My Millionaire Mentor

Anyone that has read some of my posts knows that I trade options. I started learning how to trade options back in 2010.

I can’t remember exactly how I got started, but it was most likely due to the fact that the advice of contributing a significant portion of my 401k plan in aggressive growth funds would allow me to retire one day with a seven figure account.

Unfortunately, my account will most likely never reach that level.

In previous articles, I have talked about 401k myths. It wasn’t meant to scare anyone or get them to do it my way.

I just wanted everyone to be a little more educated on the implications of this plan.

As we start 2016, if you had any of your money in stocks or aggressive growth type funds, they have most likely taken a large hit.

Most fund managers will tell you to ride it out and that dollar cost averaging will make up the loss.

Well, recently, my millionaire mentor sent us an email that highlights these points a little differently. I attached them here:

The greatest gift my millionaire mentors gave me wasn’t the real estate investing strategies or stock market strategies…

 The greatest gift was they gave me the ability to think like them.

 They taught me how to think like a millionaire. They taught me how to make decisions on my own so that I could take 100% responsibility for the results in my life.

 It was super frustrating at times because I would go to them for advice and they would hardly ever give me a straight answer.

 Instead, they’d ask me questions or teach in parables that made me think.

 I now realize they wanted me to discover the truths of wealth creation on my own. They wanted me to stand on my own two feet instead of relying on other people to do the thinking for me.

 ME: I heard buy and hold is dead, is that true? Should I stop contributing to my 401K and put all of my money into options trading?

 Millionaire: I won’t say if buy and hold is dead or not, but let me ask you a few questions…

 Have you ever met a person who invested in mutual funds and retired 5 years later? Have you ever met a person driving a Rolls Royce because of their well-balanced mutual fund portfolio?

 The point of all this is to get you to think a little differently.

When I was 26, I blindly followed advice that didn’t work out so well. I don’t blame anyone for this.

To be honest, I use to blame everyone under the sun.

However, no one put a gun to my head and told me to just blindly follow anyone’s advice.

Trust, but verify. Don’t take anything I say or anyone else as gospel.

Each of us are in different positions; both financially and career-wise. Just as long term investing may work for some, it didn’t work for me.

If financial freedom is truly what you are looking for, do you really want to wait 30+ years to get there?

Do you feel frustrated when experts tell you that you need a million dollar 401k to retire and in your mid 40’s it’s at only at 200k?

My mentor is teaching me a 5 year retirement plan and I don’t need a million dollars to realize financial freedom.

As a matter of fact, I don’t even need half that size to realize financial freedom.

I do have to change the way I think and I have to be able to do it myself. Ask yourself this: Would you really want to take a path for the next 30 years that has a greater chance of failing than succeeding?

I recently had this discussion with a co-worker and he disagreed with me.

This is a fact: 72,000 401k plans currently have a 7-figure balance. That seems like a lot until you realize there are over 52 million 401k plans. (MarketWatch)

My co-worker countered by saying that over 4,000 DoD employees have 7-figure 401k balances. I’m not sure if that is true, but I do know there are over 1 million DoD employees and 4,000 out of a million sounds like lottery odds.

So I will ask you the same question, my mentor asked me. Do you want to put your hard earned money into a fund you have very little control over?

Do you know people are retired at the age of 35 based on a 401k?

If so, have they showed you how they did it?

There are tools available to make a change, if that is what you desire. The best part is that you don’t have to quit contributing to your 401k; I haven’t.

If your employer matches your contribution that’s a 100% return on your money. I have chosen to contribute the minimum to take advantage of the matching. The rest goes into my trading account.

My final question: How many of you doubled your retirement account in 2015?

If so, that is great. You stand with a very small few that have done so.

Below is a snippet of one my mentor’s options trading account. I also attached my trading results from 2015.

I want you to take note that 2015 was the first year I started trading options consistently. I started my training in 2011, but didn’t truly commit to it until late 2014.

My mentor has been trading options for over 20 years.

Internet Portfolio Trade Record

Money Invested: $932.30

Current Balance: $2,902.34

% Gain/Loss: 211%

My Portfolio Trade Record

Money Invested: $10,000

Current Balance: $11,809.98

% Gain/Loss: 18.10%

 

As you can see, my mentor’s trading account, although this was a small account had an incredible return.

Just for the record, in 2015 the Dow started at 18,046 and closed out the year at 17,552. The S&P 500 opened 2015 at 2,087 and closed the year at 2,060.

Most professional money managers use the S&P 500 as a baseline for their investments.

My 401k’s aggressive growth fund tracks the S&P. So for 2015 my account went nowhere. Even though I only made $1,800 for 2015 trading options, I still beat the S&P500.

If I were your money manager and told you that because 2015 was tough year you had a negative return, would you be upset?

Did your fund manager get you a positive return in a negative year?

If not, did they refund their fees? Now imagine my mentor, Travis, called you and told you he was able to get a 211% return on your money?

Now imagine being able to do that yourself.

There is another point I want to make with Travis’ account above. He risked less than $1,000. Another point is that I didn’t risk $10,000.

Only a max of 10% of my account is risked at any given time and most of the time I had less than that risked.

Now that I have given you this information, it is up to you to decide which path to take.

I am not going to be offended if you choose to ignore my path. Like I said earlier, my way doesn’t work for everyone.

However, if you like what I have shown you, click on the links I have provided to further your education to be able to take total control of your financial future.

My closing thought is to take you back to my 5 year retirement plan.

Imagine for a minute that the return I gained this year was with a $100k account. That’s an $18,000 return.

Could you use an extra $18,000?

I think most would be excited to have an extra $1,800. But, imagine that one day I’m half as good as my mentor.

What does 100% return look like on a $100k account?

In all transparency, my mentor averages between 40-60% returns each year on his accounts. Many of his former students earn better returns than that.

Do the math on a $100k account with a 40-60% return each year.

Once you learned how to do that, would you be able to retire and follow other passions you may have?

 

Links:

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