Mar 192015
 

A couple days ago I made $220 in about 5 minutes from trading options. Today I will explain exactly what I did, why I did it, how others can do the same if they wish to, and the risks involved with this maneuver. Out of all the option trading strategies out there, buy write options are probably the least risky, especially done with underlying large cap, blue chip stocks. They also require minimal knowledge, no money down, and are accessible to the general public. 😀

So first, what the heck is a Buy Write options strategy? Simply put it’s when we buy a stock, and then write (sell) a covered call against the stock we just bought heh. 😉

The reason we might want to implement a buy-write is because we believe the stock will not move a lot in either direction in the near future and we want to generate some extra returns in the mean time!

Through a suggestion from a friend I decided to perform my first buy write strategy earlier this week. I chose to do it using the National Bank of Canada, which is one of the largest financial companies in the country with a strong balance sheet and growing profits. 🙂 Canadian banks are ideal for doing Buy Writes with because they are fairly stable and grow their dividends over time.

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So let’s quickly run through my thinking process. What is the purpose of buying a stock and then writing a call option against it? For me, it’s to make some quick and easy money with minimal risk, but a high chance to beat the market. 😀

Continue reading »

Aug 202014
 

I came across a story recently about a couple who moved from Colorado to California. Their incomes doubled and within two years they became debt free 🙂 The article starts off as follows.

This couple dropped $185K+ of debt in 20 months – Here’s how!
What do too many student loans, a mortgage, and a few bad money decisions equal? A debt upwards of $185K. This couple destroyed that debt in twenty months through budgeting, scrimping, and a handy book about personal finance…

Wow, good for them 🙂 Can you imagine paying down on average $9,250 of your debt every month? That’s amazing! This couple must have sacrificed a lot and lived like paupers to reach debt freedom so quickly.

However what the article introduction doesn’t reveal is that most of their $185,000 debt was in the form of a mortgage, and they sold their house and paid back that mortgage within the 20 month period 😛 I tweeted my findings and received some funny replies from the Twitterverse 😀

14-08-selling-assets-pay-debt debt freedom

Sarcasm aside, this is why it’s important to look at changes to overall net worth and not just the debt or assets as individual parts. So here are a few lessons we can learn from this story.

  • Don’t judge an article by its title. If something seems too good to be true it probably is. According to last year’s poll, virtually every visitor to Freedom 35 Blog has a positive net worth. This means anyone reading this who currently has debt can literally pay it all off and be completely debt free if they wish. All they have to do is sell your assets.
  • Debt is not a major financial worry if you have a positive net worth. If debt was really stressing you out, you would have sold your assets and paid back all your loans a long time ago. The fact that most people, including myself, have outstanding debts despite having a positive net worth, is evidence that we care more about having our material stuffs than living a debt free lifestyle 😀
  • The amount of debt someone has is irrelevant in and of itself. For example, having $40,000 of student loan debt and no financial assets is worse than having $400,000 of debt, but also having an equal amount of assets.

Whenever I hear stories about someone paying off a large amount of debt within a short period of time I always take it with a grain of salt 😉

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Random Useless Fact:
How to recycle used underwear. #frugal to the extreme. #swag

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Nov 092013
 

Twitter’s Initial Public Offering

The micro blogging site Twitter has become a publicly traded company as of Thursday this week. Its price jumped from $26 a share on opening to $48 almost immediately. There is a lot of interest in this hot stock right now. TWTR ended this week at $42 a share. The Twitter IPO raised over $2 billion, the 2nd largest for an internet company. Even more than Google. Not bad considering Twitter isn’t even profitable yet 😕 I plan to invest in Twitter some time in the future, but it’s still too early for me now.

internetipotwitter

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Best Deal of the Year

Future Shop is having a special trade-in offer this weekend that can’t be missed. Bring a copy of any used Xbox 360, PlayStation 3, Wii U, or 3DS game to a Future Shop this weekend and you can trade it in for a brand new copy of: Assassin’s Creed IVCall of Duty: Ghosts or Battlefield 4 for current generation consoles. This means you can bring them a copy of NHL 10 for the PS3, that you’ll probably never play again, and take home a copy of Call of Duty: Ghosts. Even if you’re not a gamer yourself you can give away these new games as gifts and your recipient will think you paid full retail price for them at $60 each 😉 Or you can always just resell the games for profit. Here’s one way to do it.

  • Step 1: Go to a used games store like EB games (GameStop equivalent) and buy any used Xbox 360 game for $10
  • Step 2: Take your used game to Future Shop & trade it in for 1 of the 3 new titles, eg: Assassin’s Creed IV for the Xbox 360
  • Step 3: Sell your new Assassin’s Creed IV game on Ebay
  • Step 4: Profit 😀

Over half a dozen Assassin’s Creed IV copies have sold on Ebay.ca over just the last 24 hours alone. The cheapest one was sold at $54.02, and the average sold price was about $57, or slightly below MSRP. This means if you price your game at $50, you’re almost guaranteed to sell it right away 😀 That’s a $40 profit you made, or 400% return on your $10 investment! Wow 🙂

And if you do this every day over this long weekend, you’ll have $40+$40+$40 = $120 by the end of Monday 😉 I’ve heard this deal is also going on at Best Buy so if you hit up both stores you could double your earnings to $240! If you feel bored this weekend and want to make some easy money, there you go 😉

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 Breakfast Recipe

Here’s a creative way to eat your bacon, eggs, and toast in the morning.

Ingredients: See previous sentence.

Instructions: Follow the visual guide below and bake until it looks like the final image.

recipe-breakfast-lifehack-egg

[Edit 1:10 pm PST] Apparently the news about the trade in deal on my blog has generated massive gatherings of people across Future Shops and Best Buys across the country. [/edit]

Apr 212013
 

Hope everyone is having a great weekend. Let’s look at some business and economic news we should care about.

Snail Mail Slowing Down – Canada Post made $127M in profit last year but the amount of shipments have been declining. I hope they can find new ways to make money. This company employs about 71,000 workers in Canada and is a big driver in our economy.

Low Growth – The IMF (International Monetary Fund) has downgraded Canada’s growth prospects to just 1.5% for 2013. This is great news for Canadians with debt because it probably means our interest rates will stay low for the time being. How can we take advantage of this? Well personally I plan to borrow more money to invest in assets that will directly benefit from faster growing developing countries. The IMF says that global growth on average is expected to be 3.3% this year 😀 So if we’re doing worse than the average, then there must be other countries that are doing better 🙂 My strategy is to leverage borrowed money from a place of low growth to invest in high growth environments 😉 

Losing its Glitter – Gold fell in price dramatically lately. I’m not too worried even though I’m invested in gold. China and India are huge customers of gold. China’s economy is still growing north of 5% a year so eventually precious metals should recover which means now might be a good time to start buying some gold if one doesn’t yet have any.

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Blog roundup – Personal finance and other interesting articles from around the web
Being frugal has an article on suggestions for lending money people close to you
Add Vodka warns that over deprivation can actually backfire
Agent Fang shares a frugal way to prepare some delicious home made chicken karaage
Dividend Ninja takes us through a couple of resource stocks he just bought.
Girl meets Debt discusses what she likes and dislikes about blogging as a PF blogger
Modest Money has a post on what you should if you’re traveling and run into problems with a rental car

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Liquid Updates – What’s new with me

Bought some cool entertainment recently. Thought I’d share in case anyone was curious to know what I do in my spare time.

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I also recently made a major purchase. It costed me over $2,000. Since I didn’t have any savings or an emergency fund I used my line of credit to pay for it haha. I’ll blog about my new awesome purchase this upcoming week, but here’s a hint; vampires are allergic to it 🙂

I think I may have a spending problem. I keep buying stuff I don’t even need. As if going into $2,000 of debt wasn’t bad enough I also found myself purchasing something else last week. Except this one costs WAY MORE. It’s so expensive it makes $2,000 look like a rounding error. If you follow me on the twitter, you may have seen this. 13_04_twitterland

More details to come later. It will probably mean going into more debt for me to finance the purchase. But I’m okay with that since using other people’s money was how I made 12.5% on my farmland investment last year. Some might say going into debt can restrict your freedom. But I think it can also create the foundation for wealth and financial freedom. Debt is a tool. It just depends on what we use it for 🙂