Podcast – Episode 107 – How Nelson Makes 10% A Month With Credit Spreads


Podcast Transcript

I have the pleasure of introducing you to Nelson Wennerlund. I call him Wonder Man. And you’ll see why his results and his accomplishments have been amazing. So, without any further ado, let’s just get into it. Nelson, how you doing?

Nelson: I’m doing great today. Allen, how are you?

Allen: I’m wonderful. I’m happy to talk to you. You’re one of my one of my favorite people to talk to you.

Nelson: Oh, good. Yeah.

Allen: So I know a little bit about you know, you share a little bit about you know, who you are and what you do. But for our audience, once you once you tell us, you know, give us some background into who is Nelson, and how’d you get to where you are today.

Nelson: Well live outside of Nashville, Tennessee, newly retired officially about five years ago. But I’ve been keeping busy with doing this, that and the other and volunteering. And in some of the stuff that I’ve wanted to do that I hadn’t had time to do spent 25 years in the restaurant business, I spent 15 or 20 years, almost 20 years in the financial services business. And when I was 60, I decided that I’d had enough. And I retired with my wife’s blessings. And so I’ve been kind of just volunteering and doing stuff since then. So trading, what I’ve been doing as far as trading back in the 90s. I started, I got a thing in the mail from a guy won’t mention his name that was gonna teach me how to make tons of money. Trading commodity futures.

Allen: Mr. Roberts. Yes. Mr. Roberts?

Nelson: Yes

Allen: Yeah, I got a quote. I had it. I don’t know where it is now.

Nelson: Yep. And so actually, I won and lost a few small fortunes for me at that time doing that for about I mean, I dabbled in anatomy for about 15 years. Wow. So, you know, I would I would lose, and then I would, you know, get all excited, you know, I’m gonna do this again. And, you know, I had a few small wins than that, you know, get over excited and make a dumb move and all that. Yeah, you know, same story, you know, so, and so I, but I did, you know, I, I did enjoy doing it, actually. And so, and then, but in 2010, I stopped and focused on the business I was part of and, and then I got something else in the mail about selling naked puts options. And I had been on the periphery of options, but it was just, you know, I didn’t understand them. And it was confusing, seems like a sucker’s bet to me, and all this kind of stuff. But I didn’t do any research in it, that did research for this kind of bought this course and started doing just some naked puts, and actually did really well at it, you know, identifying stocks and this kind of thing, following this certain method and this than the other and so, I thought this option thing one so bad, after all, I can make some money at it. And I wanted to be able to do something in my retirement years that would bring extra income.

Nelson: We had enough to live on wasn’t really done it to, you know, have to put food on the table, but wanted to, you know, help grandkids with college and, you know, that type of thing and give to causes that we like and, and help people out and that type of thing. So we wanted to so that’s really what I’ve got into it for. Discovered Option Genius, actually, by just wanting to get into option trading, and just went on the internet and started, you know, looking at, you know, I just counted all the guys who were getting on big airplanes, and, you know, like, they owned them, you know, and stuff like that. And so, you know, I figured that that was, I didn’t want something that was get rich quick, I knew that that I’m smart enough to know, that didn’t work, that doesn’t work. You know, um, you know, the turtle won the race. And so I wanted something that was understandable, was consistent, was slow, was high probability, all that that’s fits my personality. And when I ran into you Allen and just listen to some of your stuff, and all that, and, you know, that fit with my personality, I’m sure there’s some other one good ones out there. But there was a lot of adjusting and doing this and doing that and day trading and, you know, all this kind of stuff. I don’t want I didn’t want to do that. I don’t have time to do that. I have other stuff going on. So that’s how I kind of, you know, options fits with my personality and doing the passive trading the are already owned about some pretty good positions about 10 stops. And so I just started doing covered calls.

Allen: And this was in your retirement account?

Nelson: Yeah, yeah. It’s all in my retirement account. I don’t have a separate account.

Allen: Okay. So everything stays in there?

Nelson: It stays in my retirement account. I’ve dabbled with another account. But, you know, most of my money’s in my IRA. Plus, I don’t have to pay any capital gains tax on anything in retirement funds. So that helps to, you know keep a little bit more. So that’s, you know, with naked puts with an IRA, you know, it’s there harder to do so, and yet about the full amount. So I don’t, you know, don’t do as many of those unless a stock is getting close that I own that I want to buy more of, and that really hadn’t happened much lately. So..

Allen: Now, you said you were in the financial services? Or what do you do this?

Nelson: I was a, I started out as a loan mortgage originator like you used to do. And then I was offered a partnership in a mortgage company. And I took that and then we got gobbled up by big fish and I retire.

Allen: Oh, very nice. So is that how you were able to retire? I mean, cuz you did it at 60. So that’s a little bit earlier than most people?

Nelson: Yes. So I was able to.. my partnership was, I was rewarded handsomely. And, and we were a successful mortgage firm, local mortgage firm. And we did well. And so I was rewarded. And I’m very grateful for that.

Allen: That’s awesome. Cool. Yeah. So in your spare time right now. So you’ve been retired? For what? like five years? Six years?

Nelson: Hmm hm

Allen: Yeah. Okay. So basically, you’re, we’re looking for something to do. Yeah. And that’s, that’s how you stumbled upon and say, Oh, let me let me see what this is all about kind of thing.

Nelson: Yeah I wanted to build residual income, not to actually, you know, to live on day to day, but to just supplement some traveling and stuff. Without I mean, you don’t know what the future holds. We don’t know if, you know, I don’t want to be I mean, obviously, my wife and I don’t want to be a burden to our children when we get older. And so we want some of that stuff built in, you know, that we would have enough money in our retirement funds that if we had, you know, to go into assisted living or something like that, and there would be money for it. And so, and that’s really what we wanted to that, that that was my main aim just to build grow over time. So if that happened, we would be covered. And if it didn’t happen, we would have something to leave our children.

Allen: Sweet, nice. I mean, it’s, it’s rare to see people in that position. Most people are the other way around, you know, they’re becoming part of the sandwich problem, I guess they call it you know, where the, the kids are taking care of their own kids and then taking care of their grandparents or their parents. And it’s the they’re getting squeezed on both ends.

Nelson: Well, when I was in the mortgage business, just quickly, when I was doing loans for people, and I did over over 2000 loans at a 10 year period. It was shocking how many people had little or no, nothing in the retirement funds at even 40+, and they had a company that would match. And they just said I can’t afford it. I couldn’t afford it. But yet they had $800 truck payment.

Allen: And they’re buying a brand new house.

Nelson: So I mean, it was like I you know, right there I’m thinking that’s not gonna be me. Yeah, so, yeah, this is another thing that motivated me to, you know, find something that would build on my retirement cuz you don’t know what’s going to happen. And you know, that retirement fund can go quick. A six figure retirement fund can go quick. You may not think so. But it can.

Allen: Yeah, no, I mean, one heart attack. So that’s right there.

Nelson: Right.

Allen: So now you’re, help me out here. You’re you’re over 65? You are 65?

Nelson: I’m 65.

Allen: You’re 65. So technically, you can take out money from the IRA?

Nelson: Yes. After 59 and a half, I could.

Allen: Oh Okay. Okay. So basically all the money in the IRA that you’re trading is growing, no income tax, no, nothing. And then you can take it out for like you said, your travel and your charity and all that stuff. Awesome. So you like the best of both worlds?

Nelson: Yeah, well, that’s my plan. Yeah.

Allen: Cool. So did you try anything else before that you haven’t mentioned yet before Option Genius?

Nelson: I’ve dealt with in a couple other folks. I don’t remember their names now. But they were they were very educational and everything. But you know, the more I got into it, the more confused I got quite honestly. And they started talking about like, and I’m sure if I studied it, it would be fine. But like butterflies and doing this and taking this off and this and that and the other, like I don’t kind of want to do all that. Okay, I’m not a day trader and I don’t want to, I don’t want to be that involved. I want to be a passive trader. I want to get on my computer 15 minutes every day. Unless it’s you know, trying to do a, you know, doing some research on a trade, I wanted to check my trade, take 10 minutes and go do what I want to do. And you’re the one that offered that. Like, I mean, I could have done it with the others, but I would have probably lost all my money. Because, you know, again, they’re, you know, listen, if you want to do all the adjusting and all that stuff, that’s fine. But if I’ve got a great trade, I don’t want to have to adjust. You know, I know you have to sometimes, obviously, but yeah, you know, and I had to last month, but still, you know, yeah, I don’t, I wanted something simple, strategic, easy, high probability, you know, just prod along, if I can be, if I can, if I can go in the right direction, you know, which is up, just incrementally 3 to 5% a month? I’ll make, I’m gonna make millions. You know, 5 percent a month.

Allen: Right. A per month. Yeah, yes. Yeah.

Nelson: And that’s, you know, quite honestly, your course. That’s easy. I mean, to me, it is so..

Allen: I mean, you’ve proven it, right. Yeah. I mean when I first got started, when I, you know, options and stuff, I really was like, “Oh, yeah, you know, the adjustments” because you do a trade. And then you can, if it goes bad, you can adjust it, oh, man, I’ll never lose on any trade, I’ll just be able to adjust my way out of it. And you learn really quickly that the adjustments, they you know, they add more risk to it, because you’re adding more money most of the time. And then if it keeps going against you, then the loss just ends up really much bigger than you anticipated in the beginning. And then, you know, I guess the older I get, and really the the more assets I have, the less I want to be sitting in front of the computer, and the less I want to be worried about adjustments, and hey, what am I going to do tomorrow? Is everything okay? And being stressed out about all that time, so I totally hear where you’re coming from. So I’m sure everybody’s wondering. So what have your results been?

Nelson: Well, in 2020, despite I will mention this number, despite losing $92,000 in about 45 minutes on that Tuesday after the COVID

Allen: On the COVID crash? Yeah, the COVID bear market?

Nelson: Yeah you know, they’ve taken that hit, I still was up 24% for the year. And so, and this year, so far, I’m up about 56% through the first six months.

Allen: So 56% in six months, right?

Nelson: So I’m sure I’m gonna break the 100%. thing, and I’m gonna get my award from you.

Allen: I’m still working on that. We haven’t come up with it yet. But yeah, definitely want to, I definitely want to get you one. So what strategies are you doing? How do you get the 56%?

Nelson: Well, I just I do just almost exclusively, I do make some money on covered calls. I’m very conservative, because I like my stock. And I don’t want to be I don’t want to call the way unless I want it called away. And so that’s only happened once this year. And so that’s really, you know, otherwise, I’m just, you know, between that I’m just trying to lower my cost basis on my stocks, covered calls and in reinvesting the dividends. And so but I do just vertical spreads almost. And, you know, this summer, I’m doing iron condors because that’s what your training told me to do. So I like to do, I’m learning more about them. And so mostly I just do vertical spreads. I’m also, I also do weekly and daily spreads on SPY.

Allen: Okay

Nelson: I use a high probability 90% Delta, or 10% Delta, I should say, I’m an optimist so I always say the 90%. 10% Delta and, you know, I’ve had an occasional loss, but that’s really helped also with my return, but my bread and butter is still the monthly vertical bull that really a bull put spreads is what I’ve been doing this year. So far. I haven’t seen a whole lot of really great call spreads, but mostly put spreads from a $5 put spreads with, you know, 82%, 83%, 84%. Making 10% just doing it over and over and over, you know, on the monthly and I haven’t had a loss yet this year on that. Have on the daily and weekly.

Allen: But okay, say that again, you’ve been doing these like these, we call them layups, right? So the layups, you’ve been..

Nelson: Yeah, yeah.

Allen: Since January. Is that when you started with the layup?

Nelson: No. Well, I’ve been doing. I mean, I had been in the course.

Allen: Okay. January 2020.

Allen: Okay, so you’ve been doing them. If you were in the past year in the passive trading formula program in the course. And so you were that in January 2020. And then from April 2021 that’s when you join the layup mastery program to..

Nelson: Yeah the credit spread

Allen: Right, the credit spread mastery and then since then you have not had a losing trade at all?

Nelson: Not on my vertical spreads. I have on my daily head a couple of my daily and one of my week

Allen: Right, I mean the but those are obviously those are riskier. Yeah. But that’s amazing. How many of the monthly trades have you done?

Nelson: Oh, gosh you asked me that. I’m probably I averaged about five a month, five to six months. I would say 50 to 55 spreads, I’m guessing. Um, That’s not right. You know, 30? Probably around 30. Yeah. But in June, I only did one because I was doing those iron condors so.

Allen: Okay, so you’re not counting that. Okay. All right, but that that’s phenomenal. That’s amazing that you’ve had so much success with that one. Simple trade. Right? Yeah. That’s cool. Kudos to you, man. That’s amazing. so on. So you said in 2021, first six months, you’re up about 53%? Or 56? I don’t remember..

Nelson: 55%

Allen: 55% Okay. And then in 2020, even after the big market crash, the bear market and you lost a ton there. You still were up? 24% for the year. Yeah. So before you got or you found option genius, what were your returns then that you remember?

Nelson: Oh, gosh, they were really super hit or miss, I was basically breaking even. But I was only trying, I didn’t have scaled up trading. You know, I mean, like I do, you know, I was really basically trading two or three contracts when, instead of, you know, 40 and 50, like I do now. So..

Allen: I mean, I wouldn’t blame me if you if you don’t have confidence in the system, right now, if it’s hit or miss, or it’s when a couple of times, and I lose, and then I win, and I lose, it’s there’s nothing there to give you the ability to say, you know what this works, I’m gonna start putting more money at risk.

Nelson: Right. And that, this, that this strategy, I mean, it was a good knowledge base. But I didn’t care for the I just didn’t care for the strategy. It didn’t fit my personality. So it was a little half flying, you know, doing set, you know, doing 30 deltas. And that’s just too risky for me, and then adjusting out of that in, in the couple times, I paper traded all that and adjusted, I still lost money. Plus, I’m not a guy that wants to keep a losing trade a loser and try to eke out a few dollars. That’s just my personality. I rather let it go and move on to another trade. So yeah, but yeah, that’s just me. That’s just my personality.

Allen: Right yeah. Because if you come in, you know, 30, delta, even sometimes 25, you’re gonna end up adjusting a lot more than if you come in much lower. It’s rare that you won’t have to adjust if you come in at that high. So, yeah, okay so..

Nelson: I don’t need to actually, I don’t need that action to make me feel like I’m a big time trader or anything. That makes sense.

Allen: Yeah, I mean, some people they have that mean, and some people they actually get addicted to the, to the, you know, all the madness and watching the talking heads on TV all everyday looking for ideas and being in the chat rooms. And, oh, what do I do now? What about this? Oh, that’s the craziest thing I see. You know, people, they put trades on. And then they go to like a Facebook group or something online forum, they’re like this My trade, I’m in trouble. What do I do now? And then they just get advice from who knows who on the other end? You know, people that maybe have never put a trade on before they’re giving them advice. Oh, you should do this. And you should do that. It’s like, Ah, no, that’s not how you do it.

Nelson: That’s what I think it’s great that you Allen, one of the things is that if I have a question, I can shoot you an email and you’ll answer back. So and and that’s one thing that you don’t get with other folks. I mean, you might get somebody answering you back, but you don’t know who got out.

Allen: Yeah, I mean, that’s why we you know, we try to keep our system smaller so that we can actually give that one on one attention and so I can like right now I’m handling all the trade questions, you know, so anything that comes in. Now we do have somebody that we’re training to help take off some of the load but for any member, any student they get a direct answer for me so that’s something that I want to keep doing. Okay, so what was it that really turned the corner for you? Was it just that you found a strategy that work that fit your your your style or your your personality or was it something else that helped you go from hit or miss to wildly consistently profitable?

Nelson: Well, I really, the way he does class, Utah in the in the course materials and stuff, were super understandable to me, and, and so you know, I’m a guy that, like I made some rules not and so when this happens do this I’m that’s sort of how I’m wired. And you know, I don’t I’m not a guy that’s gonna look at a chart and sit there with angles and all this kind of stuff, I can get a lot of support and resistance and, you know, the simple stuff like that and moving averages, and, you know, but it’s really, you gave me a sense, and a confidence that if we do this, most of times, you’re going to come out as a winner, or you’re going to be profitable, and you’re not looking. You know, if you’re looking for 10%, monthly, month after month after month, and you know, and even if you make less than that, that’s okay, you know, and so I mean, you don’t go into it, like, Oh, you know, you’re gonna make 80%, you know, and, you know, some unrealistic expectation where people do they just end up quitting, that’s not the goal, the goal is to, you know, figure out a strategy.

Nelson: And one thing that you taught me is that, you know, you can look at a chart and stuff, and it’s really incomplete. You know, it’s incomplete, because you don’t know what’s gonna happen tomorrow, perfect example, is this past Monday. I mean, you went from Friday to Monday, that just crashed red, now it’s up, you know, you know, a whole, you know, for its back even so, you know, you just don’t know. And if your eye tells you, they know, they’re lying. So you know, so you don’t know. So you have to take that information, and make in take what it says to you. Make an informed decision, and then you just have to put the trade on, I learned that from you. And that revolutionized how I did things because to me, I always was thinking, “Okay, is there something else I need to know?” “Is there another indicator that’s gonna make me feel all warm and fuzzy?” and you know what, there’s not one. And so I take a few things that I look at that I think it’s going to continue in that direction, it may not. And then I’ll make a high probability bet that it’s going to, instead of a low probability bet that it’s going to end so. And that’s an edge and a strategy that totally fits me, I can do a trade that’s got a 85% probability of winning, I mean, if you can go into a casino, you’ll own the casino in about 4 hours.

Allen: Yeah, they won’t let you get away with that. They’re either beat you up, or they put you in jail or something.

Nelson: You go into the back room. Right, so that, like, you know, that I was I monitored in statistics in college. So that made a big sense to me, like, you know, I know that, that I’m going to lose some time, it’s inevitable, but the probability that I have a greater probability of winning than losing, and so that’s a strategy that’s an edge that I think works for me, you know, once it’s passive, it’s passive. And so, you know, I think that that right, there is what made me turn the corner, and in your credit spread mastery course, showing that over a period of time, how well you did with your count, through ups and downs was a real inspiration for me also not tucked up for real inspiration for me to think, you know, a regular person could do this. You know, you don’t have to have an MBA from Harvard, or some somewhere else to, or something to do all this. So a regular person who is serious and, and can do the same strategy that works over and over, can really build upon it, and, you know, reach their financial goals.

Allen: Yep. And I mean, I’ll tell you the truth, like, you know, you took the rules, you took the system, and you’ve done better than I have at it this past year. Seriously, you know, you’re from what you said, you have a losing trade, I haven’t had losing trades. So, you know, it’s like, maybe I need just need to give you my money be like, Hey, can you manage this stuff for me? But um, so now that you have a decent size portfolio, so you have a bunch of stock that you’ve had for a long time, and you do and the spreads, and then you’re also doing some dailies and weeklies, so how would you break it down in terms of percentage? How much do you do in each?

Nelson: So I would say 50% of my IRA is in 10 Stocks.

Allen: Okay

Nelson: Maybe a little bit higher that but less than 60%. And then the rest, I just keep keeping, you know, I keep it in cash, but it’s cash that I use to trade spreads and then I have backup, you know, reserves that I have for emergencies and stuff like that you know, reserve fun or rainy day fund or emergency fund whatever you want to call that so I have a really even have a savings account so I can because I can get this money out in a day, right? If I had to so I have a non that something I’m not going to touch that you know and then I have the rest of it. I really considered cash that I will invest in my spread trading.

Allen: Okay, and how much do you do monthly versus weeklies or dailies?

Nelson: Most of my I would say 60% of my that I do and or maybe 70% I do in monthlies

Allen: Okay.

Nelson: Okay, and then the rest I will do in three day-a-week, I guess the dailies, and then the rest of would be on the weeklies

Allen: And do those take a lot of time, the weeklies and the dailies.

Nelson: No I have a system that I sort of go by, but I, I use the same system for the monthlies as I do for the weeklies and the dailies. Really, it works. I mean, I use a higher Delta, Delta. And so and I don’t make you know, 10% obviously, I make three to 4%. But, you know, that compounds over, you know, every week, so..

Allen: Definitely, yeah, yeah. So now, like once you turn that corner, right? And once you started doing well, once you started getting confidence and scaling, what was something that surprised you about the whole process?

Nelson: The process and how we do it is scalable. That’s what I was sort of surprised, like, you know, I never, I didn’t think that, you know, I figured out what I had to, you know, maybe have a new strategy by now that maybe this didn’t work over a longer period of time. And it’s a surprise me that it actually, I mean, I know, yeah, and I know, you’ve said this, but, you know, nothing lasts forever. And I figured I’d have to be switching strategies or something. And I will, if there’s, you know, a long program, or you know, long bear market, you know, I’ll have to be doing more calls and puts, obviously, and all that type of thing. But the rules still apply, I would think it’s pretty much it’s the same strategies, just the other side is the opposite. So I’m thinking, you know, I’m always tweaking I’m, I mean, I’m always evaluating, I should say, you know, the strategy, you know, I mean, I’m always paper trading lower deltas to see, you know, how I would have done at the same trade, you know, and I mean, in this market, even at an 80 or 20, delta, you know, I’d probably still doing really well, but you know, I don’t want to own up I would say on the weeklies, but and then on the monthlies I always paper trade them as if they were 30 Delta, just to see how would go and they haven’t been that great on a 30 Delta. But they’ve been, so I’m thinking, why would I do that, like, I’m not going to put my account at risk over a few more $100 or so you know. So again, I’m I want something that’s consistent, sustainable over the long haul. And I’m not looking to get rich quick. I’m not trying to, I mean, I’m doubling my account, I’m going to double my account, if you’re just by doing regular stuff, not by going, I’m gonna double my account. And so I’m going to take, you know, unnecessary risk. And so I’m just not going to do that. I don’t want to have to tell my wife like you had to tell your wife that “Oh, I’m sorry, honey, but our IRA is gone”. Yeah. Like, I kind of want to have that conversation.

Allen: So okay, so on that on that note, like, what are you doing in terms of like a hedge? Do you do anything to see like, okay, hey, if stuff goes bad, do you have I don’t know, like a process or something that you Hey, this is what I’m gonna do? Or do you do you know, buy long puts or something to hedge you? Or?

Nelson: No, I don’t I haven’t gotten into that. I’d love to learn more about that. I do, I plan every one of my trades completely before I get in it. Okay, I’m going to exit this no matter what, you know, for in the course and I do this at 25%. I’m getting out. You know, but I haven’t explored the, I’ve heard you talk about it. I don’t I haven’t done the time, or taking the time to try to understand, you know what that’s about? And I mean, I do understand it, but I just haven’t done it. So but I’d love to learn more about that. But I haven’t had the need to really learn a lot of it. Does that make sense?

Allen: Yeah. Yeah. I mean, from what I know, you have already stuff built in, you know, with the stocks you like you said he even if they go down 20 25% you’re still gonna hold them? Yeah, you still want them, you still want to get their cost basis down to zero. So you’re gonna keep doing that no matter what happens with those, you’re still gonna be cash flowing them, you know?

Nelson: Exactly, exactly.

Allen: With the spreads, you have a certain number, a certain percentage of your portfolio, it’s not the whole thing. And you have your you know, when you’re getting out, right?

Nelson: It’s non negotiable to, you know, I’d get out at that time. You know, I’ve gotten out before and had it turned around on me, but you know what, but I don’t you know, I don’t worry about that, almost. If I do everything I know I can do, and do it by the rules. And, you know, I know that I’m going to win more than I lose. And I’m, you know, preservation of capital is the rule for me. You know, I don’t, I don’t need to prove myself right or wrong. You know, when it’s out. It’s out. Yeah, get out.

Allen: So it seems like you do have a plan in place. You know, it’s not like you’re just doing whatever And not even thinking about it. If stuff happens, if things go bad against you, then you you already know what you’re going to do. I mean, that’s pretty good enough, I don’t, you can go further with it. And you can say, yeah, I’m gonna hedge it this way, or I’m gonna start doing pairs trading. And, you know, there’s so many different ways that you could hedge yourself. You know..

Nelson: Maybe that’s extra work I don’t think I need to do right now.

Allen: Yeah. And there’s always a cost involved, right? So either time and money, or one of the other or so cool. I mean, as long as you’re, as long as you’re able to sleep at night, then and you know what to do, and you’re safe, then that’s cool. So, when you when you first got started, what was one of the biggest challenges that you had getting started?

Nelson: Pulling the trigger to do a trade, I didn’t have the confidence. I mean, listen, I know I did, I’ve done a lot of paper trading, and it’s not the same. And so that $100,000 in that paper trading account is not real money, and, but my $100,000 in my account is in so and so I, you know, pulling the trigger really was, you know, was the hardest thing to do. But once I did it, and once I knew that I didn’t have to know everything, before it started, and that there was a possibility to lose, and I was able to accept that loss, because I still believed in the strategy. You know, for an occasional loss, then that helped me move on in because, you know, and, and not be worried, you know, if I’ve done something dumb, in lost, that would have been bad, but if I follow the rules, and still lost, you know, and then that’s just going to happen, and that’s just life, and that happens in business. And that happens, you know, in life. And so, you know, in trading is no different, you know, my egos not tied to my trading. And so..

Allen: That’s a big deal. That’s a big, that’s a big distinction.

Nelson: I don’t have to be right, you know, and, you know, because sometimes I’m not right, and that’s just life. And so I don’t, I had that problem, at first when I was trading commodities. And I just had to be right, you know, and, and I wasn’t some of the time. So..

Allen: Well, that’s the thing with the way I mean, if you’re buying commodities, or buying stocks or buying options, you have to be right. Otherwise, you lose money, you don’t have a choice, you know, but with our way, it’s like, yeah, you know, I could be wrong on this direction, and I can still make it, you know, it’ll still might work out, it doesn’t have to be like you said, if you take incomplete information, make your best educated guess on it. And then you put the probabilities in your favor, and then most of the time is going to work out, even if you try to screw it up.

Nelson: Well, that’s a great edge that you taught me, not only myself, but you know, the other students that that that gave me some coffee, that gave me a lot of confidence to go forward and pull off trades. And that gives me confidence in scaling up my trading also, you know, we’re, um, you know, you know, I’m up to you know, trading 50 contracts on each spread. So, and that’s, you know, that’s, that’s a lot of money. There. But, you know, it’s, it’s just is what it is, you know, I mean, I’ve got the confidence that it that, you know, you put up high probability trading in your favor, you’re gonna win most of the time. Yep, if you have to get out and it should, whatever it is. Otherwise, it probably turns into a low probability trade.

Allen: Yep. And so, as you’ve been through the process, as you, you know, you started out learning and you implemented now you’ve, you’ve been doing well at it, what are some of the takeaways that you would want to share with our listeners?

Nelson: Well, I tell you, my biggest takeaway would be that follow the rules. That’s my biggest takeaway. I mean, you’re the person that’s done it. And so just bumping this takeaway is just follow the rules. If you just follow the rules, and do things that like you’ve taught us, then you’re going to have a high probability trade, it’s not coming, you’re always going to win, but you’re going to have a high probability trade, people get in trouble, and they do things that go against what we teach, passive trading, you know, betting on the next high flying stock, and, you know, and it goes up, and then goes down, and, you know, you’re out of money, you know, that type of thing. And so, you know, that that would be one one of my takeaways. And, you know, the other thing is that this course is easily explained. And it’s, it’s easily understood. And, you know, for someone who’s not even brilliant, you know, I was able to take it and fit it within my personality. And I guess the last thing that my biggest takeaway, too, is that, you know, you, Allen and your team, you care about your students, you know, and I’ve told you that before, that’s no new news. But, you know, like, I know that if I send you if I have a question for you, you’re gonna answer Or some, somebody on your team is going to answer me. And so to me, that’s, you’re committed, and your team’s committed to my success. And as I said, it’s not a tag word. I mean, that’s, that’s, I’ve felt that from day one. And so that inspires a lot of confidence in me, that I know that you care about not only my success, but you care about me and how well I’m doing too. And, and that’s, that goes for all the students that I’ve seen you interact with.

Allen: Yeah, I mean, we we try our best, right? I mean, we make mistakes, but we do try our best and we do care, everybody that comes in, it’s like we want to do whatever we have to do to help you succeed. You know, one of the things we’re looking at is we’re having more customer service issues, you know, like, “Oh, I need my password”, or what program should I get? or stuff like that little questions here and there. And we’re thinking about bringing on somebody to take over that position. And we looked at different things to think, well, we could go, you know, overseas, we could hire somebody in the Philippines or something like that, and they get, you know, three $4 an hour and full time they’re happy, you know, that’s the going rate over there. They’d be more than happy at a job like that. But then there’s still that disconnect, you know, and so we decided, no, you know, we’re gonna keep it in house, we’re gonna hire somebody here locally, that is working with us in the office. And I think I’ve made it a rule that everybody that works for us has to trade, like, they have to go through our programs, and they have to understand the trades, and they have to know what they are. And whether they do it for themselves or not, that’s up to them. Right now. Everybody’s doing it, and they’re loving it. But if somebody says, Hey, you know, this is not my thing, but that’s fine, but they’re gonna have to know how to do it. Right? If they don’t do it for themselves, that’s different, which I don’t know why they wouldn’t, when they see, you know, they’re all the results. But that’s one of the things that we want to because even for employees, it’s like, you know, I don’t want you just working, I want you to better your life as well. So, if we’re doing it for customers, and clients and students, then you should also be benefiting from that as well. So that’s something we’ve implemented that I’m proud of. So

Nelson: That’s great.

Allen: Yeah. Cool, cool. Cool. So what do you think the future holds for you now?

Nelson: Well, I’m, I’m going to keep slowly, and hopefully, I’m going to still be successful, I’m going to keep, you know, scaling up my trading slowly, you know, I mean, I have a certain I have a certain amount that I want to have in my account, by the time I’m 75. And so I need to, you know, keep compounding it and, you know, keep trading and, you know, keep just scaling up, I guess, you know, I still believe in the, you know, I can’t see the strategy changing unless some fundamental part of the market changes where you can’t do options anymore, or something, you know, I’m gonna, I’m gonna keep adding on, I’m going to keep it, just add on some more, you know, the stocks that I own, I’m gonna keep adding shares, as they, you know, as they become, you know, available at a good price. And so, you know, that’s my long term goals. The other is to really feed that, you know, that type of thing is to buy more stock, and, you know, and that type of thing, so that that’s really what’s, you know, I’m on a, hopefully, I’m still going to be involved with passive trading and doing that in the community. That’s another great thing. I mean, we have an awesome community. And that’s, you know, duty. I mean, yeah, but an easy Allen, for you to say, other courses over, I’ll see you later. Good luck, you know, send me an email if you need help. But, you know, the zoom calls, and we’ve been continuing and have been great. And it’s great to be in a community of people who are like minded, who want to progress and are serious about trading and who, you know, it’s, it’s good to bounce off ideas. I think we’ve got a pretty decent group. You know, and so, it’s been great to meet, you know, get to know those guys over the last few months, guys and girls.

Allen: Now, I want to thank you, too. I mean, you’re, you know, you’re a very beneficial source in that group. You know, I mean, especially like, you took Roberta under your wing, kind of, and you kind of coached her through it. And she, you know, she put on her I’ve been after her for months to put on a trade. And you just, you know, you kind of gave her a little pep talk. It didn’t even take that long. Hey, she Next one. She came back and she’s like, yep, I did it. I did it. You know, I made money. That was like you we have no clue how big an impact that can have on somebody. You know, we’ve been emailing back and forth so..

Nelson: Okay, all right. I’m trying to get her here. Second one now.

Allen: Cool. So I mean, I’m so I’m a bit a little bit confused, though. But do you like your living expenses, how do you that comes from another source or you take it out of your trading account?

Nelson: Well I’m on Social Security, I took it, okay, now I said, I’m waiting, I get a really decent amount of Social Security, my wife still working, but we don’t have any debt. So and, and all my kids are out of the house and, you know, rolling on with their own lives. And so we don’t, we don’t have a ton of expenses, the only, like we’re going to we’re planning some trips next year that we’re going to, you know, use some of this money for but nothing extravagant or anything, but, you know, it’s taken some trips, some places, so that’s what you know, stuff like that. And then we help in help our, I don’t, this, I know this is gonna be popular, but instead of giving our grandkids gifts for Christmas, and all that stuff, we just put some money in there for 429 Program, which makes their parents happy. They’re not super excited about but you know, what’s one less present when you’re getting 20? Anyway, so you know that that’s one thing that the..

Allen: Oh, the 529?

Nelson: Yeah 529, the college savings program. So we just put Birthday, Christmas and everything all in there once, of course, and then take a tax deduction for that. That’s how you make your grandkids birthday party. So I’ve been saying, Yeah, I stay busy. So, you know, I do some consulting restaurant wise and stuff like that, that keeps me busy. But, you know, so I, that’s kind of in the future, maybe that, you know, I look forward to, you know, doing more trading and, like, I love doing it, like, it’s fun, you know, doing it. But I think if I was like doing a day trading thing that would just wear on me, you know, and, you know, I’m kind of like, you know, I check in at about 10:30 in the morning, and about 10 minutes, and I look at the PNL just like he taught me. And if it’s doing well, I just click off of it. I don’t watch any of the you know, news programs or any of that noise. Yeah, I used to get up in the morning and check the futures you know, and we all weird about it and everything like that. And, but I don’t you know, anymore, so. So you are like the poster child for passive trading.

I took you seriously, Allen.

Allen: Yeah. And so far, it’s been working, right?

Nelson: Yeah. Well, that’s how, you know, I know, guys that are my age and have portfolios, like mine have stocks, and they’re checking them every hour. Like, that’s gonna make a difference. Like, they’re not gonna sell them anyway. So, you know, they’re checking them all time and always talking about them all that stuff. And, you know, that just bores me.

Allen: Yeah, yeah. But I think part of it is also fear, because they’re not in control of it. Right? Exactly. They don’t know how to like, once they retire, they don’t know how to generate more.

Nelson: That’s right.

Allen: Because they’ve been just okay, if I go to work, I’ll make money. And so I’m safe. But when I stopped working, and that paycheck doesn’t come in, now, it’s all this money that’s, you know, in this mystery place that somebody else is running, and they have no control over it. So they lose a big part of that certainty in their emotional makeup. And it can be very, very scary.

Nelson: Well, I had my money when we had our IRA course, to somebody and, you know, in 2018, I got my statement, you know, when was a great year for the S&P and all that I got my statement in my account had gained 1.18%.

Allen: Okay

Nelson: I said, All right. You know what, I can do better than that. I’ll be a blind squirrel finds a nut every once a while, I can invest it in myself, and make 2%. I know it. So that’s what I rolled it all over to self-directed, I rate myself, and I’m glad you had to, but, you know, I got that that got killed me on fees and stuff.

Allen: Yes

Nelson: And wiped me out. Couldn’t believe it? Yeah.

Allen: Every time they do something, there’s a fee for something. But so Okay, so would you would you recommend Option Genius to other people?

Nelson: Absolutely. Of course, it was, you know, it’s been worth every, I mean, it’s been the return on investment. It’s almost incalculable, you know, on what I’ve paid for, what I paid, and just the time that you’ve invested back into me, it’s been unbelievable to me, you know, so, I mean, I really can’t even put you know, a figure on it, because what it’s meant to me, be part of community to be coached, you know, to be almost mental word in some ways, you know, because if I hadn’t gotten involved in Option Genius, you know, I’m sure no one myself I’d be at some other deal doing something and pulling my hair out, you know, with gains, losses, gains losses, and never had the confidence So I would recommend it to anybody from the beginner to the seasoned veteran who’s just so stressed out because of their strategy just stresses them out, you know, and I don’t want to live stressed out, I, you know, I spent 25 years in the restaurant business, that was nothing but daily stress, you know, so I don’t I don’t want to do like, I don’t want to live like that. And so it’s great that I’ve been able to be profitable, but I wouldn’t learn this system if it weren’t for y’all, because no one else is teaches this system. I mean, I’ve looked, and, you know, it’s, most of them are, like, get rich quick schemes from from what I see, you know, in in, and the ones that aren’t, aren’t teaching, high probability method and even a passive method. So I would say, for, you know, a low stress trading system, that over time bills and bills and bills, you know, through incremental gains, you’re the best.

Allen: I mean, I gotta tell you 50% a year, that’s not that’s not incremental. There, there are people on Wall Street, they’ll give their right arm for one year of 50% gains, and we’re just halfway through. So we, you know,

Nelson: I don’t know what the second half of the year is going to hold Allen but..

Allen: Well I mean, even if you take the second year off, it’s 50. For a pretty good year, you got bragging rights,

Nelson: I will have to correct myself, I think that I did have a small loss on a put no, a call spread. Because you told me I need to be more diversified. Yes.

Allen: So that was my fault.

Nelson: So I tried to be, but I did take like a $200 loss, I think on that trade. But I’m not blaming you really.

Allen: You just did. Now, okay, so now you did tell me that you did want to you had a message you wanted to share.

Nelson: I did want to share for any of y’all out there that or maybe you’re, you know, retiring, or you have to retire, you know, you don’t want to work till you’re 70 or 75, or whatever, you really can start with this method. And build your nice retirement fund or nest egg or inheritance that you want to leave your children or grandchildren. Because this system, even we even with a small account with incremental growth over the years, will get up pretty quickly. Compound Interest is the eighth wonder of the world. And compounding time after time, after time doing safe trades. So if you have a small amount, and you are 60 Plus or even 55 Plus, and you haven’t done a good job of funding your 401k or IRA, for whatever reason. Doing this will get you back in the game. You know, if you follow the rules, and you think clear headed and you invest clear headed, you don’t try to all make it in one swoop. This right there, this right here will be the key to doing that. And with Allen and his team that’s committed to your success, you know, you almost have to try to go wrong.

Allen: Well said Yeah. And then you know, the other thing I was looking at it and you said compound interest. And you can go to any calculator on the on the web, and you can say, Okay, if I put this much money, and I make this return, and if it sits there for 20 years, you know, you compound it, it turns into like a huge number. But most of those calculators, they compounded on a yearly basis, right? You know, so it’s at the end of the year, in a year. So 20 times, you know, 20 years later, you’ll have a big number, but that’s 20 periods of compounding. But like, you know, you told me, you’re doing this, the monthly trades, right. And so every month, your account is now bigger. And so you have more money to compound it. So you’re compounding it on a monthly basis. So that number is just totally off the wall exponential. So it’s it’s x, you know, like, whatever, whatever your return is gonna be like, you know, cubed or quadrupled or whatever. I don’t know how to explain it, but it’s a can be so huge. So definitely, I totally agree with you, you know, you got to you got to start, right, even if you can’t just give up and part of the thing is the more I study this I’ve been looking into longevity studies, and the science and the advancements in technology and health. And they’re some crazy, crazy stuff coming down the pipeline that is almost ready to be unleashed on the world, where it’s not going to be unusual for somebody to say yeah, you know, I’m 140 years old and they’ll still be in control of their faculties you know, I myself, I think my one of my goals is, Hey, I’m going to live to 120 you know, and from what I’m reading and seeing in the, in the research in the companies that are coming out and, and COVID really, really really, you know, supercharged this movement, because before I was reading somewhere where you know, you go to the hospital, and about 5% of the visits were virtual, then you got COVID. And it went, it jumped up to like 80 90% visits were virtual. And so now everybody’s, you know, more familiar with the technology. And the government was the bureaucracy of getting new stuff approved for experiments and trials. That was one of the biggest holdups. So what used to take 10 years during COVID, took two months, because everybody saw that there’s a real need for this stuff. So we’re gonna see in the next handful, maybe five years, we’re gonna see some really radical new treatments and technologies coming out that are really going to push longevity to the future. So even if you’re behind now, in your retirement funds, you know, you get started and you’re going to have time to catch up.

Nelson: Well, if you have $100,000 account, and you average 5%, which is totally doable in this system, in 10 years, you’ll have $50 million.

Allen: But that’s per month.

Nelson: That’s per month, per month, you gave me the confidence that I could do that. With this system.

Allen: Where’d you get that number? Five? 100,000? How would you say 50 million?

Nelson: $100,000 and 5% compounded monthly will be 50 million in 10 years.

Allen: Really?

Nelson: Yes.

Allen: Wow

Nelson: I put it on a compound calculator

Allen: And you’re doing that right now you’re doing that? Well, you’re you got a head start.

Nelson: That’s assuming a 5% every month, you just don’t know.

Allen: But yeah, no, I mean, you can’t, you’re gonna have losing months but still.

Nelson: Just have a little bit of that.

Allen: Yeah, you don’t need to I don’t think anybody needs..

Nelson: So it is possible. And again, II think if you break it down 3% either. So you start with a 10,000 and a 5% and you’re gonna have $5 million. So you know, it’s, that’s that’s a lot of I mean, I can live on that.

Allen: And that’s 10 years.

Nelson: Yeah, that’s 10 years.

Allen: That passes by like this. I mean..

Nelson: Yeah so 2% would be compounded is a little bit over, it’s almost 3 million. So you, you know, 2% you can do 2%. If you had some stocks you could do you know, you could almost get 2% on covered calls a month, you know, and just keep on every month. Keep on and keep on keep on. And then you’re right. It’s at a certain point, it just starts going crazy.

Allen: Snowball. It just goes faster and faster. And then you have to do anything. It just doesn’t by itself.

Nelson: That’s right. And even if you subtract nearly 3% inflation out of it, still a ton of money.

Allen: Yep. Big time. Big time.

Nelson: But but so you don’t have to put on 20 spreads every month, you know, to do that you really can, you know, you really can do a lot less than that. And, you know, and if you make 10% you really can do that, like you teach.

Allen: Well, thank you so much, Nelson. I really appreciate your time. I know this is gonna be very beneficial for a lot of people. And you know, it’s wonderful having people like you in the community. You know, you’re so selfless and you help other people and you’re an inspiration. I really can’t thank you enough.

Nelson: Oh, no problem. I’m happy to help any way I can.

Allen: Alrighty. Take care. Take care. Bye.


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