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"Residential housing is a tough business."
These were the words told to me by two extremely wealthy real estate moguls from New York -- right after I bought my first rental property.
I couldn't believe what I was hearing. I knew several people who were making a killing buying, renting and flipping houses. And I figured I would get my piece of the pie.
I was guiding these wealthy New Yorkers and a handful of other successful businessmen down a 100-mile stretch of whitewater -- through the largest wilderness area in the lower 48. Six days in the middle of nowhere with no connection to the outside world is a great way to get to know and pick the brains of some of America's elite. I took self-made millionaires, CEOs, hedge funders and top executives down the river -- my mother even once took Jimmy Carter and George H.W. Bush down.
In short, it was a great way to meet interesting people and receive great advice.
So one night in camp I was curious as to why these two New Yorkers thought residential housing was such a tough business, especially when it contradicted with pretty much everything I had heard before.
Their logic was simple. Residential housing, done on a small scale, is a pain in the ass. You're constantly repairing things, dealing with tenants, hoping they keep the yard nice and praying that at the end of the lease they haven't completely trashed your house. In the end you have to fix it up and start over again. They said for the capital outlay and the cash flow I was making wouldn't be worth it.
Turned out they were right.
Soon my investment property became more of a cash pit than the golden goose I originally envisioned. Sure I was earning some extra cash each month, but just like my New York friends had told me on the river, it wasn't worth it.
Now don't get me wrong, if done correctly, investment properties can be a wonderful thing. I was just learning through trial by fire. But it's been a tremendous learning experience. Now I can evaluate properties and investments, and I have a better idea of which ones will throw off cash and which ones will suck every penny out of you.
But even with this knowledge and experience, venturing into real estate is still a capital-intensive (and time-intensive) undertaking. It's not for everyone.
I was reminded of this a few months ago when my colleagues and I were having a discussion around the Profitable Trading offices about the challenging environment for investors seeking to earn income in today's market.
The Federal Reserve's actions over the past few years have led to historically low interest rates, leaving next to nothing for investors to earn income from the traditional methods -- things like CDs, bonds, high-yield stocks, etc.
But my colleague Amber Hestla, Chief Investment Strategist of Maximum Income, has found a solution to this problem.
In short, she's figured out a way to earn a high amount of income from the stock market in a short amount of time. And it's really simple.
Rather than settle for paltry yields from traditional income strategies -- and also without venturing into the headaches of rental properties, why not rent shares of the stocks you already own and collect income?
Tenants -- people you can rent your shares to -- are in abundance. I don't have to call a plumber to unclog the toilet or an electrician to change out a light bulb, or even pay insurance. I can simply rent shares for as little as a few weeks to 26 weeks at a time, and the income I pocket is oftentimes more than the cash I get for renting out my home.
You see most investors just buy stocks, sit on them and collect any dividends and/or capital gains that come along with it. That's great, but with this strategy, you can also pocket a little extra cash in the process.
Take Alcoa (NYSE: AA) for example. Right now you can rent out shares of Alcoa for six weeks and pocket $68 for every 100 shares you own. If you own 500 shares, you can pocket $340, and if you own 1,000 shares you could collect $680 in income just for renting your shares.
And like I said before, it's not difficult. In fact, Amber has been showing her readers exactly how to rent shares and pocket the extra income since March. And so far, the results have been excellent.
Here's what she has to say about this strategy:
The good news is, collecting an additional income on your stocks isn't difficult. In fact, you can do it with blocks of just 100 shares, with nearly every stock listed on the Nasdaq and the NYSE.
I'll show you everything you need to know... and how to do it regardless of whether the stock market is going up, down or sideways.
See, many investors simply hold stocks in their investment accounts and hope that their dividends and capital gains will be enough.
But you can do better by using a strategy in the options market that lets you make a deal with other traders who want to pay you cash upfront -- money that goes straight into your brokerage account -- for the opportunity to buy your stock from you at a higher price.
This lets you collect the cash they pay to make the deal and the money from potentially selling your stock at a profit.
I use this strategy myself to generate extra money for my day-to-day living costs. It can cover your monthly bills, medical expenses, even provide you with an additional income for the things you otherwise couldn't afford, like taking lavish vacations.
However you choose to use this money, it's one of the conservative ways to generate extra income from the stocks you already own.
Amber's technique has been helping her readers pocket on-demand income -- from a few hundred bucks a month to a few thousand dollars a month. Unlocking your stocks to collect this extra income is a simple, conservative strategy that you can do with a few clicks of your mouse.
As Amber mentioned, this strategy has to do with the options market -- but we're not talking about anything difficult or complicated. And best of all, it's something any investor can do in their own regular portfolio. There are usually no special permissions required -- such as with selling puts -- and it can even be done in a tax-deferred account like an IRA or 401(k).
And as I pointed out with the Alcoa example, this can be done with many stocks you may already own. In fact, take a look as some the income you could be earning simply by renting out shares of some of these well-known American blue-chip companies:
If you're frustrated by the limited choices of income in today's market, then you should consider renting out your shares. To learn more from Amber, go here.
The majority of options you buy expire worthless. Now think about what that means for the person who took the other side of the trade.
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Three of our positions expired last week, and we will have an opportunity to generate even more income from one of them.