The only two Option Trading strategies you need to know for 99% wins

Before I start the article, I just wanted to state some word of caution

Option trading may not be suitable for everyone. You can potentially loose all your money with option trading. The weekly or monthly reward from option trading is widely discussed everywhere over the internet. What they fail to mention though is that, it has equal amount of risk.

As every stock market investing, option trading also comes with risk. You could potentially lose all your investment, if you fail to choose the right investment strategy.

I’m coming on this from a personal experience, where I’ve lost hundreds and thousands of dollars investing in stocks and options. I was a novice investor back then and didn’t know much. Therefore, I would suggest everyone to get your feet wet before diving deeper into the stock market investing world. Slow and steady always win race.

Option trading 101

1. What are options? A beginner’s guide

weekly option for income

Options are contracts (and they’ve expiry date) which gives option buyer the right to buy or sell the underlying stock or asset at a set price called strike price. The buyer is not, however, obligated to buy or sell the stocks. The right to buy or sell simply means, the stocks can be called away any time on or before expiry date.

Few of terminologies worth noting are – purchase of option, option premium, strike price, and expiry date.

The purchase of one option contract means 100 shares of underlying stock.

Option premium is the amount you’ll pay (for buying) or the amount you’d get (for selling option) while executing the option contract.

Yes, you can sell option contract even if you don’t have option to begin with. It is called sell to open.

Strike price is the price of a stock or assets that you’re willing to buy or sell at a future date while executing an option. The strike price can be above the current price of the stock. This is called out of the money (OTM). The strike price can also be below the current price. This is called in the money (ITM).

Expiry date is simply the date when the option expires. This is the date before which you’ll have to execute the option contract to close the position or simply it expires depending on the strategy.

To better understand the option trading concept, let me compare it with rent-to-own home contract. Some people like to think it as an insurance. But I’ll go with rent-to-own home analogy. The rent-to-own home contract gives buyer the right to buy the house. However, they are not obligated to do so.

When you invest in rent-to-own homes, you pay a non-refundable option fee (premium) for an agreement (contract) to buy the house at set date in future (expiry date). In most cases the house price is predetermined (strike price) during the contract.

The only different between these two are you cannot begin selling rent-to own home contract unlike option trading.

Types of Options

There are two options, named- CALL options and PUT options.

With a call option, the buyer of the contract purchases the right to buy the underlying asset in the future at a predetermined price, called exercise price or strike price. With a put option, the buyer acquires the right to sell the underlying asset in the future at the predetermined price.

Investopedia

With every “BUY or SELL to open” position on option trading, you must “SELL or BUY to close” as well unless you’re expecting the option to expire worthless or you’ll willing to buy the stocks, should they be assigned to you!

Things to note

2. Trading an option

As mentioned earlier, you can either buy or sell options to open. This gives a total of four basic combinations of executing an option contract. You can either buy CALL/ PUT options or sell CALL/ PUT options.  One you open your position on option trading, you must also close your position except in the situation discussed above.

The following table shows a broad picture of how basic option trades are executed. These are the most basic option trading strategies that you must learn before executing a completion combination of one or more. And to be completely honest, you don’t need complex combination. The only two option trades you need are the last two strategies: SELL a CALL and SELL a put. I’ll go in detail lower in the post why these two are the only strategies you’ll ever need for a profitable option trading.

Open positionOptionDescriptionTransactionStrategyClose position
BUYCALLGives you right to buy stocksYou pay the premiumBullishSELL
BUYPUTGive you right to sell stocksYou pay the premiumBearishSELL
SELLCALLGives option buyer right to sell stocksYou'll receive a premiumBearingBUY
SELLPUTGives option buyer right to buy stocksYou'll receive the premiumBullishBUY

Common mistakes of option trading

Like every investment, stock or option trading comes with their own risk. One must be aware about these risk before investing money. Any activity that involves growing money involves risk, no matter what. Not taking any risk is a bigger risk because the money in bank does not grow. Inflation will eat away fraction of your savings. Therefore, everyone must invest to compensate the inflation, at the very least. While trading option, you must avoid the following common trading mistakes.

1. No exit plans

This may be the biggest common option trading mistake. You’ve got to have an exit plan. Once you open a position, you must also know when to exit out of the position. Every open position must be closed. Without an exit plan, you’re doing nothing but playing the game of luck, called gambling.

And you know who wins in gambling – No you!

By exit plan, I did not mean only for the losing position. Everyone should also have exit plan for the wining position as well. It does not take a minute to flip a wining position to losing in option trading.

A good rule of thumb is – to close out of the position, if you’re losing 100% of your position. If the position is costing you twice of what you’ve paid for, then you’ve got to exit that position. There is only a slim chance that the market will go in your favor again (not that it will never happen).

I would also like to exit out of the option, if it has gained more than half of the initial premium. When you sell an option, you get a credit. If you’ve already received more than half of the credit, I’d recommend to close out of the position to prevent any future reversal and capitalized the gain.

2. Ignoring the probability

When you’re trading an option, probabilities are your best friend. If you look at any stock option list (for different expiry dates and strike prices), probability of success is listed. Making a trade without looking at probability of success is a big mistake. Even though these probabilities do not mean you’ll win 100%, they are indicator of how profitable a trade can be.

Of course, nobody can predict the market.

3. Emotional attachment

It is not easy to detach yourself when your money is involved. Everyone opens a position with a hope to make a profit. But you’ve to understand, not every trade will go in your favor. It is easier to get emotionally attached, but the more emotional you are, the less strategic your plans will be.

There will be couple of small losses followed by (hopefully) bigger wins.

Another place where people are emotionally attached are, the stocks they choose to buy options to begin with. They love the stock so much that they keep on betting on it even the odds are against them. Like the great saying in the stock market goes,

“Don’t get married to your stocks”

Be willing to get out of the position, if it does not work out for you. People often choose to double down on the stock option, if they’ve lost money on the first trade. Most of the time, this will not work.

A good strategy is all you need to win in option trading.

Thing to consider while trading option

With the basic out of the way, let me share you a word of advice, if I may, about option trading.

Never BUY an option to open a position.

This is the worst way of investing on options.

The best way to trade an option is to SELL an option to open. Buying an option requires you to pay a premium. While selling an option gives you a credit. You should always trade option for a premium. This is the only way how I trade options.

Let me explain why I love selling options to open rather than buying.

Premium credit

The first and the foremost is of course, selling an option gives you a credit. You’ll get to set the premium that you want to shoot for. It is already predefined based on the strike price and your risk tolerance.

Unlike selling, buying an option requires you to pay the premium. After the premium is paid, you wait for the option to go up so that you can sell it for higher price. The difference is what you make the profit.

Time decay

When you buy option, time works against you. As your option moves closure to expiration day, the value of an option decreases. This is called time decay. The option which is higher in value reduces it worth as it gets closure to it expiration date. This is because it does not have enough time left and therefore, less people would want to pay for it.

On the contrary, when you sell option, you’d want it to reduce it’s worth so that you can buy it back and close your position. Time works in your favor by decaying the option cost. At expiration date, the option expires worthless and the seller keeps the full premium.

Unlike selling, buying an option requires you to pay the premium. After the premium is paid, you wait for the option to go up so that you can sell it for higher price. The difference is what you make the profit.

Stock movement

You buy an option with a strategy that the stock will either go up in value (in case of BUY a CALL) or it will go down in value (in case of BUY a PUT). You will only make money if the stock move away from your strike price. As the stock moves closes to the strike price, the option buyer starts losing money.

You, as an option seller, has extra advantage against option buyer. When you sell an option, you do not necessarily have to wait for the stock price to move away from the strike price. As long as the stock price does not reach strike price, you’ll make a profit. If the stock stays when it is, you’ll still make profit.

On the contrary, when you sell option, you’d want it to reduce it’s worth so that you can buy it back and close your position. Time works in your favor by decaying the option cost. At expiration date, the option expires worthless and the seller keeps the full premium.

Unlike selling, buying an option requires you to pay the premium. After the premium is paid, you wait for the option to go up so that you can sell it for higher price. The difference is what you make the profit.

Finally the two Strategies

The two strategies that I have been advocating are SELL a PUT and SELL a CALL. These are the only two option trading strategies I use most of the time.

1. SELL a PUT

SELL a PUT is an option trading strategy, where you are assuming the stock will move higher than the strike price. You are being bullish (in a way) in your position. Let’s explain this with an example.

Bank of America (Symbol: BAC) has been trading for $44.35. If I want to SELL a PUT of BAC for a strike price of $42.50 with an October 22nd expiry date, I’ll receive a credit of $ 0.53. This means I will receive $53 (since 1 option contract is 100 stocks) immediately in my account for executing one contract.

I’ll be betting on BAC that the stock will either remain or move higher than the current price. The other way to look at this is – I’m saying, the stock will in no way move below my strike price ($42.50); if it does that then I will start losing money.  As long as BAC stays above $42.50 till expiry date (October 22), I will get the $53 credit. I can also choose to close out of this contract, for a quick profit before the expiration date.

The advantage of executing this option contract is that you’ll make money if the stock moves up or stays the same. On the contrary, if you had bought PUT, you are being bearish on your position. You will only make money if the stock moves down. If the stock stays at the same price, it will expire worthless.

I use this strategy with the stocks I would like to buy. I execute cash secured PUT which means, I’ll buy the stocks if they’re assigned to me. Let me explain:

I will execute SELL a PUT on the stocks that I’m looking to buy 100 shares. Let’s take BAC example again. I can execute the same option as above and wait for the option to expire. If the stock moves higher or stays the same, the option will expire worthless anyways, therefore, I don’t have to do anything. I will keep $53. If the stocks dips and ends below $42.50, 100 shares of stock will be assigned to me. I will pay $42.50 per share and still keep the $53 premium. Therefore, my actual cost per stock will be $41.97 ($42.50-$0.53). This is a great way of buying stocks. Had I bought the stock, I would have paid the full price of $44.35 per shares. By using this strategy, I’m getting stock at a discounted rate.

1. SELL a CALL

This is the next strategy that everyone should use while trading option. Since we are selling option, we’ll again receive credit. With SELL a CALL, we are being bearish and betting that the stock will not exceed the strike price. Let’s explain this with an example.

Let’s go back to Bank of America (BAC) again. For October 22 expiration date and the SELL a CALL strike price of $46, the credit received will be $0.45 (which is $45 per option contract). It has a good 79% probability of profit. Therefore, as long as the stock does not move past $46 strike price, we’ll make a profit of $45 at expiry date. We also can choose to close the position, should we make a profit before expiry date.

I would like to go a step forward with this strategy. I always SELL a CALL on the stocks that I already own 100 shares. This is called covered call. Let’s say, if I have 100 shares of BAC, I will place a SELL a CALL option for the strike price higher than my cost basis. I would trade this option to bring in extra cash. These extra premiums collected using covered calls are just like monthly or quarterly dividend, if the stock does not already payout dividend. I can continue selling calls until the stock is called away and my 100 shares are gone. If the stock moves higher than the strike price, I’ll have to sell 100 shares of my stock at the strike price. I’ll also receive the premium. Therefore, the total money received is total cost of stock by selling it at strike price plus option premium.

The SELL a PUT can be followed by SELL a CALL and visa versa. Once my 100 shares of stock are called away, I can start using SELL a PUT strategy to buy the stock at discount as mentioned before. When I’m assigned the stock, I can proceed with Selling a call. We can continue doing this cycle to bring in intermediate profits.

Conclusion

SELL a PUT and SELL a CALL are two very powerful option strategies to bring extra income. These are not completely passive but once you place your trade with a good probability of profit, you just let the market take its course. Starting with SELL a PUT, if the stock is not assigned to you at the expiry date, you collect the premium. If the stock is assigned to you, you can start placing covered calls and continue collecting premium with this strategy. Once the stock is called away, we are back to square one trading SELL a PUT. These two are one of the best strategies in option trading. These are not complex strategies and do not require special skills. Once you know the basic, you can start making trades. Start using these option strategies in you option trading journey and as always feel free to reach out to me if you have any questions.

Digital products that sell on Etsy and how to get started

digital product that sells on Etsy

digital product that sells on Etsy
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Spoiler Alert: I will not go into details about what digital products are and why selling them is a lucrative business. I’ve a separate post for that.

Nowadays, people are more into passive or semi-passive income.

Digital products give everyone an opportunity to sell the same product multiple times which is originally created only once. The product is revised/updated frequently (as needed) but the effort is far less than time to initially create the product. That is the beauty of digital products.

Being able to sell the same product to multiple customers makes it passive source of income.

Once the product is listed for sale, the income generation is automatic.

Etsy is one of the best marketplaces to sell digital product.

What is Etsy?

Etsy is a global online marketplace, mostly famous for handmade items, that facilitates the buying and selling of unique items. It is a popular platform for all the creative self-employed and entrepreneurs. In order to sell on Etsy, the items must be handmade, vintage (20 years and older) or a craft supply.

Reselling is strictly prohibited on Etsy and if found reselling, Etsy will take down the shop (I’m talking from my personal experience 😊).

Etsy’s motto has been “What you can’t find elsewhere you’ll find it here”.

Popular digital products on Esty

Etsy is very popular for digital products. Most of the seller also accept custom orders but the main reason of its popularity is because it’s the market for same digital product. This benefits the seller because they can create one product and sell it as is to multiple buyers with or without minor modification.

The following are the three major digital product categories that’s popular on Etsy.

1. Digital planner

Digital planner is one of the best-selling digital products on Etsy. These are PDF format digital downloads which can be used as life, finance, business, or academic planning tool. These planners can be used in iPhone, iPad or tablets and consist of one full year of planning.

Most of the planner that’s popular on Etsy are the bundle sale that has features for everyone. These digital planner works well with GoodNotes for adding text and features.

Kieran has a very famous digital planner that has been sold over 35,000 times on Etsy which cost $13.12.

electronic planner template
Example: Digital Planner that sells well on Etsy

2. Templates

Another digital product that sells very well on Etsy is template. The templates can be anything related to Invitation, Thank you Card, Menu, Invoice, spreadsheets, resume, Website themes- literally anything. This is just a small list that I’ve come across with.

Etsy has limitless template products that sells very well.

These template files are like a guide for the customer to build upon. In absence of a template, the customer would have to build the product from scratch.

For a fraction of cost, it’s a great deal for the customer.

I have been testing digital products on Etsy for a while now. You can find me on Etsy as HustlingEngineer. I don’t have a lot of products but have been testing excel template files I created for my online store.

If you want to checkout my excel template, you can find it in my store.

3. Craft supplies (Crochet/knitting/ embroidery and sewing pattern)

Craft supplies another the highest selling category on Etsy. The digital products under craft supplies include crochet pattern, knitting patterns, quilt pattern, and many other sewing patterns.

Along with other supplies, these digital craft products have good market.

Look at this Crochet Unicorn Blanket pattern by BriAbbyHMA on Esty, which has made almost 28,000 sales. The product cost only $5.99.

digital design pattern
Example: Digital pattern that wells very well under Craft Supplies

Is selling digital products on Etsy profitable?

I know what you are thinking:

Are these digital products really profitable on Etsy?  

Anybody who’s just starting out, I would not recommend going all in on Esty with digital product ideas. This can be a great side hustle for anyone who want to get their feet wet with digital products. This is completely passive, therefore once the product is created and listed, you just wait for it to sell.

Even though the digital products are completely passive, expect to have some revisions to your product to make it better.

Sales, shipping and handling are all automatic. The best part about digital products is, they are non-refundable. Hence no worries about returns.

Do you need a business license to sell on Etsy?

You do not need a business license to sell on Etsy. Most of the seller on Etsy are only part time. However, if you are planning on taking your Etsy side hustle to your full-time venture, it is always a wise decision to open a business account and start using all the benefit that it has. If you’re looking to open business bank account, consider reading this article.

As a seller on Etsy, you’ll be required to verify your address and connect your bank account in order to get paid.

Etsy also collects and remits sales tax on sellers’ behalf therefore you are not required to report your sales, if you live in the states that Etsy has listed in their article.

How to get started and increase sales on Esty with digital product?

If you are trying to test out your digital product ideas on Etsy, I’ve a pro-tip for you.

I know, everyone can do a little research, create couple of pictures and post it on Esty for sale.

But how do you get the ball rolling?

I will share you some of my tested steps I used when I wanted to try out my own digital product.

As in every marketplace it is hard to get traction. You have to compete with so many other sellers within the niche, it almost feels impossible to rank higher. Everyone prime target is to be in front of the Customer.

Yes – you have to do the market research, find niche related keywords, descriptions, upload stunning pictures and explainer video but if your listing is relatively new, it’s hard to rank on the first page.

Etsy has such a great marketing option for every seller

You’d be amazed by how easy it is to use. You do not need a marketing manager to manage Esty ads. You just set your daily budget you’re comfortable spending (start with a dollar) and select the listing you’d like to advertise and then you’re good to go.

With a daily budget of $1, I setup my add for a month and waited for the search keywords to load under stats for my advertised listings. As the keywords started populating, I revised my listing with the new keywords.

You will not be charged for the impressions. The advertising cost is charged only if a customer clicks your advertisement. 

Once ads are on for a month, you’ll start getting some exposure and eventually some sales. You would not necessarily have spent all $30 dollars by month 30.

After a month, you can decide if you’d like to continue advertising with Esty, pause it or completely stop advertising. The advertisement on Etsy not only gives you search keywords but also an opportunity to set your products’ price point. Depending on how much money you spent for a sale, you’d want to price the product similarly, so it covers the advertising cost.

This one strategy I used while getting into selling digital products has helps me learnt a lot on the Etsy marketplace. I learnt about my potential customers, their search pattern, winning keywords and most importantly, I learnt about how to price my product.

Another best way to set price point is testing product cost.

Cheap product price is not always the best price to attract customer. Sometimes, if the product is too cheap, it loses value.

So, there you have it!

All the basic you need to start selling your digital product ideas. Start testing those ideas and create digital products. Who know, one day you might live off of just by selling your digital products. I love the freedom that these passive income source provides!

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This one product category will change how you sell things online- digital products

how to sell digital products

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My story

Product inventory, shipping fees and returns – these are the three top reasons why your profit margins are so low (or at times it even goes to negative) while selling goods online.

As a seller of physical product, you need to stock up the products that sells, ship it to the customer and accept minimum 30-days free returns. Failure to do any of these three, will cost you greatly in customer acquisition.

My wife and I were happy with our online sales but the excessive returns on our Amazon store forced us to look for other avenues of making money. The ones that do not require handling returns. Digital products fall into this category perfectly.

What is a digital product?

As the name suggests, digital product is digital with no physical form, that may be used by a customer as a utility on computers, smartphone, or other electronics. As any other products, it helps solve a problem, or adds value to its purchaser. These digital assets are produced by creator once and sold multiple times without having to re-create them.

What are some of digital product ideas?

The best digital products are the one which solve problems of a community or large number of people. In some cases, it educates people to advance their career or business, while in others, it’s a finished product that helps buyer get certain things done. The following are some of the popular digital product ideas to earn extra money.

Educational products:

The largest number of digital products fall under this category. Be it a simple eBook, presentation slide or an online training course, these digital products consist of the highest share within the industry. These digital products teach buyer on certain topic like how to start blogging, invest in stock market, or take better product pictures. A successful blogger will always have an educational digital product as one of his/her income stream.

An online training is another very popular digital product under this category. With the boom of online training platform like, Udemy, Skillshare, and Teachable, creating an online training program and marketing it is becoming easier than ever before. I discuss how these online training programs are good ways of kickstarting your career in another blog post

Digital template:

This is one of the easy to create, low-cost digital product category that almost anyone can produce. Because they are low cost in creation, the sale price is also low therefore they trade in volume rather than price.

The digital template includes, MS Word, Excel PowerPoint presentation slides, PDF templates, Website themes, and invitation cards and printables. This list is limitless. The digital templates make buyers life easy by streamlining his/her work. It helps him do his job quickly.

How to create digital products to sell?

Level of difficulty in creating a digital product depends on what kind of digital product you want to create. For example, it does not take much to create an eBook, flyer or small template. It only requires some skills and knowledge on the particular field or application. With the advent of technology and free online learning, creating a digital product to sell is easier than before.

Creating a digital product starts with an idea, the type of digital product you want to create and you audience. Digital products like, MS Word and Excel templates just require software and the idea of what you want to create that sells. A digital product like an application to solve a bigger problem might take time and investment to develop the finished product. Printable and Flyers require online template design platforms which are specifically built to create digital products like Corjil, Canva etc. Therefore, creating a digital product to sell depends on what type of digital products you want to create and if there is a demand for it.

Where to sell digital products online?

The digital products can be sold in every online marketplace like Etsy, Amazon, Ebay, Skillshare, or your own website. Some of these are more streamlined toward selling digital products than others. Etsy is famous for printables, flyer design, invitation cards and office templates. You can sell eBooks on amazon. A training courses can be sold in Skillshare, Udemy or Teachables or on your own website. Corjil and Cava is famous for online template design and sharing with clients that are customizable by the buyer before download.

Why I love digital products?

I love digital products for their versatility.

One of the main reasons why I moved to digital products was because, me and my wife were trying to find alternatives to our online business which received a lot of returns. It already takes time and money to setup inventory, sell a product and ship it to the customer. On top of that, handling returns takes a toil into your initial investment let alone profit. You must build a system that takes returns into account from the start. There are others ways of selling good like dropshipping where you don’t have to manage inventory that will be another topic to discuss on some other post.

We wanted a system that does not have any returns or shipping.

We needed a system that does not require carrying an inventory and the cost associated with it.

We wanted to control the cost of a product and not by any other factor (like manufacturing cost, cost of good on landing, shipping etc).

On top of all these, we wanted a product which can be automated.

We do not want to be involved in handling and fulfilment of the product, which means more time for us to research and refine our products.  

Not only these, digital products have so many other benefits that I can never be tired of discussing. It removes the time and location constraints from your business and life – which means your business will stop being a job and becomes an actual business. You’ll have a freedom of choice on when you want to work and where you want to work from. This is the biggest freedom you’ll get in life. I wonder why anybody would not want to have a business like that. Let us know in the comments below if you’d love to have a business like that!

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How to get all your subscriptions for free for life – Dividend investing

“I’m pretty sure you are interested after reading the headline. Anyone, without a doubt, would love to have their favorite subscription (Netflix, Hulu or Amazon prime) free for life. But do you want it so bad that you are ready for the extra efforts you’ve to put in?

Let’s start with my story:

After the birth of my boy, Rhythm, I and my wife decided we need to join an activity club where we can take him to socialize and exercise. We think it is essential for his physical and mental growth. This means a monthly club membership or subscriptions.

As much as I wanted to join the nearby gym where they have pools, kids indoor play group and learning center, I didn’t like the idea of paying them every month. We needed a family membership (higher than the normal fee) so that my wife can work out and loose the stubborn calories that she added during the pregnancy.

At this time my wife had already left the job to become stay home mom full time (or should I say over time?). I needed to find a creative way to manage the subscription, so that it does not eat away our bank balance. What could be the best way to sign up for subscription (monthly $100 to $200) and at the same time does not hurt our wallet? A light bulb went inside my head – Dividend investing!

What is dividend investing?

Dividends are payments issued by a company to the investor for owning the shares of the company. The yearly dividend is usually certain percentage of the total stake that he/she has in the company. This percentage is called dividend yield which is the percentage of dividends for every dollar of stock.

Dividend investing or dividend stock investing is an investing strategy on the stocks that pays out good dividend either monthly or every quarter. As a dividend investor, an individual will look for a good dividend paying stocks in order to receive a cash flow (either monthly or quarter or annual) regardless of where the stock trades at. The dividends are received in additional to capital gains on the investment.  

Dividend investing for income

Most of the dividend investor are looking for a consistent (not always guaranteed though) income regardless of the market fluctuation on stock price. The cash flow is collected from the investment on the stock with dividend based on its dividend yield. The dividend is extra income being generated for holding the stock.

How to start dividend investing?

The best way to start dividend investing is finding the strong stocks with good dividend yield. Choosing a stock with high dividend yield is not always the right choice. One also needs to find the stock with good financial records. The best way to filter through is finding a good dividend paying stock and select based on the company’s financial evaluation. You can either choose stocks with quarterly dividends or opt for a monthly dividend stock. The real estate stocks are the perfect choice for monthly dividend stocks.

How long do you have to hold the stock to get dividends?

The one big factor that determines whether you’ll receive a dividend or not is the date when you acquired the stock. The stock will have a declared dated called ex-dividend date and any shares of stocks acquired on or after ex-dividend date is ineligible to receive the declared dividend.

To receive the dividend payout, you have to acquire own the stock before the ex-dividend date and keep it until the dividend payout.

Dividend income to pay bills

After working for almost two years, my wife decided to retire when she was close to delivering our boy. She wants to become full time mom. She retired with $30K in her savings account. It’s not a lot of money therefore we could not afford to spend it.

I told my wife about my strategy with dividend investing and how I want to use her money to invest in dividend stock to pay off our gym membership. She was not convinced. I created an excel spreadsheet (Click here to download the excel file), with the list of stocks I was going to invest and the share quantities I needed to purchase, in order to provide us consistent income. This consistent income will pay for the $100 gym membership. And the best part to it is, her principal will not decrease. It will appreciate with time. The money will be sitting in her saving account (collecting pennies in a year) any way, if she decides to keep it to herself.

She liked the idea but promised only to transfer $20K. She wants $10K as her emergency fund. I agreed and our journey to dividend investing kicked off.

Since that day, we have not paid for our gym membership with our earned income (except the first two months). We put our earned income to work for us to generate consistent dividend income. We setup the bills pay in our brokerage account to transfer monthly dues to the gym. Therefore, the process is automatic. Dividend investing is such a powerful investing technique that everyone should use to their advantage. Dividend growth investing is another strategy which we can discuss in some other post.

She liked the idea but promised only to transfer $20K. She wants $10K as her emergency fund. I agreed and our journey to dividend investing kicked off.

Since that day, we have not paid our gym membership with our earned income (except the first two month). We put our earned income to work for us to generate consistent dividend income and we setup the bills pay in our brokerage account to transfer monthly dues to the gym. Therefore, the process is automatic. Dividend investing is such a powerful investing technique that everyone should use to their advantage. Dividend growth investing is another strategy which we can discuss in some other post.