so i want to talk about realistic expectations when training options
so here's an email that i received the individual and i blacked it out obviously
for um anonymity and respect for this person's privacy he said good morning David i've definitely
received your intro emails and watch your youtube videos i've subscribed to your channel i
understand time is money i'm 47 year old veteran that has fallen down more times than i care
um to admit or account i was laid off enough to sell my house and my dream car in order
to keep them from being foreclosed and repo i've not been back to work nor do i plan to
i'm now on a fixed income so this leads me to believe that he's on disability
so he receives disability because he's on a fixed income but he's 47. um so or you know
potentially he receives like some type of veteran benefits but my god feeling is he has disability
and then the fixed income allows him to make passive income so he can make like
trading income or rental income but he can't be an employee actually receive a
salary i have a small brokerage less than 10 thousand through e-trade and purchase reits
uh my luck has been because of the market so i think that's great that he has the self-awareness
that he made money because of the market he bought when the market was in one of the dips
i like reits because their dividends are guaranteed when they come unless the company comes
yeah i mean reits are good i think they're very solid and stable uh realty which i think is oh
there are a few more as well i mean there's even reits like amt like american tower
which are really good i recently watched your show say listen to your youtube
video of the call you had when your students
a lot of what you were saying above my head i did catch when we said we always wanted to buy using
the limit option well we actually sell options but yeah you always want to use limit orders
i still don't understand this as using the limit option allows me to select
other options that i don't understand i don't understand what he means by that but i also
watched a video that you suggested where you mentioned be the casino by selling puts my goal my
goals are simply to build an account that supplies me with enough passive income on a monthly basis
um an additional 20 to 50 000 a year would be ideal i know this amount would
return my lifestyle pre-covet i live an extremely simple life
i have very little debt i'm working on getting some collections paid off roughly five thousand
in total in summary i'm interested in building my portfolio but i may have to put that on hold
until my until i get my desk paid if you have any suggestions um especially the limit stock purchase
option so all right basically by asking about limit orders he he doesn't really
understand training at all i mean i'm not being critical or trying to make this person feel bad
um i mean i've also anonymized it so there's no way to like point the finger out a specific
individual but my thoughts are that by not understanding limit orders he just doesn't
understand like a basic concept of investing or trading or anything like that because that means
that he's probably using just market orders which is fine if you're going to buy stocks because
you'll give up like a few cents but when there's less liquidity in the market
especially you know if you're going to sell options on reits then you definitely want to
use limit orders because if you give up 20 cents then that's 20 a contract that's a lot okay so
my response to him was very short so you're looking to earn 250 a year on your portfolio
if so that's completely unrealistic so i'm just like so i think it's extremely important to have
realistic expectations and i was very blunt and that was my response and then he responded back
with continued efforts of investing in a disciplined lifestyle i don't believe it
is unrealistic as i stated in my goal as i stated it's my goal not my expectation and would prefer
a mentor to suggest a plan of action rather than a canned response i wish you the best so i respond
and what do you have to offer the mentor you haven't paid you haven't offered to pay for
anything and you have 100 unrealistic expectations i encourage you to attempt to try and make 250
a year on your disability income that way you will learn from experience
so the reason why i'm showing you this and bringing this to your attention is that
it's you can't gamble especially when you don't have a lot of money like i understand
the desire or the urge to turn a little bit of money like five thousand ten thousand dollars
into like fifty thousand dollars but the reality is that the more risk you take
the higher the probability is that you're actually going to end up blowing up your account and losing
everything so for this person to think that the s p is going to return like eight percent a year
and i'm sure that he's earning you know previously like 10 to 15 a year on his reach potentially even
more because real estate has gone up significantly so maybe 15 to 20 percent recently over the past
two or three years on his on his reits including dividends for him to think that
by passively invested in it by passively investing in reits or the s p that he's going to beat that
by 10 to 12 times by trading options especially for someone who's on disability who has been down
on his luck who's been alive for 47 years so he has a significant amount of experience regarding
what his capabilities are what he's good at what he's not his ability to earn money his ability
to trade his ability to understand concepts i just don't understand what in his 47 years
of life has showed him that he's able that or rather that he would be able to earn
12 times the returns of simply being long spy and i'm not trying to be mean here but i do think it's
very important to take a step back and to look at yourself in the mirror and be realistic with
your expectations and have a reality check because if you don't the consequences are extremely dire
in that you are potentially going to end up losing all your money for example i look at myself and
if i try to play professional basketball that's not an endeavor that would be worthwhile for me
to spend my time because genetically i can't do that if i try to do something else then that i'm
not necessarily accustomed to or if i try to draw or do something creative that's something that i'm
really bad at so i don't even try to do that because i know that i'm bad at it and in this
situation that would almost be paramount to me saying okay i'm going to repaint the mona lisa
and have it be better than leonardo da vinci's original original portrait i mean it's just not
going to happen and i think in this situation when you have unrealistic expectations when
you have illusions of grandeur it does end up hurting you because this person got upset with
me because i was telling him the truth and he pretty much didn't want to hear it so now he's
probably going to end up taking significant amount of risk and my gut feeling is that he's going to
end up losing everything i hope he doesn't but that's my gut feeling so just make sure
and ask yourself are you being realistic with your expectations leave a comment below and
let me know your thoughts David Jaffee with beststockstrategy.com please watch the video
on your screen because youtube says and youtube believes that you're going to enjoy it thank you