you can retire early

8/2/2019 You Can Retire Early

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26April 2005

Before I get onto that, I wanna thank everyone who hasattended one of my FREE workshops. Ive had such a bonzaof a time, as nothing motivates me more than teaching a classfull of sponges. I mean that in a nice way, people who wanna

absorb as much information as I can give them. For those whohavent attended yet, check out www.whoisaussierob.com fordetails of my upcoming events. Read the testimonials, as thisstuff is life changn.

Life changn, yeh sure. Yeh, it certainly can be, just like theimpact it had on my students and me yesterday. We werediscussing different strategies and I asked one of the youngsheilas in the room what sort of income shed like to retire on.Being not that long out of college, she said, Around $2,000per week. Hrmmm, nothing like shooting for the stars, eh!

S e r i o u s l y ,what a great goal,I mean, as Donald Trumpso famously said, If youre going tothink, you might as well think BIG. I agree withhim 110 percent; shoot for the stars, aim straight for theTOP and if ya end up a little short, youll most definitely be

a lot better off than if you set your goals lower.

Now back to the young sheila I asked her how much moneyshe thought she would need to invest to generate that kindaincome. And of course, the answer was, I dunno. Now shewas no slouch. She was pretty switched on actually; she graspedmost of the concepts Id been teaching pretty much straightaway. Unfortunately, shes like 99.99 percent of everyone outthere who is part of the rat race. Everyones stuck on thatmouse wheel workn harder, longer hours, studying morefor more degrees to hopefully earn more money, only to find

idday Folks, Aussie Rob

here I was training a

bunch of youngns yesterday when I

realized just how powerful options reallywere. Of course, I always knew that theyre the

best thing since sliced bread, but yesterday, the

penny really dropped for me.

Check out www.AussieRob.biz for more great trading information!


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27April 2005

theyrej u s t

spinning thatwheel harder andfaster, trying to makemore money to pay for the Igotta have it NOW lifestyle thatmost people seem to have fallen into.Pretty sad, isnt it. Society is teaching ouryoungns, our future leaders, to fall into the same oldtrap that most grownups are in. Work harder, earn more,spend more, work even harder, yes, earn more and of course,spend even more, yadda yadda yadda Thats what I callthe rat race. Constantly spinnn ya wheels.

Now, it doesnt have to be that way. All you need is a plan.A plan of where ya wanna go, and a plan of how ya gunnaget there. And thats exactly what our class did yesterday.We digressed from our training curriculum and created aplan of attack to be able to provide that $2,000-per-weekincome.

Its quite simple to work out how much money you need tohave invested for your retirement.

Step 1: You need to determine how much a week youwanna retire on.

As we know, the young shelia in my class wanted $2,000per week.

Step 2: Multiply that by 4.3 for monthly income or 52 foryearly income.

So, $2,000 per week = $8,600 per month or $104,000 perannum.

Now that we know what we want, we have to work outwhat we need to be able to provide for our wants.

Step 3: Determine our investment vehicle.

OK, now this is how we can get creative. But first, lets lookat the easy way. Lets look at investing with a bank. A nicesafe and simple way to invest. After all, this is our retirementthat were talkn about, so it has to be safe.

I asked our class what sort of interest their bank paid. Nowthat was an interesting question, as some in the class had noidea. One said, My bank doesnt pay me any interest! What?

You mean tosay that you put your money in the bank and let them do

what they want with it and they dont pay you any interest?Thats right, he said. Its a checking account. Now thatwas a shock to me, as I didnt realize that most banks in theUS dont pay interest on checking accounts. Then, thingsstarted getting pretty exciting in the room as another youngsheila claimed that her bank paid her 2.5 percent interest.WOW, 2.5 percent for the month, I said. She was quickto set me straight that it was only 2.5 percent for the year,not the month. Now everyone in the room was still prettyexcited and they compared notes, as they all wanted to getmore than the zero they were getting.

I asked the class to think for a moment If you took the

easy way out and invested your money with a bank, howmuch would you need to invest to be able to provide foryour $2,000-per-week retirement? You could hear thepens pounding away on notepads and then you could startseeing the change of expressions on their faces as they startedrealizing how much money they would need to invest.

To earn $2,000 per week you would need to invest

Ya ready for it? Hope ya sittn down

You would need a whopping $4,160,000 in the bank

invested at 2.5 percent to be able to earn $2,000-per-weekinterest. Whoa, wheres that kinda money gunna comefrom? I asked. You couldve cut the air with a knife as thetension grew.

Lets put that into perspective. Id guess that the youngsheila was in her early 20s, as she was just outta college,so that would mean that shed have around 40 years untilretirement. Thats if she worked right through to the normof 65. I dont wanna work till Im 65, someone proclaimed.BUT WHERES THE MONEY GUNNA COME FROM???

.

.

.WHERESTHEMONEYGUNNAC

OMEF

ROM?



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28April 2005

Forty years to save $4.16 million equates to saving exactly$2,000 per week.

Its hard to believe, isnt it! So heres the math:

40 years = 2,080 weeks$4,160,000 divided by 2,080 = $2,000

WOW, wheres the money gunna come from?

OK, lets start getting serious here. With that kinda moneyin the bank, Im sure theyre gunna be a bit more generous,so lets say for the purpose of this exercise that the bankmanager does ya a ginormous (thats gigantic and enormousput together) favor and pays you double. He pays you 5percent per annum.

That still equates to having to have more than $2 million byretirement. Thats a heck of a lot better than before, BUTdivide that by 40 years and youre gunna have to come up

with more than $900 a week.

Ah, got it Ive found a solution: get a fantastic paying job,stay at home and live with Mom and Dad for the next 40years and hope they dont start charging you rent!

Seriously folks, this is a HUGE dilemma that the youngnshave and no one seems to be educating them on what theycan do about it. Society just sends em off to work to join therat race and they dont have a clue about saving, investingor planing for their retirement. Just work hard, getta job(speaking of which, do ya know why its called a job? JustOver Broke) and spend. Wanna spend more? Work harder,

getta better job and spend more. NO, theres an easier waythan that. Getta credit card! And when it hits its limit, getanother one. Theres plenty of banks around thatll giva yaone Scary, eh!

Now dont go slashn ya wrists I HAVE A SOLUTIONFOR YA! But before I ease your pain, heres something elsefor ya to think about. Whatsort of Social Securitybenefits are

there gunna be for retirees in another 20, 30 or 40 years? Bythe time the college grads of today get to retirement, theyhad better saved a few million, as there aint gunna be muchin the governments coffers to help them out.

As we all know, were an aging society. The Baby Boomersare starting to retire and the youngns arent breeding asmuch as the previous generations did. Theyre too busy

workn two jobs to meet their mortgage and credit cardpayments. No time or money for rug rats these days.Everyones on a mission. Theyre joinn the rat race. Hi ho, hiho, its off to work we go.

As I said, I have a solution for ya!

Ya gotta learn how to trade options!!!

Now heres a thought Why dont we pitch colleges orbetter still, high schools, to add options trading to theircurriculum? Professor Aussie Rob hrmmm, gotta nice ring

to it

Hang on a minute you crazy Aussie, I thought you should bedon something safe with your retirement fund, not tradinghigh-risk options!

Ha, where have I heard that before? Ah, thats right. Theplumber next door, the options expert. You know the type,the doubting Thomas. The moment you try to be differentand step outta the rat race and start to become successful,there are people who wanna cut ya down. Success if not forthe meek, ya gotta really want it; you gotta have the courageand the determination to follow through. You gotta have the

commitment to study this kinda stuff.

Now not all option strategies are high risk. Take good oldcovered calls for example. Gee, they cant be high risk since thegovernment allows you to trade them in your IRA. Surely ifthe government allows you to trade them, they must be ok!

Lets get back to my story about yesterdays trainingBy now, everyone in the room was lookn pretty

depressed. The thought of spendn the next40 years living with Mom and Dad

just didnt cut it with these guys.

Heck, theyve been livnwith em for 20-oddyears now and

all theyYagottalearnhowtotr

adeoptions!!!

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could think about was how to escape. But freedom comesat a cost. Gee Mom, I didnt realize groceries cost so much.Gee Pop, can you lend me 500 bucks, I gotta get my carfixed, its dumped a gallon of oil in your driveway. So whereare the few million bucks gunna come from? Ah thats right,retirement; I was kinda trying to forget about that!?!?!?

I proceeded with teaching the class covered calls. (Ms.

Jen, our editor, wont give me enough space to teach yaeverything today about covered calls, so Ill have to giveya the condensed version. Buy some back issues of thismagazine, as Ive covered them in more detail before. Betterstill; come to one of my FREE workshops so I can spend sometime with ya.)

To write a covered call is to sell a call option against a stockyou already own.

Heres the example I used:

If the stock is trading at $20 and you sell a $20 call for $1,you are selling someone the right to buy your stock from youfor $20. They are paying you $1 per share for that right.

To buy the stock and sell a call in the same transaction iscalled a buy write.

Think about it for a moment. You bought a stock at $20 andsold someone the right to buy it off you for $20, and theypaid you a buck for that right. Pickle me Grandmother, ifthe stock doesnt do anything, you still make a buck. Howcool is that?!

Now everyone in the class was starting to feel a bit better.One person actually yelled out, Thats a 5 percent return!

You betcha it is. Thats 5 percent for the month. Thats whatthe generous bank manager agreed to pay ya for the YEAR.

If ya bought the stock on margin, your return would double,giving you 10 percent for the month. Now is that worthgetting outta bed for? Do ya think thatll help ya save foryour retirement, I asked?

Now everyone in the class wasnt just feeln a bit better, they

were getting EXCITED! They could see light at the end ofthe rat race tunnel.

Lets do some more math and recalculate the lump sumneeded for retirement if you traded covered calls.

Remember, the young sheila wanted to retireon $2,000 a week and we

calculated that with a friendly bank manager, shed haveto have more than $2 million saved up.

Compare that to earning 10 percent a month, which equatesto 120 percent per annum. (I didnt compound it to allowfor a couple of lean months.) By the way, the 10 percentexample is not some pie in the sky dream, its a reality. Checkem out yourself and youll see that there are truck loads of

covered calls thatll earn 5 percent or more per month. Applymargin and you could hit that 10 percent jackpot!

Back to the $2,000 per week and 10 percent per monththe class worked out that she now only needed $86,000earning 10 percent per month to get her $2,000 a week.Phew, what a relief! Now she only needs to save $41.34 perweek for the next 40 years to have enough for her retirement.

YAHOOO, now she doesnt have to live with Mom and Dadfor the next 40 years either.

Now thats taken care of the youngns. They now have hope

for a brighter future. These guys were pretty switched onand realized theyd probably have to save up a bit more thanthat just in case things didnt work exactly to plan. But hey,what if were 50 percent off? They now have a plan. Butnow its up to them; they know a plan can only work if theystick to it.

Some of you reading this are probably a tad over early 20s,right? Well think for a moment how this can help you.

Some of your 401Ks are probably lookn more like 4.01Ksafter the last few years. Am I right? Well, now you knowwhat you can do to build it back up again. Start writing

covered calls and get some action back into your account.You may not have to work that extra 10 years to recoverfrom those losses. Heck, you may even have enough in youraccount right NOW to retire early. Try it, give covered callsa go. Do some further study and start paper trading themand you just might end up being able to tell your boss whatto do with his JOB. When you do, lemme know, Idlove to celebrate with ya. You can buy the Fosters;I think yall owe me one!

Cheers and heres to an earlyretirement. After all, there

is life after work!

Cheersandherestoa

nearlyretirem

ent.



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Trading options involves both the potential for loss as well as profit, and all trade examples arehypothetical only. Aussie Rob Financial Services ABN 36 116 471 820 trading as Lifestyle Trader isa Corporate Authorised Representative of The International Securities & Derivatives Group (ISDG)ABN 22 103 552 683 Australian Financial Service License AFSL 227544

Please see a financial advisor to see if this product is right you. Please refer to our FinancialServices Guide (FSG) located on www.lifestyletrader.com.au/fsg before undertaking this form ofinvestment. Any advice is general and does not take into consideration your personal profile.

you can retire early

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