my thighs were screaming in pain. But, I am going to do this ride, no matter what even if I'm not ready. Even if I'm the last one to cross the finish line. They close up the whole race everything. Everybody goes home. I'm the only one there on the road pedaling. I'm going to do that until I finish and I'm going to do it. Why? Because I put my mind to it. It's something I decided I'm going to do. First I thought you know, I want a hobby -join a bike team, sign up for an event, lose some weight, get something exercise, but now it's not about any of that. It's about crossing the finish line and pedaling that whole 70 miles. Is it going to take me eight hours, nine hours. I don't know, takes some breaks, maybe a lunch break and you know, a little time to calm down your muscles that are probably going to be cramping and spasming. Hopefully it doesn't take more than nine hours. But yes, it will take a long time. And it's going to be very difficult. And it's going to be something probably the hardest thing physically I've done ever. But I'm going to do it. It's really mind over body, mind over matter, right? Because I set my mind to it. And I made a decision. And I said, that's it. No, there's no backing out. There's no stopping. There's no quitting, no matter what happens, I'm going to finish this race, because I want to. So what is it that you want? And how bad do you want it? I want this thing. And so when you're out bike riding, you're out there by yourself in the heat for hours and hours at a time sitting on this small little seat that's very hard and your butt is hurting. Your butt goes numb if you're a guy, you know other areas in the groin, they go numb, your arm start hurting, your legs are hurting. It's not fun, especially when you do it that long. But I want it. It's mind over matter. I want it bad. I want to be able to say yes, I finished this ride. I did it. I set my mind to it. I finished. How bad do you want it? There are lots of people that email us, come to us buy some of our products and say yeah, "I wanna learn how to trade, I have to I have to" that's the words they use. And then a very small, tiny percentage of them actually follow through and actually do it. I hope that's not you. What is it that you want? And how badly do you want it? If you don't want it bad enough, it's not gonna happen. It doesn't matter. It's not about trading or exercise or losing weight. This is everything. How badly do you want it? Here's a question only you can answer. But the thing is, it is something that you can answer. And you can change your mind and you can change your desire into making something so badly wanting that you'll do whatever it takes. You'll sit for hours and hours on this hard little bike, pedaling in the heat, sweat stinging your eyes, wind blowing in your face, trying to push you down. legs, cramping, feet hurting, just going going going. I mean, I'm going to do it because I want to. What do you want to do? What do you want in your life and how badly do you want it? That's it. That's all it comes down to that is the secret to success. How badly do you want it? If you want it bad enough, you're going to find a way. If you don't want it bad enough, you're going to find an excuse. Even if you have the most perfect opportunity in front of you. Market has been going up. Markets are up 60% ss I say this, from the time we had the COVID, bear market, it's up 60%. Even if you didn't trade a single option, all you do is throw money in the market, you would have made money. And yet people are still on the sidelines. People are still Oh, I'm, I'm trying to open my account. I'm changing. I'm trying to find a better broker. Oh, wow. Stop making excuses, get it done. Mind over matter, put some urgency behind it. This market is not going to last forever, it's going to change, it's going to start getting more volatile, it's going to go down and up. And who knows what is going to do. Mind over matter? How badly do you want? And that's it. If you want it bad enough, you will figure out a way. And that's my message to you. How badly do you want it? And yes I keep asking because you need to give me an answer. You need to say this is what I want. And this is what I'm willing to do to get it. This is why and I want I want it. I want it. I want you to come up with your own answer. You don't need to tell me. You can tell me if you want. I'll be your accountability partner. You can email me email@example.com - you let me know, hey, this is why I wanted this, this is what I want. And this is what I'm going to do it. And if you do that, then we will email you back on your deadline and say hey what happened, did you do it? hope you did. Because everything you want can be yours. Everything is achievable. But you got to want it. How badly do you want it? Figure that out, change your life. That's it for this episode. To be honest, I am completely still exhausted. And I still have more training to go. But wish me luck. I'm going to do it. And maybe on the next episode I'll be telling you about all the stuff I learned on my ride. But until then trade with the odds in your favor and answer the question "How badly do you want it?" LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.
8 minutes | Mar 27, 2021
No Sex For You - 98
No sex for you. That's right, I said it, no sex for you. Well, not for me anyway. Like that was ever gonna happen. But still, hey, passive traders, I've been reading a book called Your Next Five Moves. And it's a book about business strategy. So the author of the book is saying that a Grandmaster of chess, when they play chess, they can think 12-14 moves in advance. So if I do this, he's gonna do this, if I do this, he'll do this, if I do, this opponent will do this. For 14 moves, right? In business, the author says, you should be thinking at least five books ahead. I'm reading this book trying to apply it to Okay, you know, that's for a business, how do we apply this to trading? You know, how many steps ahead should a trader think? And how do we apply these strategies to trading? So I'm reading through the book. And obviously, in chess, you kind of have a finite area, right? So the chess pieces can only do certain things, you can only move in certain directions, whatnot. And so when you're a grandmaster, and you do a move, you can sometimes kind of force the opponent to make a conflicting move. So if I do this, he has to do this kind of thing, right? Because if I put him in check, then he has to get out of check by moving this or this or something. So you kind of you can kind of structure that out many, many moves in events, even in business, you know, the guy says, Well, you know, you gotta have, you gotta be in charge of yourself. And you have to know that, hey, if I'm going to ask for a job, or a raise, and my job, then I need to know what could happen. So first of all, I need to be prepared, I need to show my value, I need to ask properly, I need to know what's in the best interest of the company and present it that way. So you have to have your presentation plan, that's like one move. The second move is what's gonna happen if they say, yes. The third move is what's gonna happen if they say no, and then can I back that up? Am I going to give them an ultimatum? I'm gonna do this. And if I do quit, then what am I gonna do that? what's what's my mood that so basically just thinking about, so if this happens, I'll do this. And this, and this giving ourselves options right? Now in trading, we are trying to be in control, and we try to stay steps ahead, but the market does whatever the market wants. So we're more in a reactive mode than in a active mode. That's why it's passive trading, not active trading. If you're a day trader, good luck. You know, I don't have the stomach for that all the time. So, how does a trader think many steps ahead? Well, number one, when you put on the trade, you have to have a trading plan. So that's obviously a step number two, the trade can go in your favor, or the trade can go against you. So you got to know what to do in either situation. Number three, the trade if it goes against you can go against you very wide, violently, and suddenly, or if you go very slowly against and you have to have moves for both of those aspects involved, you have to go thinking ahead for what are the small moves? What are the small things that could upset my trade? And then what are the big things that could upset my dream? Real micro and the macro? And then what are you going to do when the micro ones What are you gonna do on the macro lens? Right? And then you have to worry about not just the trading aspect, but you got to worry about your personal aspect. So what happens if I cannot get to the trade? What happens if something happens to the trader, right? Maybe he has a headache that day, maybe he is sick, and he has to go to the hospital for several days, then what happens to the trades? You have to have all of these things thought out in advance to be the best trader that you can. So yeah, there are several trades that we can do, as are several moves that we can do as a trader, and just really thinking about what is the risk? And what am I going to do to counter that? So I'll do this. This could happen. What do I do with this, this could happen? What do I do? The longer you get into trading, the longer you do it, the more trades you put on, the more you'll see what could happen, what could go wrong? And then you'll have experience and you'll be like, Oh, yeah, I remember that happened one time before. This is what I did. And it worked out. Well. That's why we also do backtesting, the more experience you can get under your belt. The more situations that you see, the more it'll be muscle memory, and then you'll be like, Oh, if this happens, I can do this. If this happens, I can do this. Because when you're first starting out, you don't know what you don't know. And that's why it's so important to have a mentor to have a coach, have somebody guiding you along and be like, hey, relax, calm down. This is what's going on. How are you going to deal with it? You can do a you can do B, to C to D which one? What are the pros and cons of each? What do you think is the best one proceed that way and let's see how it goes. Now mentor coach is not going to guarantee that he can help you be profitable, or get you the right answer every single time. Sometimes it's just not possible, right, they're gonna be lost, it's, of course, that's part of the game. Otherwise, it wouldn't make any money for us. If it was so easy, you just win every single time, there would be nothing you make, right? That'd be like buying a CD, you get like 1.1% on a CD. So the reason that we make money trading is because there is risk and there are losses. So you have to also have a move for how do you handle the loss? emotionally, and financially? You have to be aware of both situations. So now, coming back to no sex for you. All right. You're probably wondering, okay, how'd you get to this from that? Oh, well, in the book, the author Patrick Bet-David. He was a young kid, and he's telling his own story. And His goal was to become, have his company do a million dollars in sales? And so he was doing well or something. And then he was, I guess he was outside of a nightclub something happened? I don't know. I don't remember the exact story. But somebody asked him, hey, how are you going to know? What's your goal? Are you know that you're successful? Or what are you going to do to make yourself successful? I think that was the question, what are you going to do to make sure that you are successful, and he said that he was not going to have sex until he got a million dollars in sales in his company. And he took him something like 18 months or something like that, that was really cool. You know, because that was for him that was a big deal. Because he was like, in his 20s, or 30s. And he was very sexed-up. Supposedly, that's that's what he says in the book, he liked to party you'd like to hang with women, you'd like to drink. That was his thing when he was younger. And so for him, that was a big, big, big sacrifice. What is the equivalent to you? Right? How are you going to know when your moves are lined up? And how are you gonna know when you hit your goal? And what are you going to do to motivate you to hit your goal? So, you know, part of this podcast is, I'm trying to attack you in different ways to try to get you to take action, try to get you to think about different things that maybe you haven't thought about yet. Or maybe if you have thought about them, but you didn't get my second thought, or you didn't think about them enough. So I'm trying to re-hit you be like, Oh, hey, think about this. Oh, hey, what do you do about this? Oh, eight? What do I do? I can't give everybody the answers, because the answers are different for everybody. So the question is, if you haven't gotten started yet, or if you hadn't hit your goals yet? The reason is probably not because you are lacking all the tools. The reason is something internal. And you can make whatever excuses you want. I don't have the money. I don't have the time. I don't know, the proper education. Those are great. You have the same amount of time everybody else has. You have access to all the education you need through Option Genius. And in terms of money. Well, you know, what are you gonna do? How badly do you want it? What is the goal? Number one, do you know your "why" is it really, really important to you? And what are you going to do to get it? So in the beginning, it doesn't even take money to start, you need to back testing, you need to do paper trading, that doesn't take a lot of money. It's free. For the back testing, you can buy software, it's like 500 buck, a year, for some back testing software, build up track record. And then you can find the money. There are lots of investors out there that will fund somebody take a chance on you, if you've been shown that, look, I know how to make money. I mean, I've done it, I know other people that have done it. And even if you give them 100% of the gains, you look to somebody, you say, Look, I know how to make money, funded open account, I'll trade it for you, you keep all of the money. I'll do it for you for free. That's kind of weird, right? You get to work for free, make all the money that guy gets all the money or the other investor gets all the money, you get nothing. Yeah, if that's what it takes. That's you're getting your practice with no money at risk in the money with real with real money in the markets. Right? I mean, you can't get like any better, no risk situation and obviously, we lose money, the guy's gonna hate you. That's the way it goes. If you are motivated enough, you will find a way. Now, for those of you who are not motivated enough, that's where it comes to. Right. That's where that's where this question no sex for you or this idea comes from. So if you don't have that motivation to just go nuts and do whatever it takes, then maybe you need to sacrifice something, maybe you need to take something out of your Life until you hit your goal. So you got to carry and you got to stick. So what is it? No fast food? No beer, no TV? I don't know, what is that thing that you spend time on or money on? That is pleasure for you but it's taking away time that you could be spending on learning how to trade and getting better at your trading? Figure it out, and then set your goal and say, Hey, you know what, I'm gonna make XYZ dozen dollars in the next month, or I'm going to make 50 trades and the next two months, or I'm going to make, you know, I'm going to learn this strategy. And I'm going to put on my first trade. And I'm going to make 10% on one trade, whatever, whatever your short term goal is, or maybe your long term goal, you know, the author, Patrick's goal was $1 million in sales. And obviously, it takes a whole while to get to that number, right. So maybe for you, it's a "I want to make $50,000 from my training". Great. I love it. That's an awesome goal. What are you going to give up? Or what are you going to stop doing? To keep you motivated, keep you hungry until you get to that goal. That's what sex is for you. So maybe it is sex. I'm sure your spouse might not agree or your boyfriend and girlfriend, whatever. But if that's what he thinks that's what it takes, and then maybe you'll get some help from them, right? You'll get some extra motivation from them be like "Hello, hurry up here, please and get your gold" and it would be hilarious. But still, what is it figured out? What is the goal? Figure out what you're willing to sacrifice? Until you get triple? All right. So if you do if you do this, I would love for you to email me and let me know what you have decided to do. That would be cool. Just let me know. Email me help at option genius, calm and let me know what you're deciding to do what you're going to what you're going to sacrifice and give up until you hit your goal. So let me know, give me an email with your goal and what you're giving up. I would love to get these emails from you guys. I answer every one of them personally. So just let me know and keep the odds in your favor. Talk soon.
15 minutes | Mar 18, 2021
The Give Away Challenge - 97
Hey, passive traders. Howdy Ho, how's it going? Today I'm coming to you with a challenge. Yes, I'm actually going to challenge you, I had something I want you to do, or at least try because even if you try, it's gonna be better than not trying at all. And I believe that the word challenge has been watered down, you know, challenge used to be something tough, something hard to do something not everybody could accomplish. But now it's like, challenges in China that this ice bucket challenge, you know, thrives on your head, okay? No big deal. Right. So this particular challenge is actually going to be difficult. And it's not something that you're going to be able to do overnight, most likely, it's going to take some time, but I believe that this is a goal. That is very worthwhile. Now, let me give you a little background before I tell you the challenge, okay? They say, scientists, that is tell us that money can make us happy to a certain degree, right. So if you're making less than 75,000, they say, if you make more money, then you will be happier. Obviously, you'll have a better standard of living, less stress, all that good stuff, right. But after 75,000, the more you make, it doesn't really help that much, your level of happiness doesn't really change, you just stay at the same level. I believe the number is probably 100,000. Now, just because 100,000 - 6 figures is a good goal, everybody's like, Oh, yeah, make six figures. It's like a cool thing. So I would say, hey, that number is 100,000. So if you were making up to 100,000, you know, if you make more, you'll get happier. And then maybe after that, then you don't get happy anymore. But the thing is, that's really I think the point of life is to be happy. And then how do you after you're making that much money, then it becomes not about you, but it comes about how can you help other people, right, and then that's where it comes to the challenge. So I want you to be happier, I want you to be more successful. And I think that this challenge will be able to do both. First off, they have something called tithing, in Christianity. In Islam, they have something called Zakat. In Judaism and Hinduism and Buddhism, it's voluntary, I believe, to give money, not mandatory, but to encourage. So all the major religions have some sense of giving back to help, the less fortunate. The need. That's what I'm talking about. How much money of your income Do you give away? Whether it be a religious thing, or to a charity, or local cause? or whatever you want to do? How much of your money do you give away? Now some of you are thinking, Oh, Allen, hold on, they're barely making ends meet as it is. Don't be telling me about me giving away money. That's fine. You don't have to do it right away if you really can't, but I do believe that there is something that you can do. And if you do get it, it'll make everything better. It'll make you happier. And it'll make you more effective and more productive and wealthier. I've seen it with my own eyes. So here's the thing, if you're not giving anything, right now, zero. Now give me anything if you want, you know, tallied up to how much money do you give every month, on a monthly basis? Or on a yearly basis, however you want to figure out figure you know, find out what you make? How much did you give away to journeys to your religious institution? Maybe you know, give a loan to somebody that never got paid back. Because you knew Yeah, it's not very bad, that's also, you know, giving money to a friend or relative or whatever like that. Find out how much you make, find out how much you gave, what percentage is that? If you're not doing anything, if you're zero, I want you to get up to 5% I want you to give away 5% of your income. Okay, now this is for people who are like, really strict wrangling really, it's tight, everything is tight. And I think you should make it a family affair for all of us. The family should be on board with it. Wife, spouse, kids, husband, everybody. And maybe they all pitch in to help decide where the money goes. That'd be really cool thing. It's a good lesson to teach the kids as well. If you are giving something, but you're giving less than 10. Let's bump it up to 10. Okay, because if you already know how to give, then you got to make it a habit. You got to make it consistent. Okay, I'm going to get this much. Now I got to figure out where is it going to go? And that's the fun part. That's the fun part. We figured Oh my god, there are so many great places and great things that I want to help the world in. Which one do I get to help out? Eventually, the goal is to go higher. So for those of you who are giving 10% or more, you're not off the hook. Because the challenge the real challenge is to get you up to 20%. That's right, 20% of what you make your income now I'm not talking about taxes. I'm not gonna make it complicated. This could be before or after-tax, whatever. However you want to do it, that's up to you. But the challenge is to get up to 20% of your income given in a way to whatever you want whatever organization you want to, okay. How do you get there is an issue. So there are two things, two things you can do. Number one, you can lower your expenses, obviously, right? Now, I don't want you to lower your standard of living, I don't want you to live like a popper. So you know, cut the things that maybe you don't really use or need anymore. You know, maybe if you have a Netflix, and if you have an Amazon Prime, if you have a Hulu, and if you have a Disney plus, maybe you don't need all four of them. How much TV Do you watch anyway? Maybe you just need to or want to cut something, save some money. Maybe if you eat lunch out, five days a week, maybe you Brownbag at one day, not only will you be healthier, but you'll save money, you feel better about yourself. So, these little cutbacks, not only will they make you more financially stable, but they will also make you healthier, you know, you'll get out and do active stuff instead of watching TV. So we can only hope, right? The other way is to increase your income. Now 20% is a stretch by anybody's imagination, right? You're gonna have to really put your pen to paper and figure this out, like how much how can I do this, right? Go from 5 to 20 or 10 to 20, it's a big deal. So you're gonna have to make more money. And whether that's income from job income from business, investment, or trading, it's going to give you a logical, tangible, physical goal that look, I need to make "s" because that's the challenges. And then you got to figure out how you're going to do it. Now, it's not gonna happen overnight, like I said, can take some time. But I do believe if you set your mind to this challenge, and if you take it seriously, and if you do it, and you strive, and if you're on a 5%, right now, even if you get to 10, you know, and you'll get all the way to 20. Eventually, you will, if you want to, but even if you get to 10, that's going to make huge differences in your life. And then eventually, you know, maybe you feel like, okay, I don't need to give the whole point. But if you stop, you have 20% of your income just sitting there that you can use to build wealth, to build anything. Right. So it's basically building a financial discipline, to spend less, but also, it's pushing you to grow and to make more. And I think that's the real benefit. So yes, you'll feel better about yourself, you know, you're helping other people, you make a difference in the world. And who knows, by giving more money, it'll probably come back. That's the way it works, right? The more you give, the more you get back. But it will also force you to be thinking about more income. Now, obviously, we all think about Oh, man, I gotta make more money. I gotta make more money. Yeah, but this is a real number. You need to make a real plan. And then enact put that plan in motion. You know, step one, step two, step three, step four, and then you can drag and so how do you how good did I do? And you can make it a game? Because that's what is a challenge. It's a game, I'm throwing down the gauntlet and challenging you, and you get to make the world a better place. Now, for me, I'm right now I am about 20%. I'm not saying that to brag. I'm just saying that it is possible. Okay, I didn't get there years ago. Right, it took some time. But we built in a habit in my family, me and my wife, we both had a habit. Okay, we're going to start with, we started with 12 and a half percent. That's what we started with. And then we did a little bit extra, oh, hey, you know, this guy needs some help, we need to, you know, he needs a couple grand to fix his car, or this kid needs, you know, to pay his tuition payment for the month for the semester, give him some money here, or send it to charity or, or whatnot. But we came up with creative ways to do it. One of the things that I do with the kids is I've given money to this organization called Kiva, K-I-V-A-dot-org. Basically, what you do is you loan micro loans to people in other countries. So if you give maybe $1,000, each loan that you give is only 25 bucks, right? So you take the 1000 put it in the website and send it to them. And then you choose who to give the loan to. And you can give each person $25. Now, obviously, the people might need more. So there are several people giving loans. But the people then pay the loans back. So you get more money to lend to more people. Now the point here is not to make interest on it. You've given it the money away, but it gets repaid and then you get to learn it again to somebody else and get repaid and learn again, learn again. So I do this, my kids. And so now my boys, they're 8 and 10 right now, they get to choose who we give the loans And I haven't added any more money into it because the money comes back and we get more loans. And every couple of months, we look at it and say, How much money do we have? Okay, let's make some loans. And they decide who they want. They go through all of the available loans and look at the pictures and look at the description of what they need the money for, what country do they live in? Are they a man or a female? Are they a group? Are they individual? Are they going to be able to give the money back? Does it make does it make sense what they're trying to what they need the money for? They make all these decisions on their own, and then they pick. And then they track, like, How much money did they get back, you know how their loans doing. So they feel good about themselves. But they're also learning how to be a good lender, which eventually is something that I want them to know, because I want them to be making investments, that's part of the job, right, you have to know how to get your capital back. So we're using doing good to teach. So if you have kids, I think that's definitely one of the plays, one of the ways you can do it. But again, the challenge is to get yourself up to 20%, giving the money back or giving the money away. I'd be interested to know how many of you guys would actually check me up on this challenge, and how many are actually going to be able to accomplish it, it's going to be amazing. But if you get up to 20%, the feeling that you're going to feel it's unbelievable, where you actually, you know, you you feel on top of the world really does not only do you want less, like you desire less, it just makes you desire less things be less materialistic, because you're, you're not only looking at what you need, but then you're thinking, Okay, I need to raise, like I say, you're going to give away $20,000 a year, okay? You have to look for places to give the $20,000. And so you have to research. And when you're doing the research, you're going to find out all the things and all the people and all the places that are suffering, and need help. And you're going to feel so grateful for the life that you have. And whatever situation you're in right now, you're going to feel amazing. For a while, you know, I'm really in a blessed situation to be able to give away $20,000. And then you're going to help those people and you've got a few really good budgets. Not only that, but you've also increased your income hopefully. Right? And then the big thing about it is that the way the US taxes are, you don't even have to, it doesn't have to be a full 20,000. If you're making 100,000 You don't have to give away the full 20 like to make 20% because then there's taxes and stuff. So the more money you give, the more tax break you get. So you're not really having to in order to get 20% of your income, you're not really having to give away 20% 100,000 it's because of the tax breaks. So it's really cool. I thought I'd share this with you. It's an interesting idea. I think it'll definitely help you. So yeah, it's not easy. It's a challenge, right? Are you gonna, do it? I hope you do hope you give it a shot. Because not only will it change your life, it'll change your family's life and change the world. So with that, remember to trade with the odds in your favor, and good luck. Take care LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.
21 minutes | Mar 1, 2021
How Fast Can You Start Trading For a Living - 96
Welcome back. Do you remember a song I don't know, when it came out? It was I think it was in the 60s or 70s or something and it goes something like one is the loneliest number one is the loneliest. Now I apologize for my singing. And I think I was off key. And I don't even think that's how the music goes. The melody goes to the song sounds probably off on that too. And I don't even remember what they were singing about. But the message of the song to me is that yes, one is the loneliest number. I think it was about something that guy was alone, he lost his girlfriend. But the point is, for me is that yes, when you have only one of anything in your life, you don't really have a backup plan. Right? So if it comes to income, you only have one source of income. If you lose that source of income, you're kind of stuck up the creek without a paddle, right? And so I was reminded of this today, I got an email from one of our members, and I wanted to read it to you, because he just got laid off. And he wants to know how he can replace his income with trading. It's crazy that we have so many people in this same situation, it's great that when you have a job, right, you have an income source, you want to get into trading, you don't really like the job or you really like your business or whatever you're like, oh, man, I wish this trading thing could work out, I could get it and you know, you you invest in one of our programs, and then you don't really follow through because life gets in the way. And I know how that goes. You know, it's really the why, right? You're why about trading wasn't strong enough until something happens. And he jars you away. You know, so you you might be driving along the street, you're not really paying attention to the road, and then all of a sudden the car comes out of nowhere almost hits you. And after that you're like the best driver all the way home. You know, just jars you in. So this is a normal occurrence. But the older you get, or the longer you've been in a job, the chances of being laid off are increasing. Unfortunately, it's just the nature of the work ethic. And so you really need to have that backup in place. And unfortunately, for a lot of people, they're not ready with the backup plan when they get laid off. So here's Todd's email, says: Hello, Allen, I'm going through a live change your opinion, I'm currently a member of your programs joined almost a year ago have not been able to devote enough time due to work and family obligations. (Totally understandable). I'm an engineer and work in the construction industry for a health care organization. I read your book, listen all your podcast sessions at least once while going to work. Oh, thank you for that. Last week, I was laid off from my job. And now I'm trying to decide my next moves. My wife works full time and we have funds to carry us along for a couple months. But I will need to replace my income fairly soon. and relieve the stress on my wife. As an aside, yes, that's very, very, very important. Because you're not, you know, when you get laid off, you're not the only one that's suffering, the whole family suffer, especially the other spouse, because that person has to carry the load, right? They're not used to carrying the full load. Now they have to carry the full load. And then they also have to worry about you and your mental status and the pressure on them you also have to worry about so you don't want to add divorce to your problems. So be very, very careful about how your spouse is handling the situation. Make sure you give them enough time, enough attention to leave their pressure, take some of their work, you know their homework or whatever their work is off their plate while you can. And if you're looking to go into trading, discuss it with your spouse, explain what you're doing with them. So they don't think that you're just sitting at home doing nothing all day playing with computers, watching TV. Okay, so that's a really important point. So let me continue. He says I'm trying to decide if I should jump back into the construction rat race again, so I can draw salary and benefits, assuming I can find another job fairly quickly. Otherwise, I would really like to immerse my time into your programs and start trading. I realized I have to get up to speed and take some time to learn your methods and develop my own trading plan. My main concerns are being able to learn your program soon enough, and being able to replace my income, I was making 120,000 a year, but need to replace approximately 5000 a month take home pay, I plan to start paper trading this week and scale up as I learn more eventually, I will have $250,000 in capital that I could scale up into an account, how realistic is it for me to replace my income? With the size of an account? I would appreciate your opinion in the comments. Thank you. So that's the email, I want to read to you what I wrote to him, and then I want to give you my thoughts on this and a little bit going a little bit more detail. So I told him, you know, hey, I'm sorry that this happened to you very, very sorry, my first thought was, hey, you need to get out of where you are, I know where he is, he's in a different state where things might be slowing down. So I'm like, Hey, you know, get out of there, get your butt here to Texas, because we can't find enough people to do construction. But that might not be possible. So I don't think the issue here is if you can generate 5000 from 250,000. The issue is how long it will take you to get there. And from what you wrote, this is me talking from what you wrote, it would be in your best interest, I believe, for you to get out of the job for now, as a fail safe. Okay, maybe not a full time thing, just something to bring in some guaranteed capital and keep the health insurance if possible, because that's a big concern for a lot of people. Trading when you are super stressed out, and you have to win is super hard. Trading already is very hard. But doing it with one hand timing on your back, it's much harder, while you are looking for the second job or even after you get the part time job, spend three to five hours a day on your trading. Do that with the courses and programs you already have, you should be able to have the skills to do it full time in a few months. But having the skills is different from being emotionally ready. So you're going to have to overcome that aspect as well. So if you can start with a smaller goal, say 1000 a month on $100,000 account, that would be a great place to start. And then you can scale it up from there. And then I told him because he's in the programs, I want to see you on the coaching call on Thursday, I want to see you and your paper trades in our groups, I want you to posting there, I want you to get critiques, I want you to get my opinion, my advice. And I want you to send me a bit I told him, Hey, I want you to send me your trading plan, and a concrete plan of how you expect to get to 5000 a month, including your asset allocation. And this is covered in whatever programs that he's already part of, you can do it. But having a job would relieve a lot of the pressure. But even with a job, 3-5 hours a day learning and trading. Because enough is enough screw these jobs, it's time to learn how to make it from trading. Okay, so that was my email to him. You know, you can let me know if what you think if I gave him the right advice or not, really, this brought me back to my situation. And how I got involved in trading full time was also being laid off. And I eventually ended up losing over $40,000 of my wife's money before I got serious turned it around. And I don't know if you know my story, but pretty much that was my story in a nutshell. But really, I was doing all kinds of training and losing money at it. Until really I sat down with my wife and we had like a, you know, come to Jesus moment and be like, Alright, I'm going to give myself three months, if I don't figure this stuff out, I'm going to go get another job. And at the end of those three months, I don't think I've ever shared this. But at the end of those three months, I still wasn't making money, but I wasn't losing money. So that to me was a huge step. So if I'm not losing money, then I can tweak the results I'm getting and start making money. You know, I've overcome the major hurdle of screwing up. Now I just need to screw up a little less, and fix it and start winning and start doing the right things eventually took a while for me to make a full time income from trading. But even for the person who sent me this email, that's not his immediate concern. Right? He was making 120. Now he's trying to get up to five, which is a little bit less than he was making full time. I'm sure even if he can get to four, he would still be happy on the size of his account, it's totally doable. If he had the experience, if he had the knowledge, if he had the strategy. You could do it right now. But that's not where he is yet. Right. So the question really is how fast can you start trading for a living? So I have a few notes here. Number one, the thing you got to understand is that the stress can be overwhelming. So if you have to win like if you have if you say I'm going to put on these trades and from these trades I can make $5,000 and every single one of them has to win in order for me to pay my rent, send my kids to school, get the gas in the car and eat, that's very, very stressful, you are not going to win, you're not going to be able to. Okay? trading is trading, there are losses, it's just the nature of the game, every trade is not going to win every month, you're not going to win. So if you have to win every single month, in order to pay the bills, it's not going to work. Eventually, there will come a month where the money's not there. And then what happens? Well, now you're taking out of your trading account. So your trading accounts getting lower, lower your whatever you make all your gains, you're taking it out to live on all your losses, whenever you do lose money, you're still you're taking money out of the account to survive. So eventually, your account is going to get smaller and smaller, it's never going to grow, unless you're making a lot more than you're spending, which is going to be hard to do, especially in the beginning. Right? When you are desperate to win, what happens? You take more risks. Unfortunately, that's what happens. You don't play conservatively. You take more risk, you do a little bit more, because you're like, yeah, you know, you justified and you allies in your mind, and you come up with some justification to take more risk, even though in your gut, you know, you should. And what does that do? Well, that gives you ulcers, that gives you high blood pressure that keeps you up at night. So you can't sleep and it ruins your mental health, it ruins your life, it ruins your quality of life, you'll gain weight, all of this stuff, you're not going to eat right, you're not going to exercise it, it's just a it's a spiral going downhill, and one that you really really do not want to be on unless you totally have to. That's one of the reasons you know, get a part time job. Even if you don't get a part time job. Get a some you know, right now there are so many companies out there that are looking for like the freelance type people, you can drive for Uber, you can deliver groceries, you can deliver food, and it doesn't have to be a full time thing. You can do it when you want to and stop when you want to. And there's no shame in it. Okay, that's the one thing a lot of people have to overcome, you know, driving for Uber, oh, my god, no, I would never do that. I'm too good for that. No, you're not. Right. What is the end goal? What is the Why? The Why is to get off the rat race, to get off the hamster wheel, to be able to trade for a living and have the life that you deserve to eventually hopefully get your wife off of her job too if she wants to quit her job. Exactly right? So don't feel that you are too good for a part time job no matter what it is, as long as he's bringing them onto the table. Money is money. Green is green. Right? It pays the bills, when you also have to win, the stress, like I said can be overwhelming, you're going to feel worse about yourself, you're going to feel horrible about yourself when you lose, and that's part of the game, losing. But when you feel like you have to win, every time you have a losing trade, the blame is going to be on you, you're going to place the blame on yourself, I screwed up. I didn't, I didn't see that I didn't read the chart, right, I picked the wrong stuff, I picked the wrong strategy. And that's going to lower your self esteem, it's going to lower your confidence in yourself. And when you do that, it's just like a, you know, like a set of stairs going down. You do it a little bit and then gets worse, and it gets worse until you hit the bottom and then you just give up. And that's not what we're trying to do. We try to pick you up, we're trying to move you higher instead of bringing yourself lower. So, unless you absolutely absolutely have to, I would not suggest for anybody to put their back to the wall in this situation and saying, you know what, if you got to eat, you got to win on your trades. That's the wrong way to do it. That's the wrong way to trade, especially for the long term is or growth. The second thing we're gonna say is that it takes time to trade through different market cycles. So we got bear markets without bull markets, we got recessions, depressions we had up, you know, growth. We have now we have pandemics that we need to deal with. We had a tweeting president that we had to deal with and uncertainty about that all the time. There's different market cycles. And so when you think about trading for a living, you are thinking about what the market is doing right now. And as I record this, the market has been moving much higher. It's been moving it artificially, it's being inflated, that's not gonna last. So right now yes, you can put your money in something and have it go up above it, you can take money out and survive up that. How long will that last? If it changes, then what are you going to do that if you don't have the skills, so you need to develop the skills of trading through a bull market, bear market sideways market really fast crazy up and down roller coaster type market and the thing is, if you are trading for a living, and you don't have a cushion, like if you don't have other sources of income, or you have to win a certain amount, and you have to push the limits, you don't have the luxury of not being in the market all the time. Actually, no, I'll say that, again, you don't have the luxury of being out of the market, when you shouldn't be in it. Because times happen when it's not a good market to be in, when things are too volatile. When they're too crazy, when there's too much unpredictability and uncertainty, those are the times when we as option sellers, need to be on the sidelines, and just watching the clown go by, right, which is watching the parade go by, wait till things calm down, and then we get back in. And that's one of the beauties of selling options is that we go on a cycle of a cycle basis of month to month basis, expiration expiration, we don't have to be in the market all the time. But if you're trading for a living, and you're doing it on a limited amount of capital, so you have to extract a certain amount every month, you have to be in the market. And that can also cause you big losses, because if you're in the market at the wrong time, or you don't know how to handle the market when it switches, then that could cause you a big gain of your chunk of your portfolio. And then again, the smaller portfolio you have, the more stress it is to make to make your nut to make your amount of expenses that you have to come up with. Right. So those are the thoughts I had. Now I have some notes here about how to actually do it, what are the steps. So you take all that I've told you into consideration, you know, plan that if you're thinking about switching to quitting your job, or if you've been laid off, and you want to trade for a living, take all that stuff into consideration. Okay, now, here are some steps that you can take number one, I want you to pick one or two strategies to focus on the ones that make the most sense to you, not 100 different ones, we're not the goal is to get as fast as we can to make our expenses. Right? The thing that works the best for you. And if you've been trading for a while, go through all of your trades. Go through all your history for the past several years, what worked for you. What makes sense to you what seems easy to you? Now's not the time for you to figure out the nuances of Elliott Wave, you can learn that later on right now we need to put money on the table, right, we need to put cash in our pocket. What is the easiest, fastest way to do that? To me, I think it's selling options. Number two, have a small amount originally, and then scale it up. So if you notice in the email, I told him, you know, not, I don't have to try to make 1000 on $100,000 account, he'll eventually he says he has eventually like 250 I'm not I don't want him to risk the whole 250 when he doesn't know what the heck he's doing. But if you can take a smaller portion of that, say 100 and make 1000 per month as a goal originally, that's 1%, that is doable. That is confidence building that is hey, I made money. I'm successful. I'm consistent. I'm profitable. That's the goal. Right. And though that's not his eventual goal, that's not a long term goal. But it is a current goal, I think you should start small, hit your goal over and over again, build up that confidence, build up that muscle memory that you know exactly how to put the trade on, what to look for, how to manage it. And then you can scale it up, you can add contracts, you can add more trades of the same strategy in different stocks or whatever. But you start small and you start hitting it and getting hits, hits after hits after hits, wins in your belt confidence, then you start scaling. So you're not going to go if your goal is 5000 a month, you're not going to you're not going to try to hit 5000 your first month. Unless you've been trading for a long time and you know exactly what you're doing. You're going to start small, you know, 1% 1000 on $100,000 account is doable. Very, very doable. Then, once you hit the 1000 Okay, great. I've done that a couple of months. Okay, now I'm gonna try 2000. Now what I can do is I can just repeat, rinse and repeat what I've already been doing, maybe with a little bit more capital, right, I can take a little bit more of a risk. And I'm not risking, hopefully, you're not risking the whole 100,000. Right, whatever strategy you're using, but you can do it with a little bit more. And so you can get to 2000 and then she can get to three and four, five. Okay, at that point, maybe think okay, five is the limit 5% a month is a is really hard to eliminate for me, I can't do it. That's when you can add more capital to the account, let it grow. And then it goes back to being easy. Okay. 1% is easy. For some people 5% is too stressful. So then you need more capital so that you're only making 1%. So now eventually, if he has $250,000 and he needs to make 5000 then all he needs is 2% if he can learn how to consistently make 2% on a smaller amount like, let's say 100,000, then when he puts in more money and he gets 250,000, he can easily make 2% on the 250. Because it's the same thing. It's the same trades, it's just using bigger knowledge. Maybe it's more spread, maybe it's more contracts, maybe it's instead of two stocks, or three stocks, this four or five stocks. But it's the same strategy, the same trading plan, the same system, just done with bigger numbers. So that's why I want you to hit small start off, and then you can add more money, or you can grow and scale from there. Number three, just like I told him, in the email, three to five hours a day of learning, of trading, and back testing. So the trading, not gonna take you long, right? I mean, yes, you're going to be sitting in front of the screen, you're gonna be watching all the numbers go up and down, and the charts and the candles and whatever you're gonna be watching, up and down, up and down the daily ticks, you move them up to CNBC, or the Fox Business or whatever, on all day, we'll be watching all that stuff, because you have nothing else better to do. Do you need any of that stuff? No. Do you need some further screen watching? No, what you really need to be doing is back testing your strategy, putting on as many trades as you can as fast as possible. And getting that experience getting that no-how figuring out what went wrong. Why did go wrong? How can I avoid that in the future. Now the learning aspect is not as hard as you think it doesn't take as much time as you obviously do. But that will not take you three to five hours a day, for months on time on some hedge, right, it takes a small amount of time to get the basics down, takes a smaller amount of time to figure out the strategy, what takes the bulk of the time is to do it over and over and over and over and over and over and over and over again. And that's why you have the backtest. Because right now he cannot afford to do it real money every month after month, he needs to do it right away, he needs to get experience under his belt right away. And you do that with back testing. So one of the software's that I prefer is option Explorer, it does cost some money, you can get a two week trial or trial or something like that, you know, if you're not working, you sit in front of that screen for six hours a day, five hours of it should be a back test. I mean, you do hundreds of trades in a day, if you sit there for six hours or seven hours or eight hours a day, literally hundreds, that is what you need to be doing. The other thing I have is yours, you don't want to be listening to idiots. I'm not gonna give you any names. But you only listen to people who have done what you are looking to do. Okay, because I know there are Facebook groups out there. I know there's plenty of YouTube videos and YouTube channels and whatnot, everybody tries to sell you their next course and their next prop. If they are not making money, if they don't have results that you can see, they don't have hundreds of customer success stories. Don't listen to it. Okay? Because that's going to take you down the wrong path. We need to focus, we need to dial down, fix one thing that works, and do it over and over again and learn. And you're not going to learn from a group, you'll get small pieces of advice, you might post a trade. And you'll get some people that says Oh, hey, you know, check this out and check that out. That's great, that might help you. But if you do the back testing, you'll figure that out yourself. Because you never know when you get advice from somebody online, what their experience level is, how much they know, how many trades do they put on. Because a lot of times people that are posting comments in these three groups are people that don't know anything. And they have all day to sit around and give other people advice when they're not doing anything themselves. That's the problem with free groups. Now, this fellow, luckily, is in our programs. And we have groups of people who have been through our training. And so they know our methodology. And so if he comes and post something, a question in one of our groups, he's going to get a real answer from somebody who knows what they're talking about, or from me, or one of my staff. And that is invaluable. Right? So it's amazing that he has done this already. He doesn't have to pay for it, because he's already in the program. So he's going to get that where he can take something and say, Look, this is what I'm thinking about doing. Can you critique it, and we will critique it and find out what's going right and what's going on. That is invaluable. Okay. And then the other thing I have is yours, you want to pay for quality information from somebody that you trust, and you have access to. So this kind of goes back to what I said. There's tons of things out there that you're going to see about stuff for sale. People talking about "Oh, you're gonna make a million dollars overnight". Oh, you know, you 500% Oh, we made 500 trades in a row that weren't most of it is all bull crap, unfortunately, and they get away with it. So if you're going to buy something if you don't have a course or If you don't have a program that you're already part of, I think you need to pay for quality information, you pay for something seven bucks, you pay something for 100 bucks, you're going to get what you pay for. Even unfortunately, now, some people charge you 2, 3 or 5,000, and it's junk. But if you don't know, if you're just starting out, you know, the library is a good place, books are a good place. And I would even say, I mean, this podcast, I try to be as real and as honest as I can. Other podcasts are not. So you know, I'm even hesitant to recommend listening to podcasts. YouTube videos are wolves kitchen, any idiot could put up a YouTube and put up a website. So have you figure if you're watching, or if you're going from webinar to webinar, you're gonna realize that most of them are jobs that people don't know the type, but they're really good at marketing, they're not good at trade. You know, and you got to really pay for quality information from somebody you trust, and they don't just have access to, you know, our programs, they have access to me, because that that's like super important. Right? If you cannot talk to somebody who's actually doing what they're teaching you to do, then you're on your own is no better than than a scammy YouTube video. So you really do need that access. But sometimes you have to pay a little bit more and get it. But if you can get access to a full time trader, or somebody who's doing this, somebody who's been through all the different markets, that is invaluable. And so for this fellow, I'm urging him that I want to see him on our coaching calls, I want him asking questions, I want him to post in the group and get responses from myself and the other profitable traders. And I gave him homework. You know, if he had not been part of our program, I would not be able to do that. But as a customer, it's like, dude, I want you to succeed, you showed me that you have an interest in succeeding. Now, I'm going to make you do it. Now you have access to me. So do this work. Right? And hopefully he does. And hopefully I'll be able to hold this in and help him through this. Number four, on my list of how to do it, you need a job. It's not full time job part time job, just to ease the stress, to increase your income. And to relieve the pressure on yourself. And what I would suggest, if you're in the shoes is whatever income you make, from your part time job, I would suggest you take that money and give it to your spouse, don't even keep it, don't pay your bills with it, let her handle all that. Or you just take it and give it to your spouse, say look, honey, you know, this is the money I made from my Uber-Driving. I'm gonna give it you give it to you, anything I make for my trading, I'm gonna take it out, and I'm gonna pay the bills with it. But here, I need you to have this so that you know that I'm not leaving you all alone in it, you are not in this by yourself. Because like I said earlier, you need to pay attention to that person, your spouse's mental status as well. Number five, keep doing what's working and tweak to improve your results. So maybe you're doing maybe you've tried 100 different strategies in the past, find out what's working. And when you find what's working, keep doing it. Don't go away from it, don't deviate, just do what it's working over and over and over and over and over and over. The thing that we have, as human beings, we have this tendency, if something starts working, we think that "Oh, hey, I can make this better". I can improve this. Oh, let me try it this way. Oh, what if I do this? What if I did that, that's great. You do that later. You do that after you're making money. So if you join one of my programs, and I give you a trading plan and say, Look, do this, because this works for me. I want you do it exactly like it says, only until you're profitable and consistent and making money and you have oodles of money in your billionaire, then go play with it and change it and try to fix it and make it better. Until then do what it says because it's been working. If it's not working, I'm not going to sell it. Or if I tweak it, or if I change it, because I'm doing it every day. Then I'll go ahead and change it until you look I changed it. So you don't need to worry about that's like one thing off your door but don't try to fix it. It's not broken. don't fix it. Just do it over and over again. Shake was working and just repeat. rinse, repeat. rinse, repeat, rinse, repeat. You're gonna get bored on your mind. Just do it. And then number six, no gambling because you don't have the extra cash. Yes, maybe you'd love to put some money in Bitcoin because it's going to go to a million dollars. He that's wonderful right now you can't afford right now we're working on income. That's what we're talking. We need to get income up. We need to get you to a point where you're self reliant. After you have enough money, then yes, you can go buy a Rolls Royce or or a second house and do it on Airbnb or whatever you want to do. That's fine. For now, there's no gambling. There's no you know, high flying stocks. We're not buying calls or puts or whatever. We're not shorting. We're not buying Bitcoin or any other crypto or whatever that's gonna go to the moon tomorrow. We're focusing and focusing on income, doing the one or two strategies, doing them over and over and over again, trying to hit our goal, our small goal originally, and then increasing it as we show positive results. So we're not risking a lot in the beginning, over getting that experience, and we're doing it over and over and over again, and then increasing as we go. So after, you know, a couple months, if you hit your goal, increase the goal. See, if you hit it again, and increase it again, increase it again, keep going back for feedback, right? If you have access to a mentor, go back, get feedback, hey, this is what I did. This is what I do, right? What I do wrong, get some feedback from somebody who's actually doing what you want to be doing. And then just keep doing it over and over again, and scaling it. And eventually, yes, you can do this really, I don't know how long it's gonna take. But if you can put in the time, and you can do the back testing, and do hundreds and hundreds of trades, then it shouldn't take as long as you think it would. Okay, so let this be a message if you've been laid off. Or if you want to start trading for a living. Can you do it in a month? Probably not? Can you do it within a year? Yeah, I definitely think so. You know, if you're putting three to five hours a day, and it's taking you more than a year, you're doing something wrong, your time is not being spent effective. If you can put three to five hours a day or more, then yes, you can definitely do this. I have 100% faith that you could do. Now, whether it's, you know, anytime after a month or two months, or three months, up to a year or longer, I don't know, it depends on every person. If you're motivated, you'll find a way. And I think if you're listening to this podcast, you already found the way. You know, this stuff works hopefully, beaten in in your head long enough over and over again. Yeah, this stuff works. I'm doing it approve, look. Now you just got to find the motivation. You gotta find the time now obviously this guy before he said, Hey, I joined because I was interested and I liked it. But I didn't have the time because my business and my talent. Okay, great. Now the business or the work is not there anymore. So now you do it. family will still be there, family will always be there. But you're doing this for the family. Right. So that's it for this episode, guys. Remember, always trade with the odds in your favor, I hope you do never get laid off. But if you do have a backup plan in place, or start trading, and doing it in a way so that you get to quit instead of being laid off. It done your time. Don't let other people dictate to you what your end goal is, you should dictate your own. And so don't let one be the loneliest of all. LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.
24 minutes | Feb 18, 2021
Black Belt Credit Spread Trader- 95
How to be a black belt spread master. Black belt. Hiya! Like karate, right? Black Belt, that's the best belt you can get. So how can you be a spread master with a black belt? Let's talk about that. First thing we got to do, though, is go over the disclaimer, of course, trading and falls risk. It's not suitable for everybody, you can lose money, you probably will lose money. So don't raise too much. You don't want the spouse kicking out of the house. Right? Got it. Okay, so the last from the class, right? Karate Kid, the original, with Mr. Miyagi, that one rules. I love Jackie Chan. He did great. But the original Karate Kid, the original Miyagi, it was just kick ass. And I'm gonna have to tell you a little bit story here. Karate Kid. My parents actually took me to see this in the theaters. And I loved it. Right made kind of dates content your whole life, but I loved it. The original one is just a classic story of this guy. He's a little bit nerdy, he's skinny, he moves to this new town, he doesn't have any friends. He meets a girl. And then he gets picked on by this group of thugs, you know, and they know karate. And they're beating him up of over and over and over again. And then finally there's this guy's This is recluse, right? This guy who just takes him under his wing becomes like a father figure to him because he didn't have a father and teaches him how to defend himself and teaches him karate and karate is for defense. That's a very horrible, horrible accent. But, you know, that's what Mr. Miyagi teaches him. The Karate is for defense, and it's about life. And it's about meditation and being calm and peaceful. And all these things he gives him shows him how to do respect, right, how to give respect. And that's what karate is about. But the thugs, all they're talking about is no mercy, no mercy, right. karate used to win and beat in pummel, and, and destroy. And so we have the rest of the movie. And eventually, hopefully, you know, hopefully, you've seen the movie. If not go watch it. But I'm going to spoil that for you here. There's a karate tournament. And, of course, The Karate Kid wins in amazing fashion. Right? And then there's Karate Kid, part two. And so he goes to Japan, I'm not gonna tell the whole story. But that one was good, too. So if you haven't watched them, the originals, you got to go back and watch them again. And then now on Netflix, they have come out with a new series called Cobra Kai. So I guess they wanted to make more money from The Karate Kid. Right? And so they brought back all the actors. And they have a whole new series, where it continues the story. It's I think it's like 30 years in the future. 30 years have gone by since the original Karate Kid movie. And you see, all the actors have grown up, and they're all there except for of course, unfortunately, Mr. Miyagi Pat Morita, because he is unfortunately, he has passed away. But all the other actors are there. And that was I've been watching that. And it was cool. And I love the I mean, the acting is really bad. To be honest, the acting in this series is pretty bad. The story is like ehhh, you know, but I love how they showed the other side of the story. Like in The Karate Kid movie, you see everything from Daniel-san perspective. He's the kid who's just moved here how hard it is for him. You know, he's got a single mom, his mom is annoying. He's trying to make friends. But he's getting beaten up all the time. You see it from his perspective. In the in the Cobra Kai series. It starts you off. The main character is the main thug, the one that was torturing Daniel-san, and it shows you from his perspective, and he's telling the story of how this kid Daniel came to his town and messed up his life. stole his girlfriend, beat him in the tournament, made his sensei hate him, all this kind of stuff. So I loved how they showed both sides of the coin, the flip. And I mean, it was really well done. That part was really well done. Anyway, why am I telling you all this? Because after I saw the karate kid, I, of course, wanted to learn karate. Just like after I saw Top Gun, I wanted to be a fighter pilot. And after I saw Jaws, I didn't go swimming for years. But when I saw Karate Kid, I wanted to learn karate. So I told my parents, I want to learn karate, I'll put me in a glass looking too hot for me in class. So they did, buster, right? And so I joined a karate class. And I'm you see they have these belts. So you want to of course, you start off as a white belt, meaning you know nothing. And then you get a different color belt as you grow and you get better and better and better. And eventually you get to a black belt. And then when you get a black belt, it goes even higher. From there, you can get degrees of black belts. So I started off as a white belt, know nothing. And they started with basic stuff, right? How do you throw a punch? How do you do a kick? How do you Block a Punch? How do you block a kick? How do you block this and that and so you got four or five or 10 you know, basic moves, and you practice and that's what we did. That was the whole glass practicing, practicing, practicing, practicing practicing. Maybe you do a sparring with somebody else a little bit in very, very slow motion. But you're practicing the same moves over and over and over and over and over and over and over again. Eventually, I got tired of the same moves, and I'm ready to move up. So I go to my sensei (Sensei, as your teacher) I go to my sensei and Sensei, please show me some of the moves for the next belt because I want to practice at home. And I want to get really good so that I can take the test and I can go to the next belt. And what he told me is that I already know the moves. What are you talking about, Sensei, what I found out was that the moves in karate are generally the same at all the belts. The thing is that there is more complexity at the higher levels. So what he showed me is that in slow motion, he stood in front of me, and in slow motion, he threw a punch, and I blocked it. And I was able to block it, because that's what I learned as a white belt, he did a little kick, and I blocked it. But then he did it a little bit faster. And he pulled me on my butt. Right, because I didn't know how to block it, even though I should have been able to block it. And then he moved to the side a little bit. And he punched me from the side. And I didn't know how to block it. And then he hit me from the back. And he did I don't know how to block it. And then he had, you know, he hit me with to like combination really fast. And I didn't know how to block it. Even though I knew the moves, I didn't know the combinations, I didn't have the speed to block him. So then he told me to do the same thing to him. And he used the same moves to block everything I did didn't matter how fast I did it, or what side I did it, he was using the exact same moves, the block the basic block, the basic, you know, the the basic kick and punch and all that stuff to beat me, it was just the same thing. So that was his lesson for me at the time he goes, you need to focus and work on perfecting the moves that you already know, before you go to the next level. And so he sent me back, right? And do the block do the kick Faster, faster, better, better, crisper, more, more provision. So in The Karate Kid movie, if you if you watched it you remember it you know you remember wax on wax off, wax on wax on paint the fence up and down defense up and down. Those were the moves that Mr. Miyagi was teaching Daniel-san, and he made him do it over and over and over and over and over and over and over and over again, until he got so good at these basic moves, that he was good enough to go into the tournament and fight and win. You know, it was the same moves and Mr. Miyagi, he didn't have any belts, so he didn't tell Daniel-san. Okay, now your white belt. Now your green belt. Now your Brembo may even have any moves. He was just teaching karate, or karate, I guess if you say if you say it properly. But it wasn't about going from belt to belt. It was just learning he was about learning how to do the thing. Right? So now when we talk about credit spreads, we talk about learning the trade, learning how to do it, it's about learning the thing. So if you're a basic trader, and you want to get a really, really good trader, is there extra stuff that you got to learn? No, the moves are the same. The rules are the same, the basics are the same. There's more complexity, definitely at the higher levels. It gets scarier when you're dealing with larger numbers. You know, when you're not putting 500 into a trade, but you're putting 50,000 into a trade? Yeah, you can scare the heck out of you. That's more complexity. But the work that you got to do is the same. The basics are the same, you keep doing the same thing, punch, kick, wax on, wax off, that's all the same. It's just more complexity at higher, higher levels. So you got to do the work. Right? Now you take a look at Bruce Lee, the master of karate, right, the king. He's known to say that I fear not the man who has practiced 10,000 different kicks once, but I fear the man who has practiced one kick 10,000 times. Because if you focus and you excel and you expert at one particular thing, you can beat anybody else that that's not proficient. Okay, so even Bruce Lee did the same thing. The same exercise is the same, you got to master the basics. Every time I start losing money. The first thing I do is I stopped doing everything complicated. And I go back to the basics. Just take out everything, go back to the basics. That happens in everything I do, whether it's trading, or whether it's with my family, whether it's with marketing, whatever I want to do even like chess, you know, if you're if you're a good chess player, you start doing all the gambits, right, you start doing all the moves, but there might be a time when you start losing over and over and over again and you're like, I don't know what to do. If you don't know what to do, you go back to the basics, right, go back to the beginning. And then you build up again, slowly, slowly, slowly. So just like in karate, just like in chess, just like in anything else that you want to learn. You got to do the work. If you want to be a master If you want to be a credit spread Master, and that's what I want you to be in this program, that's the reason for this program, you got to put in the work. And that's why we do it over and over and over and over and over. And yes, it can get methodical, it can get boring. But that's how you become a master. That is how you become a credit spread black belt by doing the same move 1000 times 10,000 times, being able to put on a trade in your sleep, being able to have the rules ingrained in your brain so that you can recite them. And then eventually, I want you to be so good that you can teach other people, you can teach your kids, you can teach your family, you can teach your friends, your co-workers, you can teach them how to do this stuff. That's how good I want you to be a black belt, credit spread master. That's the point of this program. That's where I want you to be at the end of the program. And we're going to do it by putting in the work. So if you're with me, hey, yeah, we're gonna do it. We're gonna get you there. That's without any doubt in my mind that I can get you there. You have to put in the work. And you already know what that means, right? So if you're ready, let's do this. LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.
28 minutes | Feb 10, 2021
How I Invest My Money - 94
Howdy, howdy, howdy, passive traders. This is Alan Sama, back with another episode of the Option Genius Podcast. First of all, I want to say thank you again, for listening, thank you for spending the time with me wonderful to be in your ear. And if you're one of our power listeners, I'm gonna talk to a fellow this week, Matt, who said he has listened to every episode three times. So, Matt, thank you for being a power listener. And for those of you who would like to help the podcast or who have already done it, by leaving a rating and review, I totally, totally appreciate it, it really helps us get the word out there. And if you have not done so, I would please admonish you Please, I'm asking you nicely. If you could leave a rating and review wherever you listen to podcasts, or it was Apple Podcasts or Spotify or wherever you listen to him, just please leave a review and let us know how we're doing. I love to read them. And we love to, you know, check them out. So they're a lot of fun. Anyway, this episode is called how I invest. So I want to do two things on this episode. First of all, there's a book that just came out called “How I invest my money”. And so I'm going to give you a review of this book, I just finished it. And then secondly, I often very often get asked how I invest my money and how I separate my accounts and what I do with my money. And so I'm going to be sharing that as well at the end first the review then, and then I'll tell you what I'm doing. So that's going to be fun. So stay tuned for that. First of all, there's a guy, Josh Brown, he is almost always on CNBC sees a lot on NBC, either money manager, and he's got a blog, he's pretty popular, he shows up in all of the financial media, and they interview him and stuff. And I like him, you know, he makes a lot of sense the stuff he talks about whenever he gives advice, or whenever he says things, it's always simplified. So it's not doesn't use a lot of Wall Street jargon and stuff. But he looks out and he seems like he's looking at that particular, whatever they're talking about. He's looking at it from the eyes of an individual, you know, somebody who's working and who's given their money and trying to make sense of the stock market and stuff. And so, you know, I think that I kind of do the same. I think that's something that I have, where I can take complicated issues and boil them down and make them really simple to understand and explain them. So I think he does that as well. So it's really great. So one of the things I was watching on CNBC, and the host of the show mentioned that this guy, Josh has a new book out, and it's called, “How I Invest My Money”. And like, Okay, I need to get that. So I got it right away. And, you know, when I got the book, I was like, Okay, I'm gonna be excited, because you know, this guy smart, he's gonna tell me what he's doing with his money. And then when I actually got the book, I got even more excited, because it's not just one guy, it's 25 different people who are money managers, and they're all explaining how they invest their own personal capital. So I'm going to read the jacket, the back cover, it says the world of investing normally sees experts telling us the right way to manage our money. How often do these experts pull back the curtain and tell us how they invest their own money? Never. How I invest my money changes that, in this unprecedented collection 25 financial experts share how they navigate markets with their own capital. Sounds like oh, this is exciting. 25 people, you know, and I started reading about some of these people in the book. And they're like, wow, they're all money managers. They all some pretty smart from really good institutions, or, you know, they went to good colleges. They have been on CNBC, and they have been on Wall Street Journal, and they've been on Barron's and Reuters and interviewed all these places. Some of them have written books, they have all these letters after their name. So CP, FP, and XYZ and ABC and all these different letters that are supposed to mean something. So as your Oh, I'm really excited. So I read the book, and I will tell you on a score of one to five, you know, like on Amazon, one to five stars, I'm going to give it a one. I don't think you should waste your time or your money on this one. You can get it zero probably get zero, but I think one is good. Even if you can give it here. I think I'm still doing a one. Because the people did seem like they were honestly and openly talking about their own investments. Is that harsh? I don't know. I mean, that's my opinion. And I am saying that not because they're not nice people, not because they, you know, don't know what they're doing. But these people are holding themselves out as financial experts. Right? They are even saying this 25 financial experts. That's what it says on the back of the book. And they go on TV and they go on the radio, and they go on articles and newspapers and blogs and they tell people what to do as financial experts, not to me, an expert is not somebody who's struggling, but it is somebody who has already reached the goal that I want to get to. And that can help me - they've already reached the mountaintop. You know, and they're putting their hand out and saying here, hold my hand, I'll pull you up. I don't want to hire an expert that is five levels below me. Does that make sense? Especially when it comes to money management. Now, like I said, all these people have degrees, they all have appeared on TV and magazine. Many of them have gotten awards, like the 40, under 40 Award in their financial, whatever, you know, it's a financial money manager or 40, under 40 in financial management. That means they've been managing money for around 10 years, which is we've been in a bull market for 10 years. So these experts have never even traded or invested or manage money in a bear market - in a really tough market. You know, we had Corona, we had the March, we're on a bear market, but that doesn't really count. Good. we bounced right up in a month. Right. None of these people even remember the.com bubble. They weren't I don't know, they were like, what, eight years old, the.com bubble, they don't remember the S&L scandal in the 80s and how that happened. They don't remember what happened when, in the 70s. When inflation was super sky high, maybe they read books about it, you know. But to me, that's not really an expert, they don't have the experience to back it up. Now, I'm not that old. I'm 44. So I'm a little bit older than some of these people. But I do remember what it was like trading my own money, through the Great Recession, not even play with other people's money. That was my own money, what was on the line. These people, they don't play with their own money, they risk your mind. Because they're managers. They're not investors, they're not traders. They're not wealth creators, right? So if you're looking for really great financial advice or strategies, this is not the book, I would say that out of all these financial these 25 experts, I would say only three of them are actually really wealthy. Three of them could be defined to me as a financial expert, someone who is wealthy, and by wealthy, I mean that they could stop working today, and they have enough income and assets so that they don't have to work for the rest of their lives. That is well, that, to me is the goal. The goal is not for me to retire at 70 years old, and hope the money lasts for the rest of my life. That's the goal for these people. For most of these people, that's what they help people do. That's not the kind of expert I was expecting. So that's why I'm a little ticked, you know, out of the three in the book that are really wealthy, one of them got lucky with venture capital. He has a management company, where he is a partner in the money management company. He doesn't do any of the money management. He is a partner, he made an investment in a money management company. But he's really a venture capitalist, the second guy, he made all of his money in real estate, he admits it. He's like, Yeah, I don't do this. He has another, you know, he's a partner in a money management company. And that's how they made it into the book. But he made all his money in real estate. So he wouldn't know how to manage money. I mean, I don't think you should hold yourself out as an expert until you've actually achieved the thing that you're an expert in. Right? If you're a wealth advisor, you got to have some wealth, in order to be a frickin advisor about wealth. The one thing that all these people said in the book is that almost all of them own their own business, all of them own their own business. And for them, that is their largest investment and their largest asset. And that's really cool. That's great. You're a small business owner, or somebody, they're doing really well. So it's a medium business owner. So these folks, they make money by managing other people's money. They don't make it by investing, or trading. They spend most of their time looking for new clients. And that's probably why they agreed to be in the book for the exposure. You know, it's like being on TV, they get exposure, people see them and like, Oh, this person sounds smart. Maybe I should call them up and see if they can take care of money. So most of these people spend their time looking for exposure, looking to do marketing, looking to make new clients, they need more clients, so that they can have more assets to manage, so they can make more money. And then when they get a client, what do they do? Do they manage the money? Do they trade it invested? Do they come up with a real good plan? Well, they try to come up with a plan, but then they put the money in investments that are managed by others. So they're like the middleman. And that's not definitely not the advisor that I would want. You know, if I want a goal, if I have a goal and say, Hey, I need to get to this location. I wanted to get advice and directions from a person who's already been there before. Who knows the pitfalls, who's been there, done it, hopefully multiple times. That's the kind of person I want to give me directions and leading the way. I'll follow that person. Right. There was one girl on this, bless her heart. She is a financial expert, like everybody else in the book, you know, giving advice to everybody. And then she admits that she is Saving money in a savings account or bank hoping that when she turns 40, she'll be able to afford a trip to Hawaii. That's not what I was expecting when they say financial expert. You know, somebody who can't afford a trip to Hawaii doesn't really have total - what's the word? You know, the total control of their finances? You're not there yet. I mean, you're working hard, you're struggling. There's nothing wrong with that. That's great. That's awesome. You know, save that money. And go, or I mean, if you're listening to this, I got some frequent flyer miles, maybe just just reach out to me, I'll give you I'll send you a new trip on your flight to Hawaii. Really, please. It just broke my heart when I read that. I was like, man, but you know, I mean, they say that money management. The whole business of money management is where people that drive Toyota's are giving advice to people who own Rolls Royces. And it's true. 100% true. I mean, that is why the retirement situation is country's so screwed up. I mean, you got the blind leading the blind. And these people are the ones in this book. They're not average money managers. They're the top of the class, the cream of the crop, right? They won all the awards. Imagine if you don't have one of these money managers, and you just have an average money manager. Ouch, that's really sad. You know, you get some guy from Edward Jones or Ameriprise or something like that, Oh, my goodness, that's painful. But what the the co author of the book and I said, you know, Josh Brown is listed as the author. But he does, he does have a co author and it does seem that the book was done by the co author, Josh brown probably just wrote one little section. But it does look that the co author did hold the work and got all these information from all these people. You know, at the end, he tells you what you should take away from the book. And he says that these are people just like you and me, they have struggled, you know, they have to go through life, just like all of us. And that the important thing is not the money and money is not that important. But the other things that we value is the most important thing in life. And that's great. That's great advice. I love that advice. that money's not that important. But if it was coming from a life coach, that would make a lot more sense. Maybe a spiritual advisor, you know, that would make a lot more sense. Not from a wealth advisor. Okay, not from someone who's managed or entrusted to manage and grow my financial assets. Does that make sense? It's kind of like the doctor, you know, telling you Well, you know, getting healthy. I know, that's my job getting you healthy and keeping you healthy. But that's not the most important thing. Yeah, the most important thing is spending time with your family. Yeah, Doc, I know that. But your job is to keep me healthy. Can you do your job or not? Or do I need to go find another doctor? Same thing with these guys. If you're not wealthy as an advisor, how are you going to make anybody else? Well, you can't. And that's why most of them are putting their money in like passive investments, not passive trading, but passive as in index funds. And they say that I go, I'm a firm believer in index funds from people give me money, I put it in an ETF. People give money, I put it in a bond fund, they can do that on their own. Why do they need you, Mister financial expert? You know, Vanguard is open anybody, anybody can open an account, the vanguard put their money away. And if they don't want to invest, or they don't want to trade or they don't care, they don't know anything about the market didn't want to know, then that's the great place, they should go put it in Vanguard and they don't need a money manager charging them fees, for no reason. I mean, after reading this book, it really makes me value what we are doing here at Option, Genius, teaching people about passive trading. And how I mean, it's actually making a difference in people's lives. I mentioned earlier that I talked to a fellow named Matt earlier. And this guy, super nice guy works at Costco drives a forklift. I mean, he's a hard working guy, right. But he spent the last year learning how to trade options. Why? Because it can make a difference in his life. He's at the point now where he made $500 in a month by selling options. And it blew his mind. That $500 opened up a whole new world gave him hope, hope that other financial experts are not providing. So we don't have just, you know, passive trading is not a book. It's not just a couple of words. It's not just a trademark. It's an actual movement. And we are changing people's lives. After reading all this and looking at, you know what these people are doing? I mean, I think it might be time for me to start a money management firm, because people need better choices. It might just be time for me to do that. You know, nobody else is stepping up. Me and might as well do it, then.I don't know. Anyway, so that's the book. Don't get it. Don't waste your time. Let's get on to me, right? How I invest. This is a question that I get asked all the time. People like, Hey, you know, you're telling us to do this and do that. And do you actually do all this stuff? Of course, I do all this stuff, what am I gonna tell you do something I don't do myself, right. So a few episodes ago, I did a show on scaling. I talked about vertical scaling, horizontal scaling. And I explained about a mistake I made. I don't know if it was a mistake. But it was just a way my situation was where I started off with several different trading accounts. Many of them were retirement accounts. But because of that, they were very small. So I had several simple small accounts. When you have small accounts, it's harder to have 100 shares, so that you can actually go and sell covered calls or naked puts, right, you can still do spreads, you're on a few shares. But if you take all that money, put it together one account, it's easier to make you grow. But that's my situation. It is what it is, right? So I'll tell you right now, I have currently 14 different accounts that I manage directly, like our retirement accounts. So these are, I have a Roth IRA, my wife has one, my three kids have a Roth IRA, I don't qualify, I make too much to put money in the Roth IRA. So now I have an open regular IRA accounts for me in my life. So that's what four or 567 accounts right there. And then I have several Sep accounts that I have from three different companies that I worked at, probably should consolidate, those just haven't gotten around to it. So 10 accounts are just retirement accounts. And then I also have an HSA account that I can manage. We have other accounts that I just oversee, like the kids 529 plans, I don't get to manage that. So that's fine. I also have Well, let me tell you what to do in the retirement accounts. And retirement accounts is just passive trading, straight up high quality stocks that pay dividends. Dividends are reinvested automatically, you know, I just you go into your account, you check the box and say, Yes, I want dividends reinvested automatically, you don't want to deal with it. And then I sell options on these stocks for extra yield. So whether it's covered calls or naked puts, sometimes even credit spreads once in a while, but in retirement accounts, it's basically plain vanilla, simple, passive trading, okay. And these accounts have been growing and growing and growing up to the point where, you know, there's a lot of money in these accounts. And maybe I need to be diversified, right? less money in the stock market. In addition to these, I also have two accounts where I trade oil options exclusively. So I enjoy trading oil options. It is one of the programs that we offer. And so these two accounts are for that one's a small one that I use in our class. And then the other one's a larger one, I also have a regular trading account that I use for my membership trades. So we have three memberships at option genius that you can join, we give trades, our loads, we have option genius, the advisory, we have Simon says options, and weekly trading system, all of those give trades every month. So I do every single one of those trades in my own account with real money. You know, basically, I'm putting my money where my mouth is, so I give you a losing trade, you know, I lost money on it, too. I think there's only fair, unlike a lot of other gurus and whatnot that you know, they don't really trade, I'm actually doing the trade. And then I have a trading account, that is a much larger trading account that I'm putting more money into. So I want that one to really, really grow. And then in addition to that, I have another trading account, that is a managed account. So it's friend’s, I'm managing that account, and I have complete access to do whatever I want in that account. All right. In addition to that, I do have partnership in a real estate investment company. So that is basically me and my friend, a friend of ours, a friend of mine, actually sorry. And what he does is he does the work, I put up the money. So he goes and he finds houses that are beaten up broken down, and he'll buy them, fix them and then flip them. And then now we're adding rentals to that. So if we don't sell the property right away, then we will rent the house out. And now we're generating passive income from the rental of the houses as well. Secondly, in real estate, I have an investment in a land fund. So this is a friend of mine. He's been in real estate for over a decade, maybe two decades now, the last four years, he's been doing something that he calls, it's called land flipping, but something similar to that where he goes out and he will buy huge amounts of acreage of raw land. So maybe 200 300 acres, you'll negotiate it by that and then he will subdivide it into small tracks. So like 10 acres each, like a little Ranch, and then he will sell those to individuals. So he takes you know, he goes out and buys a whole big thing and cuts it up into little pieces and then sells those little pieces off and he can double or triple his money every time he does. So he's been doing really, really well the last few years and then he decided to You know what, he doesn't have enough money to make it grow really big. So he started a fund in order to get money from other investors, so that he can do really, really bigger deals. You know, so instead of doing like a million dollar deal or $2 million, he and now you do $5 million deal. So he raised the money for that I invested in there, he pays me 50% a year, that's a good investment. I don’t have to do anything, I'm diversified. He's gonna pay that money, because that's what he has agreed to. And then, you know, is it risky to invest in a fund for somebody else, it's somebody else's managing? I think it is, you know, you got to always have the mindset of what could go wrong. and in this situation, I gave him the money because A, I know this guy, I've known him for a long time, that doesn't mean he can't, you know, rip me off and take the money and run. But B, this guy is a very meticulous person. So he looks at all the numbers, he's got spreadsheets for everything he knows down to the penny, what his net worth is. And he tracks it all the time. And so he is very careful about every single penny that he spends, and what the fund spends. And so I trust him, he's been a good friend. And he's very meticulous, exactly the way I would want somebody to be managing money to be. And he showed me the results that he's been doing. He's been doing amazing. He showed me the numbers, little black and white Look, here's what we're doing. We just ordered more. And so the money's been in there for a couple years now. And he's been doing amazing. So he makes a lot more he pays 15%. I'm happy with it. I also have investments in cryptocurrencies, like Bitcoin that's been doing well, I want to buy more, if it comes back down, right now, it's pretty high. But eventually, I think long term is going to go much higher. So I have that. And then I do have ownership in some small businesses. So I like to help people that are looking to start up their own business. And so if they have a good idea, maybe if they have some experience, people have come to me and say, Hey, this is my idea, this is what I want to do. And I love marketing. That's my thing. You know, I enjoy trading a lot. But I really enjoy marketing, and psychology. So I tell them, okay, I'll invest with you, I'll give you some money, you're going to run the business. And I'm going to help with marketing. And so that's what I did with my other friend with the real estate investment company, he came to me and said, Hey, I would like to start flipping houses, but I don't have the money. Okay, I could put up the money, we'll do have an app, you do the work, I'll put up the money. So that's I have other businesses that I am also invested in, and I get income from there. So the other question that I often get, so that's how I've invested my money. That's what the different things we have. The question I get is, Alan, do you actually make money from trading? Or do you get it from your company? Option Genius? Well, it's a tricky question, because I do both. Right, option genius is growing, and it's doing well, it's helping people. And the only reason that we're growing is because we're helping people. And I believe that our prices are relatively cheap compared to what other people are charging for inferior information. And so what we're doing well, do I take out the money from my training accounts to live off of? Yes, and no, if you go back to the beginning episodes, I talked about the five finger strategy where you get to five different sources of income, so that if anyone gets cut off, you know, you're still okay, you got the four other income sources, and then the fifth one hopefully, will grow back. The other thing you can do when you have that is that if one of them is doing really, really well, you don't have to take the money out. So my trading account, the last several years, have been doing amazingly well, last year was a record breaking year. So I'm just letting the money sit in there and grow and grow and grow. And I don't need to take it out to live. Because I have the other sources. It wasn't always like that, in the beginning, I was living off the trading. Now. I just live off whatever cash flows coming in. If I don't need to take the money out of the trading accounts, I could let them grow. If the stock market starts dropping, then yeah, I'm gonna take that money out, I'm gonna live off that money. I'm gonna take it out and use it. That's fine. But if something is growing, like if I have a new business that I invest in, right, and it starts doing well, I don't want to take that money out. I want that money to be reinvested in the business so that the business continues to grow. It doesn't make a lot of sense to take, oh, yeah, I need you know, I own 50% of this business around 25% of this, I want my money out, I want to, you know, if we made X dollars every month, I want 25% of that. That's not going to help the business grow. You can do that technically, Yes, fine. If you need to you do it. But if you don't have to, that doesn't make any sense. Reinvest the money back in to whatever is working, let it grow. Because what I've seen is that there are seasons, you know, I've talked about the waves. Things are going to be going really, really good. And then they're going to not be going good. And they're going to go down and they're going to get worse and I Oh my god, I can't get any worse, and then that's when things start getting better. So while things are going good, you got to keep your floor your foot to the pedal foot to the floor, whatever, put the pedal to the floor, there we go, put the pedal to the floor, what things are going good. And then when they stop, when they slow down, that's when you can reevaluate and be like, Alright, what am I gonna do? And that's when you take the money out. So it's really a tricky question, hopefully, you know, for being as open as I can. Hopefully, this helps you. And you know, in the beginning, everybody's not going to have this much, you're not going to have all that it's taken me a while several years to get to this point, you know, where I have so many different accounts and the investments in real estate and investment in other companies and the investment, other investments in whatever. So it does take a while. Don't think that you're going to get there right away in the beginning is just pay. Let me find one strategy that works. Let me start generating some cash. And if you need the money, you can take it out. If you already retired. There's no reason to make that count grow. Right? Whatever you make, take it out, take it out, enjoy it. But if you're like my friend Matt, you know who's still in his 40s he's still working. He's paying 500 bucks a month from auctions. Put that money back in your account, leave it there, keep it growing, keep it growing. Let the compound interest grow, and let it compound your account into tons and tons of money exponential growth. So that's my two cents for this episode. Hope you found it valuable. And remember, always trade with the odds in your favor. Take care. LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.
11 minutes | Feb 2, 2021
How to Trade and Invest in 2021 - 93
Passive traders. Let me welcome you to 2021. One of the resolutions this year was that I was going to have a podcast episode every week. But this is the first episode of The New Year. And you are probably listening to this in February, which means I am behind, I apologize, I'm going to do my best to make it up and catch up and have at least one episode every week, if not more, depending on what's going on in the markets and whatever lessons I need to impart. So hopefully, we'll be able to take care of that and catch up. I wanted to say thank you for having a wonderful 2020. Corona aside, you know, that impacted everyone's lives to some degree, those of you who lost people, I'm greatly sorry, and my condolences. But when you look at the market and overall economy, not the economy, but the stock market economy and the stock market are two different things. We learned that in 2020, the returns and the investments that we made in the markets and our options trades did amazingly well. Amazingly, amazingly, well, I don't know if we're gonna have another year like that anytime soon. Passive trading, just keep but all of the strategies worked amazingly well. We have students that didn't have a losing trade all year, as hard as that to believe. You know, I know I had losing trades, but they showed me their results. And it's like, no losing trades the entire year, and they're doing fantastic. And they've continued to 2021. In this episode, I did want to talk about what we can expect in 2021, and how we can make money from it. So, you know, 2021 started relatively calm. We didn't have any issues with the inauguration, Biden took control, and Trump left peacefully, no big deals, no rights, no, cool, no, nothing big. I mean, we have a little issue at the Capitol for a day. And those guys were beaten back and they left. And now there's investigations and all that going on. But, you know, the government seems to be running smoothly. The Democrats do have control of the Senate and the House and the Senate, they have a 5050 with the tiebreaker. So they can get more stuff passed, but they don't have complete control, because a lot of issues, they do need 60 votes in the Senate. So they're gonna have to get all of their dems to vote in that favor, and then they'll have to have 10 Republicans to vote for them. So that's probably not going to be an easy thing for them, that's gonna keep a damper on things, meaning that they don't get to pass every single thing that they want to pass, which is a good thing. Right? I think when it comes to politics, the less laws they pass, the better the last day and a few of the better. And I will agree with Trump on that, that every time they pass a law, they should take out a loan. No. But it is what it is. And as soon as long as we have, you know, one, either the House or the Senate in one control, and the other party controls the other one, that's fine, that's great, it works best. And the market does the best in those and people are normally happier. When you have both of them being controlled by one party, things can get really out of control. The biggest thing for us is the Fed, the Fed continues to keep saying that they're going to keep rates at zero, they're waiting for inflation to come up. And they're expecting more and more stimulus from the government. So as long as the rates are at zero, as long as the Fed is continuing to pump money, markets are going to continue to move higher. as they've done the last several years, we've had a very fed induced bull market that has just pushed stocks higher and higher and higher. And we're probably going to continue higher. That doesn't mean that they can't go down. In the meantime, we could easily have a 10% correction, we normally get those once a year. easily. We can have overdue for one soon. Does that mean it's time to bail? No, maybe you take some profits. And then if it comes down, then maybe you get back in, you buy the dip, because as long as offense keeping rates too low, it doesn't make any sense for why the market will not go up. We also have the democrats and Biden pushing for more stimulus and more unemployment coming. So that's going to go towards people that are sitting at home and a lot of these youngsters have decided to put their unemployment checks and their stimulus checks and go gamble in the stock market. And so we have a lot of speculation, a lot of pumping of stocks, like what they used to do and the penny stocks really pump and dump that's going on right now. With GameStop and AMC and all these other stocks that are just jumping up for no reason. The beaten up names like those, they are going to continue to be volatile. You know, don't expect similar things in other companies to cruise lines, airlines, all those companies. If there is a small chance, you know that a beat company or company is about to go out of business is going to turn around or have some good news, there's going to be somebody to pilot in there, and then they're going to promote it and say, Hey, this is great good buy this, buy this, buy this, and then the stock will rally. So just keep an eye out for that doesn't mean that it's a bad thing, necessarily, it's part of the way the market works, of course, over corrections or whatnot, it's fine. As long as the hedge funds don't get killed, I'm happy. Or if they do get killed, I'm still happy. The only time I'm not happy is when they get killed, and they have to dump all their stock, which leads to a few down days in the stock market. A lot of times in the history, you know, financial news doesn't cover it. But you know, if the market goes down three or 4% 5%, in a couple of weeks, or in one week, especially, it's because there was some very large player that blew up. And they had to sell everything in order to satisfy their margin calls that might be going on right now as we speak. Market was down today. And it might be because of that. So we'll see. Now, what's going to do well in 2020. Right, let me take a look at the agenda for Mr. Biden, the environmental names should continue to do well. So who is that? Well, the electric companies, the companies, anything related to electric power, wind power, solar power, and all of the solar names. So there is a ETF called Tam ta n, which covers them, I own that. It's done amazingly well in 2020. And I expect it to continue to go up as long as Biden is pumping more federal money into alternative energy. I believe the cannabis companies are also going to be doing the marijuana companies, you know, they haven't done well, that launch for the past few years. But the democrats are more favorable towards marijuana and making it legal. Maybe there's a push to make it legal nationwide, I don't know, we'll see. I don't know if they have the votes to approve that or get it passed. But they'll probably be relaxing some laws and make it easier for these companies to do something. So that's definitely gonna, if anything changes in that regard, these companies are just gonna shoot up super high. Infrastructure companies are also going to be doing well. You know, the companies that build the roads, pipelines, all that kind of stuff. Caterpillar is one united rentals. Another one, that's a good quick way to get jobs and people back to work is to start building stuff, looking at building homebuilders and construction companies going to continue to do well, home builders, usually they stay in the suburbs. And that's where everybody's moving to, there is a shortage of homes in the suburbs. And so they are doing really, really well, lumber prices are through the roof. Right. But that's because there's so much demand. And with rates, so low, people are going to continue to be moving to the suburbs, people are leaving California, they're leaving Texas, they're leaving all these states that have very high taxes, and they're moving to places like Florida and Texas and Tennessee, which have zero state tax, and land is plentiful, and there are plenty of cheap properties here. So if you've been thinking about moving to Texas, come on down water, fine. It's hot as hell. But other than that, you know, if the mosquitoes don't get you, you'll be fine. What's gonna suffer is I believe the rates. So if you have a read, it's probably not going to do well probably going to drop and there might even cut the rates or the dividends. Office Building rates aren't going to suffer. Urban Development rates are going to suffer people, you know, reach that focus on properties inside major cities. And the malls are going to continue to do poorly. I just went to one of the biggest malls in Texas are not Texas, but in Houston. And there was nobody there. Weekends are pretty busy. Because we have a lot of people coming in from Mexico to Houston. But with Corona, they've closed the board on again. And so there's less, there's still people coming. But there's less weekday man places dead. There was nobody there. I don't know how they're paying rent. But those are going to suffer the stocks that shot up in 2020. In the work at home stocks, I believe they are going to suffer because they're they're going to be tapped out. There's not that much more demand for something like a DocuSign. And most people that were going to start a Shopify store or you know, something like that they've already done, and they're going to realize that it's harder than it looks. And they're probably going to lose customers because people are going to quit, you know, when they were all excited. And yeah, I'm going to work at home. I'm going to open my own online business and I'm going to go open a Shopify store. Okay, great. And then it takes a few months for you to realize that it's not that easy, and Shopify is expensive, so I'm gonna shut this down. So I think Shopify and DocuSign and those types of companies will do that, or do poorly, not as well, not for me, I guess, but not as well as it did and so the stocks are not going to rise. The unknown. Really healthcare, healthcare is an unknown. We don't know how they're going to react. Some of them are going to do well because of the vaccine rollouts. Others are not because there's a shortage in Drugs, there's a shortage in pills. And so if they can't sell their pills, and they're not going to make a lot of money, also oil companies, that's a strange one, right? oil companies are unknown. Yeah, because oil is trending higher, oil dropped considerably. And then since the drop, it's been going back over, it's up to 60. And at $60 a barrel, a lot of oil companies, they make money. So oil companies, I think will do well, better than they did last year. Even with the headwinds, the reopening trade itself, like I said, I think that's going to continue to suffer. And the reopening trade is basically cruise lines, airlines travel company, you know, entertainment places, all those places are going to continue to suffer, because Corona is not going away. We having the vaccine rollout, that's fine. But Corona itself is not going to go away. And the new variants and the new strains that are coming are coming fast and furious. It's not just one Corona, it's several Corona and then you're having there's one from South America, there's one from Brazil, there's one from the UK, and then who knows, we might have some of our own. So yes, the drug companies and the makers of the vaccines are gonna have to stay on top of this. And probably, they're probably going to start changing the vaccine and make us take more than one next. So that's going to be a very interesting scenario where, you know, oh, you have the vaccine from this company. Okay, great. Well, now you gotta go and get it from this company, too, because this one doesn't cover from that. And it doesn't cover that it's going to be, we're not out of the woods yet. Overall, though, it's still a stock pickers market. I've said that last year, I said it over and over again, every stock did not do good. The markets themselves overall did well, because they were carried by certain stocks, every stock not too well. It's going to be contained, some stocks are gonna be trending higher, some stocks are going to be in the toilet, some stocks are just gonna be going sideways, and some are gonna go up, and then they're gonna go down and they go up, and then most of them should rise until the Fed takes away the Punchbowl. Until the Fed starts making comments, they start changing. When they have their, you know, their meetings and their posts and their speeches, when they start changing their vocabulary. That's when things are going to go south. And if the market gets spooked, and if they think that the Fed is gonna start raising rates, as soon as that idea takes shape, we're gonna go straight down, and it might be more than 20%. So I'm gonna be very afraid, because this move higher has been really, really extended. Probably never liked this anything happened before. And everybody's talking about, oh, are we in a bubble in a bubble in a bubble? Well, if you're talking about a bubble, then you might be in a bubble, right. And it's an artificial bubble created by the Fed, and they know it, and they're looking for it, and they're waiting for inflation to increase while inflation is already here. Right? Well, prices are up food prices are up, I don't know what the hell they're looking for, or why they haven't noticed it. But they're gonna see it, they're looking at unemployment, you know, unemployment is still there, because of the virus unemployment, it's gonna stay there for a while. So I don't know where this goes, I don't know, if they're gonna be able to have a smooth landing. The first time they had QE. And after all that great depression, Great Recession stuff. Janet Yellen was in charge of the Fed, and they kind of had a smooth landing, you know, they were doing a lot of quantitative easing, but then they started taking it away taking away, she's now in charge of the Treasury, which might be a good thing, because she's had experience with this. And she might be able to help the Fed, if there are any issues. So that's positive. But if we see something like that, then definitely I believe the market is going to tank. And so until then, we're free to enjoy the spoils and have the market go up. When that happens, put some hedges on very, very quickly, get out of your, your bullish trades, lower the low, cut back on some of your positions, and then just wait and see what happens. And eventually things will recover. And we will continue to be selling options, our positions. And we will continue to do well. We just might have some hiccups this year coming up. So beware of those, you know, expect, expect the hiccup don't expect to be making money every single month. Expect hiccups to come. And that will keep you on guard and vigilant. Now, that's it for my 2021 promotion or predictions. I do want to thank everybody that turned out and supported us for the live event that we had a couple weeks ago in January. It was amazing. We had a lot of fun. We had a lot of people show up. It went off beautifully. I was you know, nervous and scared and everything went wonderfully well. I mean, the second day in the morning, before we got started, we actually lost our internet in the office. That kind of freaked us out. We're like oh no internet. But then, you know, five minutes later it hopped back on and we were able to start off without a hitch so that was wonderful. We got overwhelmingly positive reviews and comments from everyone that attended. So thank you so much. Thank you for that. I really appreciate And people have been asking, when's the next one? When's the next one? I don't know. So far, I don't have plans for our next one for high probability trading that we did. But I do think that I would like to do one for futures options. So, you know, maybe we'll do a one day, this time, basically cover futures options, and why they're important, why you should be looking at those as a good way to diversify away from stock options, you don't have to leave completely, but I believe there's a lot of that's the new untapped market. And so, you know, a lot of speculators and stuff are really coming in to the stock market game. But in the futures market, it's wide open. And we just have to go in and take advantage of it. So I think I'm going to do a one day live event training on futures options and how to trade them and what to look for, and the differences and the pros and cons and all that stuff, how to get approved and whatnot. So if you're interested in that, please let us know. Send us an email firstname.lastname@example.org. We'll put you on a waiting list. We don't have one now, but we'll put you on it. And we'll let you know when that comes. In the meantime, I hope you have an amazing year. Merry, merry, happy new year to you and your family. I hope you have another great year. You know, stay vigilant in terms of trading wise it should be in good year, but it might be a little bit Rocky. Other than that, I'll be here. So if you have any questions, you can always email me and we will trade it together. All right. Take care and remember to trade with the odds in your favor. LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.
15 minutes | Dec 28, 2020
It's Time to Get Real - 92
It's time to get real. This is gonna be the last episode of 2020. We're recording this in early December of 2020, we're going to get it out to the last week. And it's been quite a year. Definitely. And who knows what's gonna happen next year, we never expected all this stuff to happen this year. Hopefully, it's been a good year for you. It's been an amazing year. For those of us who have been in the markets and long markets, and long stocks. It's been incredible. It's amazing. You can't go online and not run into somebody posting how much money they're making, just buying calls, a lot of people are gambling, a lot of people are gambling, that doesn't mean passive traders have not done really well at all, we've done amazingly well. And, you know, the numbers are just astounding to me, as I am on this journey with you, you know, I have enough that the income from my investments allows me to do whatever I want. But it's not billionaire status. And so, you know, as the accounts grow, as the numbers get bigger and bigger and bigger, I'm having a hard time mentally focusing and realizing like, oh, wow, what the heck is going on, it's just keeps increasing, increasing. So I'm facing that issue. But I know a lot of you are facing several different issues. So what I want to know and I want you to focus on is 2020 happened, things happened. Market was the way it was COVID, Corona, whatever you want to call it, market shut down a lot of job losses, there were stimulus fed everything. 2021 is gonna be a way different year. And it's nobody knows what to expect. But it's going to be different. It's gonna be different from this year, vaccines coming soon, hopefully, who knows. And things will get back to normal in terms of people going out and traveling, some of the economy will come back a lot of the economy's not going to come back. How are you going to play it? What are you going to do differently? One of the things that we are doing is in the first week of January, we're having our first ever event. So a live event, it's going to be two days, January 8, and 9th. And I want to invite you to come hang out with me. Let's talk, let's learn, let's trade let's train, please go to optiongenius.com/live to get all the details. Go ahead, check it out, see what we have, we got some guest speakers coming. Got a lot of great content of how to take you to the next level. Wherever you had now, wherever you were, how to get you to the next level. What skills do you need? What do you need to overcome? What's stopping you break through all the boundaries? Make your goals say hey, this is what I want. This is where I'm now. How do I get there? Bang, bang, bang, bang, bang? What are the steps 1234. And we're gonna just knock it out. So we're gonna be asking questions when we talking live, there's an opportunity for you to be one on one with me as well. We're gonna have some hot seats, you know, bring people on say, all right, show me Let's go. Let's diagnose it. This is some coaching right right now. So it's gonna be a lot of fun. Please, if you can't make it, there's a you can get the recordings. So optiongenius.com/live, I am very, very, very nervous. To be honest with you, and seriously, like, you know, I've told my team like, Hey, we're doing this, but in my mind, I'm like, oh, man, do I really have to do this? Or do I want to do this, but we have so many people on the announcement list. And so we're like, yep, let's do it. Let's do it. Let's plan it. You know, it's not going to be a pitch fest. We got speakers, but they're not selling anything not gonna be having, you know, “buy this product and buy” this product and buy this product. No, none of that stuff is just real live learning, trading, working in like a workshop type event. So I hope to see you there. It would be amazing to show your support. If the podcast has helped you in any way. It would be nice if you came in just gave me some moral support and be like, yeah, you're doing great, good job. We love you or whatever. You don't have to love me but you know what I mean? You know, it's the introvert in me talking. It's the the lack of confidence, I guess in front of getting up in front of people and being like okay on the spot. Let's just talk because it's This podcast is like me, I'm just sitting here. Nobody's watching me. I'm just recording this. I know what to say. And I can say it. But live is a totally different story. You know, you mess up. There's everybody watching you “Oh, no what I do now? Oh, anyway, but it's time to get real. You know, we need to get to the next level a year of our life has gone by, and we've been cooped up. So it felt a lot longer than normal. But how closer are you to your goals? How close are you to the things you want it? Only you can answer that question. And how can we get you to them faster? That's the real thing. You know, whatever it is you want out of life. We can't just sit around and wait. We can't take our time. We want to push the envelope. We want to push the gas pedal down. And we want to fly. Right. And I mean yesterday. Poof last night, I took the family out to go see some lights. And you know, the Christmas lights. And it was it was fun. It was a lot of fun. It was a great we had a great time. But on the way there. The Google Maps took me down like a shortcut or something, was up there made road to digital shortcut. And it was this little lane, not even highways, just a little road houses on both sides, no divider in the middle, nothing. And I'm going pretty quickly. It's dark, not really too many lights. And all of a sudden there's a railroad track that comes cuts across the road. Now, if you've seen railroad tracks you going over them sometimes they're flat, sometimes they're hilly, this one was hilly. And I did not slow down. I did not hit the brake. I went at it as fast as I was going and yeah, man we flew, the minivan flew. And it was fun. It wasn't fun when we hit the ground, the bumper, like scraped the grout, the kids are like they were I don't know what they were sleeping when they were quiet. And we heard them like when we went airborne. And then when the van started going down, and we hit you know, the ground again, you heard the kids in the back, *Kush* fall back down in their chairs were literally up in the air. They had their seatbelts on, thank god knew probably would got heard otherwise. But yeah, you heard that boom, Daddy, what's going on? Yeah, but he was a lot of fun, it's fun to fly. You know, sometimes it's fun. Sometimes you got to put the brakes on. And 2020 was a hard year for a lot of people. But it's time to buckle down and say, all right, we can't do that. Again, it's not time to buckle down anymore. We need to push, we need to get better, we need to do things we need to move forward. And so that's why we're doing this live event. That's why I'm breaking out of my comfort zone, trying something new is like alright, you know, everybody's still at home. Everybody knows how to use zoom, this is great. Everybody can understand what we're doing now. So you don't have to fly. You don't have to rent a hotel, you don't have to buy food, do it at home in your pajamas. That's great. I wish I could be in my pajamas. I might be, who knows? I might be in my pajamas.. but it's making everything so connected more, even though we are not connected physically, we'll be online, we're able to see each other, it's gonna be a very interesting experience. I'm definitely sure that you're going to take something out of it, you're going to learn something, and you're going to get your questions answered, or we're going to work on getting you whatever you need to go to the next level. So I hope you do Join us now. In terms of going in the future, like what do you do? If you haven't, go get the passive trading book. I would start there and say, Hey, what's the roadmap? What's the game plan? And basically, that's what we're doing on the live event. We're like, okay, where are our people now? Where do they want to go? And how do we get there? What are the steps? 1-2-3-4 however many steps are? How do we get there? And that's what we're going to go through. So once you register, email me, and let me know where you are, and let me know where you want to be. And I can use that when we're creating the content. So the steps are, you know, we understand the steps were like, okay, we need a strategy, we need to understand the market, we know how he's going to do, we need to manage our trades properly, we need to have asset allocation properly, we need to be safe, so we're not, you know, risking a lot of money and losing it for what-not. And then we need to build and we need to invest properly. And that's how we do the passive trading. So we're gonna cover those in detail in depth on the training, and I can't wait. So I guess this episode has turned into an advertisement. Live event. I didn't mean to. I'm just really excited about it. So I really appreciate you guys listening the whole year. And we've been doing this episode. I think we're doing this the second or third year of the podcast. I'm not even sure I think we got we're getting close to 100 episodes. So I think it took us three years to get there. But I appreciate everything I appreciate you appreciate our customers, you know, you guys, the fact that you are listening to this, you give me an outlet, and you give me a way to help, and a way to give back so much that I've been given. And I really would love to hold your hand and say, Hey, walk with me, let's do this together. You know, it's an amazing feeling. And one of the things like one of the mentors that I have, he says that you get so much when you are doing it yourself, but you don't really, really understand it, and really, really learn it until you help somebody else do it. And so it's a progression, you know, and that's what option genius has allowed me to do. That's what this podcast allowed me to do. The passive trading formula or oil options program all our memberships, it is just, it's, I am so grateful and amazed. And like, really, you know, we announced a live event a week ago, by now it's been three weeks or four weeks. And we put out and said, hey, you know, if you're interested, go to this website, and let us know, you know, give us your name and email address and get on the list. And we had a ton of people, that first email that I sent out, I wasn't even talking about this. It was just like two lines at the bottom of the email. And we had like, 80 people signed up right away. Like what? That many people are interested in coming to a live event listening to me talk. Wow, I mean, we do have 1000s of people listening to me talk on every episode, but it's just, you know, every step you take is like, Okay, this is a new thing to do. Do people actually listen? Are they gonna show up? That's a no, oh, my god, it's gonna be live. What if nobody shows up? What if they think I'm crazy? What do they all make fun of me? Oh, no, you know. But it's time to go to the next level, it's time to go to the next steps. And you got to get out of your comfort zone as well. So if you haven't been trading, I'm telling you, you missed out on a great, great, great year of an opportunity. Next year, my assumption is that we're going to be the markets still going to be heading higher into the first couple months, at least after that things will very calm down, the volatility will go away. And we might have a correction, we might have a bear market next year or 10% 20% down, I don't know how much. But once the Fed stops printing everything, once the economy starts going back to normal, things will flatten out, we might have an up market next year, but it's not going to be as easy it was this year to just buy stuff and watch it go up every day. You know, that's not gonna happen, I'm almost guaranteeing that that's not gonna happen, there's gonna be a lot of sideways movement, there might be some down moves. If you don't know how to trade it, it can be scary. But we can do it together, we can hold your hand and take you along the way. And it's still, with passive trading, the way we do it, it's still a way that you can still be profitable. So you know, it's amazing. And I am living proof that it works, along with the 1000s of other people that are doing it with us. So hopefully, we'll see you on the live event. I wish that 2021 is an amazing year for you. I wish the best for you and your family. If there's anything that me and my team can do, please let us know. Thank you for everything. Thank you for listening. Thank you for your time. Thank you for all the reviews and the comments and the emails that we get from you guys. It just makes it all worthwhile. So Happy New Year! Merry Christmas if you are into that and we will see you in the new year. LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.
22 minutes | Dec 18, 2020
How To Fill In The Gaps To Trading Success - 91
What gaps in your trading are you suffering from? Yeah, I said gaps in your trading, not trading gaps. Normally, a gap is something on a chart where the stock, you know, it makes a jump in it, there's a little hole there in the chart, I'm not talking about those type of gaps. I'm talking about the gaps that occur in how well you're trading. So let me explain. Obviously, you want to be a better trader, that means you're going to make more money, that means you're going to be able to do more things in your life, you're going to have more time, you're gonna be able to buy more things that are state of mind, peace of mind, all those great things right now, you already know that hopefully, you already have an idea of what you want the money for. Of course, it's not just the money, it's, you know, break down bottom line, we want to be happier, we want to live better lives. So that's why your trading? I agree. That's great. Awesome. That's step number one, we get to know why. Right? why we're doing it. But then it comes to Okay, this is what I want, how do I get there? And it's like, we're on one side of a cliff. And then there's a chasm, right, a gap. And then there's the goal on the other side of the cliff, which is being a profitable trader. So now you have to figure out, Okay, how do I get from one side to the other. And for everybody, there's a different gap. Everybody doesn't face the same gap, but depends on many different things. So now I'm going to go through several of the gaps that are out there that trip up the most people, okay, then once you understand what your gap is, then you can go and you can fill it in. And you can take care of it. And we have resources to help you. So once you figure out what your gap is, you can email us and say, “Hey, this is my gap, how can I fill this in?” Okay, and we have programs where we look at, we've looked at all of these different gaps. And we've have, okay, in order to somebody has this gap, they get this, somebody has this gap, they get this, if somebody has this gap, they get this. So we've tried to identify every single gap that's out there, and I'm going to cover a few of them here, and how to fill them in. And that's the only way you can really get to become a successful trader is of all the gaps are filled in. Now, these are not like little potholes where you can, you know, just, oh, it's uncomfortable. But yeah, you get through it, no, these are big holes in the ground. And if you don't fill them in, if you don't take care of them properly, then they are going to stop you in your tracks and you are not going to get to your goal, even if you have all the other gaps filled in, but you have one left eating going to get there. Okay, so let me go through them. And then you can figure out which one you're suffering from, or maybe more than one. Now, the first one is the knowledge gap. So this basically means that you do not have the knowledge to go from where you are now to where you want to be. Okay. And there are different phases of the knowledge gap. Because you cannot just say, Okay, I want to be a wonderful trader, just give me all the knowledge in my head, like upload, right? Can't do that. You start slowly, slowly, slowly with the first things you don't know. And then you build on top of that. So if you are in this gap, and if you don't know what to do, if you are new to trading, if you're new to investing, or if you're new to options, whatever, you don't have the information, you start with the book “Passive Trading”, and you can get that for free at passivetrading.com/free. Just go there, get the book, start reading it, start learning it, we get other bonuses that will help you as well. And that is how you start to overcome this gap. It's not gonna happen overnight, you're gonna fill it in, fill it and fill it in enough to get by then you're going to go further and you see Oh, there's another knowledge gap. Because as you go on, as you start this road, you're going to realize what you don't know right now you don't know what you don't know. Hmm, makes sense. You do not know the things that you need to know but you still don't know. And so as you go along the road, those knowledge gaps will appear and you'll be like, Okay, I'm stuck here. I don't know how to do this. Then you find the answer. What I don't want you to do is say I have to master everything before I start. No. Let's not do that. Then you'll never start because nobody knows everything. Nobody masters everything. And especially comes to trading. Nobody masters trading ever. You do really well, but nobody masters it. Okay, nobody masters the market, you trade the market the best way you can. And you hopefully you come out successful if you trade your way, it's a proven way. So yeah, you should work, but nobody masters the market. Okay, so now you have this knowledge gap, start with that book, start with the basics. And it'll give you the information that you need to move to the next level. And then you'll get to another gap. And then you can show that in and then you can fill it in and fill it in. Okay, so that's gap number one, the knowledge gap. And this is not just one time it occurs over and over again. The second gap, very, very important. And this one most people don't have, it's the skills gap. And by they don't have meaning they suffer from this, they don't have the right skills. Okay. So what this means is that you actually know how to do the process, you actually know how to put on the trade, how to monitor it, how to manage it, how to exit it when you should, when you shouldn't, you can get a trading plan to tell you this stuff. And that will give you some knowledge. But it will not give you the skill until you do it until you do the thing over and over and over and over again, until it's in the back of your mind. It's like the back of your hand. And you could be like, yeah, I can do this in my sleep. Even then you probably gonna screw up. The other day, I put on a covered call trade, and I screwed it up. Yeah, I screwed it up. I bought 100 shares and I sold two options against it. And I later on I realized my thing, and I'm like, Oh my god, what the heck did I do, you know, the amount of money that I was supposed to make on that trade, I gave it away when I sold the second option. So now even though if the trade is going to work out, which is going to, I'm still gonna add best I'm gonna break even. So yeah, skills are very important. Okay, even after 15 years of trading, you can still mess it up. So if you mess it up, now, I don't fault you. Right, but you got to put in that effort, you got to overcome the skills gap. And the only way to do that is to just do it over and over and over and over and over again, I can't make you do it. I can't sit there and watch you do it, you have to do it. Okay, I can encourage you and on the sidelines but you got to do it. Right? If you never do it, you'll never overcome the skills gap. And we do have students, and I've seen them, I've talked to them, they want all the education, they want to buy everything. And they go through everything, and they do it multiple times. But when it comes time to actually putting on the trade, they back off, because they don't have the skill. They see that huge skill gap. And they're like, Oh, no, I don't know how to do it. Well, baby steps, baby steps, paper trade, try it, do a small little trade tiny trade, you know, so that if you lose the money, if you lose all of the money on the tiny trade, it's not going to kill you. Right, it's gonna go towards your education. It's like an investment, I'm gonna try, I'm gonna risk $100 to do this trade. And even if it blows up, that's $100, I invested into my education. And I put a trade on and I learned it. Right, I learned what not to do. In that case, if it blows up, but at least you did it you know, once you get over that hump, once you get this skills gap down. I don't know if you ever will. But just like the knowledge gap, there are different skills gap, you know, putting on the trade, that's one skill, managing the trades and finding skill, finding trades, those are all different skills, and you have to do them over and over again. Eventually, they become like second nature, and you get really, really good at it. So you know what you're doing. That's where I need you to get to, to become a really consistent successful trader, you got to overcome that gap by doing actual work. Third, the motivation gap. Now, I talked about this earlier, hopefully, you already know why you're doing this, why you want to be a trader. But if it's only to make money, that probably will not be enough. In the beginning. Let's say you have a lot of debt, you want to quit your job. See that's different. quitting your job is different from I want to make a lot of money. That's a different motivation. And I love that one I love I want to quit my job, or I need XYZ money to be able to send my kid to college, or I need this to because my car is about to die and I need to replace it. Those are better than I need more money. I want to make more money. Because more money in your bank accounts, is gonna do anything for you. You're not gonna be much happier. You're not gonna it's not gonna change the world is just numbers on a screen. So whether it's 1000 or 5000 or 10,000 on the screen, it doesn't make any difference. And eventually that wears off. First couple of times. You'll be like yeah, no a lot of money and then they'll be like, Oh, yeah, it's not that much. Oh, yeah. Okay. Yeah, I did it. Okay, I got a lot of money. I got 10,000 in my account. Yay. It'll go away. So You have to understand what is your motivation. So the motivational gap is really big for a lot of people, sometimes they don't feel the need to trade, or they know feel the need to overcome the skills gap. Now give the example of my father, right, he was motivated to make more money. And so if you put in front something in front of him, like a course, or a seminar or two day, like a two day workshop or something, he would buy it, because he was motivated to make more money. And you would actually go and do the thing, you would go and try to get the knowledge because he knew he had a knowledge gap. So you try to fill in the gap of knowledge. But then when it came time to actually doing the thing, he almost never did the thing. He never overcame the skills gap. Why? Because his motivation gap was not filled in. He wasn't motivated enough to make a bigger change, he was motivated a tiny, tiny bit, to invest in something and to try to overcome the knowledge gap. But he was not, his motivation gap was blocking him from overcoming the skills gap. So this kind of gets tricky, right? I told you, there's lots of motivation gaps, there's lots of skills gaps, there's lots of knowledge gaps, there's gaps all over the place. But you can do them if you go through the path, and you fill them in as they go along. So yeah, your motivation has to be really great. In the beginning. For me, my motivation, when I first started was my wife is working two jobs, and I want her to only work one job, and I want to be a provider in the household. I want to take care of my family. I want to have kids, I want to get out of this rinky dinky apartment, right. The only way I can do that is if I'm making money. So that was my motivation along with I don't want to go back to work because I had just gotten laid off. No, I don't want to go back to work. I need this to work. That was my motivation. And that was the same motivation for several years, until we got to the point where the money was there. It was coming. He was flowing. And then I kind of lost my way. And I was like, Okay, yeah, I'm making money. That's great. Okay, I'm kind of tired. I'm sick. I'm like, bored of life. I gotta find something. What am I gonna do? Okay, I went and I raised a, I learned how to race NASCAR's. I mean, it was like a $3,000 for a one day package. You know, we actually go and you you do a NASCAR 200 miles an hour per hour and do that. And I was like, Oh, yeah, that's great. You know, I got some adrenaline, but I'm still not motivated. You know, I don't feel like getting up in the morning. Why? What is that be motivation gap, really, really big motivation gap. And I learned that the key to filling the motivation gap, after you fill the little baby motivation, gaps of I need more money, more money. Once you have the money. The next motivation gap that comes is I need significance, I need something in my life that I'm doing that I gain significance from that I feel important that I feel growth that I feel loved. And the only when I started to train people and to teach people, that's when I started getting that. So this podcast is in a way, helping me overcome my motivation gap. So thank you for listening, I do appreciate it. I do appreciate all your support all the comments, all the feedback, emails, all their positive reviews. I appreciate all of that. So thank you very much for that. Thank you so much. Now, after we have the motivation gap, we have the habits gap. Now these are any, you know, daily or weekly habits that you have that are stopping you from achieving your goals. So does proper trading, have habits that you need to have in order to succeed? Yes. One thing is you got to watch your trade. Right? You can't just forget about it. It's not set it and forget it kind of things. Because the marking can go up and down. Even with the odds in your favor, you should still monitor your trades on a daily basis. Depending on the strategy. If you're doing cover calls, then Okay, maybe not every day, maybe you do it once a week, maybe once a month, that's up to you be too many on how aggressive or conservative you are. If you're doing something like our oil option strategy, I would like you to check in every day and see how oil is doing how your trades are doing. If you go 234 days too long, and you're not checking, that could be a bad thing and you might be negative, you might start losing some money. That's not a good thing. That's not going to help you on your goal. So that is a habit that needs to be instilled. And so one of the habits I instill and I tell everybody is you should have a time every day that you check on your trades. Same time every day for me, I do it at one o'clock, one o'clock Central. I have an alarm on my phone, he goes off ding ding ding ding ding, time to check my trades. Now I'll drop whatever I'm doing. And I will log in, and I will check my trades. If I need to adjust or do something, most of time, I don't need to do anything. So it didn't take very long. But that is a habit that I had to instill. I have other habits that I've also instilled, that have made me a much better trader. And we talked about them in our trade hacks program, which is very cheap. And if you want it, you can get it on our website, it's called trading hacks, I don't have the time to go into all of those, that's, you know, several hour program, and it goes through all of them. But if you have a habit program problem, then something like that, the hacks that we have come up with can definitely help you because you don't have to change yourself. Right? You don't have to have the willpower because willpower doesn't work. If you've been on a diet, or being like, yeah, I'm going to do this, I'm going to do this willpower doesn't work, you have to change the environment, you have to change your behavior, you have to change your habits, you have to change something other than yourself. Because willpower by itself will not work. And so the trading hacks program that we have, it covers several different easy things that you can implement, that you don't have to change anything about yourself or your trading. But like I said, with the one o'clock check in, right, that's one hack that I've implemented, that has really, really helped my trading. So if you do something like that, that can make a big difference, doesn't have to change my trading, doesn't have to change anything about my style. But it's just a reminder, like, Hey, you need to do this, this is a skill - a habit sorry, not a skill, it's a habit that I needed to implement. And once I did, it made a big difference. The other one is your environment, the environment gap. So where you trade has a big impact on how you trade? Do you have a nice quiet spot that you can trade from? Do you have the freedom to trade, like if you're hiding from your spouse, and you're still trading, that's going to be a lot of stress, that's not a good environment? Right, you got to get your spouse to buy in, don't be trading behind her back, or his back and try to think that Yeah, you're gonna be a great trader, there might work for a little bit. But overall, that is a very negative environment, right? When you're trying to hide it, you're gonna feel guilty, you're gonna feel bad, and Heaven forbid you lose money, oh, man, that's just going to compound everything. So your environment needs to lead you to be successful. Do you have a fast enough internet connection? Now you don't need four different monitors. You don't even need two monitors, you just need one screen that you can trade from. But you need a good enough internet connection that that's there, you need maybe a phone where you can check in on your trades smartphone, you need some basic stuff. But if you don't have it, that makes it much harder for you. And if you don't have a spot where you can actually sit down and learn and go through the environment go through the education, right, if you join one of our programs, there's a lot of information that you're going to get. If you don't have a spot to properly go through it, then what's the point? So the environment is another gap, probably one of the most easier ones that you can overcome. Right. And so that's the last one. So we got knowledge gaps, that are recurring, they happen over and over again, you'll learn a little bit, you'll move forward, then you'll realize oh, I need something I need to know something else. So then you learn the next thing. Don't try to learn everything at once. Learn them in bites, right, move forward, learn some more, move forward, learn some more when you get to a gap, learn some more, fill it in, move on to the next one. Skills gap. There are also several of those because you don't know what skills you need yet. So focus on one skill, work on that move forward, then you find Okay, I need another one. So now you get the education for that one knowledge for that one. And then you do the scale. And you fill that in then you go forward and you go forward. Motivation gaps. This is when you have to figure out for yourself. What is it that's going to keep me focused, keep me motivated, so that I don't give up. That's the thing people give up. They just stop. You know what I'm talking about is passive trading. I've been doing this for a long time. And I've seen the results. And I know this works. And I know it's great in the feeling that you get when you're doing it well is amazing. So I don't understand why people stop in the middle. Now I know it can take work. I know it can take a lot of time. But if you have the motivation, you should be able to overcome the rest of the gaps. That's probably the most important one that you need to overcome the motivational gap. Everything else I can help you with. Right, I can't help you motivate yourself. Then you got to habit gaps. Right if you know something that you keep doing over and over. And again, that's hurting you, that is a habit that you need to change. You can't break a habit, you need to replace it with something else. Right? So if you have a habit and your habit is Oh, I don't I don't I forget them on my trading plan. I don't stick to my trading plan, or I don't stick to my rules. My rules, say, of the trade is down so much money, I got to do XYZ, but I don't. Well, that's a habit that you need to change. If you already know that, you're that's half the battle, right? Like GI Joe, no knowledge is off the bottle. Yeah, I think you GI Joe. And so now you have the knowledge. Now you got to change the habit. So you overcome that gap. And then the last one is the environment, which is probably the easiest one. So I hope this helped. I hope you can overcome these gaps. If you have any issues, you can reach out to us email@example.com and trading hacks is the name of the program that can help you overcome a lot of these habit hacks. In terms of education, and skills, we can help you there as well, we have several programs that can help you depending on what you want to accomplish, what you want to be trading. So reach out to us there as well. And again, thank you so much for listening, trade with the odds in your favor, and have a great day. Thanks. LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.
20 minutes | Dec 8, 2020
Should You Go Into Debt To Trade? - 90
Check this out: High Probability Trading LIVE Hey, passive traders, how's it going today? Listen, we're thinking about doing a two-day live event. Not sure yet if it's going to happen or not, but the information is at optiongenius.com/live. If you want to be on the announcement list, just go ahead and go to that website and put in your email and your name, and we will let you know. And if we've decided that we're going to do it, then the information to figure it out and sign up is going to be there as well. It’s going to be two days of content, hard hitting trading content. And I'm probably gonna bring in some guest speakers as well. So I'm getting excited, the more I think about it, the more excited I'm getting. But I am very nervous because I'm super introverted and for me to do something like you know, we're meeting a lot of people. So that's why it's virtual. I don't have to go in front of a large stage or anything, but it is going to be really cool. So I'm already starting to think of what topics we can talk about what is the, you know, what's the best, that will help everybody. And so if you have any ideas of what you would like us to talk about, you know, go ahead and fill out that the name and email at that page, option, genius, comm slash live. And then let me know what you think. And let me know what you want to hear about. Cool. Alright, so I got an email today from a reader of the passive trading book. And I thought that this could be a pretty good episode based on what she said. So she said that she loved the book, she went through it, it was great, she learned a lot. And she's really, really focused on doing it. And she's, uh, she's already in real estate. So she understands the whole options and how they work and how they relate to stocks. Now, the problem is that she's only got a couple $100 to work with. So what should she do? Now, this is a very common situation, it's a very common problem that a lot of people have, they want to get started, they love the idea, but they don't have money to trade. And obviously, yeah, it takes money to trade, right? This is the one thing it takes money to do everything but especially trading, it does take money to get started. So what do they do, and on this episode, I'm going to give you some idea and it's actually a controversial idea, because it's not right for everybody, it might be right for you, it might not be right for you might be the most awful advice that anybody could ever give you. So I'm not giving you advice, per se, I'm giving you an idea. You have to know yourself. And you have to know if this is the right thing for you. If it's you know, too much or too risky for you, then don't do it. If you think you can handle it, then it might be the opportunity or the idea that finds you the funds that you can go and start trading. And you've probably already thought about this, but I want to go through with you a little bit more. So my first ever trade was not stock. It was a commodity trade. And I was I don't know what I was like 12, 13 years old. And we got this pamphlet in the mail. It was a brochure, it was like a sales letter for a course on how to trade futures. And I read it, I was mesmerized. I'm like, Oh, this is awesome. This is awesome. Dad, we got to get this, we got to get this. So we paid a couple of 100 bucks, whatever got the manual in the mail, opened up a futures account. And we traded soybeans, and I still remember this. We traded soybeans, one contract, and we made $25000. And I was on top of the moon. It was awesome. And then my dad shut down the account. I'm like, What happened? He goes, No, no, no, I didn't want to keep doing this. I just wanted, to show you what it was like and the actual idea that he had was that he was going to open the account, and we were going to lose money. And then that would stop me from ever wanting to trade again. Because he thought that commodities trading commodities was very, very risky and not do it. His whole thing backfired on him because he wanted to teach me he wanted me to lose money to teach me not to do this. And in fact, the opposite happened. We made money and the bug I got the bug - it bit me and ever since then I wanted to trade, but he shut it down. I didn't have any choice, right. I was too little. Fast forward and in the future. I have just dropped out of college. I came back home to help my dad with a new business he owned he just bought and things were really money was really, really tight. I mean really, really, really tight. To the point where like we don't, we're hoping we have enough money to eat every month. Even less than hand to mouth. And so in the mail, I get another brochure about a course about trading futures. And this one was even better than the first one because this one talks about technical analysis and the guy will actually help you with recorded messages to tell you what he's trading and bla bla bla bla. And, you know, times are so tough. I'm like Dad, we need to do something, I want to do this. How do we do this? So we bought the course. And I started following it. And at that time, this was pre website, or pre, you know what, they didn't have websites. We had AOL and stuff like that. But they didn't have Google, Yahoo, any of this stuff. So the charts had to come in the mail, you had to subscribe to a service. And they would print out the charts every week, at the end of the week, and they would mail them to us, he get them by Monday. So you'd have the charts and they would be newspaper size. And then every day, whatever happened, you would have to fill in the chart, you'd have to draw your lines, your support, resistance, all that stuff. And then every week, you would get a new set of charts. So you have to draw the lines again. And that was really a good way to learn for one thing, but I did it for a while and I show my Dad, I'm like, Look, Dad, I'm doing really, really good. I want to do that. So he went ahead, and he borrowed $8,000 on a credit card. So he took a cash advance on a credit card, he gave it to me, we opened up a futures trading account. And I knew that this was all the money we had. So we didn't even have it. Right? We didn't even have it. And at this point for him, it was a like a last-ditch effort. Like hopefully this works. If it doesn't, well, we're not gonna be able to pay off these cards anyway. So credit goes to hell kind of thing. I think this was the last card he had with any remaining balance. So yeah, you know, no, no pressure, right? Anyway, so you know, I'm going through all the charts I'm looking for the perfect opportunity, the perfect trade, the perfect trade. Finally, I find one and I'm like, Oh, this is it. This is gonna work. It's an uptrend. It's going great. Following all the lines, all the sports, everything, okay, Dad, I'm doing this, I put my first trade on one contract on the Japanese yen, Japanese yen was going up, it was gonna make me and I was gonna make a fortune. So I put the trade on close to the end of the day, and put my stop loss in. And that's it, I go home. And at night, I'm thinking man, I'm under how much money I'm gonna make or how much money I'm gonna make. I'm gonna pay all the bills, life is gonna be good. All this stuff. The next day I wake up, you know, I get to get to the office, I check. Oh, Yen is up, Yen is up alright. I'm making money, how much money do I make how much money they make in my account. And there's like $23 in my account. And I'm like, wait, what happened? Where's my Japanese yen contract? And there's no contract. And only wait, I bought a contract yesterday? Well, this must be like a glitch or something. I don't know, am I right? Am I signing in to the wrong account, what the heck is going on. And then I looked further. And it said that it stopped me out of the trade earlier in the day at the open. And when wait this doesn't make any sense. And so then I went back and I looked at it again. And basically what happened was, the Yen had gapped lower at the open. And then when it finally did open, it went up all day. But it opened lower, much lower than my stop loss. And so as soon as it opened, very, very low - hat's when my order was executed. And I was kicked out of my trade. And then that basically took away everything in the account. All eight grand was gone. overnight. One trade. And the sad part was the really frustrating part was that that trade would have made 1000s and 1000s of dollars because the Japanese yen continued to rise. Now, what's the moral of the story? What's the lesson to be learned here? I don't know, if you're gonna trade Yen, you got to have a lot more liquid because it moves up and down. I guess. That's one Moral of the story. But the reason I'm bringing this story up is that the idea is to do what we did. There's a potential to borrow money to trade with. And so I was talking to a fellow. And what he does is he works with companies like mine, where we're selling programs, right coaching programs that are not super expensive, but they're not dirt cheap either. So people might like to finance it. And so this guy, he works with several banks, and basically, he wanted to offer financing to my customers. Now, I don't know how I feel about that. He knows like if you can't afford the program, should you borrow money for the program? I think I'm okay with that. But if you don't have the money for the program, then how are you going to trade? Right, I don't want to take I don't want you to borrow money to buy a program and then not have anything left over to trade unless you know that that's the plan unless you say, yeah, you know what, I'm going to be paper-trading for a while until I learn, and then I'm going to invest the money, and then I'm going to do it. So when I was talking to him, what he was saying is that the way their program works is you, let's say, you come to me and you say, hey, I want to join your program, I want to finance it. So the Okay, so I turn it over to him. And they have a form that you fill out, it's a personal loan, and they they work with the world's largest banks, right. So it's not like some, some little corner shop, these are real big banks, and they look at your information. And then they put give you an offer, they say, all right, we will offer you $10,000, we will offer you 20,000 will offer you 30,000 as a loan, and these are the terms this is the interest that you could pay every month, etc. And then if you like it, then you say yes, or no. Or if you don't want the whole amount, if you don't need the 30,000, you take, you know, I'll say I need 10,000, I need 5000 or 2000, or whatever you want to take, you can you can take that amount. Once you have that money, then my company charges you for our program, whatever the cost is that you agree to. And that's how it works. And then you make the payments directly to the bank. So I was thinking about I think, wait a minute. So you're telling me that the people, the customers, my customers can borrow more than the program is cost? And he said, Yeah, they can. So I thought that was very interesting, I think, well, if somebody wants to, so they have good credit, they can borrow enough to pay for the program, and they can borrow the money to trade with. So that way they take the money that they're trading with, they earn a profit on that, and they use that profit to make the payments. So in essence, they're getting it for free. They're just working for it, but they're using their profits to pay off the loan. And that would be an amazing way to get started very quickly. And he said, Yeah, technically, they could do that if they wanted to. So that's interesting, you know, so I'm still thinking about whether we should do that or not. If you're interested in something like that, let me know the good and the bad, you know, because I'm thinking about it, I'm still debating it, I don't know if it's a good thing. For some people, it can definitely work. I've seen people that it has worked for where they've borrowed money to trade with, and they've done really, really well. And I've seen other people blow up, there was a guy on Facebook. And he he posted that he borrowed $200 on a credit card where he was going to have a 0% interest rate for one year. And he borrowed $200 on his credit card, he's going to use that $200 to trade with. And I'm scratching my head, I'm like, Dude, what are you gonna do with 200 bucks, you're gonna buy some calls, hopefully, you'll make some money, hopefully, you'll be able to pay it off. But you got to make 100% in a year, you're it's a crapshoot, right 50% chance you're gonna make 50 million, you're gonna lose it all. But I don't know, maybe he's gonna make it. But if he's only using $200, I have a feeling he doesn't know what the heck he's doing, he's probably gonna lose it $200. And, well, it's not a big deal, he's gonna have to pay back the credit card, I don't know why you would only borrow 200 though. Geez, if you if your bank is only going to give you a line of credit on a credit card of $200, you got bigger problems, you don't need to be trading, go get a job. But the thing here is, this might be a way for you to get started. So either you borrow money from a friend, you borrow money from the bank, you borrow money from somewhere else, I wouldn't advise you to borrow money from your credit card like my dad did on this, you probably knew that, hey, you know, this is a sinking ship, we might not be able to pay it, that's a bad thing. You shouldn't borrow money that you can afford to pay back. Right? So hopefully, you're not in a situation where you do have to borrow money. But if you are, please think about it before you do. Most of the time, when you borrow money, people are under a lot of pressure. And they feel that they have to pay it off right away. And so they take risks that they shouldn't necessarily take and they blow up, they lose all the money that they borrowed. And then not only do they feel really horrible about losing money, but then they still have to pay back the bank. And that can mess up their credit, they can mess up their relationship with their spouse. So you really really have to think this through before you do it. I'm just putting it out there. It's something you've probably already thought about it. If you've ever wanted to get into trading and you don't have any money, like, we're gonna get the money, we're gonna get the money, I still think the best way is to paper trade to learn without having the risk. And to build up a track record and the look, you know, I've been paper trading for six months. And I've done all these trades. I've done several trades every month, and I'm consistently profitable even a couple of months where, you know, I could have lost money, I could have lost a lot of money, but I didn't manage it properly. And here's my record. And then you can find somebody that can either borrow, you can borrow the money from or we'll put up the money and you trade their account and you get paid a fee for it. You know you get a piece of the profits. I would rather have you do that than borrow the money. But even if you are about to borrow the money, please paper trade it first. Whatever you're thinking of trading paper traded first, so that you don't end up and do what I did. That's why I told you that story in the beginning because it's a warning, right? I didn't know what I was doing. I had a course. But I didn't have like a live mentor. I didn't have a group, I didn't have any community. It was just me by myself with my little charts that come every, every Monday in the mail, and I'm drawing my lines. And even though I had it, right, even though I had the trade, right, I had nailed it, I knew the direction I knew was going up, I placed the stop loss in the wrong spot. And I was trading the yen when I shouldn't have been, because my account size wasn't large enough to be able to trade the yen properly. Does that make sense? I was trading the wrong instrument. And I didn't have anybody to tell me that. That's why we have coaching programs. That's why we do coaching calls with students. So they can tell me what they're trading and I can coach them and walk them through and say, you know what, if your account is that big, maybe you're overreaching here, maybe you need to trade more, use your feet, something else. And so we walk you through it so that you don't make that same mistake because I know how painful it can be. I know how you can do every single thing, right and still have it blow up in your face. And so if that's happened to you reach out to us get on the phone with us book a call, we can talk about it, we can tell you what we have to help you. And I think, you know, if we need to, we can even help you figure out how to finance the program. But we'll have to make sure that it's gonna work for you first. And so that's why we get on the phone. And we have to talk to you see what your background is, if you're the right fit for the program, then we will give you an invitation to join. And then if it if need be, we can tell you how to finance it if you have to. But again, that's something that we really don't really push. And we don't encourage you to very much. Just because you're going into debt for something I don't want you to go into debt for. Right, I don't want you to start behind, I want to put the odds in your favor as much as possible. And so when you're dealing with that, you have that extra added pressure. I know what it's like to have a lot of debt. You know, at the worst, I think I had myself I had over $100,000 worth of debt. That's not even including car and mortgage and all that stuff. This was just like credit cards and stuff that I had borrowed from. And it's not easy dealing with debt. It's something it sits on your shoulder every day. And it's a pressure that you feel, you know, you're feeling like Atlas, he was the in the Greek mythology, he was the guy that had to hold up the earth on the back on his back. And that's what it feels like, you know, there's something there on your back all the time, and you feel it. And I don't want you to go through that if you don't have to. So my point here is that I never thought I never talked about this before, I've never really mentioned it pushed it, because it is very risky. But if you need to, if you're the right person, if you feel that you're mature enough, you can handle it, you have a trading plan already that's working, that's consistent. Maybe this is the way to go. And if you need to give us a call, reach out to us firstname.lastname@example.org is our email. If you want to get on the phone with us, we can explain how we can help you just reach out to us via email and we'll tell you what we can do email@example.com. Oh, and if you do want to find out about that live event that we might be having, it’s optiongenius.com/live. Alright folks, thank you and trade with the odds in your favor. LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.
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