Is anyone rich here?
- Thread starter tom999w
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Yes .. you are 100% correct . I was trying not to get long winded .
If 15% of your income equals $1000 then you are making 8300 per month . You should be maxing out your 401k and a Roth IRA. Although a tax deferred IRA might be wiser . I don’t believe taxes will go up on sup 200k incomes in the next 20 years . If anything they will go down . IMO…. Remember the money invested will lower your tax liability on your entire income . Which means not only do you not pay tax on those dollars but also drop the remaining income into a lower % tax bracket .
You could dedicate maybe 600 per month to high yield riskier stocks or funds .
You could dedicate maybe 600 per month to high yield riskier stocks or funds .
44070dart
How the hell did I get this old..
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Sell your house, sell every bit of clothing you own (except for what you are wearing ), max out all credit cards you have, or can get, sell all cars you have, and borrow from any, and all family you can, have a yard sale for anything else you may own, or have borrowed and not returned, then go to the nearest casino and put it all on black.............................................. NO WAIT, red.
You're richer than I am, I'm closer to fiftyaire!
I expect my retirement and funeral will be the same day!
Oh, I don't have a hundred that's just a goal lol, id be glad to have 50 in my wallet
I know, it is funny lol
Your "broke" but have 12k saved and make over 8k per month???? Your idea of "broke" and my idea of "broke" are certainly different ...
I suggest a new line of friends from the other side of the tracks and then your next post will be "I'm rich, how shall I invest?" Ha!
Uh yeah, lol.Your "broke" but have 12k saved and make over 8k per month???? Your idea of "broke" and my idea of "broke" are certainly different ...
Ha!
As soon as you get that dummied down to a poor guy level version let me know, old buddy old pal !
The key to building wealth with efficient debt, is understanding the difference between corporate and personal finance. In personal finance, most people use debt to acquire liabilities. In corporate finance, people use debt to acquire cash flow-producing assets and leverage the tax code (i.e., depreciation) to maximize profits.
Ya, I plagiarized that.
Ya, I plagiarized that.
Whatever George Jefferson did.
Lol,,,,,people ask me about retiring,,,,,I always say,,,,,”They’ll have to bury me at sea “ !
I can’t afford to retire !
But,,,,I always remember a show I saw years ago,,,it might have been 60 minutes,,,,,I can’t remember ?
They were quizzing this great investment advisor about the advice he gave to his clients .
He said in a matter of fact way,,,,”I advise all my clients to die broke “ .
You earned it,,,you spend it !
Makes great sense to me !
I’m well on my way to that outcome already,,,,Lol !
Tommy
The sad thing about that scenario is that it can happen before you die.
Just say no to mutual funds. ACK
I'm not a fan of most advisors because they just peel off some of your potential gain (still get $ in losing years too) and get paid by the amount of assets under management, most of the time. n Most every "investment advisor" never beats the market over the long term, especially after their fee is deducted. Just do it yourself and don't get emotional if the market takes a hit.
12K... buy 200 shares of SPLG and sell covered calls against it. SPLG is a low fee SP500 index that is around $60/share right now. With the proceeds from the covered call, buy more shares or QQQ (nasdaq100) shares.
With whatever you can do monthly buy qqq until you get 100 shares and start selling a call against it. Not sure if there is a low cost alternative to QQQ that has options.
If you have access to a 401k/IRA that allows stock/etf choice go in that too. A roth IRA is good for after tax investments if you have the funds available.
The old wall street selling a bill of goods that "It's only a loss if you sell" is not true. Your account balance says otherwise. It's only a loss when you sell is in regards to tax reporting. If you buy something for $10 and it's now worth $1, do you have a loss... of course you do. It's just not recognized under certain circumstances.
I'm not a fan of most advisors because they just peel off some of your potential gain (still get $ in losing years too) and get paid by the amount of assets under management, most of the time. n Most every "investment advisor" never beats the market over the long term, especially after their fee is deducted. Just do it yourself and don't get emotional if the market takes a hit.
12K... buy 200 shares of SPLG and sell covered calls against it. SPLG is a low fee SP500 index that is around $60/share right now. With the proceeds from the covered call, buy more shares or QQQ (nasdaq100) shares.
With whatever you can do monthly buy qqq until you get 100 shares and start selling a call against it. Not sure if there is a low cost alternative to QQQ that has options.
If you have access to a 401k/IRA that allows stock/etf choice go in that too. A roth IRA is good for after tax investments if you have the funds available.
The old wall street selling a bill of goods that "It's only a loss if you sell" is not true. Your account balance says otherwise. It's only a loss when you sell is in regards to tax reporting. If you buy something for $10 and it's now worth $1, do you have a loss... of course you do. It's just not recognized under certain circumstances.
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mopowers
Well-Known Member
Probably a stupid question, but what does it mean to sell covered calls against an ETF? I roughly understand the concept of calls and puts, but have never tried trading options. The whole idea kind of scares me, but I've heard covered calls are a great strategy.
Evan, you got my number if you ever want to talk about this....
Covered calls work best in a tax deferred account because you don't have a reportable tax event. In a regular account, every time you sell a call or it gets called away, that is a taxable event for IRS purposes.
A call gives someone else the right to buy stock from you at a set price and a specific expiration date. As the seller of a call, you are like an insurance company and take in premium and someone else can take the stock from you up to a certain date. Using SPLG as an example.
SPLG was 61/share at the close today. You could buy 100 shares ($6100) and go 9 days out and sell a 62 call for $55. If it stays below $62, you keep the premium, then go to the next expiration period and sell another. In this case if the stock was about 61 next friday (8/16), the next month a 63-64 call would get you anywhere from $55-100. There is a metric called "Delta" which is the probablity the price of the stock will be at the strike price at expiration. I like to use the 20-25 delta which is a 20-25% chance the stock gets to or above your strike, 75-80% it doesn't... which is what I really want.
If above 62,. you get to keep the $55 and get an additional $100 for selling it at $62/share (62-61 purchase price). 155/6045 = 2.5% return for 9 days
Check out "mike and his whiteboard" on youtube. Really nuts and bolts stuff, very dry, informative content. Cool intro music at a minimum...
I disagree with him about best case scenario in the video. The best case is the stock runs right up to the strike price you sold. In the SPLG case 61.99 would be awesome as it wouldn't get called away, rinse and repeat as the option is worthless upon expiration.
Covered calls work best in a tax deferred account because you don't have a reportable tax event. In a regular account, every time you sell a call or it gets called away, that is a taxable event for IRS purposes.
A call gives someone else the right to buy stock from you at a set price and a specific expiration date. As the seller of a call, you are like an insurance company and take in premium and someone else can take the stock from you up to a certain date. Using SPLG as an example.
SPLG was 61/share at the close today. You could buy 100 shares ($6100) and go 9 days out and sell a 62 call for $55. If it stays below $62, you keep the premium, then go to the next expiration period and sell another. In this case if the stock was about 61 next friday (8/16), the next month a 63-64 call would get you anywhere from $55-100. There is a metric called "Delta" which is the probablity the price of the stock will be at the strike price at expiration. I like to use the 20-25 delta which is a 20-25% chance the stock gets to or above your strike, 75-80% it doesn't... which is what I really want.
If above 62,. you get to keep the $55 and get an additional $100 for selling it at $62/share (62-61 purchase price). 155/6045 = 2.5% return for 9 days
Check out "mike and his whiteboard" on youtube. Really nuts and bolts stuff, very dry, informative content. Cool intro music at a minimum...
I disagree with him about best case scenario in the video. The best case is the stock runs right up to the strike price you sold. In the SPLG case 61.99 would be awesome as it wouldn't get called away, rinse and repeat as the option is worthless upon expiration.
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mopowers
Well-Known Member
Evan, you got my number if you ever want to talk about this....
Covered calls work best in a tax deferred account because you don't have a reportable tax event. In a regular account, every time you sell a call or it gets called away, that is a taxable event for IRS purposes.
A call gives someone else the right to buy stock from you at a set price and a specific expiration date. As the seller of a call, you are like an insurance company and take in premium and someone else can take the stock from you up to a certain date. Using SPLG as an example.
SPLG was 61/share at the close today. You could buy 100 shares ($6100) and go 9 days out and sell a 62 call for $55. If it stays below $62, you keep the premium, then go to the next expiration period and sell another. In this case if the stock was about 61 next friday (8/16), the next month a 63-64 call would get you anywhere from $55-100.
If above 62,. you get to keep the $55 and get an additional $100 for selling it at $62/share (62-61 purchase price). 155/6045 = 2.5% return for 9 days
Check out "mike and his whiteboard" on youtube. Really nuts and bolts stuff, very dry, informative content. Cool intro music at a minimum...
I disagree with him about best case scenario in the video. The best case is the stock runs right up to the strike price you sold. In the SPLG case 61.99 would be awesome as it wouldn't get called away, rinse and repeat as the option is worthless upon expiration.
That makes sense. Thank you Rob.
Under the first scenario (if the price stays under $62), you still keep the $55 and the 100 shares, right? It seems like it's a win/win regardless what the share price does.
What's the catch? I guess you lose out on any potential gain from an increase in share price? Still seems like a good deal all around. I may give that a shot in my deferred comp account. I'm assuming it would work in a Roth account too, right?
44070dart
How the hell did I get this old..
- Joined
- Jul 9, 2004
- Messages
- 3,075
- Reaction score
- 5,703
- Location
- right here ...see me I'm waving.. NY
I've bailed out on my investments from the market, can't take the bullshit any more. Goes down a thousand today because some guy wasn't hired, up 400 the next day because he found a job. I took my funds out, and laddered CD's a few months ago, and now I sleep well. May not end up making a lot but the principle is going to be there. My wife has a retirement 401 and I wanted to do that for her, but she was not sure (because overall it has done well). That 1000 point blast the other day shook her, so I'm looking to also get half of hers into CD's in her 401. We're in our 70's, and have been in almost 30 years, done fairly well for our blue collar bracket, so who needs the bouncing around now at this time of life..
If it were easy, or there were a set formula, we would all be wealthy. Caveat emptor ! ....................... All that really matters, is right here.
If it were easy, or there were a set formula, we would all be wealthy. Caveat emptor ! ....................... All that really matters, is right here.
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Inertia
Well-Known Member
A lot of Banks/Brokerages have a free "practice" section, where you can use their software to " imaginary " buy/sell stocks, but I'm not sure about options, - all no charge.
There will be a whole education section to familiarize with strategies.
Learn to use the tools, so you can take advantage of dips, and avoid the gut wrenches just by one "click" .
The Stock Market today like a "Boxing Day" sale since the pullback .
Like crackedback, I found mutual funds to be a loosing deal .
Good luck
There will be a whole education section to familiarize with strategies.
Learn to use the tools, so you can take advantage of dips, and avoid the gut wrenches just by one "click" .
The Stock Market today like a "Boxing Day" sale since the pullback .
Like crackedback, I found mutual funds to be a loosing deal .
Good luck
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I am richer than I was before I started investing.
My #1 piece of advice-
Start TODAY.
Open an online brokerage account, and browse around.
Get used to their format (they are all different).
Look up stocks, and start decipering what the specs and statistics mean.
Put some in a "watch list".
I joined an investment club in 1999 with $25 a month.
They went in a different direction than me, and we parted ways.
I did so well on my own, that I increased my contributions to at one point over $1000 a month.
I don't actually contribute anymore, but the dividends and distributions, plus sales continue to gow the account and give me funds to invest in other stocks.
#2 piece of advice-
Take market analysts advice with a grain of salt.
What they say may not be anywhere near your comfort level or strategy.
Pay attention, but don't blindly follow.
#3 Pay attention to what's happening around you.
I watched Dollar General beat wal-mart at their own game.
...if only I had invested.
I did wacth Hewlet Packard make a crap load of money off the burgeoning network and internet boom, and cashed in there.
I watched ford almost beat the great recession and cashed in there.
I watched Jamie Dimon turn JP Morgan into a juggernaut of a financial empire...and I'm still cashihg in on that.
#4- don't panic and sell when the market dives.
Those are actually GREAT times to buy.
I've made more off the four worst periods the market has had since 1999 than any other "business as usual" periods in between.
Good luck, and see item #1.
My #1 piece of advice-
Start TODAY.
Open an online brokerage account, and browse around.
Get used to their format (they are all different).
Look up stocks, and start decipering what the specs and statistics mean.
Put some in a "watch list".
I joined an investment club in 1999 with $25 a month.
They went in a different direction than me, and we parted ways.
I did so well on my own, that I increased my contributions to at one point over $1000 a month.
I don't actually contribute anymore, but the dividends and distributions, plus sales continue to gow the account and give me funds to invest in other stocks.
#2 piece of advice-
Take market analysts advice with a grain of salt.
What they say may not be anywhere near your comfort level or strategy.
Pay attention, but don't blindly follow.
#3 Pay attention to what's happening around you.
I watched Dollar General beat wal-mart at their own game.
...if only I had invested.
I did wacth Hewlet Packard make a crap load of money off the burgeoning network and internet boom, and cashed in there.
I watched ford almost beat the great recession and cashed in there.
I watched Jamie Dimon turn JP Morgan into a juggernaut of a financial empire...and I'm still cashihg in on that.
#4- don't panic and sell when the market dives.
Those are actually GREAT times to buy.
I've made more off the four worst periods the market has had since 1999 than any other "business as usual" periods in between.
Good luck, and see item #1.
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