Money
Changed my profile song to fit my mood.
I made a lot of money today, and I haven’t even gone into work yet. All I did was sit back and watch my stocks bounce off support. I entered into a few debit spreads also. Want a 92% return on your money in 6 weeks? Check out AAPL. Yep, the Ipod and Iphone maker. I’ve made enough money on Apple Computers in the past year to buy all my friends an Ipod. I trade several different accounts, one I do only high probability spread trades in. So I bought the 160 AAPL call and sold the 165 AAPL call. It cost me $240 and my maximum gain is $260 and the stock only has to move five dollars in six weeks! It moved five dollars today alone! Again, my problem is that I have to be patient for spread trades. I want to make as much money as I can on every trade and it ruins me sometimes. Thats why I only trade spreads in a particular account. And I try to only look at it at the end of the day so my greed doesn’t convince me to alter the original trade. I’ve had my a$$ handed to me whenever I do that.
So, back to my original topic: MONEY
I’ve gotten a few of my coworkers into my blog, which I’m very happy about. Most entertainers don’t know a thing about money. I mean, they know how to make money at work…but they don’t understand how to make their money work for them. I know, it’s an old clique, but it’s so true.
Why is that? Well, I have a theory. Most people learn about money from their parents and their friends. If you come from wealthy parents and associate with wealthy friends then the chances are…you’ll learn a great deal about the leverage of investing your money in real estate, stocks, etc.
However if you came from a lower to middle class background (like I did) you saw your parents working to make ends meet. Maybe you and your friends got minimum wage jobs when you were teenagers and maybe went to college in hopes of getting a job that pays better than minimum wage. Maybe you watched your parents blow their tax return on a TV set and live paycheck to paycheck and not put any money into investments. If this is the case, then it’s not an earth shattering statement to say that your parents are not good role models for how to build and create wealth.
I love my mother with all my heart. She taught me how to save money. Good advice. She also told me to put it into a bank savings account and never touch the stock market. Not so good advice. Bank Savings Accounts pay about 0.5% interest PER YEAR. CDs are a little bit better at 5% a year. If I continued to follow her advice I wouldn’t make that 92% return in 6 weeks on AAPL.
So, how do you learn about money? Start reading. There is a lot of free information on the internet. I started with David Bach’s Automatic Millionaire plan 3 years ago www.finishrich.com Although I no longer use his methods, it was a fantastic starting point to help me build capital for my brokerage account. I became a PhD student at www.investools.com a year and a half ago. That is where I REALLY learned about the leverage of money.
For my money-rich but wealth challenged co-workers (this means YOU if you make $1000 a night but somehow can’t find rent money at the end of the month) the first step is to open up a bank account. Not kidding, I know some of you don’t have a bank account. Once you’ve done that open up a money market account. I use the orange savings account at www.ingdirect.com Automatically, put 10-20% of everything you make into your savings account. Once you have built that up to cover 6 months of living expenses, come talk to me about opening a retirement account. Its called a SEP-IRA.
Oh, and yes if you open a bank account you will have to pay taxes. I do, and so does most of the free world. You will never get wealthy if you fly under the IRS radar. You may be rich for a fleeting moment, but cash in hand burns up real quick by the end of the month.
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