Resources
Purpose
Stepping into the world of investing and finance is daunting and oftentimes disorienting. There's not clear place to start and as a result, may deter some from benefitting. This page will be updated periodically to provide general investing and budgeting resources to help orient individuals on starting their financial independance journey.
As a disclaimer, there is no one size fits all approach when in comes to investing and the individual should always take any financial advice with a grain a salt and view them through the lens of their own personal goals. Updates to this page will be noted in the shareholder monthly and quarterly reports.
Investing General
What is Passive Investing?
"Passive investing is an investment strategy to maximize returns by minimizing buying and selling. Index investing in one common passive investing strategy whereby investors purchase a representative benchmark, such as the S&P 500 index, and hold it over a long time horizon." - Investopedia
Compound Interest
"For savers, the definition of compound interest is basic: It’s the interest you earn on both your original money and on the interest you keep accumulating. Compound interest allows your savings to grow ever faster over time.
In an account that pays compound interest, such as a standard savings account, the return gets added to the original principal at the end of every compounding period, typically daily or monthly. Each time interest is calculated and added to the account, the larger balance results in more interest earned than before." - Nerd Wallet
Roth IRA, Traditional IRA, & 401k
Roth IRA
"A Roth IRA is an individual retirement account that enables your money to grow tax free. What's unique about Roth IRAs is that you can withdraw money without increasing your tax liability if you follow certain rules. Unlike with most other retirement accounts, Roth IRA distributions in retirement are not considered as taxable income." - The Motley Fool
Traditional IRA
"A traditional IRA is a tax-deferred retirement account you open outside of an employer’s retirement plan. In certain cases, you’ll receive a tax deduction equal to your contribution. However, the extent of this deduction varies based on your income and tax filing status. " - The Motley Fool
401k
"A 401(k) is a tax-advantaged retirement plan offered through an employer. Employees may elect to defer a certain percentage of their paychecks to their 401(k)s, and employers often match some of these contributions." - The Motley Fool
Options Trading
Options trading is the bread and butter of how this fund generates income and is a very large topic with many strategies, each with lots of nuances. When used in a calculated and disciplined manner, options trading is a great way to supplement the growth of a portfolio or provide additional income - on the flipside, when used emotionally and without discipline it can be akin to gambling. Investors should approach these strategies with extreme caution and take as much time is needed to study their desired strategy before using real money to execute trades.
Calls & Puts
All options strategies consist of writing contracts using calls, puts, or a combination of both. Regardless of what an investor's financial goals and option strategy may be, they will need to understand these two types of contracts.
Credit Spreads
The credit spread will be the main strategy used in the fund to general consistent income. Calls/puts are simultaneously being bought and sold for a premium. Risk/reward varies from low to high depending on the trader's risk tolerance and experience with the ticker being traded.
Wheel Strategy
The wheel strategy is a very low risk low reward strategy that will be used to preserve existing capital while also making a modest return. A combination of selling puts followed by selling calls given certain conditions are met.