Podcast – Episode 94 – How I Invest My Money


Podcast Transcript

Howdy, howdy, howdy, passive traders. This is Alan Sama, back with another episode of the Option Genius Podcast. First of all, I want to say thank you again, for listening, thank you for spending the time with me wonderful to be in your ear. And if you’re one of our power listeners, I’m gonna talk to a fellow this week, Matt, who said he has listened to every episode three times. So, Matt, thank you for being a power listener. And for those of you who would like to help the podcast or who have already done it, by leaving a rating and review, I totally, totally appreciate it, it really helps us get the word out there.

And if you have not done so, I would please admonish you Please, I’m asking you nicely. If you could leave a rating and review wherever you listen to podcasts, or it was Apple Podcasts or Spotify or wherever you listen to him, just please leave a review and let us know how we’re doing. I love to read them. And we love to, you know, check them out. So they’re a lot of fun. Anyway, this episode is called how I invest. So I want to do two things on this episode.

First of all, there’s a book that just came out called “How I invest my money”. And so I’m going to give you a review of this book, I just finished it. And then secondly, I often very often get asked how I invest my money and how I separate my accounts and what I do with my money. And so I’m going to be sharing that as well at the end first the review then, and then I’ll tell you what I’m doing. So that’s going to be fun. So stay tuned for that.

First of all, there’s a guy, Josh Brown, he is almost always on CNBC sees a lot on NBC, either money manager, and he’s got a blog, he’s pretty popular, he shows up in all of the financial media, and they interview him and stuff. And I like him, you know, he makes a lot of sense the stuff he talks about whenever he gives advice, or whenever he says things, it’s always simplified. So it’s not doesn’t use a lot of Wall Street jargon and stuff. But he looks out and he seems like he’s looking at that particular, whatever they’re talking about. He’s looking at it from the eyes of an individual, you know, somebody who’s working and who’s given their money and trying to make sense of the stock market and stuff. And so, you know, I think that I kind of do the same.

I think that’s something that I have, where I can take complicated issues and boil them down and make them really simple to understand and explain them. So I think he does that as well. So it’s really great. So one of the things I was watching on CNBC, and the host of the show mentioned that this guy, Josh has a new book out, and it’s called, “How I Invest My Money”. And like, Okay, I need to get that. So I got it right away. And, you know, when I got the book, I was like, Okay, I’m gonna be excited, because you know, this guy smart, he’s gonna tell me what he’s doing with his money.

And then when I actually got the book, I got even more excited, because it’s not just one guy, it’s 25 different people who are money managers, and they’re all explaining how they invest their own personal capital. So I’m going to read the jacket, the back cover, it says the world of investing normally sees experts telling us the right way to manage our money. How often do these experts pull back the curtain and tell us how they invest their own money? Never. How I invest my money changes that, in this unprecedented collection 25 financial experts share how they navigate markets with their own capital. Sounds like oh, this is exciting. 25 people, you know, and I started reading about some of these people in the book. And they’re like, wow, they’re all money managers. They all some pretty smart from really good institutions, or, you know, they went to good colleges.

They have been on CNBC, and they have been on Wall Street Journal, and they’ve been on Barron’s and Reuters and interviewed all these places. Some of them have written books, they have all these letters after their name. So CP, FP, and XYZ and ABC and all these different letters that are supposed to mean something. So as your Oh, I’m really excited. So I read the book, and I will tell you on a score of one to five, you know, like on Amazon, one to five stars, I’m going to give it a one. I don’t think you should waste your time or your money on this one. You can get it zero probably get zero, but I think one is good. Even if you can give it here. I think I’m still doing a one. Because the people did seem like they were honestly and openly talking about their own investments.

Is that harsh? I don’t know. I mean, that’s my opinion. And I am saying that not because they’re not nice people, not because they, you know, don’t know what they’re doing. But these people are holding themselves out as financial experts. Right? They are even saying this 25 financial experts. That’s what it says on the back of the book. And they go on TV and they go on the radio, and they go on articles and newspapers and blogs and they tell people what to do as financial experts, not to me, an expert is not somebody who’s struggling, but it is somebody who has already reached the goal that I want to get to.

And that can help me – they’ve already reached the mountaintop. You know, and they’re putting their hand out and saying here, hold my hand, I’ll pull you up. I don’t want to hire an expert that is five levels below me. Does that make sense? Especially when it comes to money management. Now, like I said, all these people have degrees, they all have appeared on TV and magazine. Many of them have gotten awards, like the 40, under 40 Award in their financial, whatever, you know, it’s a financial money manager or 40, under 40 in financial management.

That means they’ve been managing money for around 10 years, which is we’ve been in a bull market for 10 years. So these experts have never even traded or invested or manage money in a bear market – in a really tough market. You know, we had Corona, we had the March, we’re on a bear market, but that doesn’t really count. Good. we bounced right up in a month. Right. None of these people even remember the.com bubble. They weren’t I don’t know, they were like, what, eight years old, the.com bubble, they don’t remember the S&L scandal in the 80s and how that happened.

They don’t remember what happened when, in the 70s. When inflation was super sky high, maybe they read books about it, you know. But to me, that’s not really an expert, they don’t have the experience to back it up. Now, I’m not that old. I’m 44. So I’m a little bit older than some of these people. But I do remember what it was like trading my own money, through the Great Recession, not even play with other people’s money. That was my own money, what was on the line. These people, they don’t play with their own money, they risk your mind. Because they’re managers. They’re not investors, they’re not traders. They’re not wealth creators, right? So if you’re looking for really great financial advice or strategies, this is not the book, I would say that out of all these financial these 25 experts, I would say only three of them are actually really wealthy. Three of them could be defined to me as a financial expert, someone who is wealthy, and by wealthy, I mean that they could stop working today, and they have enough income and assets so that they don’t have to work for the rest of their lives. That is well, that, to me is the goal.

The goal is not for me to retire at 70 years old, and hope the money lasts for the rest of my life. That’s the goal for these people. For most of these people, that’s what they help people do. That’s not the kind of expert I was expecting. So that’s why I’m a little ticked, you know, out of the three in the book that are really wealthy, one of them got lucky with venture capital. He has a management company, where he is a partner in the money management company. He doesn’t do any of the money management. He is a partner, he made an investment in a money management company. But he’s really a venture capitalist, the second guy, he made all of his money in real estate, he admits it. He’s like, Yeah, I don’t do this. He has another, you know, he’s a partner in a money management company. And that’s how they made it into the book. But he made all his money in real estate. So he wouldn’t know how to manage money.

I mean, I don’t think you should hold yourself out as an expert until you’ve actually achieved the thing that you’re an expert in. Right? If you’re a wealth advisor, you got to have some wealth, in order to be a frickin advisor about wealth. The one thing that all these people said in the book is that almost all of them own their own business, all of them own their own business. And for them, that is their largest investment and their largest asset. And that’s really cool. That’s great. You’re a small business owner, or somebody, they’re doing really well. So it’s a medium business owner. So these folks, they make money by managing other people’s money. They don’t make it by investing, or trading.

They spend most of their time looking for new clients. And that’s probably why they agreed to be in the book for the exposure. You know, it’s like being on TV, they get exposure, people see them and like, Oh, this person sounds smart. Maybe I should call them up and see if they can take care of money. So most of these people spend their time looking for exposure, looking to do marketing, looking to make new clients, they need more clients, so that they can have more assets to manage, so they can make more money. And then when they get a client, what do they do? Do they manage the money? Do they trade it invested? Do they come up with a real good plan? Well, they try to come up with a plan, but then they put the money in investments that are managed by others. So they’re like the middleman.

And that’s not definitely not the advisor that I would want. You know, if I want a goal, if I have a goal and say, Hey, I need to get to this location. I wanted to get advice and directions from a person who’s already been there before. Who knows the pitfalls, who’s been there, done it, hopefully multiple times. That’s the kind of person I want to give me directions and leading the way. I’ll follow that person. Right. There was one girl on this, bless her heart. She is a financial expert, like everybody else in the book, you know, giving advice to everybody. And then she admits that she is Saving money in a savings account or bank hoping that when she turns 40, she’ll be able to afford a trip to Hawaii. That’s not what I was expecting when they say financial expert. You know, somebody who can’t afford a trip to Hawaii doesn’t really have total – what’s the word? You know, the total control of their finances? You’re not there yet. I mean, you’re working hard, you’re struggling. There’s nothing wrong with that. That’s great. That’s awesome. You know, save that money. And go, or I mean, if you’re listening to this, I got some frequent flyer miles, maybe just just reach out to me, I’ll give you I’ll send you a new trip on your flight to Hawaii. Really, please. It just broke my heart when I read that. I was like, man, but you know, I mean, they say that money management. The whole business of money management is where people that drive Toyota’s are giving advice to people who own Rolls Royces. And it’s true. 100% true.

I mean, that is why the retirement situation is country’s so screwed up. I mean, you got the blind leading the blind. And these people are the ones in this book. They’re not average money managers. They’re the top of the class, the cream of the crop, right? They won all the awards. Imagine if you don’t have one of these money managers, and you just have an average money manager. Ouch, that’s really sad. You know, you get some guy from Edward Jones or Ameriprise or something like that, Oh, my goodness, that’s painful. But what the the co author of the book and I said, you know, Josh Brown is listed as the author. But he does, he does have a co author and it does seem that the book was done by the co author, Josh brown probably just wrote one little section.

But it does look that the co author did hold the work and got all these information from all these people. You know, at the end, he tells you what you should take away from the book. And he says that these are people just like you and me, they have struggled, you know, they have to go through life, just like all of us. And that the important thing is not the money and money is not that important. But the other things that we value is the most important thing in life. And that’s great. That’s great advice. I love that advice. that money’s not that important. But if it was coming from a life coach, that would make a lot more sense. Maybe a spiritual advisor, you know, that would make a lot more sense. Not from a wealth advisor.

Okay, not from someone who’s managed or entrusted to manage and grow my financial assets. Does that make sense? It’s kind of like the doctor, you know, telling you Well, you know, getting healthy. I know, that’s my job getting you healthy and keeping you healthy. But that’s not the most important thing. Yeah, the most important thing is spending time with your family. Yeah, Doc, I know that. But your job is to keep me healthy. Can you do your job or not? Or do I need to go find another doctor? Same thing with these guys. If you’re not wealthy as an advisor, how are you going to make anybody else?

Well, you can’t. And that’s why most of them are putting their money in like passive investments, not passive trading, but passive as in index funds. And they say that I go, I’m a firm believer in index funds from people give me money, I put it in an ETF. People give money, I put it in a bond fund, they can do that on their own. Why do they need you, Mister financial expert? You know, Vanguard is open anybody, anybody can open an account, the vanguard put their money away.

And if they don’t want to invest, or they don’t want to trade or they don’t care, they don’t know anything about the market didn’t want to know, then that’s the great place, they should go put it in Vanguard and they don’t need a money manager charging them fees, for no reason. I mean, after reading this book, it really makes me value what we are doing here at Option, Genius, teaching people about passive trading. And how I mean, it’s actually making a difference in people’s lives. I mentioned earlier that I talked to a fellow named Matt earlier. And this guy, super nice guy works at Costco drives a forklift. I mean, he’s a hard working guy, right. But he spent the last year learning how to trade options.

Why? Because it can make a difference in his life. He’s at the point now where he made $500 in a month by selling options. And it blew his mind. That $500 opened up a whole new world gave him hope, hope that other financial experts are not providing. So we don’t have just, you know, passive trading is not a book. It’s not just a couple of words. It’s not just a trademark. It’s an actual movement. And we are changing people’s lives. After reading all this and looking at, you know what these people are doing? I mean, I think it might be time for me to start a money management firm, because people need better choices. It might just be time for me to do that. You know, nobody else is stepping up. Me and might as well do it, then.I don’t know. Anyway, so that’s the book. Don’t get it. Don’t waste your time.

Let’s get on to me, right? How I invest. This is a question that I get asked all the time. People like, Hey, you know, you’re telling us to do this and do that. And do you actually do all this stuff? Of course, I do all this stuff, what am I gonna tell you do something I don’t do myself, right. So a few episodes ago, I did a show on scaling. I talked about vertical scaling, horizontal scaling. And I explained about a mistake I made. I don’t know if it was a mistake. But it was just a way my situation was where I started off with several different trading accounts. Many of them were retirement accounts. But because of that, they were very small. So I had several simple small accounts.

When you have small accounts, it’s harder to have 100 shares, so that you can actually go and sell covered calls or naked puts, right, you can still do spreads, you’re on a few shares. But if you take all that money, put it together one account, it’s easier to make you grow. But that’s my situation. It is what it is, right? So I’ll tell you right now, I have currently 14 different accounts that I manage directly, like our retirement accounts. So these are, I have a Roth IRA, my wife has one, my three kids have a Roth IRA, I don’t qualify, I make too much to put money in the Roth IRA. So now I have an open regular IRA accounts for me in my life. So that’s what four or 567 accounts right there. And then I have several Sep accounts that I have from three different companies that I worked at, probably should consolidate, those just haven’t gotten around to it. So 10 accounts are just retirement accounts. And then I also have an HSA account that I can manage. We have other accounts that I just oversee, like the kids 529 plans, I don’t get to manage that. So that’s fine. I also have Well, let me tell you what to do in the retirement accounts.

And retirement accounts is just passive trading, straight up high quality stocks that pay dividends. Dividends are reinvested automatically, you know, I just you go into your account, you check the box and say, Yes, I want dividends reinvested automatically, you don’t want to deal with it. And then I sell options on these stocks for extra yield. So whether it’s covered calls or naked puts, sometimes even credit spreads once in a while, but in retirement accounts, it’s basically plain vanilla, simple, passive trading, okay. And these accounts have been growing and growing and growing up to the point where, you know, there’s a lot of money in these accounts.

And maybe I need to be diversified, right? less money in the stock market. In addition to these, I also have two accounts where I trade oil options exclusively. So I enjoy trading oil options. It is one of the programs that we offer. And so these two accounts are for that one’s a small one that I use in our class. And then the other one’s a larger one, I also have a regular trading account that I use for my membership trades. So we have three memberships at option genius that you can join, we give trades, our loads, we have option genius, the advisory, we have Simon says options, and weekly trading system, all of those give trades every month. So I do every single one of those trades in my own account with real money. You know, basically, I’m putting my money where my mouth is, so I give you a losing trade, you know, I lost money on it, too. I think there’s only fair, unlike a lot of other gurus and whatnot that you know, they don’t really trade, I’m actually doing the trade.

And then I have a trading account, that is a much larger trading account that I’m putting more money into. So I want that one to really, really grow. And then in addition to that, I have another trading account, that is a managed account. So it’s friend’s, I’m managing that account, and I have complete access to do whatever I want in that account. All right. In addition to that, I do have partnership in a real estate investment company. So that is basically me and my friend, a friend of ours, a friend of mine, actually sorry. And what he does is he does the work, I put up the money. So he goes and he finds houses that are beaten up broken down, and he’ll buy them, fix them and then flip them. And then now we’re adding rentals to that. So if we don’t sell the property right away, then we will rent the house out. And now we’re generating passive income from the rental of the houses as well.

Secondly, in real estate, I have an investment in a land fund. So this is a friend of mine. He’s been in real estate for over a decade, maybe two decades now, the last four years, he’s been doing something that he calls, it’s called land flipping, but something similar to that where he goes out and he will buy huge amounts of acreage of raw land. So maybe 200 300 acres, you’ll negotiate it by that and then he will subdivide it into small tracks. So like 10 acres each, like a little Ranch, and then he will sell those to individuals. So he takes you know, he goes out and buys a whole big thing and cuts it up into little pieces and then sells those little pieces off and he can double or triple his money every time he does. So he’s been doing really, really well the last few years and then he decided to You know what, he doesn’t have enough money to make it grow really big. So he started a fund in order to get money from other investors, so that he can do really, really bigger deals.

You know, so instead of doing like a million dollar deal or $2 million, he and now you do $5 million deal. So he raised the money for that I invested in there, he pays me 50% a year, that’s a good investment.  I don’t have to do anything, I’m diversified. He’s gonna pay that money, because that’s what he has agreed to. And then, you know, is it risky to invest in a fund for somebody else, it’s somebody else’s managing? I think it is, you know, you got to always have the mindset of what could go wrong. and in this situation, I gave him the money because A, I know this guy, I’ve known him for a long time, that doesn’t mean he can’t, you know, rip me off and take the money and run.

But B, this guy is a very meticulous person. So he looks at all the numbers, he’s got spreadsheets for everything he knows down to the penny, what his net worth is. And he tracks it all the time. And so he is very careful about every single penny that he spends, and what the fund spends. And so I trust him, he’s been a good friend. And he’s very meticulous, exactly the way I would want somebody to be managing money to be. And he showed me the results that he’s been doing. He’s been doing amazing. He showed me the numbers, little black and white Look, here’s what we’re doing. We just ordered more. And so the money’s been in there for a couple years now. And he’s been doing amazing. So he makes a lot more he pays 15%. I’m happy with it.

I also have investments in cryptocurrencies, like Bitcoin that’s been doing well, I want to buy more, if it comes back down, right now, it’s pretty high. But eventually, I think long term is going to go much higher. So I have that. And then I do have ownership in some small businesses. So I like to help people that are looking to start up their own business. And so if they have a good idea, maybe if they have some experience, people have come to me and say, Hey, this is my idea, this is what I want to do. And I love marketing. That’s my thing. You know, I enjoy trading a lot. But I really enjoy marketing, and psychology. So I tell them, okay, I’ll invest with you, I’ll give you some money, you’re going to run the business.

And I’m going to help with marketing. And so that’s what I did with my other friend with the real estate investment company, he came to me and said, Hey, I would like to start flipping houses, but I don’t have the money. Okay, I could put up the money, we’ll do have an app, you do the work, I’ll put up the money. So that’s I have other businesses that I am also invested in, and I get income from there. So the other question that I often get, so that’s how I’ve invested my money. That’s what the different things we have. The question I get is, Alan, do you actually make money from trading? Or do you get it from your company? Option Genius? Well, it’s a tricky question, because I do both. Right, option genius is growing, and it’s doing well, it’s helping people.

And the only reason that we’re growing is because we’re helping people. And I believe that our prices are relatively cheap compared to what other people are charging for inferior information. And so what we’re doing well, do I take out the money from my training accounts to live off of? Yes, and no, if you go back to the beginning episodes, I talked about the five finger strategy where you get to five different sources of income, so that if anyone gets cut off, you know, you’re still okay, you got the four other income sources, and then the fifth one hopefully, will grow back. The other thing you can do when you have that is that if one of them is doing really, really well, you don’t have to take the money out.

So my trading account, the last several years, have been doing amazingly well, last year was a record breaking year. So I’m just letting the money sit in there and grow and grow and grow. And I don’t need to take it out to live. Because I have the other sources. It wasn’t always like that, in the beginning, I was living off the trading. Now. I just live off whatever cash flows coming in. If I don’t need to take the money out of the trading accounts, I could let them grow. If the stock market starts dropping, then yeah, I’m gonna take that money out, I’m gonna live off that money. I’m gonna take it out and use it.

That’s fine. But if something is growing, like if I have a new business that I invest in, right, and it starts doing well, I don’t want to take that money out. I want that money to be reinvested in the business so that the business continues to grow. It doesn’t make a lot of sense to take, oh, yeah, I need you know, I own 50% of this business around 25% of this, I want my money out, I want to, you know, if we made X dollars every month, I want 25% of that. That’s not going to help the business grow. You can do that technically, Yes, fine. If you need to you do it. But if you don’t have to, that doesn’t make any sense. Reinvest the money back in to whatever is working, let it grow. Because what I’ve seen is that there are seasons, you know, I’ve talked about the waves. Things are going to be going really, really good. And then they’re going to not be going good.

And they’re going to go down and they’re going to get worse and I Oh my god, I can’t get any worse, and then that’s when things start getting better. So while things are going good, you got to keep your floor your foot to the pedal foot to the floor, whatever, put the pedal to the floor, there we go, put the pedal to the floor, what things are going good. And then when they stop, when they slow down, that’s when you can reevaluate and be like, Alright, what am I gonna do? And that’s when you take the money out. So it’s really a tricky question, hopefully, you know, for being as open as I can. Hopefully, this helps you. And you know, in the beginning, everybody’s not going to have this much, you’re not going to have all that it’s taken me a while several years to get to this point, you know, where I have so many different accounts and the investments in real estate and investment in other companies and the investment, other investments in whatever.

So it does take a while. Don’t think that you’re going to get there right away in the beginning is just pay. Let me find one strategy that works. Let me start generating some cash. And if you need the money, you can take it out. If you already retired. There’s no reason to make that count grow. Right? Whatever you make, take it out, take it out, enjoy it. But if you’re like my friend Matt, you know who’s still in his 40s he’s still working. He’s paying 500 bucks a month from auctions. Put that money back in your account, leave it there, keep it growing, keep it growing. Let the compound interest grow, and let it compound your account into tons and tons of money exponential growth. So that’s my two cents for this episode. Hope you found it valuable. And remember, always trade with the odds in your favor. Take care.


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