The Option Genius Podcast: Options Trading For Income and Growth

Allen: All right, everybody, welcome passive traders. I have one of my good friends with me today, Denny is going to be here. He's going to be talking about trading life in general, and everything that he's learned along the way. Denny, you know, we've, you've been in our programs for a little bit now we've seen your success. And I'm, we're friends on Facebook. So I see you with your posts from Hawaii, sitting on a beach house and all that and we're on the coaching calls, you're always you know, you're always making me jealous. You're always like, "well, I'm going to Hawaii next week, or I'm going on vacation. I'm going golfing". I'm like, Come on, man. So I'm glad that we finally got to talk, you know, thank you for thank you for taking the time to be out here and talk with us. And I can't wait to learn from you. Denny: Okay. Well, the way I you know, the way I originally got hooked up with you is I saw one of your marketing deals on the internet. And I thought, you know, well, you know, let's give this a look. And so I talked with Cory and and I said to her, hey, look, you know, I've got I said, I'd like an honest answer that if I come in and buy the program and everything, and I've got $10,000. Is it possible for me to make $2,000 a month on the $10,000? And she said, Well, we've got people doing it. She was very honest. You know, and then so so I got in on the oil deal. One. I think it's blank check trading is that was the oil is. And boy, I learned a whole lot. The first year, I was just sailing along making money hand over fist. And that was when oil was not very volatile. And it was just making, you know, moving sideways, which is perfect for if you want to trade oil futures, you know, it's perfect. Allen: Yeah. Yeah. All markets are our friend. Denny: And, and then all of a sudden, oil shot up. And I think it was November two years ago might have been three. Now I know I've been doing it quite a while. All of a sudden, I went in. And I looked and the market had dropped. And I and I was in a position where I was going to end up getting a margin call. So I liquidated my position was $4,700 that day, and I'll be damned the next day, boom, it pops right back up. And that was the day after Thanksgiving. And then on the next call, you talked about the Friday after Thanksgiving is not a very high volume deal. And so one big guy in there can make the market he can make it drop, you can make it rise, and I fell prey to that because I didn't know but you know, you can learn from your mistakes. And I made made plenty of them. But now I make money every month. Allen: That 4700, did that wipe you out? Denny: Out? No, no, I had 10 Okay. Okay, so I started all back over. And it took me it took me damn near a year to get it to get it back. And in the meantime, you had your program on stocks. Okay, so I signed up for that. And I fooled around with the stocks for a while and I went back to oil because to me, it's a little more passive where I can put a trade on and I will look at it once a week you know, and I feel comfortable with it. But then what happened is we got get them the next chapter Benny Alan COVID here. And my advertising agency that I own I do direct mail advertising for automotive industry. And I don't know if you've been reading but the car dealers don't have any new cars. Allen: Yeah, they don't need advertising. Denny: So, I my business the first year of COVID was down 2,000,400 and some $1,000 Right now, the second year is about 2.8 million and now we're into the third year of the car shortage and so far this year I'm down $1,976,000 From where my normal years would be so I went from a mid six figure income guaranteed down I collected my Social Security check with my wife, okay. And so I go okay, let's start fooling around with your knowledge with oil and with stock options and get yourself a little income so I took $25,000 out of our savings account and put it into my tasty works account and I make on an average trading two ETFs and oil and I just started doing spreads on weekly options in oil and that I've been doing okay on it but you got to watch that a little quicker because you'll, you can get caught up in a margin call on everything pretty quick on that. But since I have no other job, okay, I can watch it. You know, I just make sure that that when I go to the golf course on my daily trip I've got my phone with me. And I can hop in on the tasty works phone app and protect myself if I need to. But what I learned most from you was paid.. Allen: So how are you doing there? So you're like, Okay, so you Alright, so I'm following the story. Right? So you were you were learning like, you've been in our program, I think two years. So three, three, okay, three. So you learn how to do the oil you were doing great. And then you had one bad day where it crashed and you basically went back to zero and you had to start over? Right so that at least you didn't lose it you had you know you get back your gains then you know COVID hit so you had to basically all hands on deck for the business trying to figure that out. Now you're at the point where like, okay, you know what, I got this stuff that I know how to do let me see if I can make some money on the side. So you've been trading oil you've been doing you said you doing 2 ETFs. So what are you doing on? Yeah, what type I do? I do SPX and (inaudible). So what strategy are you doing on those? Okay, well, Denny: Let's go back to my educational background. Okay. Okay. I have a master's degree in Environmental Engineering. My master's thesis was the statistical modeling of dam failures due to excess runoff. Okay, so I'm a numbers guy, a numbers game, I understand standard deviations, regression lines, Bayesian coordinates, you know, all of this fancy mathematics that all of these indicators that when they write them, you know, I know how they get there. So I started looking at the stuff and I started looking for patterns, because standard deviation and stuff like that is nothing other than patterns, okay, that create a probability statement of the same thing occurring, okay. So, I started looking and I found the correlation between the VIX that, you know, on the CMOE, right, the VIX, right? And what happens with it? And so, I take the VIX and say it was it traded at 2588 and open this morning at 2588. I can't I can't remember exactly what it is. I go in, and I divide the VIX by 16. Now, why do I divide by 16? Allen: I have no idea. Denny: There are 256 trading days in the market. Right? The square root of 256 is 16. Okay. So I take the 68 divided by 16. And that gives me a percentage that's 87% accurate as to the upward or downward movement of SPX or rut on a daily basis. From what it opens that not what it closed that yesterday. But when the opening bell dings like, this morning, yesterday, right? Close to 1806. Okay. But this morning, when the bell rang, it was 1843 just for a short period of time until the CPI stuff caught up in the rear end dropped out of it. Okay, right. But so what I do is I go in and take what it opens at, and take the percentage and what it opens at, say it's one point it was 1.61 today, so you take 1.61% of the opening bell, and you subtract that from what it opened that and you add it to what it opened that and you gives you a high and a low rate. Okay? Allen: Say that again, do make doing so. Okay. The VIX divided by 16. Okay, then what do you do that? Denny: Okay, you multiply that the 1.61% Okay? Times when it opened that, okay, and that comes out to roughly what, close to 30 bucks. I don't have my calculator here. Okay. So you would take, you would take it and if it opened at 1843, you take the 30 off of that, that would be 1813. And then you take the 1843 and add the 32, which would be 1873. So that means that you've got an 87 point something percent chance that the right is going to close somewhere between the 1813 and 1873. Okay, okay, so now, we wait until the Between 1030 and 11 o'clock central time, okay. And the reason that I wait until then, is if you look, the market goes in and opens it bounces up and down. And if it's on the way up between 1030 and 11 o'clock you have what what usually happens and happens most days is a mid morning reversal of some sort where people are in taking profits or, or getting rid of losses. So okay. And at that point, it gives you a direction of the momentum of the market for the rest of the day. And the rest of the day barring no news or anything, it pretty much goes sideways or slightly up or slightly down. And I go in and sell a put put spread or a call spread at the bottom or the top that was ranges away from the way the momentum of the markets going. And I do that on a daily basis. Allen: So if you think is going down you sell calls if you think it's going up you sell puts at the end of that range. So is that like you said 87% So what is that like as like one and a half standard deviation? Denny: One and a half standard deviations? Allen: Okay. All right. But but why do you do the VIX because what does the VIX have to do with the rut? The VIX is based on the VIX, SPX the VIX Denny: Gives you the volatility, the market as a whole. Allen: Right. But it has to do with the volatility of the SPX, the RUT has its own.. Denny: Okay, okay. But the RUT is based on 2000 stocks, okay. And vix takes into account the volatility of what's happening in the 2000 stocks, the Dow Jones and the standards and poors. The way they calculate the bets, Allen: Okay, because I thought the VIX was just only on the SPX the 500. The large ones. Denny: Yeah, yeah. Well, but it is, but they just weren't right. There's yeah, there's a there's a correlation between what's happening in SPX and what happens in RUT. Okay. Allen: Yeah, they're, yeah, okay. Right. They are correlated. So it just it just happened correlated workout, right? Denny: And it's just and it's just like if you want to see what's going on with gonna happen for disaster time, with the SPX. Go in and look at what's going on with QQQ. If QQQ is dropping, you better watch yourself on the SPX, with about, I forget what percentage of the SPX is Fang stocks now? Right? Yeah. Okay. Allen: So how long? How long have you been doing this? Denny: I've been doing for about four months. Allen: Four months. Okay. And you back tested it? Denny: Yeah. Oh, yeah. I spent a couple, couple $100 and got some good back testing software and back tested it. And if you go through the thing and wins about 80 some percent of the time, okay. Allen: And how much are you trying to make on each trade? Denny: Okay, I'm trying to make 4% Three and a half to 4% on a trade, okay. Allen: And these are weekly trades or daily trades daily. So you want the SPX, Denny: The SPX, the SPX has a closing every day. Okay, Allen: So these are at the close. Yes. Okay. Denny: And the rut has Monday, Wednesday and Friday. So I only trade the rut on Monday, Wednesday and Friday. Allen: Cool. So now your results been so far? Denny: That I'm doubling my money every month. Allen: Wow. 100% every month? Denny: When Putin cut the pipeline off, okay. And the market and the rear end fell out of the market that day. I was at my computer when it started happening. And I closed everything out. If if I hadn't closed it out, I probably would have lost about three or 4000 that day, but I don't you know, what I do, Allen is I take a future value calculator, okay. And if this month, I want to make $10,000. I plug in $10,000. And I put three and a half percent of $10,000 times 21 or 22 trading days. And I print it out. And it tells me how much I need to make each day in order for that to occur. And then I keep a spreadsheet that I'm plus or minus off of the predicted number that I was supposed to be asked. And I adjust my trading from there now like right now for this month. So far. I'm up 900 bucks as a closing day. So I'm actually today is the 13th. Yeah, and I'm actually to where the tweet where I should be on the 20th of them. month. Okay, so if I think the markets going to be a little volatile or, or there might be some bad news coming, I can lay off, okay, and skip a day and see what's happening. Okay. That's where what you taught me is the patience. Is that it? You don't have to do it every day. Allen: Right? Right. So okay, so you're saying that you're doubling to 25? Every every month or no, Denny: Not doubling how much I want to make God, I got 25 in there, but you're trying to make you want to make if I want to make 10 This month, I put 10 up. And with the whole idea that I'm could lose all 10,000 of it. Allen: Okay so you're only using 10. Denny: Yeah, but I'm only using 10. If I lose, I lose the 10 then, you know, I'm a big boy. You know, we try again next month. Allen: So like, today's the 13th, you're only up 900. So you still got a ways to go before you get to the goal. Denny: No, no, I'm up 900 over how much I should be up. Allen: So you've already made the 10. And you made another 900? Denny: No, no, no, no. Oh, hold on a second. Okay. Okay, I started out, okay, with 10,000 in the account, okay. And I go to a future value calculator and I plug in, say three and a half percent. Okay. And I plug in 21 days, okay. Yeah. Well, that'll, at the end of the month, if I do that I shouldn't have around $21,000. Okay. And what the future value calculator says is that on day two, I should have 10,300 and some dollars on it. Okay, and then day three, I should have close to 10 Seven. Okay. So I go down what the day is what it says where I should be to achieve the deal. And I'm up 900 Okay, over that. Allen: I say okay, okay. Okay, so you're on pace. You're better you're better than doing on pace to double Denny: Yeah, right. I'm, yeah, I do what's called a phase and betting deal. Okay. Yeah. And so.. Allen: So that's what you're doing on the SPX on the RUT, and you're also doing oil. So how do you put in oil? Denny: I don't know oil, I buy maybe two to three contracts okay of the weeklies now, okay, and do a credit spread on them and try to make, you know, 4 or 500 bucks on the credit spreads and let them expire worthless. Okay. And, and then and the only and I'm only trying that because I know how to make money doing the monthlies and, and getting in at 45 days and, and monitoring it. So I'm a natural born tanker. Okay. Right. And, and, and it can cost me money at times. Okay. But, you know, I guess I'm fortunate that I'm not looking where my next meal is coming from. Allen: Right. Cool. So like today, you know, we have SPX is down 4.3% Today, big moves, they move down. So I'm assuming based on what you said, when you got in on SPX had already started moving down, so you sold calls today? Denny: Yeah, I sold calls I sold about 4090 and 4095. Allen: Okay, and then basically, you didn't have any trouble today? Denny: No and yesterday, yesterday went up. Okay. But when I went when I entered it, it was going sideways. And it was more advantageous on the calls yesterday. So I sold 4185 and 4190 yesterday, okay. And, you know, they they expired worthless okay. Allen: And is there any time you do both puts and calls? Denny: Yes. Yep. It looks like it's going absolutely sideways. Like I say, enter my trade between 1030 and 11. And I usually go to the golf course about one o'clock. But before I go to the golf course, I pull my account up and I look at it and the pit looks like it's going sideways. Then I create an iron condor and I go in and sell puts. Allen: And then what about a stoploss you have any? Denny: Yeah, I put stop losses in on everything. Allen: What percent? Like how do you know when to get out? Denny: I put 40% Okay. Allen: So 40% loss. Denny: Yeah. Allen: Okay. Cool. And so you're pretty happy with that? Denny: Yeah, you know, until it burns me I guess I will you know, I'm waiting. I'm waiting for it. I'm you know, I've done this long enough now that I know that nothing is failsafe. Allen: No, but you're doing this in a time that it is pretty volatile. You know? I mean vix today was at 27. But yeah, even so the VIX is kind of low for what's going on and all the stuff that's happening with the Fed. And, you know, we're still in a bear market. So we're still getting these wild bull market, not not a bull market rally, but a, like a whipsaw rally to go up, and then we, we hit back down on a dime. And so it still it has been very up in Downy and so well, having a you know, the strategy that you're just like, hey, I'm not gonna, I'm just gonna play day by day and not worry about at night. I think that makes a lot of sense. Denny: Yeah. You know, and, you know, I am a very, very avid reader. Okay, so I read Barron's, I read the bestsellers, Business Daily, and stuff like that, not because I think that they are going to enlighten me on anything. But what I have read is, there's a lot of guys in there that tell us about the history of the market. Okay. And for every bear market, you know, usually lasts nine to 18 months. And there's usually four to five mini rallies in there that everyone is calling the bottom of the bear market, and then it drops again, you know, and so, if we understand that, you don't get too overly enthused with the rising SPX or a Dow. Allen: Yeah, yeah. It's, I mean, that comes with experience or like you said, you know, learning and education. Cool. So what do you see going forward? Like, what's, what's next for you? Denny: Man? You know, I just enjoy doing this stuff. You know, I mean, you know, I'm in the twilight twilight of my life. You know, I'm 76 years old. Man. I'm a real young 76. I mean, I'm very mobile. I play, play golf every day. Right now, while we're speaking. I'm in Duncanville, Texas at my grandson's tennis match. He just, he just won his doubles match. And so about a half hour he'll start playing singles. So we'll watch that but.. Allen: Yeah it's a little how, I tell you that. Denny: Yeah, 95 right now here but you know, my normal week is yesterday was Monday I was in junior high volleyball and Flower Mound, which is 30 miles away from where we live. But today I'm at varsity tennis in Duncanville. That's not bad. That's close to where I live. Tomorrow. I got off then Thursday. I got junior varsity tennis. That's a home meet. And then Friday night, I've got got varsity football and Flower Mound. Okay. That's almost every day of the week. I'm doing something with the grandkids. Allen: You're going golfing every day and you're still trading every day? Denny: Yeah, and I'm trading every day. No, and you know, thanks to you. You've shown me ways that I don't have to sit there and stare at a computer. To make money. Allen: Yeah, yeah. Yeah. No, that's not the I really like what you're doing. I like your style. You know, it's like, okay, you know, put a trade on, let it work, and then go enjoy my life. Denny: Yeah. Doesn't work. So what, you know, there's another day. Allen: Yeah, but the return is good enough that, you know, you get compensated, even if there are losses, the you're, you're playing with bigger numbers. So it's like, hey, if I can make 100%, then yeah, I can lose 20, 30, 40%. That's okay. Yes. Because I can still make much more than that, you know, in the stock market. They're like, Oh, wait, you know, you shouldn't lose more than five or 10% of your account? Well, you're only making 10% a year. So obviously, you don't want to lose more than that. But if the numbers are bigger than you can take bigger, bigger, bigger bumps, so.. Denny: And I'll tell you, I'll tell you what I use I still I still use your option trading Google Spreadsheet. Allen: For the credit spreads, yeah. Denny: Yeah, I use it every day. Allen: Yep, makes it simple, right? Just calculate Yeah. Denny: The only thing is I went in and change changed the 25% to 40%. Allen: But I like it because it's like simple, you know, and I'm sure people listening to this. They're gonna be like, Okay, what do I do again? So it's like, just gonna recap. You know, you wake up in the morning, you see where the SPX and the RUT are opening, right? Yeah, take a look at the VIX. You divided by 16 and then you add that.. Denny: That's your that's your percentage movement in the ETL. Okay, that's Allen: A percentage move of the SPS. Okay. So you multiply that percentage by the open. By the Open, and then that you find your range. Denny: That will give you the that'll give you the movement, which, so say it's 1843 and say, say your your divide by say, say it's say VIX is 32. Okay, okay. Okay, you divide by 16. That's two to 2%. Okay, so say.. Allen: Okay that's percentage. Okay, yeah. Denny: 2%. So say right, opened at 1800. Today, you take 2%, that's $36. So then you take 36 off of 1800. Okay. And, you know, that puts you down to 1764. And then you add 36 to the 1800. And that gives you 1836 yeah. Allen: We have a 87% probability of this range working out for the day, it's not for the month, whatever it is for the day. And that works out to be about 1.5 standard deviations. So we've got the range, that's about one and a half standard deviations, that's 87% probability about that. And for you, it's been working pretty good. And you set it at a 40% stop loss. Oh, and then the other thing is that you get into the trade about an hour and a half an hour, hour and a half after the market opens. And so.. Denny: And the reason of the hour, hour and a half is it took me a while to realize this, the market tends to at times gap up or gap down. Okay. And then about an hour to an hour and a half later, it kind of self corrects itself. Allen: Sometimes that Yeah, yeah. But they say, you know, the opening bell is usually amateur hour. And so yeah, I mean, I could have told you that I don't trade the first hour of the day, you know, markets open markets open about 8:30 here Central time, so I don't trade before 10 o'clock, which is exactly an hour and a half. So I do that.. Denny: Yeah, that's when I'm looking at the momentum indicators and everything. Allen: And then you let your trades expire? Denny: Yes. Allen: Okay. So you got that going on. And then.. Denny: Well the good thing about it is trades good, you can't get out of it anyway, because you've made all your money by about two o'clock and go in and try to close the trades. It says that say you get the message just some of the bid ask or zero. Allen: So, okay, so you got that going on. And you got the oil, weeklies gone. So that keeps you busy. That keeps you diversified. You're making decent amount. You're happy. That's awesome. I love it. That's that's what this is all about, you know, Denny: Keeps going to Hawaii. Yeah. You know, Allen: Yeah life is good, right? You're hanging out with grandkids you got you still have the house in Hawaii, you go on vacations, everyone, wherever you feel like it. So I like it.. Denny: In two weeks. I'll be in New York City. Allen: That's great. Cool. Denny: Going to see Billy Joel at Madison Square Garden. Allen: Very nice. So did you do any kind of trading before you came across us? Denny: Yes. And I lost my rear end. Allen: Oh, no, that's not good. Yeah. Denny: I was way too aggressive. Okay, and not patient. And that's when I was gonna get out of the equity market completely. When I saw your oil deal, okay. And, you know, and I figured I had a better chance at oil, because it's something that we all need. And it's something that's not going out of style. Even if we go to all electric cars. What people don't understand is that two thirds of the pharmaceuticals and all of the plastic comes tomorrow. And that's none that's going away. Nope. There's going to be a demand. Allen: Yeah. In fact, you know, even with everything with the more solar and the more wind power they bring on, the world is still using more oil now than we have, like 10 years ago, the demand continues to increase, just goes up and up and up every year. So yeah, it's not going anywhere, anytime soon. So we're going to continue to trade even if demand starts going down. It's such a big market that we'll be trading oil for, you know, for the next 20-30 years. Denny: Yeah Allen: That's, I mean, it's a different so basically, the you are trading equities but then when you found out and you learn about how we sell options, that kind of really flipped the switch? Denny: Yeah that intrigued me. Okay. First of all well, my background before I got into the advertising thing was I owned a car dealership. Okay, I owned a Ford dealership. If you know anything about car, guys, we're super aggressive and we love leverage. And when I saw options, and I saw the leverage available, I said, this is my ticket. Allen: So then, why are we still at 25,000? Why don't we go more? Denny: You know, I've got a, I've got a wife. Okay, that funny story, okay? All donations came in and bought me out. I guess it's 28 years ago now. And I got a very sizable check. And the day I got that check, my wife reached over and she grabbed that check. And she said, seed money only comes once in a lifetime. And this is going for our old age and for fun. I go, Okay. Well, one of the ways that I've stayed married 52 years, is that I always get the last word. "Yes, dear". So, she, in the money, she basically watches it, okay. And, and she thinks that, you know, a lot of what I'm doing, although I'm making money and stuff like that, on on a basis is a little bit too risky for her, her deal. And so that, you know, that's what she has given me to play with. Okay. Consequently, I have pointed out to her recently, that because of that money, she's not had to buy any groceries out of her retirement account. For her Social Security check. I played for all the plane tickets wherever we go. This trip to New York. I've got $1,000 in Hamilton tickets invested. And she didn't have to pay for any of that. So don't you think it's about time that we started looking at adding more to that, you know, so that I think by the end of the year, she might, you know, lead me forward a little bit more. Allen: Do you have other investments and stuff elsewhere? Yeah, yeah, money's coming in. So it's not like you need this to live off of Denny: No, no, no, no. Man, like, it's like I said that when my COVID that stopped an annual mid six figure income. I mean, on a normal week, before COVID. I was, well, on a normal month, I was doing 800,000 to 1 million pieces of direct mail a month. But that so you know, it's a good sized business, okay. With annual revenues, anywhere from two and a half to three $3 million. And, and I'm a one man show. I have no employees in that business. You know. Allen: So it's still running, you still run that business? Yeah. Denny: Yeah. In fact, I just got a job today. I mean, you know, they're, they're doing infrequent, you know, I mean, you know, I might have made 30,000 bucks for the whole year doing that, you know, which, you know, that used to be a week sometimes, you know, Allen: You know, so let me ask you this. Are we going to see below MSRP prices anytime soon? Denny: No, no, no. Allen: How about MSRC? Like, I'm seeing prices that are like way above like, double MSRP. Yeah, I'm not paying. Denny: As soon as the chip shortage is alleviated, and they start to get inventory sometime in the next 18 to 24 months. They'll have inventory again. Oh, wow. But I don't know if you've seen what's happened to the used car market? Allen: No, it's taken off like crazy. Denny: Yeah, I mean, you know, my wife has macular degeneration now. And so, leasing a car is unless you have a business purpose. leasing a car is a bad investment. Okay. My wife had macular degeneration, we didn't know if she was going to, they were going to be able to get it stopped and whether she was going to be able to continue to drive. So the car that I'm sitting in right now is her car. Okay. And we leased it, and it had a $21,000 residual on it at the end of the lease period. And we were, you know, we were gonna turn it in. And then I pulled up what the value on it was, the retail value on this car was 31,000. So I went down to the Ford dealership, and broken but check for the car. And they can't want me to lease another one. I know. Thank you, you know, and so and that's happened all throughout the industry. And it's consequently forced the US car prices way up. And so what's going to happen two fold things going to happen. Matt, real quick, I know that you know, either way saw your day on this, but this is interesting. Once the inventory, get levels get up, all these car dealers that have these massive use car inventories are going to have so much water in their inventory. And water is excess pricing to what the current market book value on the vehicles is. In other words, if you can't sell it for what you own it for, you're gonna lose money. Right? And, and a lot of these big-- you live in Houston, I live in Dallas, a lot of these big dealerships that have two and 300 guards in the ground, are going to have a million and a half to $2 million in water in their inventory. And they're going to have to get rid of them. Okay. And so the rear end will fall out of the used car market. And you know, so right now consumers are getting screwed on automobiles. But the dealer has his day of reckoning coming due. Allen: Yeah, but if you need a car now, you're screwed. Denny: You need a car now you're in trouble. A buddy of mine went looked at a Subaru Outback with 19,000 miles on it, that it was a year and a half old. And they wanted $35,000 for it. Allen: Yeah, yeah, don't get in a wreck. I mean, my car I've been thinking about my wife is like, can you just get a new car, please? I'm like, No, I like it. You know, I'm trying to get it up to 200,000. You know, miles on it. Yeah, trying to get there. I mean, it's fine. It works. You know? It's comfortable. It looks fine. From the outside. Everything is comfortable. It works. You know, it's nice Toyota keeps running. But she's like, can you get some bigger? I'm like, Alright, so we looked around, and I'm like, Man, I don't want to pay this stuff. You know, it's not even. It's not like we can't afford the payment or anything. It's just from where it used to be to where it is. Now. There's no difference. The car is the same. You just charged me a whole lot more for no reason. Just because yeah, there's a you can. So yeah, yeah, no, I don't want to play that. Denny: Yeah, their day of reckoning is coming. Allen: We'll be alright. Well, do you have any advice for our listeners, people that are learning and trying to figure out like you found your way, right, you found your niche in trading, and it took you I don't know how many years you were trading for two years. But how many years? Were you looking before? Before that? Denny: Oh five years, I probably probably five years before I found you. Okay. And two years, two years of.. Allen: Learning and testing Denny: Not doing what you told me to do. And getting and getting burned, to realize, to realize that the things that you teach patients, you know, just the little thing and Think or Swim your standard deviation deal, you know, saying, Oh, you've got a red line there. That's not good. You know, just those little things, you know. So the biggest advice, the best advice I could give to an individual, be patient. Don't try to hit homeruns. You know, the age old adage, pigs get fat, hogs get slaughtered, is so true. It's like one of my rules on the SPX. You know, a $5 spread. Okay, a $5 spreads on the SPX is 500 bucks. Okay. So if I'm trying to make 4% to 5% a day, that means I'm looking to get 20 cents. On my credit spread. That's it 20 cents. Okay. And if you look at what the delta is on that, it's usually 12 to 13, which puts me in a real advantageous position. You know, so don't get greedy. Just let time be. let time be your friend. Allen: Right? Yep. And that actually might be a shortcut for you. So you don't even have to worry about the VIX. You just go in to get the 12 Delta. Denny: I'm in the process of doing about a year study on this, okay. Because I back tested it using the Delta. Okay. And some wild market swings, it comes out that it doesn't work out. Right. Okay. Yeah. Allen: But the thing is, it's hard to back test it because you're saying that you go in after looking at it visually and being like, Okay, I want to be on this side or I want to be on that side. You can't do that. Unless you do it manually yourself with a like a software that I like the one I use where you got to go in day by day by day. If you're one of those programs where you just put in the numbers and you Just let it run, it doesn't work. Denny: You've got to plug them in yourself. Yeah. And it's time consuming. Especially if you're doing dailies. Yeah. Because you got you got 256 for every year. Allen: Yeah. And I mean, like, you know, when we when we back test a new strategy, it's like I want to I want you know, a good 10 years of data, you know, I want to see the the ups and the downs and the flats and the recessions and the bulls market and everything. I want to know that it's going to work long term, not just for a couple because I've been burned on that too. You know, I, I back tested different strategies like the butterfly on McDonald's and a butterfly on a Walmart and they worked great for five years. For five years, they made money. I went in there with guns blazing. You know, I took like every money out of money I had at the time at $25,000 on one trade, just want Dre put it all and boom, blew up. And I'm like, what happened? Oh, my God, man. It was a fluke. I'm gonna do it again. Next month, next month, boom, blew up again. You know.. Denny: Those butterflies and iron condors look great. You sit there and you look at the leverage you've got on that you go, Whoa, you know, but you know, you got to think, why isn't everyone doing it? There's a reason. Allen: So, there's lots of little tweaks behind it. Yeah, yeah. This has been fun. Denny, I'm gonna let you go. I appreciate you. And if there's anything you need, please reach out to us. We're always here for you. And thank you for sharing your wisdom. Denny: Okay, well, you know, I mean, I just want to tell you and your listeners that your program has definitely taught me a lot and made me a lot successful. Faster than I ever would have been. Allen: That's awesome. That's good to hear. Make my day. I love it. I love it. JOIN OUR FREE PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps. Thank you!

What is an accredited investor? How do I become one? And why do I want to become one? It's a great question. So let's talk about the why before we get into what it is and how you become one. So as you know, you know, we talk a lot about trading, we talk a lot about passive trading, investing in the stock market selling options. But the goal, the long term goal is to not be a trader. It doesn't make sense, right? Like, what are you talking about, the goal is not for you to be a trader for the rest of your life, unless you want to, right? Now, if you look at the passive trading manifesto, and the goals of passive trading, there are three freedoms that we're trying to accomplish. Financial freedom, time, freedom, and choice, freedom. And choice freedom gives you the choice of doing what you want, when you want. And if that means that you don't want to trade, then you don't have to trade. Right? Now, if you do decide to continue to trade because you want to, then that is perfectly fine. That's your choice and more power to you. But if you don't want to, then you shouldn't have to. So that's where this accredited investor comes in. Because the point is, for us to increase not only our monthly income, basically, you know, the more income you have coming in, when you have money coming in, that pays for all your bills, you can essentially retire and you have financial freedom. But we need to also increase our net worth, so that we can have other opportunities to investing, where we don't have to be active or you don't have to be trading, even though it's called passive trading, you're still doing it. Right? Now, it's a lot less active than day trading, or stock trading or any of that stuff. But you still have to still do something. There's nothing totally, totally passive, even, you know, regular passive investing is still takes time and energy and learning and all that other stuff, stress, a lot of it. But that comes with the territory. So the goal as the way I see it, and the way I'm trying to live it and I try to teach it to my students, is that we want to use trading as a very safe, but very quick way to get us to first financial independence, where we have enough money coming in from our assets that pay for all of our expenses. Once you get there, then you are not beholden to a job, then you're not both beholden to the economy, your recession doesn't matter, right? Because you have enough money coming in, you have a skill, you can go into the market, and you can extract money, at will. And that's what we teach. That's what passive trading is all about. But once you get to that point, you want to keep going further, and you want to become what's called accredited investor. So what is that? Well, an accredited investor, according the SEC, is someone who has either $1 million in net worth, not including their house. So if you're a millionaire, and you don't count your house, you're an accredited investor officially. Or the other thing is, the other criteria is that you've made if you're by yourself, you've made $200,000 In the last two years, and you're going to keep doing that. So your income is over $200,000 a year by yourself, or if you're married, it has to be 300,000 for the both of you over the last two years, and going into the future. Now, look at the numbers. If you're making $300,000 a year, and you're not worth a million dollars, that's a problem, you should probably work on that first before talking about whatever we're doing here, right, your your expenses are way too high, you need to worry about that, first get your debt down or get your build on or whatever it is. And then you know, get to that million dollar net worth requirement. Now again, we're not counting our primary residence. So if you have a business, if you have other properties, if you have cars, you've shoved jewelry, if you have notes or anything that you have anything valuable antiques, all that stuff counts in this million dollar net worth criteria, and it's basically up to you, you know, so if you think something is worth $100,000, even if you can't sell it, but it's still worth 100,000 You can't be crazy about it. You can't say well, you know this pen, I want a million dollars for this pen. No, that's not real, right. Not realistic. But if you have something that's illiquid, something that is valuable but illiquid, maybe it's like a baseball card collection or antiques or something like that, that you know, is worth money but only to the right buyer. You can still qualify that as an asset. Now why do we want to do this because there are certain investments that are only open to you if you are an accredited or above investor. So there's that accredited investor list and I are the criteria that I told you about. And then there's also a couple other criteria above that one is called qualified. The both of them are called qualified. They're called different things. But the step above accredited is 2.1 million in net worth. And then after that, it's 5 million in net worth. So first, go for the accredited, that's the goal, then 2.1, and then 5. Okay, once you get there, a lot more things open up to you. So if you want to invest in private placements, or in real estate deals, or in syndications, you have to be, in most cases, at least an accredited investor. Now, the reason you want to do that is because these investments, while they don't make as much money as we can, trading passively, it still is a passive investment. So you're not having to do any work. Right? So, for example, I was looking at a investment recently, that is a real estate development, basically, this guy wants to create or build 200 apartments, and he needs the money for the down payment, the rest he is going to get from the loan. But he's got a construction company that plans to get the land, he's got everything ready to go. But he needs investors to come in and bring in a certain amount of money for those investors, he's going to pay them a piece of the whole deal based on his projections of what it's going to cost. And by the time it's built, what's his going to be able to sell for what is going to be worth then if they refinance, it should be about a 20 - 25% yearly return on the money. So you'll make sure if it's like a three year deal, you make 25% 25% 25%. If it's a four year deal, you'll make your money back. So whatever your money you put in, you get it back now, if you're not accredited, you can't get in the deal. Right? So that's why we want to get to be accredited. And for me, yes, I could put more money into my trading more money into the stock market. But at a certain point, when you already have seven figure plus accounts, you kind of feel like you know what, maybe I don't want to put more money in the stock market right now. Right? If all if the market is going crazy, and everything's going up, then yeah, you can go put it all in there. But in a time, like we have going on right now, you know, in mid 2022, markets are down, Fed is raising rates recession here, not here coming, who knows. But things are more up to down Z for the stock market. So yeah, I'd like to be in diversify into something else where I don't have to worry about it, it's not up to me, and I have to do any work, that money should be coming in. And of course, I have to stay on top of it, do my research, and all that stuff. So it's not completely passive. But it's more passive than me trading. So that's why I encourage all of you to become accredited investors. Now, in order to do that, sometimes, depending on the fund or the investment that you're going into, you know, there's no one place where you go and they give you a certificate or anything, it's not like that. But depending on the investment, you might have to bring a letter from your CPA, or your financial advisor or whatever, yeah, this guy's got over a million in assets. In some cases, you might be able to sell, verify. So they just ask you a question like, Hey, are you accredited? Yes or no, you click the box, and you're good. And they don't ask any more questions. So depending on type of fund regulations, and all that, we'll be able to tell if you need to self verify, or if you need an outside person to do it, because it's more painful. A lot of CPAs don't want to do it. Financial Planners don't want to do it. So more and more people are going to the self verification route, or, you know, if you have just one large account or whatever that has the money in it, you show the money, like there's my statement, boom, done. So that is what an accredited investor is. That is why you want to be one. Now, how do you become one? Well, if you're not one already, you know, it's very simple. Cut down on your debt and make as much as you can. And if you're having, like, if you can invest in yourself, you can get into you know, get a better certificate or something of learning some some specific skill that you can specialize in, you'll make more money at your job. If you can't do that, then passive trading will get you there eventually, depending on how much you have to start with and what strategies you use. So that's you know, the passive trading is the vehicle to get you to financial independence that's the first stop and then after that, it's like "Okay, now let's keep building a nest egg let's keep making more and more Grow, grow grow the pie", so that we can get to accredited investor, which is 1 million in net worth. And then that's when you can think about okay, let me diversify. Let me put some money in a crypto fund if you want to, even though you can't do it without being accredited, even though you because it's me more risky, right? So that's why they have these restrictions, these things are for sophisticated investors, and you could lose all your money. But you could do that even in the stock market, but whatever the government does, and so, you know, maybe you want to be in a fund that, like I said, builds apartments, or owns a commercial shopping center, or owns a mobile home park, or anything like that, where you know, you have other incomes coming in. So remember back to, I think it's like episode number two of the podcast, which is the five finger income theory where you got to have five sources of income. So this could be, you know, once you get to that accredited status, you could set up your investments in different funds in different parts of the country where that money is coming in. So it's a little bit spread out a little bit diversified. So I don't think you need to do it right away. Because most of these funds, they do require, you know, maybe 50,000 100,000 is average, but 100,000 requirement, you know, to invest in the Fund, some are more I've seen, some that are like 250,000, for an investment. So depending on the fund, depending on the risk, all that has worked to play, but you got to put in a substantial amount in to invest in it, sometimes you start getting money back, within six months, sometimes like the development deal. If I invest in it, I won't see any money until the thing is built three years later, or they'll probably build it out slowly and start renting them out as fast as they can. But we're still looking at about a year and a half, without any return any money coming back. Right. So you have to be in it for a little bit longer term. So that's it, that's an accredited investor, again, just to be sure, you got to have a net worth of a million dollars, not counting your house, that's for married people, as well as individual people. And then if you are going for the income route, you gotta be making separately individually at least 200,000 For the last two years, and got to be able to know that you're going to do it forward. Or if it's with a spouse, it's 300,000 for the last two years income and the same this year and going forward. So that is an accredited investor qualified, you know, it's 2.1. Basically, that's it, you just have to have a net worth of 2.1, not counting your house, that would be the next step. And then that will allow you to even more broader categories, certain funds that you can't get into as accredited, you have to be qualified. So that's a higher bar. And then there's another one after that, which is even higher bar 5 million. At that point, you can basically invest in anything you want. But that's what that is. And hopefully we can help you get there. If you have any questions, please always email us help@optiongenius.com. And whatever we can do to help you get to that accredited investor status, some of you are already there, if you are there, and you are looking to diversify, and if you do want to say, hey, what other things can I invest in, I am always looking at stuff. And so I've put together a list of people that are also interested, and we'll share the deals with them. So when I find something that I like, you know, like, Hey, this is a really good deal. This is a good return, the fee structure is great. And there's not a lot of risk here. The operator is good, you know, is vetted. I do all that research for myself anyway. So I can just share that information with you. If you're interested, you know, email us help@optionsgenius.com and and we will get you some information. Just tell us what you want to invest in and then we'll we'll be able to separate it out and let you know or you can go to I believe it's optiongenius.com/passiveincome. And there's a form there, you can just fill it out, tell us what you want to invest in, and we can send you the right information. So again, that's optiongenius.com/passiveincome or just email us or just reach out to us and we'll get you on the list. But we need to find out a little bit more of what you want to invest in. Okay, so there we go. That is accredited investor and we will see you later. Take care and trade with the odds in your favor. JOIN OUR FREE PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps. Thank you!

Hey there, passive traders How you doing? I got something really, really exciting for you today, if you'd like to have really, extra money, free money without having to do anything, that's what we're all about, right? Passive income, passive trading. This is really something I just came across this, I don't understand why I didn't know about this sooner. I just can't imagine all the money that I've left on the table over the years. I mean, I knew that this was happening. And I knew this was done. I just didn't know that us, individual investors at home guys, I didn't know that we could do this. And so I had to make this deal right away. And I had to get this information out there. So you could basically turn this setting on in your account and start making money today. Okay, that's how that's how cool it is. There's nothing to buy. There's nothing to do there. I mean, basically, it's, you have stock in your account, your broker will pay you extra money for having that stock in your account. That's simply what it is. So, I mean, let me just get into it. Okay? I'm flabbergasted. I'm speechless. No, I'm not, I'm talking. So I'm not speechless. But still, I'm really like, shocked. I call it the sticky to Wall Street stock Income program, because that's what we're doing. We're sticking it to Wall Street, we're sticking into the man. Now, look, this is our works. Normally, when we buy a stock, right? It goes up, we make money, that's what we want, you buy it, and then it goes up and you sell it or, you know, your passive trading. So you don't want to sell it, you do want to get dividends from it, you still want to sell options on it, and you want to make money off of it. You don't want to sell it ever, really, because it's just it's a it's an asset, they just want to cashflow. But this is another way to do that. So you buy the stock, it goes up, you make money. But if you think the stock is gonna go down, well, obviously, you can short the stock, right? And that's what hedge fund guys do. That's what Wall Street guys do. The big banks, the institutional traders, that's what they do all the time. They are shorting stock. Well, in order to short the stock, they don't own it, you can't short something you own right, because they would lose value and you own it. So that's bad. They instead they turn around and they borrow the stock from other brokers on Wall Street. So if they want to short a stock, they got to go to a different broker and say, Hey, I need this many shares this, I need this many shares this. And in order to do so they have to pay money, they actually pay interest to the broker that they're borrowing from. Now, if you go to your I know this, this works on Thinkorswim. If you go to the main page, where you type in the symbol, and you see the all the information, it'll tell you if the stock is easy to borrow, or hard to borrow. And that's what tells you how much volume there is and how much ability the hedges have to borrow this stock. Right? If it's easy to borrow, then they can go to any borrow and they can get it and they'll pay a lower interest rate. If it's hard to borrow, they have to pay a lot higher interest rate. Okay, so that's the really cool part. Because if we have that stock, we could lend it and collect that interest. That's right. So the hedge is they have to learn, they have to pay whoever they're borrowing their stock from the payment, it depends on the stock and how much they need to stop, right. If it's hard to borrow, they're gonna pay more. But any borrowing that they do, for us is really extra money. So yes, if you have stock in your account, it's just sitting there, you turn this feature on in your account, click, or I mean, there's no application, but you fill it out, and you get approved for this, your broker will take that stock from you whenever somebody wants to borrow it, and they will pay you interest. Now, the cool part is nothing changes in your account, nothing changes, you can still sell it whenever you want, you're not locked in. If there's a dividend, that money will still be given to you. You can sell options against it. The only requirement is that you own the stock 100% no margin. So if you own the stock 100% no margin. You can do this. Okay now, against the details a little bit, but here's what it's called. If you want to research it, you want to look it up, you want to call your own broker and find out more I think you should because it's like free money right? At Interactive Brokers. It's called the stock yield Enhancement Program, stock yield enhancement program, because that's basically what it does. They're giving you more money for owning it at other brokers like AmeriTrade, Fidelity Schwab e trade, it's called the fully paid lending Income program called the fully paid lending Income program. So you can either research it online or go into your account and search it or you just call up your broker and ask him make sure you get the pros and cons haven't walked you through it. Right do your own due diligence before you do you do it. But it sounds really awesome. And I'm applying myself to get this set up today. I was planning on setting it up first making some money off of it and then being able to come back and report it. I was like No one, we're gonna wait, I just need to tell you guys right now. And because I've seen other people do it and they were boarded that it works, it's easy, it's doable. And so I'm gonna go ahead and tell you now, and then I'll go do it, and then I'll make another, you know, we'll talk about it later, and see how it does and all that stuff, basically, you get daily income, yes, they put the money in your account every day. Because let's say, let's say there's a stock and, you know, they're gonna pay you 12% a year. That's a lot, right? 12%. Now, they're probably not going to take the stock from you, borrow it for the whole year. But for whatever period of time, they'll take that 12% divided by blah, blah, blah, how many days and then you get paid that dividend or you get that dividend, but you get paid that income that yield every every day in your account, and it'll show up as an account as a payment to you. Okay? Now, again, like I said, there's no restrictions on the on the trading, you can sell it whenever you want to, you can trade options on it, if you want to, make sure your broker allows it. Every brokers are different. They all have different criteria. So make sure your broker allows it. But yes, you can trade it you there's no locking period, you can get out whenever you want. Now, you might be thinking, But wait a minute, you know, if I'm giving this stock, and I'm letting somebody borrow it, who wants to short it, that's going to make the stock go down, and I own it. So that's going to hurt me Why would I do that? Well, you would do that because they're going to short the stock anyway, whether they borrow it from you, or they borrow from somebody else, they're going to borrow it, they're still going to do it. So you might as well make money off of it. Right. And we are in it for the long term. We're not in it for like five points. We are in it for five years. So if you do your stock selection properly, you're going to want to stay in the stock. And if it if it goes down, that's great. Well buy more. That's perfect. And we're getting paid while we're waiting. And we're selling options against it while we're waiting. And we're still getting dividend payments while we're ready. So yes, it's a good idea. The yield of what they do depends on the stock. If it's harder to borrow, you get less if it's easier to borrow. No, it's harder bar you get more, it's easier to borrow you get less, it depends on the broker as well. And the broker will then determine how much of that money they give you. So yes, I know it's yours. Right, but they're doing the transaction. So they keep part of it. Now at AmeriTrade they say they keep 50% Interactive Brokers is also 50%. So they keep 50% of that interest that gets paid. All right. Now, what's the risk? Well, the risk is that this is the once you hand over the stock, it's not government protected. So basically, what happens is if you have stock at Fidelity or AmeriTrade or whatever, your broker, if your broker goes out of business, you are protected up to a certain dollar amount by the US government. So the government will go into okay broker you failed, give us all your accounts, you know, let us know how much did Joe have in his account? Oh, this much. Okay, Joe, well, here you go, Here's your money. Or here's the stock that you own. You know, if you got 100 shares, here's your 100 shares, or they'll give you the money for it. So the government protects you in a normal environment. In this situation, the government will not protect you because you're lending them away. You're giving them up temporarily. Right, so you're not holding on to them. In order to offset that. What the brokers have done is each broker has a bank. Right? So for AmeriTrade, the bank is Wells Fargo right now. So the broker or in this case, AmeriTrade takes 102% of the value of the stock that they're borrowing and they go and they put that money or those that that amount of asset into the bank at Wells Fargo. So in case AmeriTrade goes out of business, Wells Fargo will make you whole okay. So again, if let's say you had $100,000 of a stock, AmeriTrade takes it from you, you let them borrow it, you let them give it to somebody else, then they AmeriTrade will take $102,000 worth of assets T bills or something else and they'll put it into Wells Fargo just in case. If they got a business well, Fargo will give you your money back. Okay, so you are protected, but it's not government protected. That's why they call it fully paid lending that it's, you know, fully paid. What else? Okay? So dividends, dividends are different dividends are paid, but they're not paid as a dividend. So let's say you have $1,000 dividend coming up. If you have lent the stock, the broker will still pay you that $1,000 But it won't be classified as a dividend. So depending on your tax situation, you know, that might upset you a little bit. But it's still better than not getting the money, right? It's still better than not getting interest. So I don't know if that would make sense to offset it unless you know your tax bracket and talk to your accountant about it. Make sure it works and makes sense. But if you're doing this Send an IRA account, well, then there's no taxes, so you don't have to worry about it at all. That's the last thing according to AmeriTrade, now again, I, I've only contacted AmeriTrade so far, I do think that this can be done at other brokers in a regular account. But at AmeriTrade, they want you to do this in a non-margin account. So if you have a regular account that does not have margin, they will let you do it in there, or they will let you do it in a margin enable IRA. So what that means for us, as passive traders, is if you're selling options, you know, if you're selling credit spreads, iron condors or naked puts in a regular trading account, that account will not be eligible. But if you're selling those same options in an IRA account, that account is eligible. So this works for those of us who are trading or who have IRAs, and have margin enabled. So you can do that in there, because you probably have most of your stocks in there anyway, the long term holdings, so this will be another added boost to that income and that yield. So that's really cool. That's the basics of it. Okay. Again, it's either called the stock yield Enhancement Program, or it's called the fully paid lending Income program. Again, this is money that it's free to you. There's no restrictions. And I'm looking at the website right now for AmeriTrade on that page. And it's, basically it says earn extra income on stocks and ETFs, you hold in your account by lending them out for a fee, we facilitate the loans. I mean, AmeriTrade charge borrowers and share 50% of the income with you, the securities must be fully paid for not borrowed on margin. Okay, so it says here, you know, you can buy and sell your shares. As usual, you can review the loan details on your daily statements. So you'll get daily income statements, and you can opt out at any time. So you're not logged in. There's no fee for this, you're not paying anything to do this is basically something you click on your account, you make an apply application. And then if that's turned on, then there you go, we're off to the races. How much money can you make? Well, they got some hypothetical lending rates here, you can get 10.5% 5% 1% 15% on different stocks, depending again on how hard it is to borrow. I mean, that's basically all it is, right? It's pretty crazy. If you have a it's and they based it on 360 days of lending. So I guess five days the markets are closed. All right, I guess I don't know how they calculate the 360. But that's what it is they pay you for 360 days out of the year. So even on weekends, you're still getting paid interest. And that's really cool. So again, the considerations and the you know, the risks if you want to say shares, loans are not protected by the SIPC however, the shares are fully secured by collateral held at a third party custodian like explained to you well, when the bank holds the money, you do forfeit your right to participate in any corporate actions, such as proxy votes, tender offers, and voluntary actions. So there's a vote coming on or something you don't get to vote. Okay, I don't vote anyway. So for me, it doesn't really matter. Rather than dividends, you receive substitute payments in the same amount, which are taxed differently from dividends. So again, talk to your CPA about that. Typically, typically, positions must be more than $10,000 to be considered for lending. So you want to have at least $10,000 in that stock doesn't say you got to have 100 shares. So that's cool, you know, you might have less than 100 shares. But if you have $10,000, they'll still borrow it. And then securities lending may not be suitable for all investors, and is only provided to clients after a review and approval process. So yeah, that's, you know, that's them covering their own butts, They have some FAQs here, there's an application, you gotta meet some criteria, and it doesn't say that, you know, all the money or the all this, all the shares will be loaned out, but they will all be eligible. So it depends on what the market wants, right? And yes, you can buy and sell the security, as usual. If it's lent out and you sell the stock, then you just stopped getting any interest. So that's it. And that's it and you do your own research. I just want to get this out to you. This is really cool way of just being extra free money. There's nothing to buy nothing to do. If you have an account at a broker that does this. Just ask them how do you set it up? What are the pros and cons try it out. If you don't like it, stop it, you know, but this is just another way to generate some extra passive income from stocks that you already own. And I'm just happy to bring this information to you that you could do this. Go ahead go get it started today while you're doing this, you know, watch his video again if you have to get the details but yeah, it's pretty simple. Go set it up. All right. Trade with the odds in your favor guys. Wish you all the success in the world. Peace out. JOIN OUR FREE PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps. Thank you!

Allen: All right, passive traders, we have a treat in store for you today. Many of you know about the option continuum, which is basically, you know, our levels of breakdown of where you are as an options trader, you start with level one, you don't know anything. And then you get to level 10, maybe if you want to, which is option professional. And basically a professional means that you are so good at trading options, that you are now trading and managing other people's money and you're getting paid for it. Many of you have reached out to us in the past and said, Hey, I want more information on that. And we haven't really put it out there because I am not doing it myself. Right now, as a professional, I don't I'm not measuring anybody else's money. And so, you know, I'm not the best person to talk to about that. But we keep getting people and be like, hey, you know, I want to learn, I want to learn. So one of our members, Paul Ashcraft, has volunteered to join us today. And I want to thank you, Paul, for coming and helping out. A few a couple of months ago, I think in one of our groups, I think it was a passive group, where I had put in there like, Hey, I'm thinking about starting a hedge fund. So I'm thinking about going professional, right? And he reached out and said, hey, you know, I'm already doing it if you want to, if you want to talk and I can answer your question. So we had an amazing conversation, I learned a lot. And I was like, You know what, this would be really helpful for everybody else. So I asked Paul, hey, could you do it again? And we can record it this time? It was like, Yeah, sure, no foul. And so he's here, Paul, thank you. Thank you for being on thank you for taking the time to do this. Paul: Thank you very much. Pleasure. Allen: And you're Paul is a member of our of a lot of our programs. So passive trading formula, the blank check, and now the credit spread mastery as well. So you know, it's good to see that, hey, if you're a money manager, then you're continuously getting learning and learning new things to help out your students, or your clients, I guess. So. Well, tell me, why did you get into management? What was it that drawed you through that? Paul: Well, I sort of got tricked into it. I had a, I'm a CPA by trade, and I had a client who was becoming an NFL player agent. And he trusted me and wanted me to help him manage his people's NFL players money. So I started the licensing process at that time. And so that sort of tricked me into it. So that sort of fell apart. And then he wasn't getting more leads for what he was doing. So I basically continued since then, so Allen: Okay, so were you already trading on your own? Or before that? Or did you learn as you want to? Paul: Yeah, I've been trading, you know, for quite a while. Off and on. So yeah, I've had some experience of trading. Allen: Okay. So you are comfortable, you could do it? Paul: I knew I needed to learn, I do need to learn some more. But yeah, I feel like I could I knew enough about the world to do that. Allen: Okay. And so you are known as what is a RIA, a registered independent advisor? Paul: Right. That's correct. Allen: So that's one of the ways of managing money. What exactly is an RIA? Paul: It's basically a firm that is licensed by the FINRA basically, and you are licensed to where you can manage other people's money. Allen: And all RIAs, are fiduciaries, right? Paul: That's correct. Yeah. Allen: Right. Because a lot of people don't know the difference between a fiduciary and a non fiduciary. And so a fiduciary, if you don't know you are legally bound to do what's in the best interest of the client. A lot of these other companies that people think about when they're talking about money management, or Wealth Advisors, retirement advisors, all these words that they use, they have no license, or maybe they do have a license, but they're not a fiduciary. So they're not required to do what's best for the client. And so they can sell you a product that they get the highest commission on, even if it's not really a good thing, a good fit for you. So that's why.. Paul: Yeah one of the ways I deal with that fiduciary criteria is basically whatever I do for other people, I do for myself. Allen: Okay. Okay, interesting. So, what does it take to open an RIA? Paul: Well, if you want to legal structure and need, like, I have an LLC got a creative for that. And I have had to pass a serious 65 test, which you'd like an SEC test, and get to come up some kind of agreement you have with your clients that's approved by FINRA to sign them on as clients. Those are the basics you have to do. Allen: Okay, and like how long did it take you to go through all that? Remember? Paul: I'm gonna say, basically of six to nine months. Allen: Okay, and how long have you been? How long have you been an RIA? Paul: Since 2014, so roughly eight years. Allen: Awesome. Yep. Cool. And for those of you, you know, I'm going to repeat it later on, but Paul's business website is Businessadvisors.Pro. So if you ever or if you need a good adviser, you know, please reach out to Paul. And I'll repeat at the end, and we'll put it in the show notes. I just wanted to get that out there. Paul: And that's mainly my CPA website, just so you know. Allen: Very cool. BusinessAdvisors.Pro, there you go. Paul: And then sort has been done about creating my Wealth Advisors website, because you're so under scrutiny when you were you advertise things, so I just sort of steered away from that a little bit. Allen: Interesting. Okay. So I guess there's certain things you can say and certain things you cannot say. Paul: Basically, anything you put out there to the public, you have to like, monitor it for five years, and they can question you about it anytime. So I just figured one way to get around that is just not to do it. Allen: Okay. So then that leads me to my next question, like, how do you find clients if you're not advertising? Paul: Well, you know, I have CPA clients, probably like half the clients, I have my Wealth Advisors from CPA side. Other thing is like, from friends, and referrals from other people who use me. Allen: Okay. So it takes time to build all that up? Paul: Yes, yes. And I'm currently working on more. More advertising. Allen: Okay. All right. So the advertising is possible. It's not it's not like it's restricted. But you have to be careful of what you do and how you do it. Paul: Yes, yes, yeah. Allen: Now, what are your clients looking for? Because, you know, if somebody comes to you and says, Hey, you know, I'm looking to make more money, obviously, but they have so many, so many choices. They can do it themselves, it could go to like, like Fidelity and have them do it. They could go to they're really rich, they can have their own private like, you know, Bank of America, has their own private wealth, people. So when they come to you, what do they tell you? Like? What are they looking for in terms of an advisor? Paul: Well, I mean, I had someone recently come to me, and, you know, we're signing them up, or things that I'd say we, if we look, if we're here a year later, what do you want to what your criteria are saying, I did a good job. And he wanted a 10% return, which has been difficult in this market. But that's, that's one thing. Another thing? I you know, most advisors out there, these basically are, they're buying hold people, I mean, and they bid six things in a bucket, and don't look at it too often. So I, I basically say that I'm actively working in their account, and I'm not sure I'm going to just put it there and not be looking at it. Allen: So obviously, you probably tell them about your options experience and the different types of strategies you use. Paul: Yeah, a lot of times just the casual person warnings on the manager money that, that if I tried to tell them all that it would go way over their head. Because, you know, it took me like two years talking about options to actually start doing it myself, you know, so I'm trying to be a little bit of conscientious about what they can and cannot handle information wise. I'll be glad to talk about it, they want to, but I'm not gonna write too much about it. Allen: And I bet that would that would set you apart, right? You know, it's like, hey, you know, we can do plain vanilla stuff. Or we can do if you're a little bit more aggressive than we can do this, and this and this. And then if it goes over there, that's fine. But as long as they're like, whoa, this guy knows. Paul: Yeah, definitely. That's certainly part because like, my CPA, well, I deal with investment advisors. And like, no one, no one that I know of is actually managing costs. I mean, like, you know, every week or things like that, Allen: yeah, yeah, they just don't I mean, part of it is they have, depending on where they are some of these guys that I know, they have broker dealers, and the broker basically tells them what they can do and what they can't do. And trading is like, No, you're not doing it. They just they can't, they're not allowed. And so, you know, we get we get clients that are financial advisors, they come in, they're like, oh, yeah, I'm a financial advisor, like, oh, they shouldn't, you know, all this stuff. And they're like, oh, I don't do any of this for my son. I don't know, they don't even teach us this stuff. In financial advisors. Cool. So it's like, once I call again, I'm like, Oh, my God. Paul: Yeah, most of them are just like, call themselves people. And it is this, they don't necessarily know that much about investing. It's more about they have relationships with people, and they train their people to be accustomed to five to 7% returns. So so don't want you to do that as that's, you know, not a hallmark. Allen: Yeah, yeah. Like, you know, when I go to if I go to a dinner party, or whatever, and, you know, always comes up. So what do you do? It's like, well, I teach people how to do this. And the first they're like, really, is that, you know, what do you what do you mean? And then we tell them a little bit about it, and they go, Yeah, you know, we try to aim, you know, for 5% a month, and they're like, what a month. Really? Oh, wow, I gotta learn about that. And then, you know, you explain a little bit and then they're, like, bored and then they go talk to somebody else. Because, you know, it's cool. They want, they want it. They just want to do the work. So that's cool. Now as an advisor, how do you How do you charge? Like, what do you charge? How do you do it? Paul: So I have what's called a serious 65 license. So I'm able to charge a percentage of what assets are under management. Okay, so the basic generic, charged with as generally 1% of assets under management. Okay, that if I'm doing more as a some different strategies, things like that, I'm probably going to up the field more because it's, it is active trading. Allen: It takes more time. Yeah, yeah. Because I remember way back when I had a guy at America ice, and he was my advisor. And yeah, he would charge a minimum of 1% on assets every year. Every time you put money, you gave him money, they would take 5% off the top. And then every every mutual fund and every index fund or whatever that they put you in. And most of them were, you know, Ameriprise products. Each of those things would have a separate fee every year. So I mean, I got dealing left and right. I didn't know what I was doing. At the time, I was thinking I am going to you know, I'm smart. I got an advisor. But yeah, he was the one getting rich. And so.. Paul: They made that money, whether they go down or go up it. Allen: Yeah, I mean, they take the money right up front, 5% off the top. As soon as you make a deposit, it's like, man, you haven't done anything. Even if I turn around and ask for the money back, I just love fibers. Do you have like a lot of Is There a lot of overhead for being a advisor? You need a large staff? Paul: Right now, it's just me. And so I'm already have all my setup for my CPA business. So there's not really that much more to do. Allen: And you can run it from the same location. Yes, yes. Okay. So then who does the like the backend stuff, you know, statements, and compliance audits, all that stuff. Paul: So we use Interactive Brokers as the broker dealer. So they basically, so all my clients have their own account set up with them, and it sort of goes underneath my master account. So so they take care about the then get a statement from there anytime they want to find out what their balances. And if they need to take up money, they can contact them and get the money taken out. So they saw him. So we're doing a lot of the back office stuff. Allen: Awesome. So you really don't have to do anything. And they they opened the account themselves, the client opens the account themselves, they deposit the money themselves, they can take it out whenever they want, they can go and log in, see all the trades, see whatever is there. So you really don't have a lot of customer service issues. And so you don't have to send send out statements, because Interactive Brokers will do that. Right. Paul: And one of my strategies is if someone is, I call it high maintenance, then I probably can't handle that, you know, they probably need to find someone else because, you know, I got enough things to do is it is. Allen: Awesome, cool. And then. So you don't handle any of the money either. Because they just go straight to interactive. So you're like a hands off, okay, I'll do the trades, but I'm not touching your money. So you don't have to worry about me taking your money and running away and flying to Bermuda or something. Paul: Yeah, just like the Bernie Madoff deal where he was. He they call it having custody of the funds, and he had custody. And so they, they talked about that when you're going through your testing and things like that, about having custody and not having custody and things like that. So yeah, it's a big red flag. Allen: Yeah. Because I mean, like, I've been looking into starting my own hedge fund, you know, using the the passive trading strategies and such. And I looked at RIA first and then I looked at, you know, hedge fund as another way, and I think from what I've been able to find so far is that if you start a hedge fund, and you don't charge any management fees, you don't need the license, you can set it up in a way where you know, you get you only take a percentage of the profit. So if there's a gain, you can get a percent, but you don't get that yearly management fee. If you want the yearly management fee, then you do have to separate a separate Ria, to do the management of the fund. Okay, I didn't know that. Yeah, so I thought that was pretty cool. So we've been looking at that as well, different things. So now, what percentage of your management is active? versus, you know, index funds, mutual funds, etc? Paul: I'd say about half. Allen: Okay, and all of the clients are okay with that, or do you do client by client? Paul: I pretty much put everybody under the same model. Yeah. So Allen: And so with interactive, how does that work, you have to go into each account to put a trade on or you just put one trade on and it just trickles.. Paul: There's a master account and I can set up different classification. So I could I could buy 1000 shares of IBM and have it spread it putting all the accounts did that. So they have to watch out for is some of the accounts can trade certain things, some can't, like RIAs cannot do you know, futures and naked options and things like that as far as, at least on the credit side. Allen: Okay. All right. So can does that get confusing? If you want if you want like, Okay, I want like a say IBM, I want my IBM stock to be 5% of all of my everybody's portfolio. Paul: Yeah, that would be a different the different equation. So basically, like I did a trade today where I figured, you know, want to take a $10,000 risk. So divided by what that option was going for. And I bought that many contracts to take on that kind of risk. So not necessarily rebalancing everyone is usually trade by trade. So putting on a certain set of circumstances, set a step stop loss and things like that. Allen: Okay, cool. So you can do it as easy or as simple as you want. Or you can make it as complicated as you want. Yeah, up to you. Yeah. Nice. So what types of what types of trades do you do? Paul: Well, some of what you teach. So I do some swing trading. And of course, you know, credit spreads and things like that. And some, you know, some some of the dividend paying stocks and covered calls and things like that. Allen: And do you do any any oil futures options? Paul: Well, I'm not. I'm just at the point to get licensed for that. Allen: It's a separate license? Paul: That's as a separate license. Yes. So you have to you have to get licensed through the, Chicago Board of Trade, the NFA and National Futures Association. Allen: Okay. Okay. And then will you be able to do it the same as everything else through Interactive Brokers? Paul: Yes, I think so. Sometimes you don't know to actually do it. So I think it's pretty similar. Allen: Sweet. Okay. Now, as a as an RIA, do you also advise your clients on other alternative investments, you know, real estate, crypto anything else? Or is it just stocks, bonds, options? Paul: I'm always getting to ask questions, you know, because I'm in, you know, really, I'm gonna CPA world or the IRA world, I'm getting asked questions. So I will advise on that if I think I have a good opinion. You know, I'm not roll up on that rolled up on crypto Allen: Right, right. Are you still bound by the same fiduciary type rules on that or? Paul: You could come under some scrutiny. You know, you'd like an offsetting handed comment, and then someone does something crazy. And so you got to be a little careful. Allen: Yeah. All right. And okay, so him now with the interactive account, or the broker dealer, is the software any different? Like, versus if you open a regular account by yourself? Is there anything you have to learn a new platform? Or is it basically the same thing? Paul: It's pretty much the same platform, you just have to understand how to do the trading, like I was telling you about, like, allocating between all the accounts, but the platform itself is basically the same. Okay. Cool. Yeah. Allen: What do you see as the future of money management, because like, you know, they got these robo advisors now, and they got like Robin Hood, trying to get everybody to trade on their own. And so what do you see down the pike? You know, do you see like, your clients are like, yeah, rather just have you do it? Or are robots or whatever? Paul: Yeah, I can see, you know, some of the robot picking up. But on average, most people out there don't know, hardly anything about the investing world. My average client, so I think it's going to be still a good field you know, way up currently doing it. Allen: Okay, and who is like your average client? Paul: They're probably like 50 years old, that did 60. And probably, you know, got assets anywhere from, you know, 50 to 50,000 to over a million dollars, you know? Allen: And do you have any limits on who can invest with you? And how much? Paul: No, I mean, like, I'm not, I'm just gonna take on any account right now. It would need to be over a certain dollar amount for me to I just always have to keep that in mind about, you know, do I want to take on a five or $10,000 account? Because it's gonna be extra work. Taking that versus the capital issue at-- You don't have to be you don't have to comply with the day trading rules. You know, because because if you if you accidentally in and out three, three trades in a week, then your account gets shut down. You know, so you have to deal with that. So yeah, so I'm trying to gradually move up from like a minimum of 25,000 to 50,000, 200,000. Allen: Okay. And then you also have a certain criteria like a certain person that you want right? Certain somebody they can handle the options and that Intertek can handle that because I mean, it does swing a little bit. So if they have a 5,000 to $10,000 account, they freak out if they lose $1,000, obviously, that's not the right person for you anyway. Paul: Right. But on that same note, I had a client the other day that, you know, they have, you know, an excess a half million dollars with me. And they want to know how they could put in more money since this market was down so they could capture, capture that now mark? I love that kind of client. expecting them to call you and tell you, why is my account down? Actually, that question is dead. They're saying, How can we put more money in? Allen: Yeah, that's a smart, that's a Smart Client. So that's, that's got to be your email, you know, going out, like, Hey, he's trying to give me more now. double down on your investments. Okay. Now, How has being a money manager improved your own trading? Or hasn't? Paul: Well, I mean, it's made me to seek out new avenues of investing. You know, because I'm looking out for my clients. By the same token, when I do that, I find things that I can use to, you know, like, I don't know, if I would have found the old future options without that, you know, seeking out new new investment strategies, you know, so I could do a better job for my clients. Allen: Okay. Now, we've had a lot of volatility lately. And you've, you've alluded to it already. When stocks down about 20% or so right now, how do you deal with the investor concerns or expectations? Paul: I'm continually learning that. The more, the more proactive you can be with that, I find that it's better. Like, if you have a bad day or a bad trade that, you know, that affects it so much, and then maybe call and talk to them about it versus waiting for them to call you later, and they get their quarterly statements. And they call you know? Allen: Right. So do you find that a large portion of your job is just talking to people and just calming them down? Or explaining certain things to them? Or educating them? Paul: In the beginning? Yes. If someone's with you for a while, and they haven't gotten, understood your ways, and why you do what you do. And it would be generally in the first year of a client relationship, you indeed do that more, but there is sort of they get to know you, you you get to know them and sort of like a training curve there. Allen: And now, most of your clients, are they either they know you or they were referred to you. Right. So there's always there's already that trust built in from the beginning. Most of them yes, yeah. So if you, you know, advertising, somebody comes in cold, they're like, oh, yeah, I like what you're doing here. You know, here's $100,000, there's gonna be a lot more back. Paul: Yeah. Allen: Okay. So how are you handling? How are you handling the volatility? Like when somebody calls up and says, Oh, my count is down. How do you? What do you do there? Paul: Well, number one, what I did when I saw when I saw the market starting to tank, I basically, was going more into cash. So like, I the client won't know why we aren't investing. I said, Well, I'm waiting for the market to give me indication has, it's found the bottom or, you know, it is headed back up. So I don't want to, I'm not a bottom picker. But I don't want to like, write it further down. You know. So that's one way of dealing with it. And they seem to appreciate that quite a bit and understand that. So I don't think that's something you get out of a typical advisor. Allen: So yeah, but what if somebody calls you and says, Oh, my God, you know, I'm down 10%? What am I going to do? I can't handle this. How do you handle that? Have you ever had that happen? Paul: Yeah. I tried to change up their strategies a little bit to get them a little more solid, or maybe not trade as much in their account. Just being a little more cautious. Allen: Okay, so Okay, so you can actually choose, like, let's say, we talked about that IBM thing. So if you're like, Hey, I'm buying IBM, you could choose and say, okay, don't put it in this account in this account, just because in all these other ones,. Yeah. All right. So you can actually tailor it because like, if somebody goes, Yeah, I just want to be long stocks, or I just want tech stocks. And I just want you know, credit spreads. So they you can, you can do that. Yeah, okay. Yep. So, do you have any shortcuts that you can share? You know, for somebody that's thinking, hey, you know, this sounds like cool, I'm gonna I'm gonna get into this. RIA business, anything that you probably didn't know, ahead of time that you would have liked to have known? Paul: This is sort of like a unknown territory. Because, I mean, when I was doing it, I couldn't get anybody to actually figure it out what like a serious 65 license would do. And I was sort of going into blindly a little bit. So I mean, I think the number one thing is maybe you know, then contact me. Shortcuts is, you know, I don't know like I had to find a place to take the take the course for that. And then I hired a guy to tutor me some. And, you know, there's, there's these firms out there wanting you to sign up with them for them to do oh, you know, like your paperwork and so forth. And I just sort of like fumbled my way through it and plagiarized another agreement online affected us. And so another thing is to know if you're in this world, you will get audited. Personally. Well, the your investment firm, right, yeah. Yeah. Like I'm in the CPA world, and I probably will never get out a different CPA world. But the investment side, I will get audited probably time and time again. So far, it's only been once one step Florida, but yeah, Allen: okay. Yeah. I mean, that's a good thing. I guess, you know, that, that the advisors and like you said, you know, the Bernie Madoff, he keeps him at bay as much as he can a little bit. So some of that, I guess, from a consumer standpoint, and that's a good thing to hear. Paul: Yeah, but a lot of a lot of us, they don't necessarily understand the world as much as you do. And it's more like them checking a box somewhere in a city. They ask this question, or I did that, but they don't really find that don't really necessarily know exactly what they're doing, you know, Allen: Yeah. So but do you mean tax audited or audited by like the audit by Paul: the state by the financial regulatory people for the state you're in Allen: The state regulatory? Okay, so every state has their own regulatory stuff that you have so far. Paul: Yeah. So just just sort of background here. Usually, as you're managing under $100 million, you're managed by the state. But then once you hit $100 million in the SEC is basically is going to your watchdog, it's gonna look over your shoulder. Allen: Okay. All right. Cool. And you're in Florida, right? Correct. But you can take clients from anywhere? Paul: I can. But different states have different rules, most of them allow you to take five to 15 clients, and not really be registered with them. But then once you hit over that threshold, they want you to fully registered with them. But there are a few states that require you if you get one client, they want you to be registered. And Louisiana was one of those states. Allen: So I guess, depending on how much capital the guy is gonna give you whether it's worth it to register there.. Paul: Exactly, exactly, yeah. Okay. All right. Allen: So would you knowing what you know, now, are you happy that you went this route? Paul: Ask me again, in a few years. Allen: Well, you've been doing already for like, eight years. So kind of got some kind of track record here. Paul: Yeah, it's been, you know, it's been definitely a learning curve, you know, from the regulatory side. And then from the investment side, too, so? Yes, I'm glad I did it. But it' had its rough moments. Allen: Well, give me an example. Paul: Well if you if you lose on a trade, you know, it can affect your account and other people's account. So that's probably the biggest things that has happened to me, you know? And then you got to figure out how am I gonna tell this person this? Allen: Yeah. So how did you how did you deal with that? Paul: I prayed a lot. Basically, if I knew the fact that someone so much, I would, I call them and talk to him about it. But in a certain situation, like, because it was spread over so many accounts, it didn't really affect anyone that much. It wasn't that big of a deal. Like, you know, if I'm managing $5 million of money, and I lose 20,000, you know, the most Someone's probably gonna lose is maybe 2 or 3000. So the overall number is a big number. But you know, we spread between all the counts, it's not that big of a number. Allen: Interesting. Okay. Yeah, I mean, that's that thing, right? There is like, the biggest thing that's kept me out of it for all these years, you know, people have been asking me from the beginning, okay, can you take my money? I'm like, nope, nope, because I don't know how I'm gonna handle the stress. I don't know if, um, we will sleep, I can lose my own money, you know, market down 20% Okay, whatever, it'll go back up, I got time, you know, but somebody else if I lose your money, and I don't know, I don't know how I'm gonna handle it. And so that's the one thing that that's really caused me to be hesitant up till now. And I agree what you said about not having that much information out there. You know, I mean, there are companies out there that will like if you want to be in RIA you type in how to be an RIA and there's a company that hey, you if you give us like 30 grand, you know, we'll do all the paperwork and we'll file everything for you. So you Okay, but what do I actually get? You know, they're like well you do the paperwork. Well what about after that? How do I get clients how do I do this how to do that they will help you at all and these two guys they had approached, they had talked that a because I'm you know Option Genius is in what's called the financial publishing space that world, so we have our own little conventions and all the Guru's come and hang out and talk marketing and stuff. And so there was there was these two guys who were speakers, and they were telling all of the financial publishers that hey, you guys need to get into the into the management business, because you guys already have all these clients? They already trust you? You know, and they probably have a lot of money because people coming to me, you know, they say, Hey, I want to learn how to trade options. Okay, cool, you know, and how large is your account? They're like, Oh, 50,000. Okay, cool. And they trading options with 50,000. But they also have like, maybe a million dollar IRA, that they're not touching, or their wife has $500,000 that is with some other financial advisor that she doesn't want her husband to touch with options. So it's like, yeah, everybody that comes in has a lot more money. So if you started an IRA or an advisor, then you know, they'll give you that money as well. And you can make all this money. And I was like, Okay, that's interesting. But, you know, what are the legalities and all that and they wanted, I don't know, obtain $1,000 plus a percentage of the company to actually teach me all this stuff. And I'm finding a there's a lot of secrecy, as you can say, you know, and Wall Street, I think puts it like that on purpose. Because they don't want everybody to know what they're doing and what they that they don't know what they're doing. Pretty much. So cool. Paul: I don't know, that's intentional, but it just got I think there's so few people who are looking to do it. And like, it's not a widespread throughout the population thing. So you don't find as much about it, you know. Allen: Maybe okay, yeah, I'll take that. Yeah. Because like, you know, even like, what is the difference between an RIA and a hedge fund? You know, I've been beating my head, like, which one? Which way? Do we go? Which way? Do we go? If we go this way? Or this? Or what are the pros? What are the cons, and there's like, no one person that can that can tell me, if you want to go to a hedge fund, they got a little hedge fund world, and, you know, you got to you got to pay the dues to get in. If you want the RA world, then it's more common, but it's, it's for the guys, you know, for people who are like, Yeah, you know, I just want to put everybody's money in an index fund, you know, so it's like, what you're doing is totally different, like, I have not met any advisors that are actually, you know, trading that actively for people. So I mean, compared to the other guy, Joe Schmo that charges 1% a year, or 2% a year, just to put their money in an index fund compared to what you're doing, you know, your value is just so much more. But it does seem like it's very similar to a hedge fund where, you know, a hedge fund is a little bit different, where all the money is pooled into one spot. And then, you know, the, the trader controls it, you're doing kind of similar, where you can look at it and be like, Okay, I got, you know, $10 million under management, how am I going to split that up into different trades? And it just happens to be in different people's accounts? So have you ever thought about increasing your rates because like a hedge fund, they can charge a percentage of the gains? An RIA can't? Can they do that? Paul: They can do that on their certains particulars criteria? I think like you have to have an investor who's has at least $2 million in investable assets. They have at least $1 million invested with you. And then you can have certain arrangements where you say, Well, if I make whatever percentage I'll make about what the s&p does, you'll split it with me, or something like that, you know? Okay, so again, it's very, it's has a lot of criteria to it can't be done, though. Okay. Yeah. Because I wouldn't say the hedge fund world is based on what you're telling me is, cuz you're basically commingling all the funds. Right? So you got to do like a statement for each person or something. Yeah. And so I think the advantage is, you can just commingle it all and then do whatever you need to do. And then at the end of the day, you somehow allocated? Allen: Right, so the thing with the hedge fund is that all the investors have to be accredited. Okay, so accredited, as you know, probably, you know, you basically you have a million dollar net worth not putting your house, or you're making upwards of 300,000 a year. So, you know, basically, so at least Paul: They have to tell you, they're accredited. Right? Allen: I think we would actually want them to be proof, you know, give me proof otherwise, we're not letting you in. Paul: That was actually in so my testing I just did is like, yeah, you want this criteria? But are you actually gonna go go check it? No. So Allen: Interesting. Okay. Because I mean, you know, the government says that the hedge funds, you know, if you're an accredited investor, you should be smarter than the average bear. And so, if you lose money, it's not that big a deal. Like you are smart enough to get into it. You know, somebody with $5,000 or $10,000. That's my life savings. No, sorry, you can't invest in this. Even though the hedge fund might be like doing 1,000,000% a year, you can't invest because you're not accredited. Ras can take basically everybody, so that was one of the things okay, somebody comes in with 50,000 as an RIA, you might just take it because it's not that much paperwork. It's not extra for you. But for a hedge fund. Yeah, no, I can't do it. Because I gotta, I gotta pay the auditing company. I gotta pay the statement company. I got to pay the customer. You know, whoever's doing customer service and answering the phone and doing all that, and salespeople and all that. So 50,000 is not going to cut it, you know, the limit is a lot higher. For sure. Okay. Yeah. So yeah, that, in that sense, totally different world. But very similar from what I'm seeing is that, you know, you're doing probably what we're gonna be doing, you know, similar. Paul: So you probably can't take qualified money like IRAs and things like that. Allen: I think they can. Yeah, yeah, I think they can, as long as a person is accredited. And so there's different regulations, 5063 C, or six, C, five, or six D, they'll those tell you, you know, if you can take accredited and non accredited, and then can you advertise or not, I'm still learning all this, it's all different, because like, if you start a Real Estate Fund, different from if you're doing a hedge fund, versus a private equity fund, so some of the rules apply to everything. Some of the rules are just separate. So I'm still learning all that. But I know that the Interactive Brokers, people, they've done webinars in the past with attorneys. So if anybody wants to start a hedge fund, you can still use the Interactive Brokers platform. And they have they actually have a separate portal, I think, for hedge funds. Yeah, I've seen that. You've seen that too? Where you can actually see what other people are doing. And what are the trades that they're making? Paul: I didn't know about that. I just knew that they had some kind of hedge fund portion of what they're doing. I didn't know exactly what it meant. Allen: Yeah. So So what they said was that, you know, the attorney was like, you know, it'll take several, you know, maybe $30,000, to set up your hedge fund, you can probably do it with a smaller amount, if you want to start an incubator fund, which is like, you know, if you have your own money, and you put in and say $300,000, and you trade it as if it's a fund, and you don't maybe that that paperwork might be like 7000, and you set that up, you treat it as a fun, you build up your track record, and be like, Oh, hey, look, you know, I was trading for six months, I got this, that or not, and then you can start advertising it, and you convert it to a full fund. And then you can say, well, look at my track record, this is what I did. And then people can come in for the full fund. So that was one of the things that they were they were talking about. But so yeah, we were we were looking at an interactive, but the one thing that interacted with their software is a little bit more clunky or less user friendly than some of the most user friendly software. Yeah, it was my personal accounts. Now. So when, do you still trade on on your own on the side? Or is all of your money in the big? Paul: I have some money still in the in the huge fund? And then, you know, I have some I have an account on the side, right? Allen: So that separate account, did that change it all after you got licensed? Because they always, you know, when you open an account, they always ask you, are you licensed? And then they're I don't know why they do that. Is there to change anything on? You're not gonna recall? Paul: Yeah. So, there's, there's occasions where you can link up an account with the master fund, and you can D link the account. So I think at one time I had, it's actually my 401k account for my accounting firm attached to the IRA account, but then I detached it. One of the main reasons was for futures. Okay, because I knew I wasn't qualified to do futures for the whole fun. But I could on a mountain account. Allen: Ah, okay. So you have to keep it separate to do the futures options. Yeah. Until you get licensed by them. And is that like a lengthy process as well? The futures options? License? Yeah. Paul: I took a series three exam back a month or so ago. So I'd studied for two or three months, and again, got a tutor. Yeah. Okay. Allen: All right. How many clients do you have right now? Paul: I'd say about 20-25. Allen: Okay. All right. Cool. And so, from a financial standpoint, has it been worth it? Paul: Yeah, it's been really good. I might, my intention when I know that, you know, once I got into it, my intention was over the years, you know, retirement age, is at my incomes shift for my CPA business or to my investment business. So I could do that, say two hours a day and retirement versus, you know, doing tax seasons and all that. CPA visits. Allen: Okay. Is that still the plan? Yes. Still plan. Awesome. Cool. So yeah, I mean, handling managing millions of dollars of assets in two hours a day. That sounds pretty good to me. Paul: That might be a pipe dream. But that's what I had in mind. Allen: I think you could do it your own way. You're on your way. Cool. Awesome. So is there anything that I haven't asked you that you think like, oh, yeah, people need to know this. Paul: I could probably sit here and think about a few things. Not on every call. No, no, no, no. I mean, one thing you have to like for instance, a you have to have a like an email account that you Gotta add to retain all your emails for at least like five years. That's one thing to keep in mind. And like I have to send a like a balance sheet and income statement to the state of Florida every year and get someone to notarize it. You have to upload information to the FINRA site at least once a year. And that's where you pay your like on license Louisiana along Florida and things like that. So I pay my fees for those licensing booth vendors website. Allen: And that you had told me that the fee that you charge for management that comes out Interactive Brokers basically pays you every quarter, your fixed asset if I had to build it, right, yeah. Paul: Okay. So, so they do it automatically. But when I got audited, the state wanted me to actually create invoices. So the answer your question is, I'm not sure what the real requirement is. So far, I guess I met that criteria then. So I'm not actually grading him. What's the reporter right now? Okay. Allen: Yeah, I mean, because like, I mentioned, those two consultants that I had talked to, they had told me that I would have to bill everybody invoice, everybody, every quarter. And those people would have to pay me directly. So it wouldn't be taken out of their account, it would be sent directly to me that they would have to write a check every quarter. And I'm like, that's a pain in the butt. You know, that's pretty cumbersome. Yeah, if a customer has to pay, you know, a big check every quarter for management fees. And then especially if you have a down year, he's like, What am I paying for it? I don't pay for this anymore. And you don't get paid. So I was like, Okay, that's a big red flag. But I'm glad that that's not true. Cool. Okay. Paul: One thing I have figured out there is, like, there's an account I was going to take from someone from one advisors to me, and they had all their fees, like totally hidden with all these mutual funds and things like that. And so like, you know, that account, I was gonna charge 3.3%. But we weren't able to ever get to the bottom of what the other advisor was charging. So, even though they have a lot of disclosures and things like that, I think we could have pressed the issue if we really wanted to. But, um, but you know, I ended up losing that account. Allen: So did that customer realize that, that he's being charged all these things? Paul: No, no, no clue. No, I mean, whenever I sort of parted ways, and I said, you guys at least need to figure out what they're charging you. You'd be surprised at the amount of inept that's out there and people who are actually hiring advisors, like, yeah, most people do not keep like their annual statements. They couldn't tell me how much they made last year. You know, because really, when I'm taking on an account, I want to know, what their track record has been sort of what I would need to beat to make them happy. You know, a lot of them are not that attuned to that. Allen: That's crazy. Yeah. I mean, people, they work their entire lives to save up money and invest it so they can retire. But then they don't pay any attention to the money. Oh, boy.. Paul: I think it's because they don't know that much about it. So they wouldn't know what to do if it was not what they wanted, you know? Allen: Yeah. I mean, you gotta you gotta take a little bit of time to at least read the statements and figure out where's the money going? And it could be better disclosed, you know, the statements could be easier to read that that's definitely sure. That's, yeah. But it is what it is for now. Paul: Like, I have this account right now, I'm probably going pick up another six to nine or 1000. And I asked them to get their annual statements ready. Because I wanted to see what they have been. have been doing, you know, so, you know, so they didn't know if there'll be they'll find those. So let me guess. It's like, it's weird. Allen: Okay, they just like asked her her advisor. Paul: Oh, that might be red flag fight flight to them. And they are looking so yeah. Wow. Okay. All right. seem bizarre. Allen: So if somebody was thinking about starting their own advisory firm, what would you say? They would need in terms of like, what are the minimums, okay, you should have been in the market for, you know, five years, you know, or you got to know XYZ, is there anything that you would say that, you know, if you don't, if you can't even do this, and this is not for you? Paul: Well, they're planning on doing what I'm doing, they probably need at least three to five years, you know, their own market experience. But, you know, that being said, like, I just met with someone the other day, and I could put all my funds through their strategies, and just sit and coast. You know, really, they charge an extra 1% or whatever, so I'll back off of my fee a little bit. You know, so you can you can play the game different ways. Wow. So you could do like I can see a new person and starting that and just have these other you know, because they have what's called sub managers or something like that. I don't know the exact term. Basically, you're hiring other money managers to manage the money you have for your clients. Right, like sub advisors, maybe is what it's called. Okay. So I'm not saying it will totally preclude them that they didn't have three to five years. But, you know, hopefully they're drawing on someone's experience to help hold their handle that Allen: Right. And do you know how much it costs to get it up and running? Paul: I would say three to five grand. Wow, that's not much. I mean, the hardware, these firms are brought in to charge you five times that? Allen: Yeah. Okay. So well, the sub accounts. Yeah, actually, I do remember those consultants talking to me about that. Paul: They they call it sub advisors? Allen: Yeah, I think that's what it is. And it's like, yeah, you know, if you don't want to do it yourself, you can put your money, you can put your your clients money into different buckets, and then they just do it for you, and they charge and then you split the fees or whatever, or something like that. So, and then each broker, each broker dealer has different ones. So like Fidelity or Schwab will have different sub accounts versus what you could put your stuff in. But interesting, I just Just curious the ones that you had talked to what what strategies were they were using, Paul: They're using free cash flow to is their criteria for who they're investing in. So they have like international, they call a cash cow c-o-w. So they've international domestic, and things like that. So they have a different definition of free cash flow. So they're they're fearing that's the best value, their way of determining value out there, like sort of like a value fund, but their own definition of what value is. Allen: Okay, so they're investing in stocks. Paul: Yes, international and domestic. Allen: And they handle the ins and outs. And so you could put a portion of your client's money in there, you put it all in there. So it's like, it's like an ETF. So basically, you can say I want 20% of my money to go on this domestic one 20% International. And I might, I'm in talks with them. So I might end up doing some more money that way. But so they're coming up with different sample portfolios that I can use their funds for. Allen: Okay, interesting. And so that must be a much larger company. Paul: Yeah, I'm not sure how big they are. But they're, you know, big enough to where they had like a representative here in central Florida and some of their back office helping them out. Awesome. I'm not sure their size yet. Allen: Yeah. So I mean, this rabbit hole is pretty big. You can dive in there and spend a lot of time figuring all this stuff out. Paul: Yeah, yeah. So I can see a way I could sit and close more. But you're only doing it two hours a day anyway. Allen: Cool. All right. Paul: Well, maybe we're gonna get into my retirement years, a certain amount of years. I'll just put it there and just coast. The zero hours a day. Yep. Allen: Yeah, my, my neighbor in the office next door, he's a financial adviser. He's been doing it for, I think, 25 years now. So he's built up, you know, a sizable clientele. And so now he's at the point where he wants to retire. But he doesn't know what to do with the firm. He's like, you know, he makes probably a good 500,000 a year income from it. And he's like, I want one of my kids to take over. But the kids are not really willing, and not interested. He's like, I don't know what to do. So he's still there. So there's been periods of times or, you know, like, I sit on the CPA world deal with other investment advisors, where it's been a quite a lucrative market to get bought your practice bought out by bigger, let's say Merrill Lynch or something like that, you know, they pay some pretty big bucks to buy those books of business. Yeah, yeah. Because I mean, one of the things that the consultants told me is that once you get you get a client, that turnover, meaning the fact that they're going to leave you is not very high, they're gonna stay with you for years and years. So you can count on that money coming in, you know, that fee money coming in for a long period of time, unless you unless you totally screw it up, and then they're gonna leave. Paul: If you play the play smart. You know, if you're dealing with someone 50 years old, right now, you know, another 10 or 20 years, you're gonna pick up their kids and things like that when they need investment advice and stuff. It's, it'd be a self perpetuating thing. Allen: Yeah, yeah. And I do like the fact that there's always going to be somebody there willing to buy you, your company. You know, because a lot of times in smaller companies if you're the only person or if you got one or two employees, nobody really wants to buy the company even if it's successful. Nobody wants to buy it because they would without you there they're basically buying a job for themselves, right? It's not running on its own you're the one doing all the work in this case. Yeah, you're the one doing all the work but they don't need you. They can just, you know, have their own advisors take over. So you still get a pretty decent multiple when you sell so that's really cool too. Right? Paul: Also, I met a.. in my travels on this world. I've met the company and actually finance you if you want to buy on someone else's practice in the financial visor word world. Allen: Hmm.. So have you looked into that? Paul: I had a conversation or two with them, but I haven't really pursued it further. Yeah. Because I didn't know if I wanted to buy a larger practice. Right? Yeah. Because generally, that is a seven year payout to do that. So, you know, seven years, you'd be free and clear. Allen: That'll be interesting. Yeah. So a lot of ways to skin this cat. So you would I mean, I'm assuming that if anybody asked you, Hey, should I do this? Probably the answer is yes. Paul: Yeah, I mean, just mean, talk to people who have done it, and sort of figure out if it's a good fit for you, you know? Yeah. It's definitely can be pretty lucrative. Allen: Right? And I like the fact that it's like, for you at least it's more localized, you know, so you're not competing with somebody in California or Canada, or whatever. It's like, yeah, you guys get your clients over there. I'll have my clients over here. You know, they love me, they trust me. We hang out maybe. And sometimes. So it's not like a competitive situation. So, right. Awesome. Are you in any? Are there any, like, associations or memberships for advisors? Paul: No, I'm not. Allen: No, but obviously, they probably have them? Paul: Yeah, I'm just not familiar. Very familiar with that. I have another advisor to hang out with suddenly sort of share some ideas. That's, that's all I have right now. Allen: And they're also private. Like on their own? Paul: Now, one of the reasons I didn't cover this in the beginning, like when I started looking into this whole thing, I didn't want to get clients and then share my fees with other people. That's why I didn't latch on to a bigger firm and start building my clients from there. So that's why I started my own Ra. So they will be my clients. And I get all the fees for them. And no one else had had rights to him. So that's, that's one of the reasons I did the way I did it. Allen: Okay. Okay. So what would be the benefits of going with a larger firm just to name recognition? Paul: Well, they have, one of the biggest things is called compliance. So like, right now, I'm my own compliance officer for my firm, okay, and larger firm like that they have whole departments that take care of compliance, for you to make sure you don't get in trouble, the regulators and so forth. So, like this other advisor, I had, he joined another firm, just so you could have that compliance piece to it. But in his firm, he can't trade options. Right? Allen: Because they're very limited. Yeah, exactly. Paul: It's taught me to join his is up, like can't trade options. Allen: Because compliance says no. Paul: It was on the client's officer. Allen: Right. So that's why when you said you were thinking about advertising, it's the risk is on you because you're the compliance officer. So you got to know exactly what can be done and what can't be done. Right. Right. Interesting, cool. Is there anything else because I'm out of questions. Paul: One of the things, one of the things I tell you, I looked into going with other companies, other inactive brokers when I started, okay, and like Charles Schwab wanted you to have $7 million you're managing before you could go with them. Allen: Whoa, okay. And they're the biggest right right now, I think. Paul: I think so. Yeah. Yeah. So that's one reasons with Interactive Brokers, because they didn't have the minimums like that. I didn't really check too much rather than other people. Allen: So and how's your customer service at Interactive Brokers, because they for personal accounts, they don't have a good reputation. Paul: Yeah, they have a separate line, you can call as a professional advisor. So it's, I get pretty quick attention. Usually, you know, it's not it's not perfect, but you know, it's decent. Yeah, but you're happy. Yeah, I'm not saying that. I'm sure other companies have better customer service but you know, for right now, they, you know, I might need to call him a few times, but I get what I needed if I need need to.. Allen: And how are their margins and Commissions? Paul: Commission's are pretty low. I don't have the exact numbers I just know less than like $1 per 100 shares. Allen: And who comes out of the customers account? Obviously. Paul: Each person like when you do a trade display something all the counselee they pick up their own fees. Allen: Cool. All right. Well, thank you Paul. You know, Paul's website is again BusinessAdvisors.Pro. Paul said that he could reach out you know, you guys can reach out to him if you have any questions. And Paul is also in our other memberships are other programs as well past trading formula blank check and credit spread. So if you guys are members of those, you can reach out to him there. You'll find him in the group. And he's been very gracious with his time. So I do want to thank you and And he's very active in the group and you know you've been helping a lot of newer people as well they're so appreciate you there. Interesting place, interesting world and as I dive in I'm probably going to reach out to you more. Paul: Sounds great, I appreciate it. Allen: Thank you thank you so much and we'll talk to you soon JOIN OUR FREE PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps. Thank you!

Author Richard Koch discusses the 80-20 principle and its application to trading and life, emphasizing the importance of focusing on the vital few for significant results. The podcast explores how analyzing past trades can lead to trading success by refining proven strategies rather than constantly seeking new opportunities.

I don't know if you're doing day trading, but over 74% of day traders lose money. Interesting stat actually thought would be a lot higher, probably is. Let me give the details. So the other day, I was talking on my phone to a friend and the word migraine came out. We were talking about her child that does he have migraines. It was just one or two times that the word migraine was used. The next day on my phone, I start seeing ads for migraines, migraine relief, migraine therapy. I'm like, What the heck is going on? You know, I haven't been to any migraine sites. I haven't searched for mi-- oh yeah, I mentioned migraines on the phone. So my phone is listening to me. And you've probably seen it. And it's just happened too many times to be a coincidence. The phones are listening to you. Mine is listening to me right now, you know, Alexa, Siri, all these guys. They're all listening. And then they're showing us ads based on the stuff we're talking about. Now, that is the future, that's how things are gonna happen in the future, right, we're gonna be thinking something, and there's gonna be some software, some program that's gonna be able to read our thoughts. And it's gonna show us a billboard with a thing that we're thinking about. So every car that goes by on the highway, will see a different sign on the Billboard, because of what they're thinking about. I don't know, it's gonna be crazy. But so I bring this up, because now I don't do day trading, I'm not interested in day trading, I lost money doing it, I don't want to do it, I found my niche. But as a trader, you know, we talk about trading all the time. And so I see ads for all different types of companies, option buyers, forex guys, day trading companies, all this stuff. And I keep seeing, I kept seeing this ad from a company called Warrior Trading, They're day traders and the main guy, he looked like a really nice guy. Tall, skinny, long ponytail glasses, could be like, your average community college or university professor. Nice guy, you know, a little hippie looking guy. But he looked like, he was trustworthy. And he was talking about how he made millions of dollars doing day trading, and it doesn't take a lot of time. And it's super easy. And he'll teach you everything on his webinar and stuff like that. Now, I never looked at it. But by the the numbers that he was throwing up, and the amount of ads that he was running, obviously, he's got a pretty big company, and they're got a lot of students and people are going to it. So it turns out last month, in 2022, or earlier this year, the FTC went after this company for several issues. The company has since settled. And they have agreed to pay a $3 million fine to the government, to the FTC, because of a few different things. Number one, they were teaching people how to avoid the $25,000 rule. So there's a day trading rule that if you have less than 25,000 in your account, then you can only do two or three trades a day. And then once you get classified as a day trader and you have to have more money in your account, because it's more risky, right day trading is actually riskier than regular investing. And so if you become a day trader, then you have to have a lot more money. Well, they were teaching people how to avoid that rule. So that was strike one. Strike two is the claims that they were making, you know, basically, he had a claim that "Oh, how I turned $500 into a million dollars, I'll teach you how to do this with very little time and you don't need a good education. You don't need this and that. And the claims, according to the government were very exaggerated, and they weren't for average people. So it's not true that you can learn to day trade if you're an idiot. It's not possible for you to day trade if you only have 15 minutes a day, it's not possible to profitably day trade by following your rules if you haven't been doing this for 50 years or some stuff like that, right? Now our company we make claims as well. And then we make similar claims. Now, the FTC sometimes they go after certain companies, the bigger companies and they try to make an example out of them so other people like us get the hint and stop making exaggerated claims. So hopefully our claims are not exactly that, we try to make them not exaggerated. But like I said, you know you guys see the ads you guys see that you guys get the emails, most likely you get emails from lots of different option guys. And there are crazy crazy crazy claims that are being made. You know, oh how you can make 100% in your underwear in two minutes every day. You know in the morning when the open is crazy, crazy stuff. Hopefully ours are not that crazy. Yes. You know, we tell you that we can make 10% in a month and we tried to. Every month every month, and that's 120% a year, which is a lot, crazy a lot. So people won't believe that. But if we can show that we can do it, then we can say that. And so you know, that's why we have to do it. But all of our testimonials and whatnot, you know, we interview the people that are having success. So they reach out and they're like, Hey, I'm having awesome success, I want to talk to you about it, I want to thank you for it. And I want to tell other people to do this. So they can also have success. Those are the people we interview. Right? We don't interview the people that, you know, have been doing options for 10 years, and they've made money like 50 bucks. Nobody really wants to listen that right. So we don't interview those people. Because anybody can lose money. That's not a big deal. You want to learn from people that are making money. So that's the ones you want to interview and list. But I digress. So anyway, so this company agreed to a $3 million penalty. And they agreed to change their advertising and the practices and all that stuff. The third thing, the third thing they found was that the majority of the students were not making money. And so how did they do that? Well, I guess this company has a simulator, which is a software program, kind of like a paper trading program that you would get from your broker. So they had their own and they were telling all their students, don't risk your money, do the paper trading on the virtual simulator, and learn to trade there before you go into the real world. So these people didn't lose money, technically, because they didn't have any money invested. Right? They weren't doing real money, they were on the simulator. 74% of the people on the simulator lost money, and they never made money, I expected it to be a lot higher. But think about it, not everybody uses the simulator. So if they have 1000 students, there's gonna be a lot of the people that don't do anything out of the 1000, there might be 20 30% that don't do anything. They just buy the program. And they're like, Okay, Oh, give me the money. No, you have to do something you have to work, right trading is work, you have to do something. So they probably never even used the simulator. Out of the ones that did use the simulator, those are the ones that are taking seriously, or trying to learn watching the videos or the courses going or whatever. And then they're actually doing the trades. Out of those people, the serious ones, 74% lost money. So I think it's pretty clear to say the majority of people doing day trading, probably over 85-90% lose money, even with you know, Mr. Nice college professor guy teaching them how to turn $500 into a million dollars. So if he's teaching, and I don't know if he's legit or not, he might be probably is I mean, FTC looked at everything. So he probably did that. Hopefully, even with him teaching, very small percent of the people actually make money. So should you be a day trader? No. Then again, this is not just a warning about day trading, this is a warning about crazy claims. So I try to a lot of different traders, people are trying to make a living trading options. And the ones that have the biggest issues. And who don't have as much success as they should keep bouncing around from one shiny object to the next shiny object and a nice shiny object because they see the claims. They see that oh, here you can make, you know, a million dollars by next Tuesday. So they jump into that program, and they jump into another program and gentlemen, so there's no focus, right? There's no reliability is you know, it's not stable. Because they just jump around. And so, you know, there was another company recently, a couple years ago called Raging Bull. These guys were teaching people how to trade options and do day trading and buy options and do all the other stuff. They had a lot of stuff, they were selling millions and millions of dollars worth of their courses every single year. They were the ones I don't know if you remember this, but a guy getting out of the helicopter, the guy in the Lamborghini, and it had a private airplane talking about oh, "I'm the world's greatest options trader in the world". Turns out, the guy wasn't even a real trader, he didn't trade at all. Right? Their company got hit by the FTC for a lot of the same reasons that their claims are just too much. They're too exaggerated. But in the research and in the investigation and found out that these guys-- the head guys, you know, the guy on the airplane and, and his main teacher and the other main coach or whatever, they didn't even have big trading accounts. And the trading accounts that they had were negative, they were losing money. So they were busy teaching stuff that they really couldn't do. And so that company went away for a couple years. And now they're back and they're advertising like crazy. They're selling courses again, they're selling everything again, and the same people so you know, it's a sad state of affairs I guess, in the financial marketing world that we live in, I live in at least, you know, you're on the other side of it, you don't see the inside. It's more about marketing, than actually about getting results, unfortunately, for a lot of people, and so, you know, and that's one of the reasons that our company is still small, we're relatively very small compared to all these guys, because we're not willing to go and make the crazy, crazy claims. And so people don't buy our stuff as much. Okay, you know, but the people who see through the crap, you know, they look at it, and they see our stuff. And I Oh, this is actually legitimate, this is actually real. And that's like, the biggest, the biggest thing that we get when people come into our program, they're like, Oh, my God, this thing actually works. Oh, my God. It's like, it's like, shocking to them. And it still works. I mean, yeah, I trade it every day, we-- I do it all the time. So I guess there's a lot of people out there that are selling stuff that doesn't work, or, you know, maybe you have to do it for a long period of time, or whatever. And people just jump around, and they don't see it. But just be careful. You know, this is just an announcement, like a public service message that, hey, you know, day trading, number one probably doesn't work. You know, I mean, yeah, some people do make money. I've seen them. I know some of them. I know some people that make money day trading, it's serious. It's a job, you got to be up before the markets, you have to be ready and sitting at your desk the whole day. And then when market closes, then you can actually do your work and research and homework and tracking and all that other stuff. So yeah, it's not easy to make money day trading, no matter what the advertisement says. In terms of option selling, it does take time to learn. But it doesn't take a lot of hard work. And it doesn't take a lot of time. Because once you put the trade on, our whole process is different. We're not trying to get out of a trade in 10 seconds, we're trying to stay in the trade for 30 days, right? We're trying to stay in the trade for a long time. Our whole process is different. So while we are in trades for much longer, the time it takes for us to find trades, manage them is much less. So I've looked at many, many different ways of trading, and tried them all, several of them lost money on most of them. And then I keep coming back to selling Options. Because it's, for me, the simplest way to do it, easiest to understand, and you can make mistakes, and still have it turnout, right in your favor. Or at least you don't lose a lot even if you're screwing it up. You know, the whole goal. And I've told this all my students like in the beginning, when you're starting out, it's not to make money. The goal is to be consistent. So if you can trade month after month and not lose money, that's great. Because then you just do one or two tweaks, and then that'll that will just skyrocket your returns. So if you're on the roller coaster, right, that's like Oh, win, win, win, lose, win, win, win, lose. That's the biggest bane of option sellers, because they're not doing it properly. Because there's no consistency. So that's the first goal. It's not about making money in option selling. It's not about how much return you can get. It's about how much they didn't lose. I'm consistent. I can if I mean, if your goal is 2%, then make 2% two to two to two. And then if you want to go to three and four and five, then we just changed a little bit. And then you go 345. And then you compound it and you compound it and compound it and you played the long game. Right? We're not looking to retire in a couple of years. Oh, yeah, I'm going to turn my $500 into a million dollars and then go buy an island and live forever on the beach. No, we're this is a long game. We're doing this for a while. Yes, you can turn a small amount into a large amount. If you compound it and you keep working the system. It's not gonna happen overnight. Okay, it takes some time, but it's doable. It's doable, very doable. So, you know, beware, there's a lot of stuff out there, your phone is listening to you. That's one thing. And if you find yourself on too many email lists, just hit that unsubscribe button, get off the email list. I told that to somebody a couple of weeks ago. That's what she told me. She was like, Hey, I keep bouncing around from shiny object to shiny object. And I'm like, Okay, this is what you do. You find the strategy that makes the most sense to you one strategy, just one, that's what you focus on. And you unsubscribe from every other service. You cancel every other service, get off every other email list. She's like, even yours, like yeah, even mine. If you don't want to sell options to get off my list, you know, I don't want you on my list if you're not gonna sell options, right? It's costing me money to send you emails. So get off my list. If you're not gonna sell options. That's basically all it is. boil it down to simplicity. That's what we're talking about. That's how you get ahead. One concept, one strategy. Just get good at it, focus on it, get consistent, and then the rest is history. Alright folks, take it easy. Talk soon. Bye.

Let's talk about the Fed and more inmportantly how to make money from the Fed. How do we as passive traders, make money when the Fed is going to make an announcement? So a little bit of history, a little bit of background and when you're watching this, but today, while I'm recording, this is May the Fourth 2022. And today, we just had a Fed announcement, the Fed just came out made an announcement, they raised rates, they raised rates last month, they raised them again, and I want to talk to you about how the markets performing and how we could have made money off it. So now you got to understand in the past-- last several years, markets have been doing great. The Fed was not important, right? The Fed had their meetings, they did their announcements, they raised rates, a load rate, whatever they mostly are just lowering rate didn't raise that much over the last like, say 10 years. But the Fed was really important. We wouldn't even notice as traders, when there was a Fed meeting today. Oh, okay. What happened? Oh, yeah, cuz nothing in the market habit, nothing changed didn't make, you know, Marty was paying attention to what the Fed was doing. So we as traders didn't have to pay that much attention. That changed in 2022, when the Fed said, Hey, we are going to raise rates, and we're going to do it aggressively. That changed the whole ballgame. Everything is different. Now. 2022 marks the time when the stock market returns back to normal. This is gonna be a normal stock market year normal trading year, where we go up and down and up and down. And it's not just straight up anymore, because rates are zero, or very, very low or the keep going low. Okay. So in the past, since the last meeting, when they raised rates a quarter point, the Fed has been talking how the Chairman has been talking, the other governors have been going out and been talking, they put out articles, they put out interviews, they've gone in speeches, and they said, Hey, we're gonna raise rates 50 points. In this next meeting, which was today, right, I'm gonna raise, we're gonna raise 50 points. And they actually said it. And they've been telegraphing everything that they're going to do up till now. And up till now, I think the Fed myself, I think the Fed is doing a great job. We do have inflation, I get that. But those were things that were not in their control, right? You cannot control the COVID day, they cannot control the not having enough cars on the road. They cannot control the supply chain and the lack of truckers in California to unload all the chips and they can't control that. So obviously, yes, there's going to be some kind of invasion, some prices are gonna go up, and then they'll even out and maybe they'll come down or whatever. But they figured out hey, we need to raise rates. Cool. Awesome. Got it. So the raising rates couldn't be zero forever, right? So now they're raising rates, they told everybody, Hey, we're gonna go 50 cents, at half a percent point 50 basis points, or half a percent, we're gonna go up. And eventually, we want to get to two, two and a half. And so today, they made an announcement that said, Hey, we're raising 50 cents, then Powell came out, he answers the questions. And he said, Yeah, hey, you know, inflation is there. But it might be peaking, you know, it might be stopping, or we might not, we're gonna raise 30 points this meeting, and we're gonna raise 50 points next meeting. And then we're going to try to get to that to two and a half point, range. And we'll see how it goes. Because more than a month out more than 60 days, we really can't predict what's going to happen. So we have to go month by month and and see what happens. Because that makes total sense, right? Sounds like a smart answer. Right? He's not he's telling you what they did and why. And he's telling what they could do next. But later on, after that, he's not saying anything, say, Oh, well, that's a check to see, we'll have to see. So kind of leaving the market on edge a little bit. But still, you know what's going to happen? You know, what he's going to do, and you know what the target is? So he's telegraphing, he's basically giving you the roadmap and saying here, this is what we're going to do, there should not be any surprises, right? So you think, okay, he already told us what he's going to do. And then he did what he's going to do. Oh, that concept, right? Somebody actually lives up to his word. He did what he's going to do. And so the stock market should not have really done anything. It should not have been a non event, because everybody knew is already baked into the price. But what happened to the stock market today? Well, it's up over 120 points. The s&p 500 was almost 3%, almost 3%. It's about to close right now, in a couple of minutes. 3% On a day when you already knew what was going to happen, because he had already told you now if you don't believe him, and a lot of Wall Street obviously didn't believe him. Maybe they were expecting something else. Maybe they heard something that he mentioned, you know, there's no way to tell. And so for the people who were trying to predict and play today's announcement, they got hammered. Because nobody expected a 3% move. Not the the options change, not the experts on Wall Street. Nobody expected 3% Move, but somehow we ended up up 2% Today, So, how should you have played this? How could you have made money on it? And how can you make money on the Fed in the future, it's very simple. You make money on the fed by not losing money on the Fed. What do I mean by that? I mean, don't play the Fed, if the Feds gonna make an announcement, you don't want to be trading at that time. Basically, you treat it like earnings. Now, if you've been following me for any period of time, if you're selling options and doing passive trading, we don't trade earnings. Right, because you never know what's going to happen in earnings, it's uncertain, it's high volatility. Don't know what's going to happen. And so you can get blasted in either direction. Same thing with the Fed. This is now in stocks, the Fed is the most important thing to keep your eye on, listen to, to pay attention, they are the most important thing. If you're even trading any stocks, the Fed is more important than how much money that stock is making that company is making how the chart looks on that stock, a Fed is more important than basically everything. You don't fight the Fed. Right. That's the same, it's been around for a long time since they made the Fed. And there's a reason you don't fight the Fed. Now, again, like I said, The Secret should not to making money off the Fed is not to lose money when the Fed made the announcement. Now, this is gonna go contrary to all the other option gurus out there that are telling you, hey, you need to be selling options when volatility is high. And volatility was high right before the Fed announcement. Because it's uncertain, right? So they would have told you oh, man, go sell a calendar, go sell a strangle, straddle and do something, sell options when premium is high, when volatility is high, sell it, sell, sell it. And then what happened, they probably got their butts handed to today, 3% Move, nobody saw that. You know, you look at the implied moves and all that he was not there. So it just goes to show you that if you're going to play the long game, like me, right, I want to be doing this for next 30 years, 40 years, 50 years, I don't know how long I'm gonna live, I want to keep doing it. I don't want to get blown up. I don't want to get my butt handed to me, for a stupid reason. And a stupid reason would be to go into a very high risk situation and put a trade on just to make a little bit of extra premium. So I would not trade today, I would not have traded yesterday, a day before I would wait till the Fed.. Hoopla is over. Right? Markets up almost 3%. Today. 2.99 is where it's closing 2.99% Where today are to let the smoke clear. Let the market tell you when it's going to do next. Then you place your trade. Yes, volatility will be down then. And you'll make less money for selling an option. But it'll be safer. And in the long run, that makes more sense. Because option traders I have so many toxic people I've talked to they do good. They do good because you know it's easy to sell high low delta options. Oh, yeah, probably isn't my client. Yeah, great. Do that. Do that do that. Then the crash? Because they blow up because they make stupid moves like this because they're told to do stupid things. So yeah, this is controversial in the markets and the other gurus don't really like that. I'm saying this. Because they blow up and then they go away. And then a new guru takes her place. I've been around here for like 14 years telling you what to do. Teaching people what to do. So yeah, I'm still here. Maybe I'm doing something right. So if you want to make money on the Fed? Do'nt , don't try it. Not worth it. It's not worth the stress. It's not worth the high blood pressure. It's not worth the extra drink and all that extra yucky, Pepto-Bismol. You don't want it. You don't want the heartburn. You don't want the stress, you don't want the high blood pressure. Okay. Put the odds in your favor. One of the ways you do that there are many different ways to do it. Not just one way. It's not just probably the Prophet. Put the odds in your favor. One of the ways is by staying out of very risky situations, like a Fed announcement day. So there'll be putting on trades trying to game it. If you're going to put on a trade wait till after and then play it that way. All right? Hopefully this episode will actually help you and save you from some heartburn. All right, may the odds be in your favor. Take care

Hey, it's Allen again, from Option Genius. And today I learned something that I want to share with you. Over this weekend, this past weekend, I attended virtually a conference. And it was an investment conference on basically it was on funds. So how to, it was for people who want to have a fund like hedge fund or a real estate fund or crypto fund at all, there's so many different types of funds. And so they put all the people together in a room and they had speakers come and talk about the different things that they're doing and how you can do it, and how you can get investors to give you money and how you can build your track record and all this kind of stuff. So currently, I am thinking about doing that. And so I went there, and one of the speakers was a guy by the name of John Pennington, you can look him up John Pennington, he's probably a billionaire, or if not, he's worth several 100 million dollars. About a year ago, he took his company public, they were a fund, they were a real estate fund. So they were using investors to give them money. And then he would go out and buy real estate and do loans and stuff like that. And they made it to build it up pretty good—several billions of dollars of assets. And then they took the company public. And he was the I believe he was the president or the co-founder, one of them and then he retired. So now he has a lot of time on his hands. But he's still a very smart guy, because you don't build up a company and go public, you know, and make millions or millions of dollars if you're not a smart guy. So he took the stage. And he talked about a couple of different things. One of the things he talked about was he what he calls the Bitcoin cage. Now, I want to give him complete credit for this because I hadn't thought about this. This is his thing. I don't know if he got it from somewhere else. But he brought this in spoken to everybody. And it was very interesting. So I'm telling you this not because we're going to be making money, I will not be selling options on Bitcoin or anything like that. But I want to also show you how other people think and how when you're investing, you need to be looking two or three steps down the road, to really understand what is going on in the markets. It's not just hey, I want to buy this stock is gonna go up and sell puts because it's going up. Yes, that's just kind of what we do. Right, simplicity wise, but long term, we have to also know what's going on. So Ray Dalio, the guy who has the biggest hedge fund in the world is another guy, he has written several books. And he's been talking a lot about the reserve currency, as the dollar is currently the reserve currency of the world, meaning that most of the trade around the world is done in dollars. So that's very, very, very, very, very important for the United States. And if they stopped being the reserve currency, the dollar stops being the reserve currency, it's going to be very negative for our economy, our country, our debts, borrowing money, all that stuff, taxes are gonna go up all kinds of crazy stuff is gonna happen. And at this point, China really wants their currency to be the reserve currency. They don't want the dollar, they don't like the dollar anymore, and Russia is trying to get everybody off the dollar, as well. So it's gonna be interesting, the next 1520 years, see what happens with that, but call him John, John Pennington, the guy who's talking. According to him, the Fed-its main mandate there number one mandate is to keep the dollar the reserve currency. That's what he says is that their most important goal, their most important objective is to do that. Now a few years ago, nobody ever heard of Bitcoin, right? But bitcoin is billed as a currency is that's where it's supposed to be used to buy stuff with itself stuff with it, right now, because of the US tax laws, it's not really a currency, right? Because you pay taxes on it, every time you sell it, every time you buy something, you paying taxes, you got to record all that stuff, that's crazy. So until they get rid of that, it's never really going to be a true currency. But still people are using it to buy stuff with. And so it's gaining more and more traction. And it's unregulated by any government. So that's the appeal to it, right? And there's no one government that can take away your Bitcoin or and they actually found ways they can, but technically, you're not supposed to do that. And so the federal government, obviously, you know, there'll be the they got smart people that work in there, they'd be like, well, you know, this Bitcoin thing, it might take over as the reserve currency of the world, and they're going to replace the dollar, that's not gonna be a good thing. And so the Fed is thinking, okay, so how do we stop that? How do we not allow that? So before I tell you how they did that, let me give you a little bit more background. In the 2000s JP Morgan was manipulating the price of gold. Yes. JP Morgan, the bank was manipulating the entire gold market. So they were keeping prices within the range that they wanted to they were not letting go up nine where they say you can look this up and they were fined by the s&c. You know people found out about it, they were fined about it. And, you know, most people didn't even hear about it, they were fined a billion dollars, because of their manipulation. And this went on for nine years. So that's a lot of manipulation. And JP Morgan, you know, it's a big bank. But if you compare it, the resources that they have to the Fed, it's nothing, because they only have a certain amount of cash and serve on a market cap that they can tap into news, the Fed can print money as much as they want. They like unlimited supply of cash. And over the last several years, they've been printing, printing printing, and I'm sure nobody knows where all that money that the printing went to. So I'm sure the Fed has, you know, taken some of that money and done other things with it. That was just a footnote somewhere. Oh, yeah, $50 billion, went to this program over here. Nobody knows what it is. Right? And so John, he made the inference that if JP Morgan can manipulate and control the gold market, gold market is 10 times with Bitcoin, it's, it's way bigger than Bitcoin. Really even greater than that. I mean, it might be more than 10 times larger than Bitcoin at this point. So if JP Morgan with limited resources can manipulate a market 10 times bigger than Bitcoin, it means the reason that a fed with unlimited resources could easily manipulate the Bitcoin market. Make sense? Do you see what I'm going on here? I'm trying to connect the dots here. So what John was saying is that the Fed is manipulating the Bitcoin. And they bought up a lot of Bitcoin when it was at lower prices. And now as it gets higher and higher, they are selling the Bitcoin that they have. So they're keeping a lid on prices, because we had a lot of people mentioning later, oh, yeah, Bitcoin should be at 100,000, it should be valid should be at 200,000. Because every day, there's less and less Bitcoin out there. It's been mined. So it's, it's not like there's an unlimited supply, eventually, they'll stop making it. But that supply, that's the amount of mining that they're doing is becoming less and less and less. So basically, all a bit, most of the Bitcoin is already out there. There's a small percentage of it, that needs to be mined yet. But people lose their Bitcoin all the time, people put their money in their wallet, and then the guy dies. And nobody knows where their bitcoins just gone, where it can be stolen or hacked. And there's so much Bitcoin has been lost just because people forget their passwords. So the supply of Bitcoin is going down, that shouldn't be sending the prices up just by itself, but it's not. And so John is saying that the Fed is purposely keeping the price down, because they don't want interest in Bitcoin. If Bitcoin prices got super sky high, everyone's gonna be buying it, everyone's gonna start using it, all that stuff, they don't want that to happen. And so they're purposely keeping prices down. And what they what they're trying to do is most of the people who trade Bitcoin who buy bitcoin, they're doing technical analysis, right, so they look at the charts and the Bitcoin chart is going up, they're gonna start buying and holding, and if the charge is going down, then they're gonna leave it alone or sell. And so the Fed wants to create a chart of Bitcoin where it's slowly, slowly, slowly, lower highs, lower highs, lower highs, very bearish looking chatter, so that the people avoid Bitcoin and move on to something else invest in something else. And so Bitcoin eventually falls out of favor. Now they can do this for the next 15-20 years. People live on Bitcoin rises. It's crazy, but it's very possible. Now, is this accurate? Is this going to happen? The Fed really doing this? You might be thinking, Oh, conspiracy theory, conspiracy theory meaning, right, maybe that's what it is. But it makes sense. Is it doable? Yes. Is it in the favor of the Fed to do that? And the US government, if not the Fed and the US government or somebody else, you know, that wants to keep the dollar as a reserve currency? Yes, it is in their favor. And Bitcoin becomes the world's reserve currency. Whoa, big shocks all around the world, especially in the United States. So it was just eye opening to me to even hear that see is like, wow, okay, you know, this is some next not just next level thinking, this is like four stories up thinking, right? This is the kind of stuff that these guys talk about, think about. And it's like playing investing is like playing chess, right? You don't just think one or two moves ahead, you got to think 1520 moves. That's how the Masters do it, then the grandmasters they think, like 30 moves ahead. So that's how they become grandmasters. So this is the way people think on Wall Street and how they obviously there has, you know, I mean, I don't even know JP Morgan was manipulating gold prices. I didn't know that but they people know about it. And if that's possible, then there's a whole bunch of other things that are possible as well. They shouldn't be done. But they are being done. And if the government is doing it, then all bets are off because nobody's gonna go to jail eludes me, we're gonna find out about it. Probably. Right? So that is the Bitcoin cage. I know, we didn't talk about options or trading or anything like that. But, you know, I just wanted to put it out there and be like, hey, look, there's other ways to think. And you can't just look at one thing and be like, okay, Bitcoin, yeah, it's gonna go up because of XYZ. Well, there are other factors involved. So you got to look at all the offshoots as well. And when you make your investment thesis, so, you know, whatever you're investing in, look at all the different angles, think about it, you know, talk to other people that might have contrary views to what you're thinking. If you're if you're a Bitcoin bold, then talk to people who think bitcoins going to zero. You know, Warren Buffett said that Charlie Munger says that, why are these guys idiots? No, they're pretty smart. But they have reasons. So find out what those reasons are and then find out why and listen to it and keep an open mind. And then head yourself. Always head yourself. So yes, I still own Bitcoin. I'm hoping it goes 200,000. But this talk did keep me from buying more. So we'll see what happens. Right? We'll see what happens. He might be right, he might be totally off but if Bitcoin doesn't go up 200,000 over the next 10 years, then we'll know that he was right. Be crazy if he was anyway. So that's it for this episode. I'll talk to you guys soon. Bye.

Today I wanted to talk to you about the trader's journey. At least he that's what I call it. I like to learn about marketing. I don't know, it's just one of my things. I just I enjoy marketing. And I think it's because it's a lot about psychology. And so even in trading, you have to understand Psychology because, you know, people are what make markets and so when people are reacting or behaving a certain way, if you understand it, then you can profit from it. Right? So in marketing, one of the things that I've been learning about recently is something called the hero's journey. Now, the hero's journey is a common.. now it's common way to tell stories. So whether it's a movie or a book, most likely the most, you know, the most famous movies, the most famous books, the ones that you really enjoy, they follow this trajectory, this story arc, which is called the hero's journey. Now, basically, what it means is that there's obviously a hero, right, and there has to be a hero in every story, cannot be vague, it has to be very clear who the hero of the story is. Secondly, the hero has to want something, right, it just can't be about a guy just going about his daily life, because that would be boring. And we can all do that ourselves. So the hero has to want something. And then the problem occurs that there is a problem or a blockage, that is stopping the hero from getting that thing, right? So there is something that he needs to go or do or overcome, or there's people in the way, and then there is usually a guide. So a person or a tool or something that helps the hero. Now this is kind of like the Obi wan to Luke, or the Dumbledore to Harry Potter, right? There's, there's somebody that's guiding them along the way. And then at the end, the climax happens when the hero achieves his goal, or sometimes doesn't, right. And a lot of times in the more deeper stories, the thing that the hero has to overcome is external, which means that he has to actually do accomplish something or beat somebody or win something. And then there's also an internal problem that he has to overcome. So from the beginning of the story, to the end of the story, the hero has changed has grown as a person, because he had to overcome something internally, in order for him to get to the end and achieve his external goal. Okay, so now in the traders journey, obviously, we have you, you are the hero, you are the star of the show, not me, it's you. I know we do the podcast, and I talk about my own exploits or whatever. But in reality, it's all about you, the trader, the hero of our story, and there has to be something you want. Right? So what is it that you want? Now in order for us to have a successful hero's journey for you, you have to know very clearly and specifically what it is you want? Is it that, hey, I would like to make X dollars per month, for whatever reason, or I want to make enough money from trading that I can quit my job and retire early. Or is it hey, I want to buy a new Lamborghini. And I need, I don't know how much they are. But you know, maybe like $2000 or $3,000 a month to pay for this Lamborghini, or I want to pay it in cash, or I want to be a billionaire. Or a multimillionaire, I don't know, I want to start my own foundation, my own charity, and I want to be worth millions of dollars so that it lasts for hundreds of years, whatever that is, whatever that thing that you want. If you don't know it, and you're not clear about it, then we're gonna have a lot of trouble on our journey. Okay, so step number one for you to have a very successful hero's journey is to know what you want specifically Okay, so now, after that comes the guide, like, "Hey, Hi, I'm Allen, I'll be your guide on this traders journey. I'm not the hero you are, I'm just going to help you guide you along the way". Because normally times the "guide" has some special information, some special skills, maybe he's done the journey before, right? He knows the pitfalls. He knows the traps. He knows where to write the right turn left, turn all that stuff. So in case I'm going to be your guide, and I appreciate you listening to this podcast and letting me help you along on your journey, then what is it that's stopping you from your destination? That's what we have to figure out as well. And it's not as simple as oh, Allen I need more money. No. I mean, I could give you a million dollars tomorrow, but you wouldn't know what to do with it. Right? So the issue is that we need to figure out a path or a way to get to your goal that is systematic, and can be replicated, right? So that it can be done over and over and over again, it's not just a one time fluke, we don't want to just give you a lottery ticket. No, here's $10 million. And it's going to be gone in winter, right? It's something that we build over time. And we get because the internal issue also comes out, right? If you're just given money, you don't change, it's too easy. But if you grow the money, if you learn a skill, if you do it, and you go through different market cycles, and you have building up that confidence in yourself, and your trading, and the confidence that other people will have in you, around you the way they see you, the way you feel, the way you grow. All of that is part of the traders journey. And that's having all that is the only way to be and have a successful traders journey. Does that make sense? So you can't just be given the money, you just can't be given the thing. It has to be hard fought, it has to be a trial a struggle, and only then will it be worth it at the end to get it. Makes sense? So I was thinking about fuel on the podcast, I did a interview with one of our students, Todd. Okay. Now Todd's journey, his issue was that he wanted to make enough money to pay his monthly expenses. Very simple, very easy, you know, right. That's, that's a big why pretty much right? I want to I need to do this. And so for him, his number was 5000. I was like, hey, I need to make $5,000 a month. That's my goal. That's my why, that's my.. that thing, the end of the journey. It wasn't the end for him, because then he continued later. But that was for the first part of the story. That was his thing. Now, what was keeping him back? Well, he had never done before. And he wanted to do it via trading. But he had never done that before. He had dabbled in it, had some success and failure. But he'd never done it before. So he didn't have the confidence for one, and then comes the guide. Now luckily for Tom, he had already been in our circle, he was already a student, he was in our Oil Options program. And so he had the guide, the Mentor-- me, he had the education, he had the components, everything was there, he had the strategy that was proven, that was like, hey, follow this except some steps up. So he was well advanced in his storyline. If you are not that advanced, if you don't have the guy, then I would be willing to work with you, I'd love to do it. And if you don't have the methodology, you know, that's what we do. That's what I'm an option genius. That's all we do, we have different ways to get there. And we can, if you reach out to us, we can we can help you out. So Todd, had one more thing, which I left out, he had an account. And his account had about $40,000 in it. So he had everything that he needed to go from zero to gold in a short amount of time. And he did it in about three months. So within three months of trading and learning and all that, he went from not making any money in trading to paying off all of his bills every month. And then later on, he kept growing and growing, he added more money to account and, you know, he kept going from there. So it was a very successful trading journey. And that's why it made for a good interview, you know, a good podcast because he had all of the elements that make a good story. Now comes down to you. This is your story. That's why you're listening to this. That's why you're watching this, right? We want to know the hero, the heroe's you. Number 3? It's not "I don't have any money". It might be "Hey, I don't have the discipline to do this". It might be Hey, I don't have the the options approval to do this. It might be I don't have the knowledge to do this. All of those can be overcomed. Right? If the discipline is a problem, it's a question of your why of the thing that you want. You got to make that really really, really clear. Now Todd, in our story, he had been laid off. So you didn't really have a choice. You had to make your work or go get another job. Right. So that's it's a pretty big why. Now I would not tell you to go quit your job in order to do this. But there are ways to do it while you're also working. Um We have another student Mary that I interviewed recently, she is also making as much money from trading as she is from her full time job. Right. But she did it in a way that she could do both at the same time, she could trade as well as do her job at the same time. And her trading doesn't take that long. So yes, that's why I love active trading. That's why I love selling options, because it doesn't take a lot of time, doesn't take a lot of time to learn it, it does take time to really get good at it. And you do have to change internally, you have to become different, you have to become more discipline, you have to become more confident. And you have to in some cases, you have to become more humble. Look at that, right. So for some people, they gotta be more confident. Other people, they have to be more humble. And some people it's crazy, they have to do both at the same time. They're overconfident in some things, and not confident enough in other things. And they also have to know themselves. So that's another story. So all of these issues are things that we cover on the podcast, we cover in our Facebook group that's free for everybody. It's called the The Alliance, you can go to our website and get more information about that. So there's multiple ways to get to where you want to be. Step one is to know figure out what it is. And then step two is to get step by step by step. How do I get there? Okay, now, I don't have time on this episode to go through everything about how to do that. But obviously, if it was, hey, I want to make, you know, an extra $1,000 a month? Well, number one, what's the plan? The plan is we're going to do it through trading. Okay, we got that established, so I can be your mentor, what strategy, right? We've done it we've we've covered this before on the podcast, pick a strategy, pick a trading plan, work the trading plan, focus on it, figure out the numbers, like okay, if I want to make $1,000 a month, and my trading plan allows me to make 1% on my money, well, then on a monthly basis, well then if I want to make 1000, then I need $100,000 in my account. Well, maybe I don't have $100,000. Okay, so step one is going to be how do we get to the 100,000? Right? Maybe we don't go and say, Okay, we're not going to hit our goal right away, we're gonna start smaller. So maybe we only have 20,000. Okay, start with 20, make 200 200 every month to under 200, let it grow and grow and compound and come out, and eventually we'll get to our goal. So, you know, the time aspect, in a story in a movie, you know, it's done within a couple hours. But your life is not a two hour movie, right? You got years and years and years, and we've covered this in other podcasts, we're probably have a lot more years to live than we actually think we're going to be living average lifespan now was about eight years old. But with all the science technologies coming, you know, the improvements that are happening, we're probably gonna live 120-150. So these are skills, this is a story that's going to continue. So it's worth it. It is worth your time, it's worth your effort. It's worth everything for you to start your trading journey. Now. Instead of putting it off, because every day you put it off, every month, you put it off every year you put it off, that time is not coming back. Right, whatever the thing is you want. You can have it and I'm telling you, yes, you can have it. If you do those two things, number one, overcome the obstacles that are external. And then number two, overcome the obstacles that are internal. And part of that internal obstacle is to get started to start doing it to start working it to set aside one hour a day, two hours a day, whatever you can set aside to spend studying, trading, researching, listening to this podcast, watching our videos, joining our courses, going through those programs, being in our Facebook group, so that you are talking to you're building a community, you're building your knowledge, you're building your resources, and you're getting in touch with the guide. Right? You have questions, reach out to us, ask us we will guide you along the way, because we've already done it. Right. I'm probably for most of you, I probably already accomplished what you want to accomplish. And so I'm happy to share that with you. But you got to reach out. Okay, so that is the traders journey. I hope that this has been helpful. I hope that you allow me to be your guide. And I hope that you take the journey. And I mean, it's a crazy fun, wild ride. It is hard, it is a struggle. It does take time. Not everybody can get there in three months like Todd did. That was fantastic. But again, he had everything that he needed. He had the education, he had the strategy and he had the account. Okay? If you have those four, four things, you have those four things. And yes, you can get there in three months as well. Right? If you don't, then we'll need to work on those and then it'll take you a little bit longer but you can still get there. So that is it. For this one. Make sure that you trade with the odds in your favor that will definitely help you on your journey and keep hope alive. Take care, everybody. 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. Thank you!

Vince couldn't trade like he wanted to because he was a commercial pilot and it is hard to put on a position and not be able to monitor, adjust, or exit when you are flying across the world. So we started with our Blank Check Oil Options program....and for 2 years...Vince has not has a losing month! Listen in to hear his amazing story and how we accomplished this. JOIN OUR FREE PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps. Thank you!