One of the most impactful things you can do for your portfolio is to add money or capital to it. A consistent and persistent schedule of funding your account, even with small amounts, gives you the added boost that compounds over time. But, we all know this already, don’t we? Why don’t we do it, or at least at a higher level than we do now? I’m a firm believer that these “big ideas” around saving money will help free up some cash for you.
- We all know that the best way to grow our portfolio is to consistently add money to it, so why don’t we do it?
- There are a zillion ways you can save money for investing. The goal of this podcast is to bring attention to some major areas they fall under which you might be overlooking. Paying attention to them can help you build some new habits and find ways to build up extra capital to invest in trading and investment accounts.
- There are six core concepts or “big rocks” that underpin money-saving and money-making habits, and we will go through them today.
- We are not looking to become cheapskates but financially coherent adults who look at the difference between price and value. The six concepts we look at today will help you do this. Applying them will make a difference in where you’ll end up in 5, 10, 15, 20 years.
The Six Rocks of Saving:
- Don’t Buy Stupid Stuff (stuff you don’t need). These little, unnecessary spendings add up to thousands of dollars a year.
- Examples include seemingly insignificant upgrades that add up, such as not flying first class, not buying phone or car accessories you don’t need, etc.
2) Microscopic Changes
- There are microscopic financial decisions you can make that don’t feel like much at the time but will add up over time.
- For example, if you turn the heating up one degree more, you won’t really feel it, but your bill will be that much higher at the end of the year.
- Other examples include switching the lights off in a room after you exit it, not letting the water run unnecessarily, not buying in bulk and then never using the stuff, using less data and more WiFi, etc.
3) Financial Planning
- This goes beyond planning to invest each month and contributing to your IRA. It’s about being strategic with everything you do during the month.
- For example, planning your trip to the grocery store in conjunction with filling your car and running errands can save you hundreds of dollars a year. Make one trip to the grocery store a week, and make a meal plan for the week. If you forgot to buy something on your weekly shopping trip, go without it. Avoid unnecessary trips.
4) Borrow Versus Buy
- Get stuff from a family member or neighbor versus going out and buying it. Share the cost of bigger items with friends and family.
5) Spend Wisely
- This seems counterintuitive – it’s about being concerned with the value of the things you buy rather than their price.
- For example, buy quality furniture rather than cheap stuff from IKEA that breaks after a year. Buy high-quality things and then look after them so they last longer.
6) Figure Out Ways to Increase Your Income
- There are so many ways to increase your income here and there.
- This one is important because it’s focused on growing rather than cutting.
- For example, take on a side hustle. Try to make a little extra money somehow and then put all of that toward your savings and investments.
- Start a small business, start a blog and get ad revenue, write content for companies about topics you have expertise in, sign up on Upwork, etc.
Option Trader Q&A w/ Hitesh
Trader Q&A is our favorite segment of the show because we get to hear from one of our community members and help answer their questions live on the air. Today’s question comes from Hitesh:
Hi Kirk. This is Hitesh from India. First of all, thanks for all the podcasts and all the free content. My question is – Does the non-limited option selling strategies like strangles and straddles work as usual during the recession period? Let’s say 2000’s dot com crash and 2008 and other older bubbles. If not, in those periods, buying strangles or straddles would have made sense because I see that actual volatility is higher than the implied volatility in those periods. Thank you.
Remember, if you’d like to get your question answered here on the podcast or LIVE on Facebook & Periscope, head over to OptionAlpha.com/ASK and click the big red record button in the middle of the screen and leave me a private voicemail. There’s no software to download or install and it’s incredibly easy.