The Next Step in building financial freedom

Strongly suggest commercial real estate. Low risk, a rated type tenants.

Or b- to b+ multi family.

Many a people have gotten many a rich when they buy real estate AND HOLD LONG TERM before the ramrods bounce in that the market is crashing.

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that is real estate and I have no interest in flipping or renting properties.

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either you deal with cash flowing RE of whatever type or you get cash flowing businesses. that is your two choices. take it or leave it. your choice. never say you did not have a choice.

if you simply do not want to do it then that is on you for the failure. vast majority of financially free people have 1 or both of the above.

LINK

Go after commercial properties. Flipping and SFR rentals are super tough. You need passive cash flow where you have long term credit quality commercial tenants that all have lease bumps each year.

Higher interest rates and insurance cost are going to dampen real estate values.

Could present some buying opportunities.

I do finance a builder of houses on a small basis—one or two at a time—we have one house now that has taken longer to sell than any other we have built the last three years. I am going to lay off those deals for a while.

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Damn near all of my wealth is tied up in the market except my house. I would like to try to diversify myself up a little more, but the only thing I can think of to do that is real estate and I have no interest in flipping or renting properties.

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Sell covered calls against a portion of your long positions to collect steady income, which you can then reinvest or do whatever with.

Example:
If you own 1,000 shares of SPY (currently $410/share) then sell a few calls (let’s say three, which equals 300 shares) that expire next month (6/16) at a strike price that could be reached, but isn’t likely to be reached (say $424).

Statistically, there is an 80.77% chance that SPY will not reach $424 by 6/16.
But someone is still willing to bet that it will…and as of Friday’s close they’ll pay you $202 for the right to buy 100 of your shares for $424/share.

In this scenario, if you sell three contracts of covered calls you will collect $606 instantly, and you have, statistically an 80.77% chance of keeping your three hundred shares too.

If the price of SPY reaches $424 by 6/16 then you must sell your shares at $424 but you still keep the $606 premium paid to you. Because of the the premium you received, you actually sold your shares for $426.02 if you'd prefer to think about it that way.

This is now your new thing to do with your money to generate income, and it’s hassle free.
You also dictate all of the terms—Expiration date, strike price, and number of contracts sold. Again, one contract represents 100 shares.
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If you must sell your shares at $424 because SPY reaches the strike price by expiration then you can also get paid to buy your shares back at a lower price. This is you selling a cash secured put, which is essentially the same as a covered call, but on the downside. Both are a type of options strategy. What I’ve just described (selling CCs and purchasing again using CSPs) is called the wheel strategy.

It is the absolute safest way to use options, and a guarantee to reduce your cost basis on any stock or etf. It's also a great strategy to implement when volatility is high, as you will get paid more for your covered calls and cash secured puts when there is more uncertainty in the market.

If this strategy piques your interest then look up delta, theta, and gamma next. Also r/thetagang is a good resource.

I realize that not everyone wants to learn about this, but I’m ate up with it.
I’ve added 3% to my Roth balance since early March selling covered calls. Never lost my shares either. The goal is to keep your shares and pocket as much premium as possible.

Edit to add: you might be thinking, “so I’ve got to own 120k worth of SPY to make $606/month?
1) Yes, but that’s roughly 6% annualized and the strike price selected only has a 19.23% chance of being reached. A lower strike will pay much better.
2) We are currently in a low volatility market environment. When volatility increases, premiums paid for options get more expensive, which means you make more on covered calls and cash secured puts.
3) Additionally, there will always be individual stocks that have higher implied volatility thus more expensive contracts to sell. Think TSLA.

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And if the price of SPY goes down…

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That’s actually the best case scenario.

The value of the calls will plummet, but you have already sold them. SPY plummeting sucks for the buyer of the options, but it’s great for the seller (because to close your position you must either buy them back or allow it to expire in a month or so).

So, as of Friday the price of the contract mentioned was $2.02 ($202).
If SPY plummeted then the price of the option would fall even lower.

In this case, the seller can buy the contract back (buy to close) and then there is no risk of losing any shares to the options buyer. Conversely, the buyer has just lost his arse. He paid $202 on what amounts to a gamble, and he’s lost 50% of that investment.

I no longer buy options. I sell them almost exclusively.

It is recommended that the options seller closes his position at 50% profit and then rinse, repeat the process going out another 30-45 days with the expiration date.

If SPY plummeted and the options contract went down to 1.01 in a few days, then the seller of the contract profited $101 per contract.

There is no risk here other than selling your shares at $424. It truly is risk free outside of limiting your gains, but you’re getting paid for the possibility that you may cap your gains. That’s the trade. That’s the risk.
SPY, the underlying in this case, going down, is a BIG win!