No way you'd take a job without knowing how much it pays you an hour. Most people trade time for money, I want you to start thinking how much does this hour pay me!
Almost every worker knows their hourly rate. You knew it before you accepted the job. You probably roughly knew it before you even interviewed. Financial freedom comes when you replace your paycheck with passive income.
So... Do you look at every position you have in your portfolio to see what it's paying you?
I'm not just talking about your entire account overall. I mean every single position you own.
I think almost every broker shows you this (you might need to add a column) It's theta. And if you're serious about income through selling options, theta tells you exactly what you're collecting every day just for owning that position and having a contract sold against it.
Look at these 4 positions as an example (this is from one of my accounts)
My Robinhood Position.. It's paying me $35 a day
Schwab is paying me $18 a day
JPMorgan is paying me $36 a day
ServiceNow is paying me $35 a day.
These 4 positions are like getting paid $15 an hour for 8 hours of "work". If you have 8 positions you could make $30 an hour... If you have more capital you could double these 8 positions and make double... You get the point.
Theta is important to my financial freedom. If my theta is zero I'm not making money. If I have negative theta (from buying options) it's costing me money. I'm not saying EVERY single position has to have positive theta. It might still be a good position. But we should know that going in.
Stop spending so much time trying to make the stock market into something complicated and mysterious. If what you actually want is income, then treat options selling like income.
Know what each position pays. Also pay attention to your delta, but that's an email for another day :)
Know theta's role in your financial freedom journey!
A portfolio that generates freedom isn't some abstract concept. It's just a collection of positions that PAY you, each one doing a job.
Do you know what each one of your positions is paying you?? If you want financial freedom you need pay attention :)
Turning knowledge into wealth,
$Maxwell
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