If You Are Overthinking About Investing and Time is Passing By, This is What Happens

Friends, Colleagues, and even Family Members ask me, “Joey, Why are you so committed to investing?”

It is a question that makes me both happy but also sad.

Happy because everyone around me sees my commitment to my financials. But also Sad because they still don’t understand what moves me.

My goal is that by the end of this article, you will understand my point of view towards the future and take action to help yourself along the way.

I got involved in the markets during the 2008-2009 crash. Believe me or not, it was one of the best times to get involved in the markets because it quickly taught me that it was not easy, especially if you were a trader more than an investor.

Although trading is exciting, it takes time to analyze the markets daily. Try to find what is moving and catch the perfect windows to jump in and out. Unfortunately, it is an ideal recipe for burning out quickly.

On the other hand, let’s say that I’m lazy. I don’t want to be stuck to my computer all day looking for opportunities. So use that time in other productive activities while the markets do their thing, and you still get paid for being patient.

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To answer the first question, “why am I so committed,” is because I realized the earlier you begin investing, the sooner you can reach your goal and the less time you have to spend working for someone else. Understand that I said “Investing” and not “Trading.”

Most financial advisors teach individuals about the 4% rule at retirement. Unfortunately, that is a horrible strategy because it involves withdrawing 4% of your capital to live and cover expenses every year. As a result, most people will have little to no money towards the end of their years.

It puts a severe amount of pressure on their kids and family members. Now, they have to cover their expenses and yours as well.

Who wants to put that pressure on their kids?

I’m pretty sure no one does. That is why I have an alternate strategy that will work wonders for everyone.

The idea is to invest in assets that will cash flow enough money to cover your expenses while leaving your capital intact. Then, when we die, our kids or family members can inherit that capital (investments) and make their lives easier.

With Fundrise, you can become a digital landlord anywhere in the United States without the hassle.

How it works:

Although there are several cash flow assets, we will concentrate on dividend-paying stocks and ETFs.

Why?

Because when you invest in dividend-paying stocks and ETFs, you have several ways of making money. The most common one is capital gains as time passes. If they increase their dividends with time, your cash flow also increases. You can also learn how to sell covered calls and other income strategies to bring even more money each month.

While all of this is happening, you are not depleting your capital. Meaning your net worth will never decrease. On the contrary, you can keep increasing your net worth while living the life you want.

So, What happens if you keep postponing your investing?

In simple words, you won’t have enough cash flow to retire comfortably.

One of two things happen:

1. You can’t retire; hence, keep working longer.

2. You have to increase the money you invest to catch up.

With Robinhood you can get cash dividends from well-known and established companies like Coca-Cola (KO).

Let’s look at an example:

Mimi and Joey both begin with a $3,000 initial investment. After that, both invest $300 monthly and receive an average annual return of 8.5%. Mimi is 20 years old, while Joey is 30 years old.

In 10 years, they both have $60,826.

In 20 years, they both have $190,935.

In 30 years, they both have $485,107.

And this is where things take a turn. Joey was 30 when he began investing and is now 60 years old and ready to retire.

Meanwhile, Mimi has another 10 years of compounding before she turns 60 years old, which will end up with a portfolio worth $1,150,226.

Who will have a better life using the 4% rule?

If they both use the 4% rule at retirement, Joey will be receiving $19,404 from his withdrawals. On the other hand, Mimi will be receiving $46,009 for her withdrawals.

You can say that Mimi will have a better life because she will receive more than double what Joey will receive. He will have to figure out how to live on $19,404 a year. However, both of them will run out of money by age 85.

Why?

Because regardless of how big your portfolio is, if you withdraw 4%, you will deplete your account in 25 years.

Just do the math:

Joey – $19,404 * 25 years = $485,100

Mimi – $46,009 * 25 years = $1,150,225

In the end, neither one will have anything to give to their kids, and if they live past their 85 birthday, their families will have to support them for the rest of their lives.

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What if they cash flow instead of withdrawing capital?

Now, this is where my strategy beats the financial advisors. Instead of withdrawing capital, we can build a dividend-paying stock and ETFs portfolio. The investments can be paying 3%-4% today, but if they increase their dividend payouts yearly, by the time you are 60 years old, you could be receiving dividend payouts well above 6%-8%.

Using this conservative estimate, Joey could receive anywhere between $29,106 to $38,808 in dividends. But, of course, it could be higher if Joey learns how to sell covered calls or other income strategies.

As for Mimi, she could receive between $69,013 to $92,018 in dividends. But, again, it could be higher if she learns the strategies previously mentioned.

I think both of them could live comfortably with those amounts, and the best part is they will never run out of money. Their portfolios will remain the same or even increase. Then, when their time is up, and they move on to a better place, their families will inherit their money, or they could give their money to charity.

It is your money, so do with it what you feel is the right thing to do.

Sin companies that pay your expenses and more.

Key takeaways:

  • The sooner you begin, the sooner you will reach your goals.
  • Concentrate on cash flowing assets instead of accumulating money to withdraw in retirement
  • Teach your kids and family members, so they too have a better life
  • The 4% rule is widespread; however, it is flawed
  • The more you postpone investing, the more money you will have to invest in catching up.
  • Begin your investing journey today

Note:

If Joey wants to have the same amount as Mimi by age 60, he will have to invest $750 instead of $300. That leaves Joey with $450 less each paycheck. So don’t be like Joey. Start now!

Now, begin your Road to Wealth!

Leave your comment below. If you liked it, pay it forward. Please share it on social media and help others become successful as well. Your success will be the result of two things: Knowledge and Action.

Follow me on TWITTER, PINTEREST, INSTAGRAM, LINKEDIN, and FACEBOOK for more posts and updates. You can also reach me here with any questions.

If you are not receiving dividends, you are missing out!

DISCLAIMER: Please read our disclosure policy here. This post contains affiliate links, and I earn from qualifying purchases at no cost to you. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Road-to-wealth.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles, and other features are for educational purposes only and should not be construed as investment advice. Information for any trading observations is obtained from sources believed to be reliable. Still, we do not warrant its completeness or accuracy or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk, and it is your sole responsibility to evaluate the information’s accuracy, completeness, and usefulness. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein.

MARKET REVIEW WEEK 21-25 FEB & DIVIDEND INCREASES

We have seen images and videos of everything occurring in Ukraine over the last week. The stock market was anticipating the attacks and has declined quite a bit from its top the first week of 2022. It has steadily declined ever since, although we had a bounce the last couple of sessions.

Looking at the S&P500 (SPY) chart, prices have bounced before from the $420-430 area. This time, the difference is that we are currently under all the simple moving averages to include the 200 SMA. It’s as bearish as you can get in the stock market.

S&P 500 (SPY) as of 25 Feb 2022.

To turn bullish again, we must trade above the averages, which means prices need to climb over the $450 area.

Pullbacks and market sell-offs are great buying opportunities for long-term investors since you can buy your favorite stocks at discounted prices. It’s like going to the clearance section at your favorite store.

Pepsi (PEP) is a proven company through the ups & downs of the stock market.

History shows that stock markets tend to drop during wartime. However, once it’s resolved, the stock market tends to begin to climb up once again.

With that said, traders have their hands full, trying to figure out which side of the trade they should position. The swings right now are significant, and traders may find themselves in losing positions relatively quickly.

On a positive note, several companies announced dividend increases over the last couple of weeks, while no company has announced dividend cuts.

The picture below shows which companies announced their dividend hikes:

Dividend increases for the last 2 weeks of February 2022 by Joey Ortiz.
Dividend increases over the last 2 weeks of February 2022 by Joey Ortiz.

Overall, we are trending lower in the stock market. Ensure to have a plan and execute your plan as close to perfection as possible. Follow your rules and stay true to yourself. Your plan should account for up and down markets as well.

We will be back next week with more updates. Glad to help!

Now, begin your Road to Wealth!

Leave your comment below. If you liked it, pay it forward. Please share it on social media and help others become successful as well. Your success will be the result of two things: Knowledge and Action.

Follow me on TWITTER, PINTEREST, INSTAGRAM, LINKEDIN, FACEBOOK for more posts and updates. You can also reach me here with any questions.

From the comfort of your home, invest anywhere in the united states with Fundrise.

DISCLAIMER: Please read our disclosure policy here. This post contains affiliate links, and I earn from qualifying purchases at no cost to you. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Road-to-wealth.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles, and other features are for educational purposes only and should not be construed as investment advice. Information for any trading observations is obtained from sources believed to be reliable. Still, we do not warrant its completeness or accuracy or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk, and it is your sole responsibility to evaluate the information’s accuracy, completeness, and usefulness. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein.

NEW YEAR, NEW RECORDS! 2022 STARTS WITH A BANG! HERE IS YOUR NEXT MOVE.

The S&P500 (SPY) had a solid finish to 2021. It rallied on Monday into all-time highs and set the highest point on Thursday, 30 Dec 21. On Monday, 3 Jan 22, the market opened positively, ending the day higher and within 1 point of yet another record.

The cheerful open to the year indicates no re-test of the newfound support (former resistance) around the 471 area. Instead, everything points to the trend resuming to the upside into uncharted territory. It looks like it will take much more than the Fed printing money, another pandemic, or a new crisis. Markets seem unstoppable.

Many new investors are afraid of jumping in at the wrong time, which is understandable. However, the markets are breaking record after record and showing no signs of slowing down.

AMAZON (AMZN) keeps growing year after year. Your account can too!

What to do next?

There are many ways to skin a cat. It’s just a saying people. It’s not literally. However, we are never short of strategies and possibilities as traders and investors.

A. Test the Waters

If you are brand new to investing, I suggest NOT jumping with both feet. Test the waters first. The idea here is to invest half of what you have available. There are two reasons for that:

          1. By investing in small portions, you are not risking all of your capital, but at the same time, if the markets keep pushing higher, you are participating and adding gains to your portfolio.

          2. With the same token of investing small portions, if the market decides to pull back and take a breather, you will have capital free to be deployed as you wish and at a discount. Who doesn’t like discounts? I do!

B. Learn to Sell

A strategy I use is selling options. I like to sell options on volatile stocks and also on support areas. In my case, the idea is NOT to get assigned the shares. Instead, collect premiums with each sell, rinse and repeat.

If you want to own shares on a specific stock, you sell the options at the price you are comfortable buying it. Keep in mind that each contract holds 100 shares when you sell options.

For example, You don’t mind owning AT&T (T) shares at a $20 strike price. Therefore, you will sell the $20 put option.

With Fundrise you can become a digital landlord anywhere in the United States, without the hassle.

What happens?

1. Next, multiply the strike price by 100 shares, which will give you the amount needed in cash. To sell this put option, you need to have in your account $2,000 available (not invested) per each contract you plan on selling. This cash will be used as collateral if you get assigned, and this will be the money used to buy those shares. The same thing happens with each option you sell regardless of the stock.

2. Once the money is available and ready to go, one of these two possibilities will occur:

          – The stock price falls under the option strike price, and you get assigned those shares. In this case, you will buy 100 shares at $20.

          – The stock price remains above the option strike price, and the option expires worthless. Therefore, you keep the premium while releasing the cash held as collateral.

Keep in mind this is an investing mindset. We are not here to jump in and out daily or intra-day. If that is your mindset, you are a trader and not an investor.

STARBUCKS (SBUX) can pay for your coffee with their profits. What are you waiting for?

TRADERS

As a trader, you need momentum. So I don’t recommend any newbie to trade first. Instead, start with the basic easy steps of investing, then move up the latter.

If you are a little more experience, then look for weekly breakouts. For example, during the weekend, change the setting on your chart to weekly. Then, set an alert at the high of the week that just closed. If you are doing it during the week, ensure to set the alert at the high of last week.

Once the alert goes off that a break out of that high occurred, you can take a position with shares, you can sell puts, or you can buy calls. The choice is yours.

Ensure to preset your stop-loss price (area) and your targets.

Are you going to sell all of it once you hit an area?

Are you selling half and riding the other half for more profits?

You can also sell 1/3 of the position at target #1 (T1), sell another 1/3 at a higher target #2 (T2), and let the last 1/3 ride as high as possible for maximum profits.

As I said, there are many ways to skin a cat. First, you need to figure out which strategy makes more sense. Not all methods work for everyone. Please choose the one you like most and become a master at it. Once you become a master, you start adding to your toolbox with new strategies in a few years. Join groups and share your experiences. Also, listen to others and learn from their mistakes.

Now, begin your Road to Wealth!

Leave your comment below. If you liked it, pay it forward. Please share it on social media and help others become successful as well. Your success will be the result of two things: Knowledge and Action.

Follow me on TWITTER, PINTEREST, INSTAGRAM, LINKEDIN, FACEBOOK for more posts and updates. You can also reach me here with any questions.

From the comfort of your home, invest anywhere in the united states with Fundrise.

DISCLAIMER: Please read our disclosure policy here. This post contains affiliate links, and I earn from qualifying purchases at no cost to you. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Road-to-wealth.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles, and other features are for educational purposes only and should not be construed as investment advice. Information for any trading observations is obtained from sources believed to be reliable. Still, we do not warrant its completeness or accuracy or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk, and it is your sole responsibility to evaluate the information’s accuracy, completeness, and usefulness. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein.