Every now and then, I like to stop for a moment and look back at what I’ve accomplished that led me to where I am today. Overall, I’m pleased but that doesn’t mean that I am content. I like to reset my goals and raise the bar. Today, I’m reviewing my finances.
I have a decent savings and retirement nest egg but I am a father of 3 young children that still needs to be put through college. With the cost of tuition on a constant artificially inflated rate that exceeds inflationary rates, my concerns grow at an even higher rate. Am I saving enough? Will I still have enough for me and my wife to retire after my 3 kids are put through college? Will I be working until 75 (if anyone would let me)? Will there even be social security when I retire? Look at this chart from https://www.in2013dollars.com/College-tuition-and-fees/price-inflation
So this led to me start thinking about trying something different. Build additional revenue streams. There’s real estate investing. I’ll write a separate blog about that one. There’s potentially blogs like this one that could potentially generate income. But for this post, let’s focus on investing in the stock options market. Now, I’ve dabbled in the markets many times in the past. I’ve even worked as an IT professional for over 10 years at one of the largest financial institutions but that doesn’t make me a great trader.
Many people get intimidated by the options market and it may seem complicated or very risky if you don’t know what you are doing. But then again, so is buying and selling stocks if you don’t know what you are doing. I think it’s fun and very exciting and sometimes addictive. (I sound like I’ve got some issues.) But I hope you’ll find the same excitement and enjoyment following along in my journey to generate an additional income stream. Financial freedom or Bust.
So, the first thing I did is open a Robinhood account. The number one benefit to their app is that they are commission free. The other little benefit is that they give you 1 share when you sign up. In addition, they also give you a share when you refer a friend so please click on this link to sign up and you can be a contributor to my “project financial independence”. I’ll even give you shout out on this blog.
Second thing is I funded my account with $30K though I made a few unfortunate trades before this Coronavirus pandemic hit so my balance is more like $26K at the moment. You can fund it with as little as you want. Don’t invest more than you can afford. I don’t want to see you become homeless because of a bad trade.
The third thing I did was create some principals of investing.
1. I will review my trades in the morning for no longer than 1 hour before I start work and place my trades for the day. I’m not planning on being a day trader. I’m already juggling multiple full time jobs as a father, husband, and as a program manager of a big tech company.
2. Once I’ve made the trade to take the money out of the market, I will not look back to what it could have been. This will only influence the greed in me to make irrational trades later.
3. I have NOT made any money until I have sold the security and have it back as cash. I don’t want to be one of those guys who says “I made 500% of my trade but I held on to it and then lost it all.”
4. I don’t expect to buy at the lowest possible price and sell at the highest price. One thing I’ve learned in my youth is that I can’t time the market.
Now, for the forth thing to do is do some research and find a security I want to invest in. Stay tuned.