Podcast – Episode 113 – How Todd When From Laid Off To Full Time Trader in 7 Months


Podcast Transcript

Allen: Back on Episode 96 of this podcast, I was talking about how to get started trading for a living. And that came about because I got an email from one of our students saying that he had just been laid off. And he needed some help, and some sounding board about what he should do. Should he go back to work? Should he new start trading full time? And he gave a little bit of the background? And you know, I read his email on that episode. And then I gave, I had written him an answer, but then I went into a little bit more detail in that episode. But right now I’m happy to say that I have Todd with me on the line here. And he is going to be giving us an update of what he decided to do, the situation, what happened and how he did it. So Todd, welcome to the show.

Todd: Yeah, I am. Yeah, thanks for having me on.

Allen: Yeah, I really appreciate you coming on. You know, it can be a little bit vulnerable, embarrassing a little bit, you know, when somebody gets laid off, it’s, you know, not always under our control, especially when you’re working. So I appreciate you taking the time to help us out here.

Todd: Right, no problem.

Allen: Cool. So can you go back a little bit and tell us so what exactly was the situation when you had sent that first email in?

Todd: Yeah, so the situation was I ended up losing my job. It was due to budgets that were constrained because of the Coronavirus in response to that. And so some of the projects that I was working on, the funding got pushed out another year. And so they couldn’t, you know, they couldn’t compensate me anymore. So they laid me off. And at that point, I had already signed up for to have your blank check program, I was kind of starting to get, do the homework, but I really didn’t have a lot of time to do it, when I was working full time and balancing family and, and then when I got laid off, it was more imminent.

Todd: And so I thought, well, this might be an option that I I’ll have more time to dive into it. And so that’s what I did and I sent you an email and said, “Hey, Allen, is it really feasible that I could, you know, do this full time and at least cover my my hard cost- my expenses?” And that was my initial goal. I wanted to, you know, cover my mortgage bills, you know, monthly expenses. And, you know, your advice at that time was, yes, it is possible, it may take you a few months to get up to speed. So, and I think at that time, you said maybe you should look at getting a part time job, something like that. And, I ended up not doing that. I just kinda, I just kind of dove into it. And I think in the third month of trading, I was able to meet my goal. So that’s amazing, right? So I met my initial goal of just covering my expenses. And, and then the next couple months, I increased my goal. And I think I was running about an average of 10% rate of return on my trades. So month to month, it was real positive. And I kept scaling up. So it’s continued to be a positive experience. As you know, last month, it was a little bit volatile, a little bit of a roller coaster. I ended up getting out of that month, I think I met I was at 8% of my rate of return. So..

Allen: That’s still really amazing. 8% a month is a good month.

Todd: Right, right. So it’s good for that. Now, what’s changed recently is now that I’ve learned this, and I’ve gotten a little more in tune to the oil market, I’m actually out again, looking for a job and what I think I one of my plan is continue trading at this level, and then find a job. So I think I have more time during the days that I could I can do that. And and so hopefully I could go back make my original salary, and I can still, you know, profit from the trading.

Allen: Oh, that’s really interesting. Wow. I mean, yeah, I didn’t see that coming.

Todd: Right. Right.

Allen: So okay, so you are in our oil options program. And you’re also in another You said you were in another program which one the passive the passive trading.

Todd: The passive trading program.

Allen: So when you started trading full time, right after after the layoff? What did you focus on? What did you trade?

Todd: I jumped, well, I went through about half the courses of the passive trading program and got a you know, learn what options are how they were, but I ended up migrating towards the blank check program with oil. I’m okay. With my job. I’m more in tune with the energy markets. It’s more interesting to me. I can understand I can understand that supply and demand a little bit better. And so that just appealed to me. So I, I really dove into that. And that’s what I’m doing 100% right now, in the future, you know, in the next couple months, I plan to go backwards more into the strategies that you teach in the passive trading and use probably use, you know, covered calls on, you know, on some other other trades, just to supplement.

Allen: Right. Okay. Yeah, because in the passive program we do, you know, cover calls, naked puts, covered credit spreads and whatnot. And just to make a living, it’s a little bit harder with covered calls and naked puts. We do have students doing it with credit spreads, but like you said, you know, when you need to go from zero to whatever it is cover the expenses, the oil one, it just, it has more, I guess, bang for your buck right away.

Todd: Right, right.

Allen: Credit spreads do too but the covered calls naked puts, I mean, those are, you know, maybe 1 to 3% probably, or profitability in a month, how much you can make a return? Well, we we go for 10 credit spreads, we go for 10. So those are more the strategies that if you’re going full time, then yeah, I like what you said. Because, you know, once you have that coming in that extra cash coming in, then you’re like, Okay, now what do I do with it? Okay, now, let’s put it into building up that foundation that we talked about in the past program where you’re putting in stocks, and you’re just cash flowing that foundation. So cool. I like the thinking of it. So if you don’t mind that what was that goal? The original goal? You know, you said it was okay to cover the expenses. How much was that?

Todd: Yeah, the original goal was $5,000.

Allen: Okay, and how long it took you three months to get there?

Todd: Yeah, I think my third month I hit that. Okay. So the months before that, I was at about $2,500, $3,000. By the third month, I hit that.

Allen: And how long have you been doing that? Like, how long has it been since you started full time?

Todd: Since March? Okay. Since March.

Allen: So September is almost nine months? No, seven, seven months?

Todd: Right. This would be the seventh month.

Allen: Okay. Awesome. Awesome. So we got seven months, and what was your best month?

Todd: Best month was actually last month at about $8,000.

Allen: Okay, awesome. Cool. So now, originally, when in your email, you said your wife was a little bit concerned? What do you What does she feel now?

Todd: Well, she is, and it’s more because she’s just a little more conservative. Or I would say that her risk tolerance is a little bit less than mine. Right? So in her opinion, and rightfully so it’s, we have a family, we have kids in the college, you know, so she’s just don’t comfortable with the fact that it’s not sustainable. Every month, necessarily.

Allen: It’s just not that checks just doesn’t come in every month. Right?

Todd: Exactly. Yeah.

Allen: It can vary..

Todd: It can vary. And, and so that’s really what she’s uncomfortable with. So, you know, if I think if I get another job on the side, and I do both, then I’ll be more than sustainable. And I’ll be bringing in, you know, more money than I that I was previously making. So..

Allen: And that’ll get her to be a little bit more relaxed.

Todd: Exactly. Exactly. So yeah. It’ll be it’ll be a win win for for everyone.

Allen: Yeah, I mean, that’s one of the reasons I started option genius was to get me off of her back. She was like, Hey, can you go leave me alone? Can you go do something else, you know, and she didn’t I get where your wife is coming from, because my wife was coming from the same place. She’s like, you know, you’re doing the trades, you’re looking at it every day. I don’t know what you know, to me. It’s just up and down, up and down, up and down. And so I don’t feel secure. And for my wife, it was about security as like, you know, I need to know that I’m going to be able to pay the bills, or go to the grocery store, and my car’s not gonna get declined, you know? So absolutely. So she’s like, yes, if you can get me something on the side, then I’m okay with you trading, but that on the side has to come in. Like, okay, I think we can work on that.

Todd: Right? Yeah, that’s, that’s a lot where we were so or where we are now. So. Okay, we’re working through it.

Allen: So the business that you were in, it was construction, right?

Todd: Yeah. Construction Management.

Allen: So that has, is that picked up again now?

Todd: Yeah, it sort of has, I mean, it took a dip with the COVID. A lot of funding was frozen in the, you know, the immediate industry that I was in and, you know, things are picking up. So, yup.

Allen: Okay, cool. So, all right. So let’s recap. The industry that you’re in had bit of a constriction. They didn’t have any more work for you. Right, you decided, Hey, I’m going to try my hand at trading. Did you give yourself like a deadline, like I’m going to try it for three months or six months or I have like 50,000 I could lose, or did you have some kind of, you know, line at the end?

Todd: Yeah, I think it was really like, three to five months. Okay, is what I was figuring. I mean, I was under a little bit of pressure and motivation, I guess, right? I really wanted to make it work. So I kind of went all in and was having, you know, good success. And so I kept going. So I, you know, is really, you get, like, get thrown to the wolves, right? You got to, you got to make it work. So that’s really what I did. And that’s how I learned by, you know, putting skin in the game, putting money in it. And that’s where I really paid attention, and was my motivation to learn it. So..

Allen: That’s awesome. So what would you say your return average has been on a monthly basis?

Todd: I think I hit 10% every month, except this last month.

Allen: Wow. So every month for like six months? You did 10? And then this last year? You did 8?

Todd: 8. Yeah.

Allen: That’s phenomenal. That’s amazing. Yeah. So then you started doing that. And obviously you had, you know, you had the the program. You know, you had the coaching calls, right? You had all the stuff that comes with it. But you had to actually do it. You had to get in and be like, Okay, I’m making the dishes, I’m going to put this I’m going to scale it, you decided when to scale. Kudos to you for that. And then now so Okay, so you’ve gotten you want your goal was like five, you’ve surpassed the goal, you’re making more than you were making as a working. So how long does it take you to do your trading right now?

Todd: Oh, yeah. You know, I spend about two hours a day, not just on trading, but on, you know, looking at news, educating myself, you know, looking at different websites. I, I probably spend two hours a day on on it. Yeah.

Allen: So we’re doing two hours a day, we’re making a really nice income. But now you’re gonna go back? Because you’re going to basically you’re diversifying, right? Correct. One income source. Now you’re adding a second income source, which is going to take more time. But you know, going back to work, it does, you know, keep you mentally sharp gives you social interaction, there’s there’s several benefits of working with a lot of other people. And so that’s going to give you so do you think you’ll still be able to do the two hours a day of trading?

Todd: Oh, I think so. I think I can still, you know, check in on it. First thing in the morning, I’ve got to the app on my phone, where I can keep tabs. And, you know, I think I need to jump in. You know, I certainly could do that for a few minutes during the day. And then, you know, check in again in the evening. So I think if I just keep tabs on it all day long, I can control what my positions are doing.

Allen: Okay. Yeah because some people might listening to this might be like, what? This guy’s crazy, he’s doing so great. Why is he going to, you know, why doesn’t he just continue to scale? Why is he going to go back to the workforce, you know, if he can, if he can take some of that money that he’s throwing off every month that he doesn’t need, you can put that in some other passive investment, maybe some rental properties, or investing in some other companies or whatnot? What would you say to that?

Todd: Well, I think right now, like I just said, I have, you know, my kids are young adults. So I’ve got three kids in college right now. And so the expenses are pretty high. And so, you know, I think it’s gonna benefit us if I can go back to work, get a regular paycheck, and do this on the side. You know, I’m almost twice as good as I was seven months ago.

Allen: Right, and how long do you plan on working?

Todd: You know, I don’t know, I think probably at least get the kids out of college, and then, and then reassess. Right? You know, what we’re doing. But I think one of the, you know, one of the benefits of trading is, you know, you can continue to do this, eventually, I’ll retire. And once the kids get out of college, I could retire, I could do this. And I could do this. I’m sure. You know, as long as my mind is good, and into my 70s. Right? So so the long term plan is, keep trading. And I’ll continue doing is as long as I’m able.

Allen: Are you going to continue to scale it, or are you going to take that money and put it somewhere else?

Todd: Well, I’ll continue to scale it as far as I can on the oil and then I think you reach a limit where you have to do something else.

Allen: Well, I mean, you already said that, right? You’re putting it into the other stocks and the other..

Todd: Yeah so I’ll put it in other socks and also with a, you know, I can’t turn I can’t trade retirement accounts and in oil, so I could trade that with, you know, some of the other strategies.

Allen: Okay. Now, let me let me ask you on a on a personal level, because a lot of people they say they want to trade for a living, they say they want to go full time, right? But when it comes down to it, they just can’t make the change they they either take too much risk, or they trade too much they over trade the under trade, they don’t follow the rules. How did you stay emotionally grounded with that much pressure because it it does go for, you know, it has a lot of pressure, where it’s like, hey, I need to not only just not lose money, but I have to make a certain amount. Otherwise, you know, maybe the lights get cut off, or I don’t make the car payment. How did you handle that emotional pressure?

Todd: Right, right, you’re right, there’s some pressure there, I think that, you know, I’m pretty easy going person, I can handle some of that stress and some of that risk. But on the other hand, I think you have to have a little bit of capital to absorb some of the downturns and I’m in a position where I have that it’s not that I want to lose it. But you know, if it came to it, I could, I could lose a little bit and absorb that for a month or two. Right. So I think that’s how I went through it. And but uh, you know, it does get a little bit stressful when you when you have some money on the line and the market turns against you. You can’t make knee jerk reactions, you’d have to, you know, kind of settle down and maybe turn it off for a little bit and reassess. So, you know, just by doing that is the way I was successful that to keep a level head and not get my emotions into it. So..

Allen: Awesome. Awesome. Yeah. I mean, it’s it’s a really interesting story because you never hear that where it’s like, Hey, you know, I learned a skill I’m doing great at it, but then I’m gonna do it part time and go back to you know, this my job. I’ve never I’ve seen people do it. But it’s, it’s something that nobody talks about, because it’s like, you know, “I hate my job”. “I can’t wait to get out of here”. You know, “I’m gonna go after you to my boss”. You know, they have they actually have a term. It’s called FU money. You know, it’s like, when you make so much money, that you’d have to care what anybody else does or says to you. You could be like, I’m rich. I don’t care.

Todd: Well I’m not, I’m not there yet. And that’s a problem.

Allen: But you but it seems like you enjoy your job. Like, enjoy what you do?

Todd: Yeah. My original career?

Allen: Uh huh?

Todd: Yeah, yeah. I enjoyed it. I mean, it was nice. You know, it’s very nice. Getting involved in trading and, and, you know, making money this way. But, yeah, so I don’t mind going back. And, you know, getting back into my old career.

Allen: Okay, cool. So.. Alright, so if we were talking to Todd, eight months ago, what advice would you give him?

Todd: Oh, you know, I really don’t think I would do anything different. No, I would do something different. I would be more clear with my wife about what I was doing. I think that that was my biggest challenge. It was our largest challenge. And, you know, my wife wasn’t really didn’t want to take the time to understand what this was all about. And, you know, eventually I was able to explain it to her. And so she kind of came around, but, you know, it was she’s just risk adverse. We didn’t we don’t have the same opinion. And I was probably didn’t communicate enough with her and early enough. So yes, my advice would be communicate more with my wife and, and do it earlier and more often and clear. You could do that. So that was my biggest challenge really.

Allen: Okay. So if there was somebody that came to you and asked you for your advice, like, hey, Todd, you know, you’ve had great success. You’ve been doing this for a while now, how do I do this? How do I get started? What would you tell?

Todd: Yeah well, I was talking to a couple people, that would be my brothers. And they, you know, we got talking. And what I did is I said, hey, look up Allen’s website, again, your website, and I said, you guys should do this. It’s, you know, it’s a way to get another income. So now two brothers that have signed up for your programs. So that’s my initial advice – anyone who’s interested..

Allen: And do you think that in terms of time, do you think three months was enough? Could you have done it sooner? Would it have taken longer? How did that feel?

Todd: No, I think three months was enough time, I think, you know, speaking of another challenge was once you start making trades with your own money, because I did paper trading for I think a month. Once you start making trades with your own money, you know, you have to ease into it, because there’s, there’s really a mental capacity that you have to get used to and get over with. So for example, start with a start with a couple $1,000 trading, I think, you know, you probably need an account worth $10,000. But don’t bet at all, you know, don’t don’t trade at all, leave a cushion. I think one of your rules is leave 50 to a minimum 30% out there to absorb fluctuations in the market. So I’ve done that and but Just like you said, don’t overtrain don’t get, don’t do too much where you’re uncomfortable with it. And it takes a couple months to kind of get used to that mentally.

Allen: If you don’t mind, how much did you start with? In your account?

Todd: So I started with $40,000.

Allen: Okay.

Todd: And then I scaled that up to 100,000. Okay, eventually.

Allen: Awesome. Awesome. Cool. Yeah. So you were okay with that risk? The 40,000? I mean, you know, obviously, you didn’t use all of it at one time, but

Todd: No, exactly. I’ve never used at all and, you know, I’m, what I’m comfortable with, I guess is that you’re not risking all of that. You can control your risks a little bit more, and, you know, make adjustments. So you don’t take on that enormous of a risk.

Allen: And those of us who are well, not us, but others who are trying to do this, how did you handle the scaling? Like you started with 40? And then how did you know that? Okay, now I’m going to add more, I’m going to add more.

Todd: Yeah. So once I got more comfortable with it, after about three months, I was just, I wanted to make more trades and, and my margin, I was pushing the limits of my margin. So I needed to add to my account. So that’s the point that I added to my account, and then I kind of kept scaling up, but I kept enough margin reserve, you know, to be comfortable. So, you know, so I really scaled it up over, you know, a three month period, I guess.

Allen: And when you started talking to your brothers, and I’m sure other people probably asked you, hey, Todd, you’re not working? What are you doing all day long? And you told them? Well, I’m an option seller? What are they? How did they respond? Originally, in the beginning?

Todd: Yeah, most people, I had to kind of educate what it was and what it was about. Yeah. And I think that my two brothers, and when I started talking about it, they actually knew people who were trading options, but they didn’t know a whole lot more about it. And, you know, so I was able to educate them a little bit about what it’s about, and I told them about my success that I was having, and then that got them more interested. So but yeah, for the majority of people, I typically have to tell them what it’s about. And, you know, the difference between what stocks are and what options are, you know, options are a derivative of stocks are not the same. So really had to just educate them and some people got it. And some people, you know, weren’t really interested in knowing more.

Allen: Now, their eyes glaze over and they say that’s too complicated, I don’t care. I don’t want to learn about it. Right. And I, you know, but everybody’s different, everybody. So it’s interesting, very few people have heard about it. So I mean, that’s why we’re trying to do the podcast, and thank you for coming on to spread the word. I think it’s really important to hear from real people that are actually doing this real money real, you know, everything’s on the line. We’re not just doing back testing here, just coming up with strategies or theories. You’re actually doing it every day, month in month out, and you’ve had a lot of success with it. So kudos to you. Congratulations. I hope that your wife eventually does come around. Right? Yeah, like mine. I mean, with mine, I guess, you know, eventually I got her her own business. Like she wanted to start her own business. And so I’m like, Yeah, sure. Let’s do it. You know, and I’m like, okay, she’s off my back now. So she’s happy, she’s running her thing. You know, she’s making money there. So she doesn’t even she doesn’t even ask me anymore. Right? But because in the beginning, it was like, she would come home from work. And I if I had a, she’d look at my face. And she’d be like, “Oh, the markets up or the markets down today. Right? You look sad”. And I’m like, “Yeah, the markets down today”. You know, I’m sad. And then the next day, she come home, and I’d be sad. And she’s like, “well, what happened? I checked the market, the market is up, you should be happy”. I’m like, “Yeah, no, I’m sad because the markets up today”, like every day, no matter what, I would still be sad in the beginning, while I was learning, so it was it was really a roller coaster for both of us. But I’m really happy that it didn’t take you that long. For me, it took a little bit longer to actually understand everything and get through it and get to that point where “Yeah, okay, I’m making enough, you know, to pay all the bills”, and it was a hard thing for me.

Todd: Right? Well, and, you know, speak to my wife, she’s a competent professional person herself. She’s very successful. And it’s our 26th wedding anniversary here this week so.

Allen: Wow, congratulations.

Todd: Yeah. But very proud of her. And, you know, we just got to get over this, this pump and move on.

Allen: No, but you’re doing great. I mean, look, the future is looking good. You added a skill. You know, now you have something under your belt, you’re like you said it, you know, I could do this into my 70s we have people doing it into their 80s. So it and with all the technology and the health advancements that are coming down the pike, who knows maybe 100, 120 that will still be trading, you know, you never know.

Todd: Right. So that’s, it’s a long term plan. Yeah.

Allen: Yep. It’s awesome. It’s awesome. I love it. I love it. So any any final parting advice you’d give to our listeners?

Todd: No just keep plugging away and, you know, keep track of your markets and your positions and don’t over trade. So probably the best advice yeah.

Allen: Awesome. Was there anything before you came to us? Were there any other stuff that you had tried that didn’t work?

Todd: No, I didn’t. To tell you the truth. I, I was traveling a lot for my job. And I came across your podcast first. And so I was listening to your podcasts. While I was on the road that got me more interested. I was trying to look for something that, you know, could supplement my income. And so I got interested, and then eventually signed up for one of your programs. So no, I didn’t try any other programs before I, you know, found yours. And, you know, I kind of checked it out and it looked like it was viable. And so, so that’s how I got going.

Allen: Awesome. Yeah. Great, great. Great, great to hear. Great to hear. I really appreciate you coming on. And you know, I wish you all the best of success. And, you know, you’re in our program so if anybody wants to reach out to Todd, he’ll be in our group. And thank you again for being here.

Todd: Okay. Thanks, Allen.

Allen: Hmm hmm

Todd: All right. Take care.


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