BennyEast.Com/Blog The official blog of Kenny West

16Nov/160

A-B-C-List

I've decided to start getting more serious about stocks, books and music.  My plan is to just buckle down and stay in more and work in the evenings after work on doing more stock research, working on music, and finishing my book.

Right now my income from stock trading for the year is at about 1100 bucks January 1 to today.  Not amazing... But, it's not too bad.  I'm going to beat last year's income for sure.  My plan for next year is just to continue my year over year income increase.  Last year I made about 1300 bucks...  So, next year I want to try and make between 2 and 5k.  And then the year after over 10k.  We'll see.  There's more to it than dividend income... three's capital appreciation and capital gains.  Those are also up, but I don't count those until the end of the year since they change.

For the music thing, I want to keep putting up more songs.  I have 4 pretty good songs I'm working on with 2 just about being close to the finish point.

The book is getting close to being completed as well.  I'm hoping to finish that over my winter break from work.  But, we'll see.

SO back to the stocks.  Right now, stocks are the most promising form of income...  I'm hoping to get better at researching investments and making trades and collecting income from the trades.  I basically want to get so good at it that I'll have lots of extra side income from it that I can just use that to do home improvements and such.

I'm not much of a traveler, or I'd travel instead, I basically just stay local and go to things around the area.  It's not that I haven't traveled, I have.... but I'm just more of a stay local kind of person.

Anyways, so I have this A-B-C list thing for my stocks now.  C list is like my crap shoot dump where I just take any stock that passes my first screen and throw it in that pile.  Then I pick through that and pull stocks from there.  Then, ones that I like... that are performing well, or are strong, or have strong dividends.  I take those and put them in the B list.  From that list, I make a smaller A list.  So, C is full... B is slimmed down, and A is very small and selective.  The cream of the crop.

My current investment strategy is just to hold stocks and collect dividends.  I make very few buys and sells.  I let them go up and down and all over the place.  Should a stock completely go bust, like out of business, or the shares are merged out, or taken private on me (at a loss).... I actively trade to make it so that my capital gains erase my capital loss.  I have a year end policy to never have a capital loss.  Then my dividends are all income.

That's my current strategy.  Buy and hold, and collect income.  That's where the current 1100 is from for year to date.  Like I said, there's currently capital gains on my books, and no losses yet... But there's also capital appreciation.  So my investments have gained value even though I haven't actually sold them to realize the gains.

It's complicated.

My strategy going forwards is going to be to keep the previous one in place... But then also I want to use one small bit of the cash I now have access to recently from my mom's stuff... To make larger short term swing trades.  So, I'll take small gains in short term swing trades.

If I can make just 5 percent gain on a stock, I can then use that money to buy things for around the house.  Or, I can then use that money to add to my income dividend stock bundle.

5 percent doesn't seem like a lot... But if you make 5 percent trades over and over again... it can really add up.  So, that's the plan.

I'd love, really, just to consistently beat my work salary in trading.  That way, I have a nice safety blanket and can sleep well at night knowing I have this extra money to rely on if I needed it.

That's one of the things about working and getting paychecks from work... Should something happen and the job is no longer able to keep those checks coming in... that source of money dries up.

That's why I like trading stocks and dividends... That money is passive, and so it's like a base life salary that, no matter what... I always have and can count on.

Knowing that there's sort of a renewable supply of money that can be generated by trading stocks in a predictable and highly analytical way would be amazing.  That way I don't have to worry about buying new personal belongings, paying bills, paying for necessities of life, or a new car for example.. Or paying taxes on my house.. Etc. etc.

So, if you have, lets just say 10 thousand bucks... and you spend 1000 a month for example... In 10 months you run out of money.  That's if it's just cash being spent.

But let's say you have 10 grand and you're spending 1000 a month.... Now let's say you make three trades in a month valued at 5 percent a piece.

5 percent of 10k is 500 bucks... SO, if I make 3 trades with that 10k block of money, I can make 1500 bucks... Then I spend my 1000 for expenses and I reinvest the 500 left.  Obviously stocks are a bit volatile, so maybe some months I won't make ANY trades and other months I'll make way more than 3.  Like 5, or 10.  Who knows.

But the idea is that, the 10k never goes away.  It just sits there being used as trade capital and then money is spent off the top of it, the earned income from that original principle.

Ideally though, I'd like to cover my costs 100 percent with trading so that my work paychecks just go into my other account and then I can use those for whatever else.  Maybe use those for home improvements, or who knows what.

My other part to this is, I put all of my expenses that I can on a cash back credit card... That way that's a little extra bit of money that I can also add to my bottomline trade income, and investment income.

But anyways, I'm working on going for my first 10k trade.  Hopefully it will be a quick in, and quick out trade.  And I'll scoop up 500 or 1k in anywhere from a few days to a few weeks.

There's all sorts of strategies.  I'll probably eventually establish margin on my account and leverage trades, or do options trading with covered call options...

Trading is neat because there's SOOOO many different things one can do with stocks.  It's possible to make money even on falling stocks by shorting them.  I don't know if I'll get into shorting... But we'll see.

The grand master plan is to really get amazing at trading so that I can use that money to build a recording studio maybe, and then really do more with music, and of course maybe also use this to publish my books, then make movies of the books... Etc. etc.

It's all intertwined.... There's a C list a B list and an A list for mostly everything.  I have this for my songs and books too.  Stuff that's on the C list is just an idea, stuff that's on the A list is closer to being completed.

I do this for my daily to-do lists.  A is super top priority and C is not so much.  Or whatever letter.... Sometimes I add a D to the list.  It's much like a grading system.  A is top priority, and then the sub letters all go down to become less and less important.

Anything can start on the C or D list and make its way up to the B and A list.  Hopefully by doing it this way, I get the best stocks to trade, and I get the best songs finished and posted, and the best books.

We'll see.  Right now I haven't actually been making any trades.  Just letting my income stocks sit and generate income.  Most of my capital is parked in cash.  Things are a bit uncertain in the markets at the moment.  So, I'm mostly taking a wait and see stance while I research the heck out of possible trades.

Until now all of my trades have been very small scale trades.  I buy and hold generally for years at a time with very small amounts of money and stay heavily diversified.

A large scale trade is one of those, putting all your eggs in one basket type of deals... It can go great if the stock goes up... Like Nvidia has been doing... or it can go sour if the stock unexpectedly falls due to a bad earnings report or some kind of unexpected news.

There are various ways to deal with trades, I can just sell out and take the loss, hoping to beat it the next time and then the idea is that you have more gains than losses in the long run... OR, I can just hold, and wait for it to turn around... This ties up the money for a longer than anticipated period of time.  That's why I like dividends.  Let's say I hypothetically put that 10k into a dividend stock that gave me 4 percent a year in dividends...

Now I have 100 bucks a quarter to use for things while I wait for that stock to turn around.

Probably not going to do that.  I'll just get in and out over and over... For now I'm not making any trades.  Just doing research.

We'll see how much I get into it.  Right now I'm just setting up my trading platform.  I'm building into my dividend income stocks a little more.  I bought 3 stocks in the last month.  So, I guess I did make some trades... But I plan to hold those 3 stocks for a long time.

Anyways... That's the latest.

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