Options trading for retirement
Perhaps the concept of retirement (working hard just to stop and do nothing) is flawed.
I am currently rereading the book, The 4 Hour Workweek by Tim Ferris.
This book is required reading for anyone wanting to live the Option Seller Lifestyle.
There is one section that stood out to me today, and I am copying it below:
Retirement planning is like life insurance. It should be viewed as nothing more than a hedge against the absolute worst-case scenario: in this case, becoming physically incapable of working and needing a reservoir of capital to survive.
Retirement as a goal or final redemption is flawed for at least three solid reasons:
a. It is predicated on the assumption that you dislike what you are doing during the most physically capable years of your life. This is a nonstarter- nothing can justify the sacrifice.
b. Most people will never be able to retire and maintain even a hotdogs for dinner standard of living. Even one million is chump change in a world where traditional retirement could span 30 years and inflation lowers your purchasing power 2-4% per year. The math doesn’t work. (Living Well, Barrons, March 20,2006, Suzanne McGee) The golden years become lower-middle-class life revisited. That’s a bittersweet ending.
c. If the math does work, it means that you are one ambitious, hardworking machine. If that is the case, guess what? One week into retirement, you’ll be so damn bored that you’ll want to stick bicycle spokes in your eyes. You’ll probably opt to look for a new job or start another company. Kinda defeats the purpose of waiting, doesn’t it?
This stuck out to me, because I get many emails from people who stuck to the “plan” and because of some hiccup along the way (illness, layoff, whatever), they are now in a really bad place where the income they have is not enough to cover the bills. And retirement is not even a possibility anymore.
That’s why I am urging everyone to take control of their finances and add options to their income arsenal. There are different types of investments you can start with.
So what is the goal if it is not retirement?
It is living on your terms.
Having enough of an income from your investments that allows you to spend your time, your way.
The fastest way to do this is to lower your monthly expenses, increase your savings, and generate as much yield as you can from your capital.
Expand your investments through option selling
If you currently limit your asset mix to traditional investments, then you’re missing out on what could be a powerful tool and opportunity for growing and protecting your net worth.
The rewards of options investing can be far greater than the potential gains of buying or selling stock. However, the risks are also greater. For those of us who love the extra challenge of option investing, it is worth every minute of time you spend.
So make the first step and dedicate some time to learn how to use options the smart way. Got something to share? Please feel free to leave your comments below.