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The Option Genius Podcast: Options Trading For Income and Growth

Sep 1, 2021

The question asked was:

"Allen, what has been your greatest investment?" I was asked this by a coaching student recently. And I told him, I have to think about it and get back to him. Right? Well, I have thought about it, and I want to share the answer with you as well. So when it comes to success, at anything, really, there are three major components. Okay, number one is the skills, you got to know what to do. And then you got to get good at it. And that's doing the thing. Now, whether this is trading, whether this is parenting, weightlifting, anything, there are certain skills that you have to be able to perform. And the best way to learn those skills is by investing in education, something like a book or a course or something like that. Right? Now, these are basic skills. So when it comes to trading, you have to know some stuff, you have to know what is a stock? How do they go up? What do they go down? What is an option? What does it call? What does it put? How do they work that you go, and you get from a book you get from a course or a video right? Now, most of the questions out there that you want to know, you can get the answers for free. From about skills, you can get the answers for free at the library, in a book, and now maybe even on YouTube. Now YouTube's a little sketchy, because you don't know exactly who's making these videos and how good it is. And if the answer is actually going to legitimate how old this stuff is, I mean, I've I've tried some things on YouTube that were so old, they didn't work anymore, and you can't tell. But at the bookstore library, you know, the skills, the basic skills, hey, I want to learn fundamental analysis, I want to learn technical analysis.

90% of what you need to know, you can learn by a book or a course, that stuff is out there, there aren't that many things that are secret out there. And that's like a myth, right? Everything you hear about is like, oh, the secret method to do this the secret to do this, oh, they that person got so rich, because they have a secret. No, the skills are the same trading, the skills are the same, you got to know how to chart you got to know how to look at a stock, you got to know how to read the direction, you got to know how to put the trade on, you have to understand how the trade works. Right, you have to know probability of profit, you got to know when to get in when to get out, follow a trading plan, you got to have a trading plan. These are all skill-based things. Because the skills are just the basic level. That's like the entry level. Right? That's the first things you got to learn the skills. And some people they spend their whole life working on the skills. But that's why they never become successful because they don't do the other two components. Getting good at the skill does not guarantee success. There is a lot more to uncover. Just because you know, this skills or your book smart doesn't mean you're going to be successful. Knowledge is not power. I don't know why people say that. So I've heard that before. Knowledge is power. Knowledge is power. No, it's potential power, if you use the knowledge, right. But if you only have the knowledge, that's not good enough. If you know some of the skills, you could do some of the things that will get you some success, but will not get you the ultimate success that you're after. Okay. So I know a lot of people that are very smart. You know, they went to Harvard, MIT brainiacs, you know, everything. They're like a walking encyclopedia, but they struggling to pay the bills every month, because they are missing the other two components. So now, component number two is the habits, the discipline, the work ethic, these are all based on character, right, you have to have the right character. In order to succeed, you have to have discipline, you have to have work ethic, you have to be able to get up when you get knocked down. You can only get that one way. By doing the thing over and over and over. Like they say, practice makes perfect. But then again, there's no such thing as perfection. Because there is always another level, there's always a way to get better, there's always a way to achieve more to improve more. So you never get to the end goal. So there's no such thing as perfection. But you still got to practice and you have to have it internally. It has to come from inside. That's the only way to have the discipline and the work ethic you have to work on that everybody's not born that way. You know, you look at take a look at Arnold Schwarzenegger or the rock, Dwayne Johnson. They got bodies like crazy, I'm never gonna have a body like that, because I don't have the discipline to be in the gym for six hours a day. That's not me. That's not my thing. I don't have that discipline. Right. And so I might have the skills, I might know how to lift weights, I might know how to be a personal trainer or whatever, but I'm never going to look like them because I don't have that work ethic or that discipline or that desire.

So whatever it is you need to master, if it's trading, you gotta follow the trading plan, you got to follow the rules, you got to have that discipline, you got to be able to take a loss, you have to be have your emotions in check. That's all character, that's the second component. Now these character traits like habits, you can have them by working on themselves on yourself, if you're lucky, you might be able to do it on your own. It's not easy, but it is doable. The easier way to do it, the shortcut is to do it with somebody else. So they can see where you are falling behind. Okay, so they can help you, they can motivate you, they can point out certain things that you might not be able to see, they can push you, when you fall down. When you don't want to go, they can give you that nudge, that encouragement. If you do what somebody else, the habits, the character traits are easier to develop.

Does that make sense? Okay, now, number three, the third component, this might be the one that's the biggest one that people miss that that causes them from having the ultimate success that they're looking for. They might have the skills, they might even have the character traits and the habits. But if they don't have the belief, it's not going to work. And not just any belief, they have to have the right belief. And that is the toughest one yet. Because if you have the skills and the habits, but you're not achieving what you desire, then it is because your beliefs are not right. Now you already have beliefs, you already have some, they might not be the ones that you need to get to your goal. Now, for most people, the reason is that they believe something that is not accurate. They have what's called false beliefs. And the crazy thing is that we often don't know what we don't know. We think we know. But what we know, is the thing that is blocking us. Does that make sense? I'll say it again, we don't know what we don't know, we're blind to it. We're the guy in the forest, you can't see the forest from the trees. We think we know, we already have beliefs we think we know. But that thing that we think we know, the thing that we know, is the thing that is blocking us. That's the false belief. Now, like Einstein said, or maybe he didn't say, I don't know, he said, the quote is the thinking that got us into the problem won't get us out of the problem.

And for the longest time, I couldn't understand what that meant. Right? But when you're in a problem, and then eventually you have an epiphany, you have an AHA moment you have like, "Oh, my God, why don't I think of that", that is a change in thinking to get you out of the problem to show you the solution. Okay, now, for example, in our credit spread mastery program, the hardest thing I have to do is to get students to break their false beliefs, the ones that they already have, when they come into the program. They understand the system, they understand how to find trades, place trades, all that that's easy for me to teach. But then they keep trying to use their own beliefs, and their things that they learned into the new system. They're taking their old skills, trying to apply it to a new system. And that's why they don't have the success that they could have. That's what causes them problems and losses. Now, the students that have the most success, are the ones that are new to options and just follow the program. They just take what I say at face value and just do it, you know, it's like run Forrest run, just do it be like Forrest, just do it. And the results for them have been crazy, amazing. I mean, so good that you won't even believe them if I share them. But they're not my results, right?

They're the results of students. And there are so many of them that are getting similar results. Because they're doing the three steps. They're believing what I tell them, they get developing the skills, and they're developing the work ethic, the character. Now, on the other hand, we have the students that have been trading for a while. They keep trying to do it the way that they've learned to do it, and they keep struggling. Right now they still make money, they still end up doing well. But they're not doing as well as they could. And that's where they get frustrated. They see it in front of their eyes. They're like, Man, this is working. This is working. It's working for other people. Why isn't it working for me? If you ever had that problem, if you ever felt that way that oh, my God, this thing works. I see it working for others. It's not working for me. It's because there's something wrong with the belief level, or maybe even the character level. But most likely, it's the belief level.

If your why is strong enough, if you really, really, really want to make it work. That's your character level. But if the beliefs are wrong, it's still not going to work. Okay, now this is crazy to me, because I do the same thing. I'm preaching to you about it. But I do exactly the same thing. So don't feel bad. But if you want to succeed at something, this is a shortcut, I'll give you the secret, the best way to do it is to have someone who has done it before you who has the success you want, and then have them point out the beliefs that you have that are holding you back, basically, get some coaching. Hire a coach, and that person will tell you why you're being held back if they're any good. Okay, now, I heard a podcast today where a guy, the speaker, the guy doing the podcast, he said he hired himself a coach for $30,000 an hour. 30,000 an hour, and he had to buy for hours. He had to pay $120,000 for a coach. Now that's freaking crazy, right? That's amazing. But for him, it was worth it. Because this guy's already making according to him, he already makes a couple 100 million dollars a year. So for him $100,000, $120,000 no big deal. But, I mean, it is still a big deal. I bet you still a big deal. But he's looking at it in a different lens. He's not looking at like, Oh my God, that's 120. He's looking at it, like, what can I get out of this? What can I make from this? Like, what is my return going to be? What is my value going to be? Okay, the answers that he got, were worth a lot more to him than the $30,000 that he had to pay for one hour. He was able to go to the source to somebody who had already done what he wants to do, and got the answer from the horse's mouth. He was able to say, Hey, this is my problem. What do I do? This is my thinking. I'm thinking about doing this. Should I do this? Yes, no, why not? Oh, you did it before? Oh, it didn't work for you. Okay, that makes sense. What about this? Oh, I see that now. Oh, my God, I didn't think about that. I didn't know anything about that. What does that mean? etc. So not only does he know what to do, but he knows what not to do? What not to waste his time on what not to waste his money on. Right? He's saving his time, which is a lot more valuable to somebody who's making 200 million a year, than the $120,000 that it cost him. Now it's the same with most traders online, I see it every day. They said that they would never pay to learn to trade. Oh, yeah, I'm not going to pay to learn trade, I'm going to figure it out myself. I'm going to do it myself. That's great. If you want it to take forever, do you really have forever to learn?

I mean, think about it. Let's just say it takes you five years to learn how to trade to be successful to be profitable consistently. Okay, that is five years of profits that you never get back. So either you have two options, right? Let's do you can do it yourself is gonna take you five years. And in that five years, you get some winners, you get some losers, you lose some more, you get some you kind of break even. But after five years, you know what you're doing. Awesome. trader number two, trader B goes and hires a coach takes a mentoring program. And he learns it right away. Like let's say he takes credit spread mastery, and he learns how to trade in three months, and it becomes profitable. And so after three months, he's profitable for five years. Whereas trader A is still breaking even after five years, because he's learning it on his own. He didn't want to spend the money for the coaching. Okay, that's five years of profits that trader a could have had, but he'll never have, he doesn't get it back. The years of profit could compound into millions of dollars. That's what these guys don't think about. They don't think about long term they don't think about they're just thinking about the short term like, Oh, I have to pay for coaching right now. No, it's not worth it. But they don't look at the long term compounding image 10, 20, 30 years down the road. Right? Now, I'll give you an example. I put aside $20,000 for each of my kids, in their IRAs for them, three kids 20 grand each. Okay, now, when my oldest turns 65 when he retires, and he can take money out of his account, even if I don't add another penny. And if I only leave it in an SPX index fund, like an index eval, put in the index fund, it matches the stock market. I don't touch it. We don't add anything. We don't do anything. It's just that 20,000 just growing, growing, compounding, compounding, when he's 65. He's gonna have over a million dollars in that account.

That's pretty good, right? I mean, the kid is 10 years old. He's gonna have million dollars. He's a millionaire. That's amazing. You know, hopefully he'll thank me. Might not be around but hopefully he'll thank me Like, oh, yeah, my Dad was a great guy. I don't know, hopefully, right? Fingers crossed. Now my youngest, my youngest child, I also put 20,000 aside for her, when she hit 65. Same thing, no extra money, no touching it just index fund, her account, her 20 grand will turn into over 2.5 million. What? One kid gets 1,000,000, 1 kid gets 2.5 million? What's the difference? Well, they're six years apart in age. So the oldest, he's got six years less of compounding. And that means over a million dollars difference in account size. Six years of compounding means over a million dollars. So yeah, when you try to learn something on your own, you're gonna pay for it, you're paying, you're paying a lot more than it costs to hire a professional to teach it to you. Let that sink in. You're still gonna pay, you pay this way you pay that way. One is harder, takes longer, and you got to pay more. The other one, you get to learn the right way quicker. And you have somebody on your side, and you profit sooner. So what was my greatest investment? Investing in coaching. It had to be the greatest return on investment of anything I've ever done. Okay, I mean, I read a lot. I've read lots and lots of books. I've been to seminars, I've watched videos, but nothing can replace that in-person coaching, where somebody is talking to you looking at your situation, looking answering your questions, it made a complete world of difference. There was one program I joined three or four years ago, I think was like four or five, a four year five years ago, not sure how many, it was for $8,000.

And I was like, and I don't know, if I want to spend $8,000 for this. There's a lot of money. It was for business marketing and business development stuff. And I paid for it. I was like, Alright, you know, I'm gonna plug it in, I need some help. I'm gonna do it. In the first, very first session, I went up to the main guy, and I asked him a question. I said, Look, man, I have this specific problem. It has to do with my technical stuff that we're using in my business, my systems, my software, what do I do? I have a problem. What do I do? Okay. And his answer, he looked at me, he goes, "Oh, that's simple", you know, in our business, and this is him talking goes in our business, we use this system, we set it up this way. This is the guy that sets everything up for us. So why don't you talk to him, I'll introduce you, you talk to him. And he'll set up the whole thing for you. Now, I'm getting a referral from somebody who's doing millions and millions of dollars in revenue, somebody that I look up to somebody that I paid to coaching to teach me because I want to be where he is. Right? And he's telling me to use this software that he uses, and to use this guy that he also uses to set everything up. Is that not the ultimate shortcut? I mean, that paid for the 8 Grand right there. Just that one introduction. Okay, that was it. One sentence, I followed his advice, I hired that guy.

And guess what? That guy was an idiot. a total idiot. It was a waste of money. And time, he promised to do something he tooks part of the money. It took him a year and a half, and he still hadn't done it. But what it did was it got me on the right path. It got me that software, it got me thinking along those lines of how to improve my systems and my processes. And then eventually, I did find somebody to finish the job. I got to find somebody sooner if I wanted to, but I was still being cheap. And instead of hiring somebody else and firing that guy, I was like, No, no, he's gonna do it. He's going to do it. I kept pounding and pounding and kept pounding. Finally I gave up. If I'd given up a year earlier, I would have been done a year sooner. So I found somebody else to finish that job. And then that helped me reach my goals in that particular area for Option Genius. That one sentence, that that coach told me, not one cent is telling me what systems they use was worth the whole price of the program that $8,000 that I paid for them. But I still get value from that program in other areas. Even years later, I was still looking at some of my notes the other day from that program, and it's still giving me ideas. I'm still helping me out. Okay, so save yourself the frustration of learning things yourself. If I could start all over again, which I can't go back. It would be cool, right? If I could start all over again. That is the thing that I would change in my own life. I would have found somebody who was trading profitably the way I wanted to and paid them to be their apprentice or be in their coaching program, or whatever, and then followed exactly what they say. That's the biggest thing. Yeah, we can pay people. But when we don't follow them, we don't believe what they're telling us. We bring our own misconceptions and our false beliefs to a new system.

It doesn't work. So you need those three things. You need the skill, need the character traits, and you need the right beliefs. All right, folks, that's it for this episode. Much love to you and trade with the odds in your favor.




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