Instant Income

[WebBoard]

From: Glenn M


Has anyone completed the Peter Spann "Instant Income" course? It is coming up relatively soon and at around $3K, I was wondering if people had found that they had received value for money. Has anyone used options to derive income for their properties?


Glenn.

 

[Rolf Latham]

Reply: 1
From: Rolf Latham


Hi Michael

Gee, you are being a bit rough aren't you - "The system only works if you do".

Funny that - like Paul Keating or Malcolm Fraser Reiterated

"there is no free lunch"

Anything that apparently comes for free will extract its price in some other area of your life at some time.

Ta

Rolf

 

[WebBoard]

Reply: 1.1
From: Eric Snow


Glenn,

Trading in options is extremely unwise. It's a zero sum game you see. Every dollar made by one person is a dollar lost by another. Add in brokerage fees and it becomes a negative sum game.
They expire after 3 months, after which time comes another transaction, and another brokerage fee.
Can you consistently predict share prices over a 3 month window? If you can, good luck, but I would rather take my chances down at the casino.

Michael,

Interesting figure you quoted. I would have guessed the percentage a wealthy people would be closer to 25%. Just curious, how much in assets does one need to qualify as wealthy?

"A wife is a luxury, a smart accountant a necessity."

Eric.

 

[Waverlybay]

Reply: 1.1.1
From: Waverly Bay


Hi Glenn
The idea of selling options for "some additional income" (as it is commonly advertised) is not new. I have not done the course myself but have seen the notes and spoken to a number of people who did attend.

From what i have seen and heard from others, PS advocates what is technically described as a "protected covered write" which at first glance looks like a dead winner for profits. Here's briefly how it works: 1) you buy the stock, 2) you buy a put option for protection against the fall in the stock 3) sell a call option against that stock for premium. PS course will set out a whole list of factors which will act as the "trigger" to do each of these steps and more importantly, which stock and option to buy/sell.

As the course participants will tell you - its not that easy in practice ! As Michael said, there's alot of work that needs to be done to perfect any trading strategy ! For example, if you buy and sell the options in periods of high volatility, mistimings can be costly. Stick in the transaction costs and this whole exercise can easily be property's version of a negative gear - without the capital growth

I have no doubt that the PS strategy will work BUT.... like all trading strategies... I strongly believe that psychology and money management is the key to success. From my experience, you can create the most complex trading charts, the trade with the best software and develop what you think are fool-proof entry/exit points.. - but unless you have good money management systems and the right trading psychology: you will lose. A simple trading psychology like cutting losses (rather than hoping for the losers to "come back" ) can take a life time to learn.

So beware of anybody that promises "you can make oodles and oodles of income from stocks/options" !

My suggestion for anyone who wants to get into this stock/options game as a means of earning some "additional income" is.. - get your hands on the following:
1) Market Wizards
2) New Market Wizards
3) Reminiscence of a stock operator
4) The Secret of Writing Options
5) Options manual from the ASX website: www.asx.com.au

The books are available from dymocks and will cost you around $100 total. If you are gong to learn anything about trading, you might as well learn first from some of the gurus who have done it successfully.. right? - hence books (1)-(3) above. Light reading, nothing technical - but insightful.

I'm sure the PS course is useful for some but if the cost is an issue, then only do the course if you are still in a haze after reading the above books and checking out a few nitty gritty "how to trade" type books (surf around in www.stockcentral.com.au).

Cheers

Waverly

 

[WebBoard]

Reply: 1.1.2
From: Sergey Golovin


"Reminiscences of a Stock operator" by Edwin Lefevre is excellent.

Nothing technical and easy to read.
Other good once

"Where are the Customers' Yacht? or a good hard look at wall street" by Fred Schwed, Jr.
It spelled as it is on cover. I do not know why they have done it that way.

"The Battle for Investment Survival" by Gerald M. Loeb.

Serge.

 

[WebBoard]

Reply: 1.1.2.1
From: Sergey Golovin


Sorry "...Yachts"
"where are the customers yachts"

Serge

 

[karsal]

Reply: 1.1.2.1.1
From: Sam Vannutini


At last a subject to stir the passion!
Let me be quite frank here.

Firstly those of you who have not done the course nor trade options should not comment.
Your opinions are based on your own beliefs and experiences. There's nothing that annoys me more than people passing judgement when they are not doing it!

I have done the course. The strategy is good, but unfortunately PS makes it out to be a lot simpler than it is. That is why people go out and lose money.
The startegy is a combination of two option strategies and capital growth. If you want to just learn about options, try David Novac's course. If you like the religious experience do II. Peter spend a lot of time on changing your belief system. I believe that this is the single biggest reason why people don't become rich nor fulfill their potential in life. This explains why there are so many who attend seminars yet do nothing. As a wealth mentor, this is one aspect that I spend a lot of time on.

Options trading is risky, and the key is to be spot on with your technical analysis.
Option expiry can be anywhere from 1 to 12 months. I agree that you need good money management skills as well.

What are my qualifications?
I trade full time from home and achieve 20 to 30% on my cash p.a.
Secondly, I generate $15,000+ per month from Peter's strategy (5-8% pcm). There are some losses along the way, but the wins are much greater.
I have spent the last 8 months studying the strategy and covering all scenarios.

So for some of you who haven't put your money on the line or attended, spare us the token opinions. Like anything in life, if you do the research then apply it and it doesn't work, then maybe you are doing it wrong. I doubt that some one with a multi million dollar business would risk his reputation by teaching something that doesn't work. The startegy is not the greatest earner, but when you consider the risk/ reward ratio, it ain't too bad. Plus you can do it with minimal supervision, and you can sleep at night. It is also easier to gear up than property as a $500,000 margin loan is easier to get than a $100,000 home loan.
My final words of advice: If the share market is too daunting, stick to property. Options are not for every one.

I am happy to discuss this with anyone on my own email, as this is probably not the forum for shares.

Cheers, Sam.

 

[Peter_Tersteeg]

Reply: 1.1.2.1.1.1
From: PT Bear


The ASX in Melbourne has an investor day on the 11 of August. The details if anyone's interested are at:

http://www.asx.com.au/education/InvestorDay_IE2.shtm

PT_Bear

 

[Lissy]

Reply: 1.1.2.1.1.1.1
From: Felicity W.


I attended one of PS introductory nights, and picked up on his information on the options strategy.
Brilliant! I thought. I then went out and learnt as much as I could from books and other sources, then sat down and worked out a strategy that suited me.
It's not what PS teaches, but it works really well for me. I guess the point I'm trying to make is that I think any strategy can be successful once you understand it and make it your own. But until you do that, you'll probably mess up.
That's why I think so many courses produce graduates who either don't do anything or muck it up - they don't OWN the strategy themselves, and don't always put the work in to achieve that.
Hope that makes sense, it's early!
Keep smiling
Felicity

 

[WebBoard]

Reply: 1.1.2.1.1.2
From: Jeanette .


You said:

'It is also easier to gear up than property as a $500,000 margin loan is easier to get than a $100,000 home loan.'

How do you do that? I thought margin loans only lent 30-75% on shares (depending on what they are) but property lends anything up to 100% on the value.

 

[WebBoard]

Reply: 1.1.2.1.1.2.1
From: Glenn M


Thanks for all of your replies.

Does anybody know of a book out there that describes the strategy of buying shares, buying put options and writing covered calls (the PS strategy)? Every book on options I have come across have mentioned these separate components, but never as a total strategy.

I thought it would be appropriate to mention options in this forum, as this underpins and provides serviceability for future Property purchases.

Glenn

 

[paulzag]

Reply: 1.1.2.1.1.2.1.1
From: Paul Zagoridis


Rolf or Victor may be able to clarify things better, but I've never met a financier who would take share trading income into account in determining my loan serviceability (and I've asked a few). The closest I've come is they'll look at 3 years of a company P&L for a corporate loan with Director guarantee.

While I find Peter Spann's approach interesting, I do think you're more likely to find people experienced with the strategy in Stockmarket forums. Covered call writing is not new and buying puts is merely a variation. Peter adds the neat spin of borrowing against real estate to buy the underlying stock. So effectively it's a margin trade without the risk of margin calls and allows you to write covered calls against it.

If you want Peter's exact strategy you may need to either do the course or find a friendly graduate (face to face).

Paul Zag
Dreamspinner
Oz Film Biz is at
http://www.healey.com.au/~paulz

 

[Rolf Latham]

Reply: 1.1.2.1.1.2.1.1.1
From: Rolf Latham


Hiya Paul

A lot of lenders will look at traders with 2 years trading figures

Ta

Rolf