Everyone wants to make money from home. Imagine making $2,000 per month from the safety and security of your cozy house.
What’s not to love about the idea of generating revenue without having to get dressed? However, making any type of income from your home is extremely challenging.
Since everyone wants to be the next home-based millionaire, the landscape is full of competitors and scams. The only way to make money from home is to learn about your income stream thoroughly.
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With knowledge comes power and exponential growth, but where do we begin? Let’s start with two income streams: trading options and starting an online business.
The magic of an online business. An online business differs from a physical business because the online infrastructure is infinitely scalable.
For example, let’s say you sell digital spreadsheets online. You can produce one spreadsheet and sell it as many times as you desire.
Conversely, selling physical products requires receiving, inventory, and shipping. We definitely want to focus on staying with digital products and advice.
Many types of online businesses include e-commerce (Amazon, Etsy), consulting, coaching, websites, coding, and content creation.
In today’s world, the best guidance I can give is to focus on selling your skillset. For example, I served in the military for 24 years and have extensive knowledge about how to succeed in the military.
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Advertising vs. content marketing. The best way to build an online business is through content marketing. All the major retailers will want you to advertise (Facebook, Google) through their platforms, but content marketing will eventually generate free, organic traffic to your business.
Let’s say I start a mentoring program to help people prepare to join the military. Once I establish myself as a subject matter expert in my field, customers will seek me out.
The best way to establish myself as a subject matter expert is to write articles on my blog, host podcasts, and publish books.
All my content would funnel people back to my online mentoring business. Websites like Patreaon help creators establish closer relationships with serious customers.
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I would avoid the e-commerce world for now. It is rife with scams and mismanagement. However, commerce in the metaverse will be interesting.
No matter how much the media attempts to dissuade people from the benefits of the metaverse, it will be the new online marketplace in the next 15 years.
Trading options for passive income. The options market has existed since “Tulip Mania” in 1634. Some form of derivative will always exist around risk assets because there will always be those who want to hedge or speculate.
One of my favorite options strategies is The Option Wheel, which consists of selling cash-secured puts and covered calls in a “circle of life.”
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The most essential part of the options wheel strategy is finding young, volatile stocks like Rivian (RIVN), SoFi (SOFI), or Palantir (PLTR).
You can also run the wheel on older, more steady stocks, but the options premium is much lower. Remember, the options market runs on volatility and time. The more volatile the stock, the higher premiums—we get paid for risk.
We will choose RIVN today. The first step of the options wheel is to sell a cash-secured put. This means I set my strike price lower than the current stock price.
For example, RIVN trades at $13.21 today. I know this stock deeply, so I would sell a cash-secured put at $11. It would only net me $21 in options premiums, but as I said, I know this stock well.
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I don’t want to be assigned shares, but receiving them for $11 is a good deal. However, recently, RIVN was trading at $18.24. This would have been a bad time to sell a cash-secured put because receiving shares at $16 would have been a nightmare.
The key to the cash-secured put portion of the wheel is understanding your stock’s price action. You want to assume shares at a reasonable price.
That’s why it’s imperative that options traders exercise patience. Options trading can be an emotional roller coaster; our best defense is limiting our exposed capital to what we are willing to lose.
Let’s say we get assigned 100 shares of RIVN with a $11 price tag per share. We’ll run covered calls until someone finally buys our shares at an evaluated price—say $13.
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While we shift between selling puts and calls, we earn premiums. Hopefully, we will also obtain some capital gains once we finally lose your shares from the covered call portion.
It can be a magical process if you have patience. However, at some point, you may need to wait for a month or two as the stock price recovers, which is why you should follow one or two more stocks.
The options wheel vs. online business. The options market is an extremely structured and regulated path. You will only lose because of your own mistakes (greed and fear).
If you can afford to lose $100, only bet $100. If things are too volatile or slow, you can sit it out until you are ready to jump back in. You can invest your capital in money market or closed-end funds while waiting.
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On the other hand, starting an online business is completely freeform. Nobody will be there to hold your hand. You can pay someone to build you a $5,000 website, and you get no sales.
You will need to learn website design, public speaking, networking skills, content marketing, and advertising while building relationships with thought leaders in your area of influence.
You will only become successful in an online business if you put yourself out there. I have been in the space for four years and have learned many things.
I also know I do not desire to be totally “out there.” I am retired from the military and don’t want to go back to the meat grinder (or hamster wheel).
Robert Kiyosaki says that you become richer the more people you serve. The more seriously you take your online business, the more money you will eventually make.
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Focus on creating passive income streams inside of your business. For example, let’s say you start a math tutoring business.
Talk to your clients and see if they will let you release the recording of the tutoring session in return for a lower fee. Then, you can release the video on YouTube. Once you get thousands of videos of you helping people with math, it’ll translate to passive income and more clients.
Conclusion. Trading options allows you to focus on one skill set you can repeat for the next twenty years. Trading options is complex but predictable.
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Starting an online business requires leaving your comfort zone and never going back. You can start small by building your business on content marketing.
Or you can come in big and hire writers, designers, and specialists. This path will be much tougher because you will need capital upfront, and your burn rate and churn could be high.
I recommend content marketing. Establishing your niche and sub-niche takes a while; you don’t want to be in the discovery phase while you are spending thousands of dollars per month.
The average person has a better chance of success at a small online business than trading options. We are all good at something; finding a way to monetize our skill set will be easier than learning to trade options against the professionals. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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