“2017 Challenge”
This section is to explain to the readers of Main Street beats Wall Street what my goals are for the entire year of 2017. Below is a list of particulars of my “2017 Challenge” for readers to follow. I will do a quarterly report on my progress; these reports will be posted on or about March 31st, June 30th, September 30th and December 31st.
In my “2017 Challenge” I have a weekly goal; this will be a minimum goal. Besides a minimum goal per week for my account to grow, I am also setting a goal for myself to limit my upside, which will basically help to control greed. Many years I found myself having an unbelievable first half of the year, only to give much of my profit back to Wall Street, because of overconfidence and GREED. While my weekly dollar amount goal is a very nice number, I know many weeks I can do more. Once I hit my weekly goal I will not look for more deals, unless it would be totally imprudent for me to do so. For example: if you look at my “Trade History 2017,” in the 2nd week, which is “Week Ending 1/13/17,” you will see I made $7800. That week I made $3000 in the first 15 minutes of the market on Monday morning. The trade was entered and exited, putting the money in my mattress, by 9:45. Should I close my computer and call it a week? Or should I act like I didn’t make that trade and start my week again? Clearly, it wouldn’t have been prudent of me to take the rest of the week off. I ended up finishing the week with an extra $4800 without putting myself at any extra risk. I will be happy with my weekly goal. However, I will enter other trades if I don’t have to assume any extra risk.
Another way my weekly gain will go above my weekly goal is if I get capital gains on a stock that moved up. For example, in the case of Covered Calls when I get assigned,or if I get a bigger premium without assuming extra risk. For my “2017 Challenge” I’ll be happy with my weekly goal, unless I can bring in a little extra money without picking up extra risk.
The reason for my “2017 Challenge” is to show readers the results a disciplined trader can have, and to teach Main Street beats Wall Street readers that you can make great money without extending your risk. Also, to show readers you must manage your account like a business. You must limit your expenses! I will be cutting down on my commission fees and as my account grows I’ll be using less of my margin account because I’ll be buying my stock with more of my money than borrowed money. If I constantly try to make more and more money I’ll be maxing out my margin, paying more margin interest, and assuming more risk. I feel as the year gets older and my account grows, my margin interest will be reduced. I love the weekly goal I put on myself and I know it’s achievable with a relatively small starting account value. Read below for my “2017 Challenge.”
I normally don’t include all these numbers, like account value and expenses in my site, but I thought is would be fun for the readers to follow along as I try to accomplish my goals outlined in my “2017 Challenge.”
1) Account starting value on January 1, 2017 – $110,000.
2) My goal is to make $3000 a week, $156,000 for the year. My goal of $3000 a week is for incoming premiums. This is my goal but some weeks my premiums will exceed $3000 because of Options and Strike Prices chosen.
3) Estimated commission fees, $125 per week, $6500 for the year. This $125 a week will vary. Option’s commissions are based on contract size. If I trade 100 contracts on a lower price stock, my commission will be higher than if I trade a 50 contract trade on a higher priced stock. The premium might be the same, but the commission will be lower because of less contracts.
4) Estimated margin interest $1000 per month. Margin interest of $12,000 for the year is a high estimate. This number will be determined by how many Covered Calls, or Naked Calls I trade. Buying the stock for Covered Calls will cost me margin interest. There is no margin interest on Naked Calls. Also, another goal in my “2017 Challenge” is to lower my margin interest as the year moves on. I said my margin interest of $12,000 a year is a high estimate. I feel my interest will start at $1000 a month, but I think the monthly interest will go down as my account grows. When I buy a stock with a larger account, I’ll be using more of my money and less from my margin account.
5) Estimated total expenses for my trading is $18,500. (commission fees, $6500 plus margin interest, $12,000).
6) Total expenses for the year is estimated at $18,500, dividing that by 52 week will make $355 a week in expenses. I hope to add these expenses ($355) to my weekly $3000 goal to make an average of $3355 per week. When you add up my extra premiums and some possible stock capital gains my goal is $156,000 for the year, PERIOD! However, if I can bring in this extra $355 a week on average, I could bring in a total of $174,460 for the year. I will not bring in the $355 every week, but if I can average an extra $355 a week on the year, it will help offset my expenses.
7) I want to withdraw $42,000 in 2017 from this account in the form of contributions to make my life more enjoyable. The rest of my profit will remain in the account. If I am successful with my weekly goal, the contributions will be transferred automatically to my personal bank account at the end of each month as follows:
January $2000
February $2000
March $3000
April $3000
May $4000
June $4000
July $4000
August $4000
September $4000
October $4000
November $4000
December $4000
2017 Total contributions (Profit taking), $42,000
Get out a calculator
The numbers, considering expenses and profit contributions
If I can be successful in my “2017 Challenge”, my gain will be $156,000 on a starting amount of $110,000. My account on December 31,2017 will be $205,500.
$3000 a week, times 52 weeks is $156,000
My expenses are $18,500
$156,000 – $18,500 = $137,500. If I make a profit of $137,500 on a starting account of $110,000, my total profit Rate of Return is 125%.
My total contributions (profit taking) is $42,000
My account will end the year at $205,500. Start with $110,000, plus gain of $156,000 is $266,000. Minus my expenses of $18,500, my account value is $247,500.
When you remove my $42,000 in monthly contributions, my account on 12/31/17 will be $205,500.
This is My Goal!
This is My “2017 Challenge”
If I’m successful making the extra $355 a week on average to cover expenses
If I am successful with making that extra $355 a week to cover my expenses (an additional $18,460 on the year), my gain will be $174,460 on a starting amount of $110,000. My account on December 31,2017 will be $223,960.
$3355 a week, times 52 weeks is $174,460
My expenses are still $18,500
$174,460 – $18,500 = $155,960. If I make a profit of $155,960 on a starting account of $110,000, my total profit Rate of Return is 141%.
My Total contributions (profit taking) is $42,000
My account will end the year at $223,960. Start with $110,000, plus gain of $174,460 is $284,460. Minus my expenses of $18,500, my account value is $265,960.
When you remove my $42,000 in monthly contributions, my account on 12/31/17 will be $223,960.
Clearly my “account values” on 12/31/17 are estimates based on my “2017 Challenge” goals.
If you have any questions or comments please email me.