Profitable methods of making money while in medical school ...

Hate to tell you this but you're probably going to be so overworked in medschool that you won't have time to manage money.

If you're already a very good investor, you can spend some small time managing investments.

But if you're someone who isn't skilled at this, you're going to have some pretty bad moments like any investor has--and this could be during a bad time during the school year.

If in invest--I'd suggest only safe investments. Personally I'd put it into a stock with a very high dividend yield such as one of the canadian energy company stocks.

Dr.Inviz said:

be it in a bank or stocks ..

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how about taking the "or" out and investing it in bank stocks. wells fargo seems undervalued, and citigroup has made it's largest move since august 2000. both yield above 3%. if the fed cuts rates anytime soon, banks should make out good.

Borrow at 0% using 0%, no fee, balance transfer credit card offers and deposit proceeds in a 5%+ savings account.
http://www.mymoneyblog.com/how-to-make-money-from-0-apr-balance-transfers/

Cash back credit card. Pay it off every month or the benefits wont outweigh the cost. Mine is 5% on gas, grocery and pharmacy. 1% on everything else.

Online savings account. These pay higher interest rates. Convenient for us students that recieve a loan disbursement for an entire quarter/semester and then use it up slowly over that time. (HSBC, Citi, etc...)

Stock symbol ENT has right now about a 17% dividend.

So if you put your money in ENT, and it doesn't go up 1 cent during the next year, you'll earn 17% in interest.

Its right now in the low 8 range. IMHO it ain't going lower, and if it does, its not going much lower-to the point where even if it went below 8, you'll still probably do better than 10% per year.

whopper said:

Stock symbol ENT has right now about a 17% dividend.

So if you put your money in ENT, and it doesn't go up 1 cent during the next year, you'll earn 17% in interest.

Its right now in the low 8 range. IMHO it ain't going lower, and if it does, its not going much lower-to the point where even if it went below 8, you'll still probably do better than 10% per year.

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how long will they be able to maintain that dividend? and won't the stock go down about 5% every ex-date, cancelling out the dividend?

logos said:

Cash back credit card. Pay it off every month or the benefits wont outweigh the cost. Mine is 5% on gas, grocery and pharmacy. 1% on everything else.

Online savings account. These pay higher interest rates. Convenient for us students that recieve a loan disbursement for an entire quarter/semester and then use it up slowly over that time. (HSBC, Citi, etc...)

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what credit card do you have? mine used to be like that (Citibank), but they quietly dropped that 5% to 2% last fall. i'm looking for another b/c that's annoying.

If you have time, great. Taking loan money and investing is risky business.
I worked as a bouncer/doorman in Chicago clubs my first summer, and even my 2nd summer after Boards I (Psych Rotation) - but don't invest what you don't have.
Know if you can get other peoples money than do it - but if you want money, go into business and forget about getting into Medical school

blanche said:

what credit card do you have? mine used to be like that (Citibank), but they quietly dropped that 5% to 2% last fall. i'm looking for another b/c that's annoying.

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Uh oh...its from citi.

I havent gotten any notice about changing the percentages, but they very well may have.

whopper said:

Stock symbol ENT has right now about a 17% dividend.

So if you put your money in ENT, and it doesn't go up 1 cent during the next year, you'll earn 17% in interest.

Its right now in the low 8 range. IMHO it ain't going lower, and if it does, its not going much lower-to the point where even if it went below 8, you'll still probably do better than 10% per year.

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All stocks can, and occasionally do go to 0. At that point, a 17% yield doesn't mean much. Normal stocks don't yield 17%, therefore those that do are more likely than most to go to zero. Anything that yields 17% is an extremely speculative investment.

Dr.Inviz said:

I am currently applying to medical school. I was looking at a variety of options to make money while in medical school.

I know theres work-study, but you dont make much, however, it is something I would consider.

Also, I was thinking about investing excess loan money in something that would yield a high return rate, be it in a bank or stocks ..

Lastly, I was looking at condos. Ive seen some 1 room/1.5 bath condos in the 130K-150K range.

Are there any other considerations as to money-making pursuits while in medical school? If so, what are some ideas and how would one go about pursuing it?

Thanks!
Dr. Inviz

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A few thoughts...

1) Concentrate on medical school. You will have plenty of time to make money when you get out. Your single best investment will be in your own earning power.

2) Excess loan money isn't a great investment right now. When I was in med school rates were at all time lows, and many of my classmates consolidated at 1.9%. At those rates, taking extra and investing it makes a lot of cents, but at today's rates, the risk/return profile is significantly worse. You are essentially buying stocks on margin, a very risky endeavor. If you have some excess, put it in a money market fund at 5.1% right now (Consider Vanguard Prime MMF ($3000 minimum.) At least that way it isn't sitting in your bank account losing value to inflation.

3) I wouldn't invest in investment property as a medical student. It is a very time consuming endeavor, not to mention the market has really flattened out lately, so you can't expect a quick flip in most markets. 1 bedroom condos are a horrible market too. I had a difficult time selling mine after med school and ended up barely breaking even after 4 years. Most people just aren't looking for one bedrooms.

4) Other options include moonlighting (I did H&Ps for $20/hour at a local outpatient surgical center as an MSIV) sperm donation (I have a friend who was always rounding up volunteers in the class), volunteering for medical studies, egg donation (not worth the risk IMHO), working as a clerk in the ED or one of the wards (sometimes time to study on the job) etc. For the most part, just suck up the loans, you'll get them paid back eventually.

Writing covered calls is a great safe way to make additional income. You can get 5% easy on your money a month, not a year. You do however have to know about tech and fundamental analysis. It isn't nearly as hard as your premed classes. I made a ton of money off buying calls for ATI.

Dr.Inviz said:

Also, I was thinking about investing excess loan money in something that would yield a high return rate, be it in a bank or stocks ..

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I thought that this was expressly forbidden and illegal (as I know a guy who did it and made a killing, and he told me he was in fear until the statute of limitations expired that he would get caught).

Options, even writing simple covered calls is behond most of the audience's financial knowledge. It is definitly not a smart thing to attempt using student loan money.
I traded some S&P 500 options during my 4th yr Med School (1988) and was plugged into my friends at the CBOE in CHicago. I would not advise doing anything like this, unless you have disposable income and close friend that are experienced traders that can give you hands-on assistance.

csly said:

Writing covered calls is a great safe way to make additional income. You can get 5% easy on your money a month, not a year. You do however have to know about tech and fundamental analysis. It isn't nearly as hard as your premed classes. I made a ton of money off buying calls for ATI.

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Jocomama said:

Options, even writing simple covered calls is behond most of the audience's financial knowledge. It is definitly not a smart thing to attempt using student loan money.
I traded some S&P 500 options during my 4th yr Med School (1988) and was plugged into my friends at the CBOE in CHicago. I would not advise doing anything like this, unless you have disposable income and close friend that are experienced traders that can give you hands-on assistance.

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i don't know, i think covered calls are relatively safe, considering that they are the only options strategy that's allowed in IRA accounts. i mean, basically you're just setting a limit order to sell, and getting paid to wait. you can't really "lose" money writing covered calls - you just lose the potential appreciation if the stock moves a lot higher. that 5% monthly seemed bogus to me, but when i checked it out, i'm actually making around 2% monthly selling citigroup calls - although last month the stock moved higher for the first time since august 2000, so my position got called away

etf, in the money covered calls are the most profitable. 5% a month is easy. 10% is totally reasonable. Get a good uptrending stock, with a lot of delta, and sell fluff. Its great.

I flipped used cars my first year and a half off of craigslist.

csly said:

etf, in the money covered calls are the most profitable. 5% a month is easy. 10% is totally reasonable. Get a good uptrending stock, with a lot of delta, and sell fluff. Its great.

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If you knew a stock was going to be "good and uptrending", why not just buy the stock? Covered calls are a way to give away most of the upside in a stock while retaining all the downside. Not as risky as other options one could write, but.....

Caveat emptor

etf said:

how about taking the "or" out and investing it in bank stocks. wells fargo seems undervalued, and citigroup has made it's largest move since august 2000. both yield above 3%. if the fed cuts rates anytime soon, banks should make out good.

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Well if your goal is only 3% then why bother taking a chance with stocks when you can just put the money in one of many online savings accounts now offering APY's of 5.0% + ?

blanche said:

what credit card do you have? mine used to be like that (Citibank), but they quietly dropped that 5% to 2% last fall. i'm looking for another b/c that's annoying.

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Most of these cash back cards also have yearly limits on the cash back.

Jejton said:

Well if your goal is only 3% then why bother taking a chance with stocks when you can just put the money in one of many online savings accounts now offering APY's of 5.0% + ?

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this 3% dividend is in addition to the capital appreciation i hope to experience as i hold on to one of the best run businesses in this country.

ActiveDutyMD said:

If you knew a stock was going to be "good and uptrending", why not just buy the stock? Covered calls are a way to give away most of the upside in a stock while retaining all the downside. Not as risky as other options one could write, but.....

Caveat emptor

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wait, i thought you only sold covered calls when you know a stock is going down or sideways - if it was going up, you wouldn't want to get your position called away. in fact, if you knew it was going up, why not just buy calls yourself?

the options game is great, and one of the reasons i took a position in ibkr...but the ipo has been lackluster to date. either way i don't want to flip the ipo shares, lest i anger the gods at fidelity...

etf said:

wait, i thought you only sold covered calls when you know a stock is going down or sideways - if it was going up, you wouldn't want to get your position called away. in fact, if you knew it was going up, why not just buy calls yourself?

the options game is great, and one of the reasons i took a position in ibkr...but the ipo has been lackluster to date. either way i don't want to flip the ipo shares, lest i anger the gods at fidelity...

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Yeah, you want to SELL CALLS when you think the stock will trend sideways or down. If you are talking COVERED CALLS, you want the stock to stay the same price (make money on the option which, presumably never gets exercised, and you don't lose money on the stock that covers it.) In that way, "covering" a call is somewhat of a neutering move (kind of like betting on the Pass Line and Don't Pass at the same time on a Craps table) and you are limiting both your risk, and your potential earnings. Then again, selling uncovered calls is probably one of the riskiest things that you can do, and if there are any amateur/budding investors reading this, just move along.

If you think the stock will be trending down, BUYING PUTS would probably be a better move.

And, like you said, if you think the stock will be trending up, BUYING CALLS would be more appropriate. However, csly's last post made it seem like he/she was advocating selling calls for an uptrending stock, which is what ActiveDutyMD was probably responding to.

jota_jota said:

Yeah, you want to SELL CALLS when you think the stock will trend sideways or down. If you are talking COVERED CALLS, you want the stock to stay the same price (make money on the option which, presumably never gets exercised, and you don't lose money on the stock that covers it.) In that way, "covering" a call is somewhat of a neutering move (kind of like betting on the Pass Line and Don't Pass at the same time on a Craps table) and you are limiting both your risk, and your potential earnings. Then again, selling uncovered calls is probably one of the riskiest things that you can do, and if there are any amateur/budding investors reading this, just move along.

If you think the stock will be trending down, BUYING PUTS would probably be a better move.

And, like you said, if you think the stock will be trending up, BUYING CALLS would be more appropriate. However, csly's last post made it seem like he/she was advocating selling calls for an uptrending stock, which is what ActiveDutyMD was probably responding to.

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i actually made a killing once selling naked puts on genentech. they eventually expired and i got my money, but i pretty much couldn't sleep for those 3 weeks, so i've never done it again.

i actually made a killing once selling naked puts on genentech. they eventually expired and i got my money, but i pretty much couldn't sleep for those 3 weeks, so i've never done it again.

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...and naked puts have a better theoretical max. loss than naked calls. Even covered calls have an unacceptable loss (to me,) when you consider that if you just bought the stock without the call, and the stock goes up, you could've done better. That's why I've never sold calls (covered or naked.) Wasn't that guy who advertises on the radio all the time, Wade Cook, a huge pusher of selling covered calls?

Most of my options trading has been buying puts (instead of selling short, but I sell short on occasion, as well.)

ActiveDutyMD said:

If you knew a stock was going to be "good and uptrending", why not just buy the stock? Covered calls are a way to give away most of the upside in a stock while retaining all the downside. Not as risky as other options one could write, but.....

Caveat emptor

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The cover call prem is money in the bank for sure. If and only if the stock price rises enough for one to get all the prem money back should he or her close out his or her position. (by buying calls to close out the position).
If the stock did not get called, did we make money. Yes
If the stock price rises enough for one to get all the prem money back and he or she close out the position did we make money? Yes
If the stock price does not rise enough for one to get all the prem money but the stock gets called out, did we make money? Yes

We don't give away any upside really (as described above). Becuase once one sees that he or she can get all the prem money back (with a little buffer zone) one should close the position out.
One should not own stock for the purposes of writing covered calls if tech and fundamental Analysis show stock to be in a downtrend.

Paper trading this way will create some believers.

Hope I explained this well
God Bless

csly said:

The cover call prem is money in the bank for sure. If and only if the stock price rises enough for one to get all the prem money back should he or her close out his or her position. (by buying calls to close out the position).
If the stock did not get called, did we make money. Yes
If the stock price rises enough for one to get all the prem money back and he or she close out the position did we make money? Yes
If the stock price does not rise enough for one to get all the prem money but the stock gets called out, did we make money? Yes

We don't give away any upside really (as described above). Becuase once one sees that he or she can get all the prem money back (with a little buffer zone) one should close the position out.
One should not own stock for the purposes of writing covered calls if tech and fundamental Analysis show stock to be in a downtrend.

Paper trading this way will create some believers.

Hope I explained this well
God Bless

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i guess the best stocks to write covered calls for are mega-cap companies like citigroup and exxon that would really never jump high enough in a short period of time for you to regret writing the call. of course, this lack of volatility is priced into the derivative...

csly said:

The cover call prem is money in the bank for sure. If and only if the stock price rises enough for one to get all the prem money back should he or her close out his or her position. (by buying calls to close out the position).
If the stock did not get called, did we make money. Yes
If the stock price rises enough for one to get all the prem money back and he or she close out the position did we make money? Yes
If the stock price does not rise enough for one to get all the prem money but the stock gets called out, did we make money? Yes

We don't give away any upside really (as described above). Becuase once one sees that he or she can get all the prem money back (with a little buffer zone) one should close the position out.
One should not own stock for the purposes of writing covered calls if tech and fundamental Analysis show stock to be in a downtrend.

Paper trading this way will create some believers.

Hope I explained this well
God Bless

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You "make" money on selling the option in all of those cases (as you describe) but you "lose" money if the option gets exercised, because had you not sold the call, you would've made more money just holding a long position in the stock. Therefore, while covering the call makes your theoretical maximum out-of-pocket loss finite (possible out-of-pocket losses from a naked call are theoretically infinite) the theoretical "losses" are still infinite if you count the cost of "giving away" stock value to be a loss.

The only way to truly come out ahead (relative to just holding a long position in the stock) is if the stock price is staying more-or-less constant. If you already own the stock, and you are looking to generate some extra income from it, you can definitely argue that selling the [covered] call reduces your losses in the case where the stock declines in value.

etf said:

i guess the best stocks to write covered calls for are mega-cap companies like citigroup and exxon that would really never jump high enough in a short period of time for you to regret writing the call. of course, this lack of volatility is priced into the derivative...

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That's how I look at it....

jota_jota said:

You "make" money on selling the option in all of those cases (as you describe) but you "lose" money if the option gets exercised, because had you not sold the call, you would've made more money just holding a long position in the stock. Therefore, while covering the call makes your theoretical maximum out-of-pocket loss finite (possible out-of-pocket losses from a naked call are theoretically infinite) the theoretical "losses" are still infinite if you count the cost of "giving away" stock value to be a loss.

The only way to truly come out ahead (relative to just holding a long position in the stock) is if the stock price is staying more-or-less constant. If you already own the stock, and you are looking to generate some extra income from it, you can definitely argue that selling the [covered] call reduces your losses in the case where the stock declines in value.

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If the stock price rises so that the total amount of money made on stock appreciation is equal to or slightly greater than the money one got from the prem than one should close out the position (by buying the options back). The money that you paid for buying the calls back is not lost, becuase your position increased in value. You see what I am saying? You don't lose on huge moves this way, because you jump on buying the options back when stock appreciation = or slightly > option prem you received.

csly said:

If the stock price rises so that the total amount of money made on stock appreciation is equal to or slightly greater than the money one got from the prem than one should close out the position (by buying the options back). The money that you paid for buying the calls back is not lost, becuase your position increased in value. You see what I am saying? You don't lose on huge moves this way, because you jump on buying the options back when stock appreciation = or slightly > option prem you received.

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actually, i tend not to close the options position when i have a risk of getting called away, simply because i don't care if it is called away. stocks have their ups and downs - you are selling at a high, so just buy it back lower. there's no guarantee that it will be lower, but yeah, it's worth waiting a couple of days.

csly said:

We don't give away any upside really (as described above).

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?

Let's say you buy a $10,000 of stock at $100.

You sell a covered call with a strike price of $110.

The stock price rises to $150. Instead of getting $5K like you would have if you hadn't sold the call, you get $1K plus the premium (say...3 or 4 hundred bucks.) How do you figure you haven't given away the upside potential?

I get it. He's saying that if the stock price rises to near the strike price, you should then buy a call at that strike price (i.e. buy "back" the option,) thus limiting your loss. This is completely analogous to betting on the Pass and Don't Pass line at the same time.)

jota_jota said:

I get it. He's saying that if the stock price rises to near the strike price, you should then buy a call at that strike price (i.e. buy "back" the option,) thus limiting your loss. This is completely analogous to betting on the Pass and Don't Pass line at the same time.)

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Ahhh, schneaky. Kind of a hedge mentality. Of course, as the price of the stock approaches the strike price, that call becomes much more expensive because it is worth so much more. IMHO an investment strategy based on this concept is 1) overly complex, 2) overly expensive. I prefer a strategy where I can go for 6 months without looking at or fussing with my portfolio without having "my strategy" stop making money. Remember for every dollar you make playing the options game, someone else loses a dollar (+ costs). There is no wealth created by options, it is simply a redistribution. Do you really think you're better at playing the game than the pros? If not, you shouldn't be trading options. If so, what are you doing in medical school?

jota_jota said:

I get it. He's saying that if the stock price rises to near the strike price, you should then buy a call at that strike price (i.e. buy "back" the option,) thus limiting your loss. This is completely analogous to betting on the Pass and Don't Pass line at the same time.)

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if the stock gets close to the strike price and you don't want your position called away, just roll it over. basically what you do is sell next months call at the same strike price and use part of the proceeds to buy back this months call. do it indefinately.

Dr.Inviz said:

I am currently applying to medical school. I was looking at a variety of options to make money while in medical school.

I know theres work-study, but you dont make much, however, it is something I would consider.

Also, I was thinking about investing excess loan money in something that would yield a high return rate, be it in a bank or stocks ..

Lastly, I was looking at condos. Ive seen some 1 room/1.5 bath condos in the 130K-150K range.

Are there any other considerations as to money-making pursuits while in medical school? If so, what are some ideas and how would one go about pursuing it?

Thanks!
Dr. Inviz

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oy this is my kind of thread, I started a similar one in MD MBA recently. Too bad you're on hold, we may get along. There is always work and work studying, forget about the salaried options though I say. Our opportunity cost as med students is too high for that. Or maybe it's just too demeaning. But I do believe in starting up ventures or putting our money to work for us. I've thought too about using loan money for things, however I've decided against that as it seems pretty ballsy. What's the interest rate on the loans? I haven't even looked at mine although I guess as students it would be pretty low. I'd just feel too bad if I lost loan money on investing or business stuff, not to mention I may screw myself over. How's your financial situation right now? You know let me actually read the thread which I haven't done yet. Interesting though, I like

You guys are pretty good at finance, how'd you learn all that? I'm trying to learn it but it's coming along slowly as it's an intricate subject and difficult to learn without actual practice. Wish I had some work experience in it

logos said:

Cash back credit card. Pay it off every month or the benefits wont outweigh the cost. Mine is 5% on gas, grocery and pharmacy. 1% on everything else.

Online savings account. These pay higher interest rates. Convenient for us students that recieve a loan disbursement for an entire quarter/semester and then use it up slowly over that time. (HSBC, Citi, etc...)

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Yeah I use Chase rewards card, gives a few percent here and there but overall it's trivial. I've found Paypal a handy place for keeping my money between credit card statements as the money market fund is very simple, safe, liquid and gives monthly dividends of decent return. It's great right after I get my loan disbursements

I sell my old stuff on Ebay for profit, do freelance programming work and make websites on the side.

Currently I'm bringing in enough to pay rent each month from Google Adsense with a new website creation tool I acquired for free. Requires about 2 hours every couple weeks and 20 bucks in hosting fees a month to make it happen. Been doing this about 3 months now.

You can also sell a product on the side, which I just started doing.

There are ways to make money, you just have to find ways that require minimal time investment since the lion's share of it will be spent studying. Free time gets a little bit better in 3rd and 4th year though, so don't worry too much.

I'm getting worried about the loans I am going to have to pay back so that is why I've started looking at revenue streams that are passive in nature.

Good luck and grats on your admission,
Richie

You got a nice site up dude. Keep up the nice work! Congrats on your engagement as well!

i was bored at work today and sold 2 covered calls for a position i own 2 minutes before the markets closed. the options expire tomorrow, so if the stock stays below the strike price (highly likely), it'll be the easiest $22 i've made.

Exotic dancing can work, but you might have to work nights

etf said:

i was bored at work today and sold 2 covered calls for a position i own 2 minutes before the markets closed. the options expire tomorrow, so if the stock stays below the strike price (highly likely), it'll be the easiest $22 i've made.

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sigh, the stock was up pretty good today, so i had to close out the position to avoid having the stock called away. instead of making $22, i lost $80. fantastic.

I'm beginning to think of selling [covered] calls on a bunch of my "dead-money" stocks to try to get them to generate some income. Stuff like XRX, which I have owned forever and hasn't really gone anywhere. If you already own it and you're not making anyhing from the position, might as well try to generate some income through the calls. If the position gets called away, no big loss.