Discover more from Covered Calls with Reinis Fischer
Invest $50/week turn in $4,000 in just one year with call options and dividend stock
I love investing using the so-called dollar-cost averaging, investing once a month or even once in a week. I have done it many times in the past and most times I have not only kept my money but also made some nice income.
Currently, I’m running two 52 week challenges - one investing once in a week in mutual funds with my bank and second, much sexier - investing once in a week in Bitcoin.
Last week I decided to start a challenge - turning $50/week in $150,000 in just 10 years and additionally involved my partner, now she is running the same challenge if all works as expected we might have some nice $300,000 in just 10 years. Awesome!
Disclosure: your capital is at risk when investing in stocks and you could actually lose some, if not all money, as stock prices might drop. invest only money you are comfortable losing. I’m not a financial advisor, all information shared in this article and on this website is for informational use only. I take no responsibility if you decide to invest
I decided to launch another challenge, this time for our almost 3 years kiddo, but this time, instead of the longer 10 years timeframe, I’m looking at a shorter 1-year term.
Here you go - a new experiment - investing an additional $50 every week for the next 52 weeks in the stock market and I’m looking to turn them into $4,000 or more in just one year using covered calls, collecting dividends, and hoping on price appreciation.
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Here is the plan - for the first 3-4 months I will invest in Smile Direct Club stock (SDC), this is a stock I’m pretty well familiar with actually, have been selling puts and calls with great success for over a year.
I’m not sure, is this a stock I would love to hold for 10 years, but I’m pretty confident this is a stock I can afford to invest $2,600, but I will do it gradually, once in a week pouring in just $50 in this stock and additionally selling call options to generate extra income.
Here is how much I could buy (if the price stays the same for the next 52 weeks): 52 weeks times $50 = $2,600
$2,600 gives us 273 shares with SDC.
It’s not said that I’m going to invest all money in SDC stock only if an opportunity arises I might invest in some other stock, once at least 100 shares with SDC will be collected.
With the current stock price of 9.5, we could sell weekly near-the-money options and pocket about $20 in premium.
The only problem we don’t actually have yet these shares to deliver if called away, so for the first month we are going to sell naked call options or almost covered options and will actively manage them (if challenged will roll up and forward for a credit)
At the end of every month, the money made from premium will be reinvested in a dividend-paying stock, right now I’m looking at some quality dividend aristocrat stocks in a price range of $30-50, so we can acquire additional 100 shares in a reasonable time frame and sell covered calls on them.
There are a few candidates we are looking for now, to not miss an important update, make sure to subscribe to my newsletter.
Or I might change my mind completely and go in some other direction, will see, one is sure all updates are going to be shared here, make sure to subscribe not to miss an important update.