Secrets of the Third Way
This is a very important concept if you want to get rich steady. I will add that wealth to me is creating and then having a grouping of assets spin off the monthly income we need to retire on. Are you tired of get rich schemes? I sure am. That's just not who I am or what I teach. It's not that it's get rich slow, but it is that you use your brain, think it through and create an extra source of income so you can quit your job. It's a very wise person who generates an extra, independent source of income. As you read the above paragraph do you think of working harder, say in getting an extra job or working overtime? I hope not. There is a better way. I call it the "Secret of the Third Way." You see there have been two ways of getting wealthy: 1) You buy a million dollars of assets, say real estate, and spend the next thirty years paying it off. This works for some. 2) You start small, like in a regular business, and build it up so that's it's worth millions, and then live off of it. How many people do you know who have actually done this? I'm sure not many.
My Secret is different. I'll share it with you here—just a little—and more in JOB FREE INCOME. First, ask yourself how much $1,000,000 in the bank will produce for you each year. At 2%, which is almost impossible to get today, that would be $20,000 a year. Most people couldn't live on that amount. Nice, but not enough. This is not my Secret of the Third Way. I just want you to keep things in perspective.
I think Writing Covered Calls is a powerful, workhorse strategy. It lets you put market forces to work for you, not against you, and it truly produces monthly. Let me explain and then I'll use this information to explain the Third Way. I constantly write about getting assets to produce income, in this case the asset is a select stock. Let's look at a real one. TSL was at $4.90 a short time ago. We used this one in our TDT (now your TDT, if you’ve subscribed) recently. We buy the stock, I think it was 2,000 shares, but we'll stick with 1,000 shares here to show how it's done.
1,000 shares cost you $4,900. Now you sell the $5 call out for a month. Let me explain. A call is the call option. An option gives you the right, but not the obligation to buy the stock at a certain price. Most people lose money at options. Did you notice that I didn't say to buy the option? I said to sell it to all of those weirdos who like to buy them. They take the risk, you take the money. A world of difference. The $5 call options were going for 52¢ X 55¢. That's the bid and ask. You sell at the bid and buy at the ask. If you purchased the option you would need the stock to go up and go up quickly or you'll lose all or part of your money. Stay away from this type of risky trade until you have a lot of experience and money to burn. Remember we need steady monthly income. The money is in the Meter Drop.
Writing, in the stock market, means to sell. Covered means you own the stock, to deliver if you are called out (sell the stock). The option is the call option you sold. People are buying the right, locking in the price and locking down the time. Time works against them. You did not do that. You sold the option, and now put the market force of time to your advantage. You generate income now, this month. And probably next month, and maybe many months to come.
You will sell the option and give someone out there the right to buy your stock at $5. We tie up the stock for 3 to 5 weeks, agreeing to deliver the stock at $5. It will only be purchased from us if the stock is above $5. If it stays around $5 or even goes down a bit, it matters not. We still get to keep the option money. It's yours for taking on the obligation to sell the stock at a price you like.
How much did you make? In this case, doing the trade at the market prices, you sold 1,000 times 52¢, taking in $520 cash now. This is cash in the account you can take out, or leave it there, and even buy more stock. It depends on your needs.
I hope you are staring at the $520 and asking, "is this for real? Are you telling me I can buy a stock for $4,900 and take in $520 for writing the call?" And if you sell the stock, you make an extra $100. We'll ignore that, and we'll ignore the commissions for now. We don't want you tripping over pennies on your way to dollars.
So yes, it's for real. In fact this was a real deal. And it's gets a little better than the numbers in the last paragraph. We don't want to bog you down here, but you could buy 2,000 shares with $4,900 using margin. With the extra shares you could sell $1,040 in options. You could buy back the call on a dip and sell it again. We call this double-dipping and it happens all of the time. We want you to see your future retirement unfold before you. We hope it's this month or within the next few months.
We can talk theory all day, but we think most people want to see money made. That's what TDT, or Thousand Dollar Thousand is all about. We love education and will teach you all we can, but what about a service that delivers on their site a real deal or two every week. We call it "A GRAND NEW DEAL EVERY WEEK." It's real. It's exciting, and it's achievable.
Please don't judge your ability to do this on your current knowledge. We are first and foremost an educational company. We get nothing out of what you do. Everyone else gets something. We are pure educators, and we are in the trenches with you doing the deals, practicing, researching and then sharing all of this with with you.
TDT is a mere $22 a month. Yes, you heard correctly, you will be given about 4 to 5 deals every month, one every Thursday. Please understand we always talk monthly. We live in a monthly billing and income society. After decades of teaching though, we're still surprised that people think all of this monthly is annual. Nope. So, to end this letter, please think about what you really need. If you don't understand all of the above numbers, do not despair. We're here to help you through the process. We encourage you to paper/practice trade at first. Build your knowledge and confidence. Work the numbers on each deal until you understand them completely. Find a good brokerage firm for trade suitability. Learn and Earn.
And now for a limited time you have access to our Paid To Trade Mega-Study Course for only $95, when you become a WIN Member. (Normal Retail Value $495).
To get you thinking of your retirement, think of how many groupings of $4,900 do you need, at $1,040 a month income, to quit your job? Now, how much money do you need to start with to retire with say $5,000 of monthly income? Now, the kicker, how long would it take making this kind of money to build up your goose that lays the golden eggs?
We would love to be part of this process with you. It's what drives us.
Team Wall Street www.wininc.biz