The world of investing is made to seem over-whelming to the average person. Why? Because the more confusing they make it sound the more you need someone esle to invest your money for you and take a nice cut whether they perform at their best or not.

The goal of this letter is to help you understand how to create income using stocks you already own or if you own none then I want to show you how to find stocks for the singular purpose of using them to create income!

Income is the Outcome

When you think about investing most of us think long term holdings in 401k or IRAs. That is all we need right?

Well in the recent years we have seen many who suffered downturns in the stock market that blew up their portfolios and after that those people were never able to fully life the retirement lifestyle.

Did you know that if you approach the market from a different angle you can use your IRA to compound your money at a 5-6% rate monthly. Using all cash in and out buying stock and selling stock and in 10 years you would see more than $7,000,000 compounded in your IRA!

How many of you can retire comfortably off that and live off 10% a year interest from that 7 mil and never touch the principle.

I was always taught to look at your investments from 4 buckets

Alternative Investing Styles for the Rebel

Be a rebel and do not settle for 10% a year when you can earn 20% and your families financial future is important enough that you should understand how to do that for them.

The goal for any investment portfolio should be long term wealth that becomes a generational change for your families finances. You can do that while obtaining massive compounding in an individual IRA and taking a small amount of money say $6,000 and churning into a 5% income stream for your lifestyle freedom longterm.

The goal should be a massive wealth bucket but what if you could also replace your income long term. How would that change your life?

What if you could grow your income bucket to where you could earn 5% a month off the princple and life off that. How is that possible? I will show you a little known secret that makes it so. It is called the covered call!

The Covered Call Income Formula

If you need to earn $5,000 then all you need is $100,000.

You take that $100,000 and buy stock say INTC (Intel) owning about 4000 shares and you can earn 5% on that ownership in the stock by simply selling covered calls one strike out of the money, one month out in time.

This is a real life example of the money you woulld return if you owned 4000 shares on INTC today and sold the July calls which is one month out of the money.

Covered calls are an extremely lucractive way to earn income from stocks you own without selling them and paying hefty captail gains taxes.

Now just like any other stock market stratedgy there is risk involved here. What is the risk you ask? The big risk is using getting called out of your stock and having to sell 100 shares of stock you own at the strike price you sold for every options contract you sold.

The best way to make sure that risk is minimal is to put yourself in position to profit from the stock if you are called out. How do you that?

Make sure that you always OTM options atleast 1 strike above where you bought the stock at and if the strikes are only in $1 increments then then I would use a minimium of 3 strikes Out of the Money (OTM).

Bottom line if you buy a stock @ $30 and you sell the $35 calls then even if you get called out you earn $5 profit plus the premium you have already been paid. Multiply that by the 1000 shares you own and you are talking 5-7 grand profit for one month!

I am good with a downside risk that turns out that way, how about you?

Growing your Covered Call Income

If you need more explanation on covered call stratedgies then I suggest reading this article

Now when you start selling covered calls in the beginning I would suggest you add as much of the profits back into the principle as you can so that you can grow a small amount of money into several hundred thousand dollars.

Once you get to high 6 figures then your covered call income becomes a large one. The same 5% is much larger when it is 5% of $570,000,( $28,500).

Then you can take that $28,500 and live on 1/3 while paying taxes with 1/3 and continuing to grow your income with 1/3 by adding it back to principle and buying more stock.

You may be thinking it will take forever to grow your money to $500,000, but in my experience it takes 10 years or so to build up a large sum. You can increase that time by using another one of the money buckets and trading risky options with a new account and a different amount of principle.

We will talk more about growing your money faster using options trading strategies in our next newsletter.

What Risk?

Truthfully you should understand that I am not a financial advisor and this is not financial advise, however I also am a successful stock market operator and I do this with my own as well as my families monies every month. So am I recommending you should do what works well for me. Read between the lines. The stock market is arena where you ethier go into to kill and eat or you get eaten.
If your reading this newsletter my goal is to teach you to become the hunter that can consistently bag the easy prey and eat well. Let everyone esle be the hunted, you can become a stock market CEO!

Your Friend in Success,

Robert M Morris