Living on a Budget, Saving Money/credit to build wealth
QUESTION: hey i wanna use credit to build wealth how do i do it?i heard a few stories about how you did it?how can i?
ANSWER: The secret is using other peoples money to make a profit. Can u borrow for 5% and use that money to make 10% return. Example get a credit card that gives u zero % for 1 year on purchases. Pay ur bills with it. Then take that unspent cash that u would have used to pay those bills and invest it for a 5 to 10% profit. Lets say they gave u 2k in credit and u made 200 so in month 11 if you had paid the card 100 a month as a payment ur balance is 900 to pay off. So 2200 minus 900 is 1300 left 4 u to invest with
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QUESTION: I'm not sure I understand that example.Aren't you just putting yourself in debt that way.And how can one make 5 to 10 percent off of such minimal amounts or at all.Can you elaborate pls?
ANSWER: The minimal amounts are how you get started. In the first 5 years you may only make 2k. It depends on your skill set. Going into debt is just a way to access funds. I use stock options good for 2 years to make my money. Ibm will have an ex div day around may 8. Its 150 a share now . the 160 call good till 2018 will be mybuy if ibm drops to say 145 in next 2 weeks as its an 70% probability that i can make 100 off a 1k investment. Like i said earlier. Little bits make the wealth. Dilligence makes the ontime payments. So u pay little or no interest. To me buying 20 24 pks of coke which i will drink anyway. And paying 60 bucks for 10 cases from my investment acct is a profit of 10% when i pay back my investment account at the rate of 7.48 a case. Or 74.80. Which is reg price for the 10 cases. This is how i did it. It aint fast its a slow grind. It may not fit your desires. Tyler hicks said it best 30 years ago. The secret to success is the effective use of other peoples money. Ie going into debt to make a small consistant profit after the debt is paid back
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QUESTION: What is a good.book or recommendation to learn stock options?And does one need a lot of funds in order to do it?When you say put bills on card strategy you include what bills exactly?
bills gas grocery phone bill electric bill water bill auto insurance etc.
as for stock options i learned from asking questions. so here is what i learned. a stock option is a contract that controls 100 share of stock. let us use my actual trade today. you may remember i said i was looking for ibm to drop below 145 a share. well it did today. went to 142.60 and came back up to 144. the so called reason is bad earnings. but since ibm will go ex div in 3 weeks ie around may 8. this is in my opinion just the specialist accumulating cheap stock ie 8 bucks cheaper than what he sold it for 2 days ago at 152 a share. ie he probably was short selling .which means selling stock he didnt own and backing up the sale with cash reserves. and then he finds an excuse to drop the stock and then buy stock at a cheaper price to replace the stock he sold short.
now comes me who has been waiting for this predictable drop and i bought the ibm jan 145 strike call option good till jan 2018 . you buy this long term call for safety. it cost me 1185 per contract. the 140 strike call was selling for 1405 a contract, so i filled my price ie the broker sold to me at my price and now i put a sell order in at 1360 a contract. ie 45 bucks cheaper than the 140 sells for today. thus if a spike up occurs i may execute my sale automatically as my order is entered for 90 days and is called a good till cancel order. if the predictable trend of ibm continues the stock should rise 5 bucks by 8 may and i will auto sell when my order hits the option price. thus i will make 165 a contract gross profit . or 12% return after commission. and then i will be out and waiting for the next drop with my profit from this 1185 a contract investment.
now the reason why i buy two years out is because the market is fickle and i may have to wait to 8 aug to make my profit. so i pay for extra time for safety.
patience and small consistant profits are my secret. cause once i sell the contracts that profit can never be lost. unless the next trade goes south . this is why i trade only a couple stocks and i take small consistant profits. bears win bulls win and pigs get slaughtered
hope this helps you
And 2 days later i am out with my 12% profit . this is the fluke of the market. A reverse like this only happens 20% of the time but its why i bought in as exp tells me it may happen.