The Option Genius Podcast: Options Trading For Income and Growth

A Decade To Freedom - 62

2020-02-16

People literally ask me this one question ALL THE TIME… “Allen, how did come up with such a lucrative, safe, and easy way to trade?” I explain it all in my new book Passive Trading, get your free book here https://www.passivetrading.com/free-book! Option Genius was built with you...the individual trader, the breadwinner, the dreamer, the rock your family depends on ...in mind. Because we know what it takes to become a successful and profitable trader. And that’s exactly what we help you...

Option Genius was built with you...the individual trader, the breadwinner, the dreamer, the rock your family depends on ...in mind. Because we know what it takes to become a successful and profitable trader. And that’s exactly what we help you do best. Get your $1 trial of Simon Says Options, our most conservative and profitable trading service here https://simonsaysoptions.com/stockslist-ss-trial-offer.

Every single day you get older and older, and this is not something we can stop, but it is something we should be taking advantage of. And that's what I want to talk about in this episode.

It's already 2020. Another decade has come and gone, and it's fun sometimes to sit back and say, "Wow. You know, where'd the last 10 years ago? They go by so fast." Oh, geez. 2010, man. I don't remember everything about 2010. It just seems like the older we get, the less we remember. But 2010, I had to write this down. I had no kids in 2010. Now my oldest is nine, and then we have a seven-year-old and a three-year-old. And I really cannot remember what it was like before them. That's a crazy thing. That was only 10 years ago. But they've changed our life in so many crazy ways that it's unbelievable.

2010 was also the beginning of Option Genius. Option Genius was started in 2009. So it only was about a year old, and I was just getting started with a couple of hundred members, and doing iron condors every day, every month, and just really had no clue. But I mean, we had no clue as to how to grow the business or where it was going to go. At that time, it was just going to be one website, kind of like a lifestyle brand or lifestyle company that I wanted to just use, and earn some extra money, and stay busy. Because I was trading options full-time, making money from it, but wasn't taking very long, and I was getting on my wife's nerves. So she told me very bluntly one day that, hey, you need to go do something otherwise because you're driving me nuts, and that's what she told me. So that was the reason for the birth of Option Genius. And of course, I wanted to help people, so that's awesome too. But really, it was her push that I needed to do something else with my time that led to the creation of Option Genius.

Now, at that time, we had one website, one membership. That's all I was going to be. Now we have three memberships. We have two full-scale, very large courses that stand on their own. We have e-books. We have other products that we sell. And I have my Passive Trading book coming out. Still working on that one. Hopefully it'll be out soon. I know I've said that many times, but I'm still working on it. Want to get it just right, but I think maybe I should just get it out before it's going to be another 10 years and I'm still saying the same thing that I'm still working on this book and it's already been two years. Two years that I have been saying that. So I promise to get it out soon.

What else? 10 years ago, the U.S. Was just coming out or still in the midst of the great recession. Lending was tight. It was hard to get a mortgage. It was hard to get a loan. It was hard to buy anything on credit. People were scared about what was going to happen to the future. Stock market was kind of ... You know, who knows what it was going to ... Nobody knew. Nobody could tell what was going to happen, and politics was all going nuts. Everybody was fighting, and just a big mess.

Now, 10 years later, I take a look at my own self, we have the three kids, changed our lives completely. Financially, we're much stronger. We're much better off in much, much better position than we were 10 years ago. My five fingers are growing. And if you don't know what I'm talking about when I say five fingers, we do have a podcast episode that we did earlier on that covers that. Basically, in a nutshell, it's you got to have five different streams of income that are independent. So if one of your fingers breaks or two of them break at the same time, you still have three that are working and generating income for you while you regrow the other two.

My passive trading is doing wonderful. I'm moving more and more towards that. My oil options trading is doing great. I'm very, very happy with those results. Keep learning, keep trying to do new things with that as well. But I keep seeing that the more I try different strategies, the more I try to mix it up or to improve it, it just changes it up. So I got to go back to the basics. Then, the way that we do it is the way that's been working. So even though we tried to improve this ... Okay, can we modify this? Can we change this amount? And we'd do backtesting on it. We find out that the original, the way we're already doing it is what's working the best. So I'm happy about that.

My income from investment is growing considerably because the money that I'm getting ... Thank god we have enough to survive. My family, we are not big spenders. That is something that was ... I was very blessed with a wife that knows how to save money and knows how to be prudent with her money. So when she wants to buy something, she can go out and buy it. That's fine. She does. But she's not into name brands. Neither am I. We're trying to get our kids that way. She's not on top of the latest fresh and trends that she has to have a Gucci bag or a Prada bag and everywhere she goes, and she has to have 20 different kinds of bags, and she has to have matching shoes for every outfit and all that stuff. She looks good, but she does it without spending a lot of money. So thank god for me, right?

So our expenses are lower than what they would normally be for a family of five. So the money that is saved then goes into other investments. So we've started to invest in other people in terms of people who are starting companies that people that we know or people that have cause that we would like to see. So we're investing in those types of businesses, and the returns have been good from that as well, and that's growing and growing.

It's really interesting because the growth or the changes of my mentality over the years is something that I haven't really talked about. But when I started, it was all about I have to make enough money to pay the bills. Pretty much desperation. Now, my wife was at the time was working two jobs, so she was making enough to cover the bills. But being the man of the house, your masculinity is at risk when you're not bringing home the bacon.

Now, I know that is changing now and there are a lot of guys who are stay-at-home dads, and that's wonderful. But in my household, my wife didn't want to work. She wanted me to do the job. She wanted me to make the money, and she wanted to not have to work two jobs. So it was on me to, hey, at least pitch in, at least they have the bills. I wasn't paying anything because I was laid off, and I was losing money, in fact, from my trading. So that was my first goal to, hey, start making some money, help around with the household expenses. And then eventually it got to the point where I was able to pay for all the expenses. Then, she quit one job. Then, later on she quit another one. Then we had the funds for her to actually go and start her own business, which is doing very well. So that was a good succession, and she was happy with that. Thank god.

So my thinking shifted, right? So it went from first off to being in a mode of desperation, being in a mode of, okay, I need to pay complete attention to this, I'm going to do this nonstop 40 hours or more a week because I need to pay the bills doing this, and so I was on top of my trades. I was learning new strategies. I was backtesting. I was staying on top of the markets religiously. And then eventually, slowly, slowly, slowly, I got the confidence to know what I was doing to get better at my trades, to pick the strategies that worked for me and to really hone in on those strategies and to get better and better and better to the point where then I was comfortable again.

I got to the point where, yes, okay, I have a certain amount of money coming in. I am pretty confident that that money's going to continue, and so now I can take my foot off the gas and I can kind of relax a little bit. That's when I got to the point where, okay, I'm chilling. I got money coming in. It comes in, and I spending a little bit of time on them. Still am working and staying on top of the markets but not like I was before because now I have a cushion. Now I have enough of a larger enough trading account where I can be relaxed. And even if I go a month and I lose, I still have the money where I can still generate income from it, and still take out the money, and still be okay.

So the stress level, completely different stress level. Completely different mental game at that point. Now it was how could I maximize what I have instead of oh my god, oh my god, if I don't make money I'm going to not eat or whatever, whatever the case is. You don't have to borrow money from my father-in-law to pay the rent or something like that. So that was a complete shift. Mental, emotional, confidence-wise, I was a different person from being a failure at trading to now being actually living the life that I had always dreamed of living. Then, that's when my wife pushed me to start Option Genius. Then I got into ...

Basically, I saw myself as a new role. I saw myself as a new person where I was like, "Anybody can do this stuff. Just go ahead and do it. Just learn it like I did." But I found that people needed a lot more handholding, for whatever reason they didn't believe it, or they didn't have the time, or they didn't have the resources to put the time in to learn it. So I think that Option Genius has helped thousands and thousands of people over the years because we've gotten all the emails, we got the testimonials, we have videos of people thanking us, and it's been really a blessing to me. I know I've been trying to help other people through it, but it does provide income and it does provide me with a satisfaction that I'm actually making the world a better place.

Because when you're just sitting there selling options, it's great. It's great money. And I feel good that I can make money and I can provide for my family. But I'm not really helping the world very much. I'm not really changing the world. I'm not out there helping little old ladies cross the street or something that would really charge your soul. Yeah, you can take the money and you can go out and help people. You can feed the homeless. You can adopt a child or something. But if you're only in front of the screen and you're just sending out checks, you don't have that same feeling of actually going out and doing it.

So by selling options, it's not like you're a public defender. If you're a lawyer, you go to law school and then you actually go and you try to help people that are innocent and you try to get them off. That is you're using your skills to make the world a better place. I didn't feel I was doing that by being a trader. If I didn't sell these options, maybe somebody else would, or maybe it wouldn't even be necessary. But I found something where I can actually go and take income from it. Okay, it didn't help make the world a better place, but it hit and served my needs. So that was great.

But now I was getting bored. I got to the point where like this is fun, but now I'm bored. So my wife told me, "Go get a business. Go start your own business. Go help other people," so I did that. So that, it's been a complete blessing. So that was a new phase of my life. So first we had desperation phase. Then we had confident trader by myself phase. Then we had, okay, now we have a company where we're actually have people working for me and we have people that we're helping as members and students, and people asking questions, and me be able to respond and share my knowledge, and not really being a leader in a sense but being more like a teacher or an educator. And that really has helped me feel good about myself in that role.

But as time went by, that was great. That was a great aspect. But in terms of my trading, I realized that I don't want to be spending even the time that I am spending on my trades. I mean, you can be doing iron condors. You could be doing butterflies, and calendars, and these type of strategies, and you can dive into the weeklies and you can generate very, very good returns. Whenever we do a butterfly spread, my target is 20% return on that trade. Iron condors, we're looking around 12%. Weeklies, we're looking for 5% a week. That's a lot of money if you can do it over, and over, and over again, which is what we try to do. So that requires a certain amount of time where you're staying on top of it.

Now, my ultimate goal in life is not to be a trader, if that makes sense. I'm using trading as a vehicle to get me from point A to point B. But when I get to point B, I might not need the vehicle anymore. I will probably always trade, but I'm not going to be trading for a living anymore. I'm not going to be saying, "Okay, I need $12,000 a month to pay all my expenses. That's how much money at least I need to be making from my trading account." I won't be there. I'll be having my five different, at least five different, streams of income, and I won't have to worry about if I don't trade this month, how am I going to pay the bills. That's where I want to get to. That's where I'm moving towards.

So how can I get to that point where I can pay my bills or increase my accounts without having to spend so much time monitoring the markets and looking at what's going on? So that is what I've been working on for the last couple of years. So okay, I know option trading can get me there to the point where maybe I'm just spending three, four hours a month, maybe five hours a month maximum and I'm still earning really, really good returns that's better than anybody else can get or any other investment. But I don't want to be spending 10, 15 hours a week. Does that make sense?

So I got to the point where I have money coming in. I want to go out and actually do good with that. I want to get to the point where I'm the one feeding the homeless person, not just writing a check for them. I want to write the check, too, but I want to be able to go out there and actually feed the homeless person, and shake that person's hand, and talk to them, and see if we can help them or whatever. There's just an example. Whatever the issue is. But I want to be the one that can actually go out into the world and make a better place. And if we build a school, I want to be able to go and visit the school and be involved in the process of picking the location and seeing the kids go there. I don't want to be a teacher or anything, but I would like to be able to go and visit it from time to time, even if it's in another country somewhere off in the mountains or something like that.

So that is the ultimate what I want to get to. So when I start my foundation, and I've been talking about this for a while, I'm still in the process, my goal is to be able to work on the foundation and be able to help in certain areas that I would like to participate in. So in order to do that, you have to study. You have to research. You have to talk to people. So I believe that I'll be able to get access to certain conferences. Or if you call up the university and you say, "Hey, I want to talk to so-and-so professor about something," if you just say, "I'm Joe Schmoe," they probably won't put you through. But if you say, "Hey, I'm calling from XYZ foundation, they'll be like, "Oh, okay. It's a donor. Get that guy, get the professor on the phone." So that's the whole point. That's why I came up with Passive Trading. That was the whole idea behind it, whereas we want to have something that is stable, reliable source of consistent monthly income.

Another aspect that has bothered me for years after the great recession and the financial debacle was that there were a lot of people at that time that were trading iron condors and certain strategies. Then after or during the recession and afterwards, the iron condor, the way everybody was doing it, just didn't work anymore, and so people were lost. People kept doing what they knew without changing. They didn't realize that the market had changed. They saw that, hey, before I used to put on an iron condor and I would only have to adjust it maybe 6 or 7 times out of 12. Now I'm putting on my iron condors and I'm adjusting it 10 times out of 12. They noticed that part, but they didn't realize the reason why and that the market had changed and so they needed to change their strategies along with it.

So that bothered me. It's like, "Okay, these people ... " And I was doing the same thing. I had all my money tied up in options, and I was selling options. But the point is if you have a large move in the market, and, let's say, you're using 70% of your account, if you're doing iron condors, or spreads, or whatever it is, if you're only trading in options, if you're only doing options, and there's a large move that catches you off guard and it goes against you, there's a good chance that you can lose 70% of your account or whatever percentage you have in your trades. You could lose all of that. Even if the market comes back, once it's gone, once that trade is over, once it expires, or once you get out, it's gone. That money's gone. It's very hard to recover from.

Now, this is unlike stocks, right? Where if you buy a stock at $100 and it drops to $50, yes, you've lost money, but you can still hold onto that stupid thing until it comes all the way back up to a hundred hopefully. Does that make sense? So with the stock, you actually have something that doesn't expire. With the option, we're selling them because they do expire. But my point here is that the stocks can act as a foundation for your option trading portfolio. So if there is a drop in the market and your option trades do lose, you still have your foundation.

What I found out was that when the markets dropped, a lot of option sellers would lose all their money and they'd be blow up their accounts because they didn't have a foundation. They didn't have a way to bounce back. They didn't have any rock solid thing on the bottom that was still there that they could build off of. So part of our Passive Trading Formula, and that was part of the thing that I came up with first, say, "Okay, if I'm going to be a trader, I have to be able to withstand all the ups and downs." Because the great recession was they say once in a lifetime. I don't know. I don't know if the stock market is going to drop another 50%, or 60%, or 70%. It could. And if that happens in one day, or one week, or whatever, a lot of my option trades are going to lose money because that's unexpected and is huge. So how would I recover from that if that did happen? That's the biggest thing that a lot of options sellers don't think about.

Well, in this particular situation with the great recession, stocks stopped like 50% or more, but then eventually they'd recover, and it took ... Some stocks recovered within three years, five years. Some took 10 years. But they did recover, most of them. And in the meantime while they were recovering, option sellers were able to rent them out and sell covered calls on them and naked puts on them. So the people that had that foundation, number one, they didn't freaked out as much. Yeah, they lost money and it sucked, but they were able to build it back. And number two, which is even more important, they didn't blow up. They didn't lose everything.

So as the next 10 years go by for you ... I mean, it'd be a good experience to just sit down and say, "Hey, where was my life 10 years ago? What were my goals back then? What was I thinking back then? And then where am I now?" So take a just like I did earlier in the episode where I sat down and said, "Okay, I didn't have kids, and this and that. This was happening. That's happening. Now where am I now?" And it's like I can't believe how much has changed in 10 years. I'm sure in your life it's probably the same thing. Hopefully it is because there's ... Tony Robbins has said it and other people have said it before him that we as individuals, we overestimate what we can do in one year, like, "Oh, yeah. In one year I want to be a billionaire." But we underestimate how much we can do in 10 years. Because if you take small actions every time over and over, and those small actions, they compound on each other, and they grow, and they grow, and they grow, and the results are crazy.

So I would like you to take a few minutes if you haven't done it already ... Maybe you did it for New Year's as an activity or whatnot. But think about where you were 10 years ago. What were your dreams? What were your goals? What were you working towards? What situation were you in? Look at them now. If things have not changed, then we need to take more action. We need to set better goals, more realistic, reliable goals. If you haven't done any goals at all, you don't know where you're going, you're going to be lost. You have to have something. You have to have some direction, right? You have to have some desire of what you want, and then you have to take action to get there. So if you haven't had any changes in the last 10 years, something is very, very wrong in that situation. Maybe you and I need to talk. Maybe I can talk some sense into you. And I would love to help you, okay?

If you're like most people and you had some growth, some things have changed ... And I'm not saying all of them are going to be positive. In the last 10 years, my wife and I, our family, has had two very major, major losses that I didn't talk about until now. My wife's best friend and our best friends, really, they both passed in a very violent, traumatic way. It was a murder-suicide. And that still haunts me and my wife because we were so close and we didn't see it. It happened, and it affected us in such a major way that it kind of derailed us for a couple of years. Then just recently, my wife's father having been shot and killed at his job. So you're going to have the good and the bad. That's just part of it. People are going to pass. Businesses are going to fail. People are going to get laid off. Kinds of things are going to happen. Divorces will happen. Life happens.

But take a look at where you were 10 years from now. Take a look at where you are now. Then, think about where you want to be in the future 10 years from now. Making goals just one year out, that's great, but you can do a lot more in 10 years than you can in one year. And I don't even think 10 years ago I would not have even imagined the kind of success and the life that we're having now as we 10 years ago. It would've been like, "Yeah, maybe 20 or 30 years from I'll have some kids and I'll be able to do this and live like this." Well, no. That happened in the last 10 years.

So the dreams that you have, they can be accomplished in 10 years. I think that trading options, passive trading is an amazing, amazing way to help you to achieve your goals. This is what I want for you, and this is what your assignment would be for this episode. Look back 10 years, look at now, and then look at 10 years in the future. Where do you want to be 10 years from now? And how are you going to get there? Then, what actions are you going to take to get there? Because if you don't do anything different than you're doing now, then life will just meander. You'll just go along that dah, dah, dah. The time is going to pass. The years will pass, and you will be looking at 2030, right? 2030's going to come whether you change anything or not. But if you want things different in your life, if you want certain things in your life, then we have to take the right actions to get there.

So that's it. That's the episode. That is the homework assignment. And if you want to take it one step further, I would say email me your goals for the next 10 years. Help@optiongenius.com is the email address, help@optiongenius.com. Send me your goals. I'm not going to share them with anybody. I'm just going to keep them. If I can help you accomplish them, that would be great. If you need any from me, let us know. We're here for you. And who knows, maybe we can even accomplish some of our goals together. Maybe if something of yours aligns with mine, maybe we can do it together. Who knows. But that's it. That's your homework assignment. And may the next 10 years bring you all of your dreams. Remember, trade with the odds in your favor. Take care.

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