It is once again Friday, and its not a Paycheck Friday, that means its time for another Off-Week Rambling. On a quick note though I did forget to mention last time that I did have ADM assigned in the Rollover IRA. I ending up profiting $81.05 (1.54%) the problem with that is I sold $112.05 in Options so I ended up losing $31 (-0.59%). Since I’m not withdrawing funds yet there is no real loss, but when I am living off of options income, which is my goal. That’s why I feel like treating my trading like a business is going to be the key to my success.
Like it or not, for all the talk about Conscientious Capitalism (which I support) unless a business is making a profit it isn’t going to stay in business. That doesn’t mean everything the business does has to be about profits, but it needs to make sure that the money coming in is more than the money going out. The ADM trade is a good example of why its important to treat a portfolio like a business. If I am living off of Options Income that would be my business’s expenses, and if I paid myself $112 but only made $81 I’m an idiot. I can’t take $30 dollar losses on my account every trade, or I’ll blow up my account. I’ll say it this way, long term profits have to be the top priority for trading options and not the short term gains from selling the options. That doesn’t mean it has to be the only priority. My top priority for my family is keeping them safe, but I’m not locking them in the house everytime I leave.
I am completely guilty of focusing too much on the options income myself. That’s partly why I am trying out this strategy of Buy/Writes to capture dividends. I’m not sure if it’s going to work, but it does give me something to focus my attention on besides options income. Right now profits are from options and growth, if I can capture some dividends as well that would just add to the bottom line.
Something I’ve just been considered is starting to reinvest the dividends instead of collecting the extra money. I think that could be a good way to diversify my investments and grow my income streams. I’m not sure how that would work, if it works the way it does in my head, if I can just get shares of the company instead of dividends even though I might not have that particular company when I get the shares. I would be more diversified, and it doesn’t take away from what I am doing now, so in that sense it would be free shares essentially. I’m going to try it. Follow along and see how it goes.
A final thought, I really need to put more work into the website, I know. Finding the time to do that is a challenge right now. I would really like to find a way to share graph of my accounts, so people can follow along. It’s probably not going to happen until I change jobs, unless I find some help.
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