If you can understand real estate, you can understand the greatest income-producing tool for retirees.
That was the promise I made in last Friday’s issue. My Retirement Trader readers understand this tool… These are regular investors (just like you). And they’re using this tool to pull thousands of dollars out of the market every month.
You can do the same…
On Friday, I told you how to collect regular cash payments by offering to buy stocks at a discount. This practice is called “selling puts.” I compared selling puts in the stock market to making discount offers on real estate. Make sure to read the essay again if you missed it. You can find it here.
Most of the time, these “discount” offers are not accepted. Most of the trades work out so my readers get to keep the cash payments and walk away. But my service’s history shows that around 20% of the time, our discount offers are accepted… and we are obligated to buy the shares.
When that happens, we turn into “stock market landlords.”
Conventional landlords collect regular income on properties they own. It’s a time-tested plan for getting a good, double-digit annual yield on your money. When you follow our Retirement Trader plan, you also collect income on properties you own. Except these properties are in the stock market.
That means that unlike conventional real estate investing, this type of investing doesn’t involve bank loans, fixing toilets, or dealing with tenants at 2 a.m.
Here’s how it works…
After you buy a stock, you can then enter the options market and sell someone the right to buy your stock at a higher price in the future. In return for agreeing to sell your stock, you collect cash upfront.
No… using options in this way has nothing to do with the risky, “all or nothing” option strategies many people use. This is a very safe strategy. It’s called “selling covered calls.”
Again, this amounts to buying shares, then selling someone else the right to buy the shares from you at a higher price. I know it might sound like a strange transaction. But it happens millions of times a day…
Let me walk you through some numbers, so you can see how useful a tool it is if you’re looking for safe income…
Back in May, I told my readers about an opportunity to become a “stock market landlord” with shares of tech giant Microsoft. At the time, you could buy Microsoft for $29.06 per share. Let’s say you bought 100 shares at the time, for a total of $2,906.
Right after buying your shares, you were able to sell someone the right to buy your shares from you for $29 per share any time over the next two months. You collected $1.23 for selling that right. This $1.23 payment represented an instant 4.2% yield on your investment.
In July, Microsoft was trading over $29. So you would have sold at $29 and kept the $1.23 you got for selling the call… like a landlord selling the property to his tenant.
Now… if Microsoft wasn’t trading above $29, you would have been able to do pretty much the same trade all over again.
Do this “4.2% in two months” trade four times in one year, and you can make 16.8% (while collecting Microsoft’s safe 2.5% regular dividend). On a $50,000 stake, that would generate more than $8,000 a year. That’s a lot better than you’ll get with most rental properties…
And you need to understand… this Microsoft trade isn’t just theory. My readers have sold covered calls on Microsoft many times to make 3%, 4%, even 5% in two to four months.
Like I showed you on Friday, we’re collecting cash by making discount offers that are rarely accepted… And when they are accepted, we’re able to use the covered call strategy to generate even more cash.
Of course, this strategy takes a little bit more work than what you might be used to… But as many of my readers have discovered, it’s simple to learn… and simple to use once you get the hang of it.
And becoming a “stock market landlord” is well worth the extra effort.
Here’s to our health, wealth, and a great retirement,
Dr. David Eifrig
P.S. If you’d like to learn more about these low-risk, high-income strategies, I’ve created an exclusive series of videos for my Retirement Trader subscribers that teach everything you need to know… including how to make these trades with your broker and the best stocks to use these strategies on.
You can learn more about Retirement Trader here. (And you should know… my publisher is offering a big discount to new readers… but only through October 4.)
Last week, Doc explained the power of selling puts… and showed how his Retirement Trader subscribers pocketed profits on a real-life trade. “Many subscribers write in to say it has completely changed the way they invest… and changed their retirement for the better,” Doc says. “It is helping people earn hundreds or even thousands of extra dollars a month.”
See how you can take advantage of this strategy, too, here: A Conservative Way to Generate 15% Returns on Your Portfolio.
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