Income, benefits, compensation thread

[cyanide12345678]

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Do you annually generate 200k from stock options? That’s really good.

This year i did. First time ever. Last year was positive 30k - which isn’t bad considering the market was minus 20 percent.

201k realized gains for ytd.

Sitting on 12k more unrealized gains that I’m not closing until jan 1st - don’t want more taxes this April - will defer those gains to next tax year.

 

[Mbekweni]

That's incredible. Were you in finance before medicine? My YTD investment gains were around 22K, which I felt was ok given that I'm a year and a half out and only started investing/learning to invest last December and my portfolio up until recently was small. And for now I'm single income (SO went back to school). Seems like option trading is the money maker.. but I don't really understand it all that well and the risk is high. Guess I need to learn.

Most options traders lose money. Some make money for a year or two, or even 10. But the vast majority either lose money or underperform the market over the long term. At the very least it's a lot of effort to learn how to not take too much risk and lose your shirt or straight up gamble. If you want to put all of that time in consider the opportunity cost of just working extra shifts at $200-300/hr and investing in a boring index fund instead which is all but guaranteed statistically to end up higher in the long term. You are statistically FAR more likely to come out ahead that way on a risk adjusted basis. I appreciate the transparency of Cyanide on this forum and appreciate the posts...but also think his strategy is generally bad advice for most on this forum as well. If you want a guarantee then $/hr and save extra by limiting expenses, invest sensibly. It's not sexy though.

 

[cyanide12345678]

Most options traders lose money. Some make money for a year or two, or even 10. But the vast majority either lose money or underperform the market over the long term. At the very least it's a lot of effort to learn how to not take too much risk and lose your shirt or straight up gamble. If you want to put all of that time in consider the opportunity cost of just working extra shifts at $200-300/hr and investing in a boring index fund instead which is all but guaranteed statistically to end up higher in the long term. You are statistically FAR more likely to come out ahead that way on a risk adjusted basis. I appreciate the transparency of Cyanide on this forum and appreciate the posts...but also think his strategy is generally bad advice for most on this forum as well. If you want a guarantee then $/hr and save extra by limiting expenses, invest sensibly. It's not sexy though.

The vast majority buys contracts, it’s been shown to be a losing trade over the long term. People are trying to hit it out of the park and get massive returns with buying calls or buying puts, it just doesn’t work long term.

Selling premium has a lot of literature showing solid returns over long term periods while decreasing volatility. Literature says that selling premium gives slightly less return than being a buy and hold investor, but with much less risk. So it’s one of the best risk adjusted returns.

I just balance the low volatility strategy, add risk and volatility to it and try for higher returns.

I’m now at a point where I’m only aiming for 1.5 percent per month consistent gains. You would be surprised how that’s actually not that hard to do.

 

[cyanide12345678]

That's incredible. Were you in finance before medicine? My YTD investment gains were around 22K, which I felt was ok given that I'm a year and a half out and only started investing/learning to invest last December and my portfolio up until recently was small. And for now I'm single income (SO went back to school). Seems like option trading is the money maker.. but I don't really understand it all that well and the risk is high. Guess I need to learn.

Biochem major. Haven’t had any formal education in finance except from what I’ve learned through reading and through YouTube. Completely self taught.

I started my finance journey as a pgy3 when i read almost every finance book in my local library - i was getting prepared for the day i had money. I started off as a boglehead and constructed a perfect 4 fund portfolio with a slight small cap tilt then i learned about options - watched YouTube (tasty trade channel) for 15-20 hours in 2 days and made my first trade the next day.

In fact, in 2020 when i was a complete novice at trading, i sort of built a very nice theoretical strategy and posted everything about it on this forum just 3-4 weeks into trading options. That was my first strategy, a very very very low risk one that almost certainly guaranteed beating the sp500 long term. Big words, i know. But yeah….

I should have been in finance.

Edit:

Here’s the first ever post about options - 2 ish weeks into learning about options and trading.

Beating Index Investing with Options Trading

Since we were discussing stocks, I think we should have a discussion on options trading. I've recently gotten into options, while the rumor is that options are dangerous and extremely risky, but the more I've read on this topic, the more it seems that options are one of the best ways to...

forums.studentdoctor.net

@thegenius was the only person i intrigued enough to go on a deep dive to educate themselves and now I’m fairly certain he knows a lot more than me.

Though i will say options get a bad reputation. It’s really not rocket science, it can be learned in 3-4 days. There’s only 4-5 strategies that actually work (wheel, naked puts, strangles, credit spreads and iron condors). Other things shouldn’t be done anyway. I eventually landed on naked puts as my favorite. It’s the only thing i do. Probably can be learned in 2-4 hours.

 

[Mbekweni]

The vast majority buys contracts, it’s been shown to be a losing trade over the long term. People are trying to hit it out of the park and get massive returns with buying calls or buying puts, it just doesn’t work long term.

Selling premium has a lot of literature showing solid returns over long term periods while decreasing volatility. Literature says that selling premium gives slightly less return than being a buy and hold investor, but with much less risk. So it’s one of the best risk adjusted returns.

I just balance the low volatility strategy, add risk and volatility to it and try for higher returns.

I’m now at a point where I’m only aiming for 1.5 percent per month consistent gains. You would be surprised how that’s actually not that hard to do.

Good luck! For an early 30s ER doctor investing 5k a month and dedicating 10 years to this strategy (600k total so not a crazy overall input) and getting 1.5% per month will yield 152M in retirement at 65 and 13.7 billion at age 93 if you live to Warren Buffet’s age.

 

[cyanide12345678]

Good luck! For an early 30s ER doctor investing 5k a month and dedicating 10 years to this strategy (600k total so not a crazy overall input) and getting 1.5% per month will yield 152M in retirement at 65 and 13.7 billion at age 93 if you live to Warren Buffet’s age.

Ah yes, the usual sarcasm. It’s funny, i read my own thread from 3.5 years ago when i started options - was 2 weeks in. I actually did better than i thought i would. Shout out to @wamcp for predicting higher inflation, higher rates, lower vix, lower premiums 3 years ago. I barely understood what he meant then, now that i read the thread again, i was like ‘damn - this dude knows what he’s talking about’.

Also your math probably didn’t account for my paying 37 percent marginal federal tax on my gains. Plus once your account gets really big, you start moving the bid ask spreads. These are easier strategies when you dont have a multi million dollar account.

And while i probably will retire from EM with a 10 year career, a lot of what i do relies on having liquidity from my income which allows me to take risk. Once that happens, my risk profile will drop even more.

I also have quite an appreciation for quitting the game when you’ve won. Chances are once i have 5M, my money will be in something like JEPI. 6-8 percent reliable cash on cash return with some minimal capital appreciation. yes I’ll take that.

So no I’m not going to be getting 18 percent return for the next 60 years.

 

[Splenda88]

Ah yes, the usual sarcasm. It’s funny, i read my own thread from 3.5 years ago when i started options - was 2 weeks in. I actually did better than i thought i would.

I also have quite an appreciation for quitting the game when you’ve won. Chances are once i have 5M, my money will be in something like JEPI. 6-8 percent reliable cash on cash return with some minimal capital appreciation. yes I’ll take that.

So no I’m not going to be getting 18 percent return for the next 60 years.

We are physicians; we have already won the game.

 

[emergentmd]

Bravo to Cyanide. He knows more about options that I ever would bc It just doesn't float my boat. I essentially have large amounts of Tesla and sell calls to reap 1% a month. No a great deal but better than nothing.

I will say this again. Start Early, diversify, own something run your own business, do not get divorced.

I just started an investment company and should hit 6 figures income starting in a few years with very little time. Think outside the box esp when you are young without kids. Calculated risks is a good thing.

So now, I have 6 figure income from RE, ER work, Medical facility ownership, and hopefully in 5 yrs my finance company will dwarf all of this.

 

[JacobMcCandles]

I just started an investment company and should hit 6 figures income starting in a few years with very little time.

What do you mean you started an investment company? In a somewhat serious but also somewhat joking way, an EM doc starting an investment company seems like the top is in...😉

 

[Groove]

Keep those diamond hands you options gurus! We need a stickied finance thread for the finance nerds. On a related note, I just finished a couple new ichimoku books which were reasonably educational. It's really difficult to find quality ichimoku traders because it's just not a very commonly used system. It's also really difficult to backtest as it's much more complicated than your typical kumo breakout, etc.. I managed to find this forex guy on Youtube and he has a forex academy type subscription thing. I hemmed and hawed about it but finally subscribed and he's actually very good and the forex strategies are easily applicable to any equity/timeframe. I'm also re-reading one of Minervini's books. I've read most of them but that was years ago and I pretty much forgot the details other than the CANSLIM basics. It's actually a really good book and although I'm not sold on his approach to the market, it's educational seeing things through someone else's eyes. (This thread is no exception.) Anyway, I love this stuff.

@emergentmd Can you elaborate on your investment company and how you were inspired to start it in the first place? I'm intrigued.

 

[RustedFox]

Keep those diamond hands you options gurus! We need a stickied finance thread for the finance nerds. On a related note, I just finished a couple new ichimoku books which were reasonably educational. It's really difficult to find quality ichimoku traders because it's just not a very commonly used system. It's also really difficult to backtest as it's much more complicated than your typical kumo breakout, etc.. I managed to find this forex guy on Youtube and he has a forex academy type subscription thing. I hemmed and hawed about it but finally subscribed and he's actually very good and the forex strategies are easily applicable to any equity/timeframe. I'm also re-reading one of Minervini's books. I've read most of them but that was years ago and I pretty much forgot the details other than the CANSLIM basics. It's actually a really good book and although I'm not sold on his approach to the market, it's educational seeing things through someone else's eyes. (This thread is no exception.) Anyway, I love this stuff.

@emergentmd Can you elaborate on your investment company and how you were inspired to start it in the first place? I'm intrigued.

Uhhh.... HODL GME?
Ape together strong.

 

[gutonc]

Uhhh.... HODL GME?
Ape together strong.

See, this I understand. The rest of this thread is complete gibberish to me.

 

[RustedFox]

See, this I understand. The rest of this thread is complete gibberish to me.

I still read that subreddit because those regards are hilarious. Absolutely hilarious.

 

[cyanide12345678]

See, this I understand. The rest of this thread is complete gibberish to me.

6 out of 7 pages are technically people discussing their salary lol.

 

[cyanide12345678]

I just started an investment company and should hit 6 figures income starting in a few years with very little time. Think outside the box esp when you are young without kids. Calculated risks is a good thing.

How are you doing this? I give out too much free advice and should start a subscription service 😂

I’m also an admin of a Pakistani investor group with 1000 US based physicians and i swear i get WhatsApp messages from dozens of people asking financial advice for free all the time because i often post my options trade in real time - all for free 😂

 

[cyanide12345678]

I still read that subreddit because those regards are hilarious. Absolutely hilarious.

Some of those gamblers do hit the lottery once in a while when the market moves dramatically and their calls make big bucks.

I sometimes wish i had the balls to buy calls myself, go YOLO, and hopefully hit the lottery lol

 

[emergentmd]

What do you mean you started an investment company? In a somewhat serious but also somewhat joking way, an EM doc starting an investment company seems like the top is in...😉

Investment company is broad but I have started to syndicate large RE purchases. I started investing as a LP years ago, found it to be a great investment option, networked and figured out who the good operators are, and now moved over to the GP side.

I am in a good position b/c I am FIRE, have multiple passive income, have lots of free time so risk is low and reward is high.

 

[emergentmd]

How are you doing this? I give out too much free advice and should start a subscription service 😂

I’m also an admin of a Pakistani investor group with 1000 US based physicians and i swear i get WhatsApp messages from dozens of people asking financial advice for free all the time because i often post my options trade in real time - all for free 😂

What you are doing is great for those who are willing to be open to what is available. It doesn't work for everyone, but helps push people to be more active and think about not working for the "man" forever. Docs make a bunch of money, ER docs have a bunch of time, which is a great recipe for creating passive income.

Networking is the key, find good people and new doors will open for you.

 

[GonnaBeADoc2222]

I'm a simple man.

I just buy VTSAX.

 

[cyanide12345678]

I'm a simple man.

I just buy VTSAX.

It’s a great strategy. Though consider at least 20 percent international exposure. International is so much cheaper right now from a valuation perspective so it might do better over the next decade. At least vanguard thinks been 20-45 percent of international exposure improves your risk adjusted returns.

 

[GonnaBeADoc2222]

Yeah I've been buying international as well