#26: For the Love of Money! Who Wants to Make Passive Income? With Allen Sama
Description:
The conversation with our super cool guest Allen Sama rocked my week! You will love learning how to make passive income with OPTIONS on the stock market. Be ready to take notes. ; )
Plus hear how Allen lost $40,000 of his wife’s money. OMG! Yes, no joke. That one loss made him get Super Serious and master a craft that you will want to know more about. Get ready to BANK with Options Trading. Plus he gives you a free book. Not a download or pdf… the real actual hold it I your hands book. Listen in.
You will love me every more because of this podcast. Remember me at Christmas. Mwah! - Tina Marie
Bio:
Allen is a full-time trader and trading coach specializing in high probability trading. He started trading once he was laid off from the only “real” job he ever had and only got serious in trading once he lost over $40k of his newlywed wife's savings and vowed to her that he would either become profitable in 3 months or go back into the workforce. Since then, he has used what he calls Passive Trading to be able to make more in a day than he was used to making in an entire year. This path was far from easy and Allen openly shares his struggles of overcoming severe frustration, hundreds of losing trades, and losing thousands of dollars. Now, he lives a life most can only dream of earning full-time income trading less than an hour a day.
Links:
Facebook: https://www.facebook.com/allen.sama.9
Website: https://optiongenius.com/
Tina Marie St. Cyr 00:00
Hello, I'm Tina Marie St. Cyr and welcome to light your life, the podcast. I believe our dreams have energy calling and purpose and that when we move in their direction, our lives become even more joyful, fulfilled and effortless. This podcast gives you insights to the strategies our guests use to overcome obstacles and manifest their dreams, in business, career, relationships and in life. Listen to find new levels of energy, perspective and courage. Your journey to light your life begins now. Hello, and welcome to light your life. I'm your host Tina Marie, and I can't wait to dive into today's subject. We're talking about one of my favorite subjects, money, and let's learn how to make money in our sleep. I am so awesomely excited to be talking with Allen Sama. He is the full-time trader and Trading Coach at OptionGenius, which specializes in high probability trading. Allen started his trading once he was laid off from his real job and ever since then, he got serious when he lost $40,000 of his newlywed wife's savings, we're going to find out more about that I need to know that story and since then, he has used what he calls passive trading to be able to make more money in a day than he was able to make in an entire year. If that hasn't gotten your attention yet. I don't know what well. So, Allen, thank you so much for being our guest here today on light your life.
Allen Sama 01:36
Thank you. It's an honour to be here.
Tina Marie St. Cyr 01:39
Awesome. I am really curious. You've piqued my interest. Whenever I first learned about you and got your book, your passive trading. I was like, we've got to have this guy on, we've got to know your story and your secret. So, thanks for sharing that with us.
Allen Sama 01:52
No worries.
Tina Marie St. Cyr 01:54
So, you lost $40,000 of your wife's her savings. You guys were newlyweds and how did that come about?
Allen Sama 02:02
So, my wife is a saver. So, all through high school, she worked college, she worked after that she got a job as a nurse. So, she was making money and bracing, saving all of it. We got married and right after that, the job that I was working at. If you remember, we had the big financial crisis, mortgage meltdown, all that stuff happened. I was unfortunately laid off. I'm not as you would say, a model employee. That was really the only real job I had, because I was good at marketing. So, they let me get away with a lot of stuff most bosses would not let me get away with. So, it was really a matter of okay, you know, we just got married, what do we do? Do I go back and get another job, which is probably going to be hard at that time, especially because everything was going crazy. But in my spare time I was trying to learn how to trade and it was always an interest of mine, like you said to make money and all the different ways to make money and what are the some of the easiest ways? Well, hey, if you can make money in the stock market, it's just purchasing a couple of buttons and that's pretty easy. So, I thought it would be easy. I was learning about it and she said, hey, what are you going to do? I was like, well, I really would like to try to make a go at this. I think I can do it seems easy enough, let me go for it. So, she goes alright, I took the money that she had saved.
She would go to work and that in fact, she actually got two jobs to support us, she got a second job. It was a gold medal. I would be working and trading during the daytime and then watching the financial news and watching all the financial shows too late at night, stress levels going up and up because the account value is going down and down. I really couldn't figure out what I was doing wrong. I did everything you could think of I read books and bought courses and went to seminars and everything that they tell you to do. But there was just nothing was working and one day when she came home and she actually checked the mail and I don't want her to see the statements right because she'd been, how're you doing honey? How was great, it's only been like three months or so. I was already down significantly. So, she checked the mail and she came home and she saw it and she had in her hand. She didn't even say anything and she's just looking at me and I'm like, Oh no.
Tina Marie St. Cyr 04:39
Like that proverbial woman with her hand on her hip looking.
Allen Sama 04:43
Yeah. It almost cost us the marriage. But I made a promise to her like, hey, look, just give me a couple more months. I'll make it better and we'll fix it.
Tina Marie St. Cyr 04:58
So, that lit a fire and something changed.
Allen Sama 05:01
Yeah, that's when he got real. That's when it got like, oh my god because up till now it was comfortable, she was working, I didn't have to work. I'm just sitting in my pajamas playing keyboard playing trader and pretending like I was actually doing something when I wasn't. Every time I would lose money be like, oh, I learned a lesson. I learned a lesson. No, I was just losing money justifying it. So, that's what lit me a fire. It's okay, now I got a deadline. Now, I got to make sure I got to do this work. I went through everything that I had done, all the trades that I got to have. So, maybe I did something right, let me see and there was just one trade that I had put on and I had totally forgotten about it. I just put it on, it was something new that I found out about I tried it and it worked I didn't even know that it worked and it made money and suddenly, what is this? Where did this trade go? It just disappeared. It wasn't even there anymore. I realized that it was a trade that dealt with options and it was a very conservative strategy. I looked more into it and I'm like, well, I could do this, this is simple, this is easy.
Tina Marie St. Cyr 06:08
Yeah, you look for what was working and then you looked at the pattern and you said, let's investigate this and try this even more.
Allen Sama 06:14
Yeah, because everybody's different and everybody has different strengths and weaknesses and risk tolerances. For me, I learned that when it comes to picking direction of the stock market, I'm not good at that at all that you're going to ask me, hey, what's this stock doing tomorrow? I don't know, it could be anybody's guess. But this particular strategy allowed me to not have to pick which direction it was moving. I actually later on learned on that these strategies are used by large hedge funds and multimillionaires like Warren Buffett, and Mark Cuban, and all these guys that they have learned this stuff from others, and they pay and they learn all these information, and they are using it. So, I'm like, wait a minute, why am I using the same stuff. So, that's what I really made my life study about to learn how to do this and since then, it's been incredible. It's been an amazing ride and then a few years after I got really good at it, then I started showing other people what I was doing, and they were blown away and then it was just a matter of Allen, teach us what you're doing. Just tell us teach us what you're doing. Can you show us what you're doing and then that's how the book came about, and all this stuff happened. So, now we're out there, and we're spreading the word about what passive trading is and its changing lives, literally. So, I'm really blessed.
Tina Marie St. Cyr 07:33
Awesome. I'm so glad you're here. as entrepreneurs, some people think that it's an overnight success and what I hear is that you went through your own years of struggle, and because of that, now you can share a short cut of what to do precisely, with your audience, through the book and through the courses that you have. So, how many years was it? So, just let us know, from the time you started with your options trading or learned about it till now? What are we looking at?
Allen Sama 08:03
I would say probably in about 15 years, 15 to 16 years. Y
Tina Marie St. Cyr 08:10
You're able to shortcut that for the people that follow you and now that you're a mentor and coach to and allow them to take those hard days and hard nights that you had at the very beginning and that way they can learn how to do it and be more effective and efficient in a shorter timeframe?
Allen Sama 08:28
Yes, I've taken all the mistakes that I've made. Don't do this, I did this, check this out. This is a mistake was a mistake. It's a mistake, somebody has to show it to you, or you have to go through and make those mistakes, which it takes a long time. Because you're not taught that there's other people out there that are talking and you don't know exactly why they're saying what they're saying and then later on, you figure it out, like oh, this wasn't exactly meant for me. But I tried to use it and it didn't work. So, it is confusing.
Tina Marie St. Cyr 09:06
Where do people start with investing? I know, you mentioned the stock market and then you said that's not the avenue that you ultimately went with you went with options. So, where do people start investing in your programme or under your tutelage.
Allen Sama 09:22
So, there are different ways to do it and you can do it with only stock options or you can layer in stocks and then layer in options as well. So, in our passive trading programme, we start at the very beginning at the very basic level, and we say hey, you need a foundation so stocks would be a good foundation for you, especially good stable stocks, like dividend paying stocks, companies like McDonald's and Starbucks and Pepsi or Coca Cola. They've been around for 100 years, probably not going anywhere. So, you have something that's just going to pay you dividends and hopefully appreciate over the years. Then we layer in option to that, and then we sell options and basically what we can do is we can cashflow these stocks. So, you have a rental property, and you rent it out to somebody and they pay, you sent you a rent check? Well, we're doing the same thing with the stocks. So, I have all the stocks, and every month, I sell an option against the stock, and I get paid several $100 for each one that I sell and that's just income coming in every month. and there's two different strategies that we use against to do that and then there's another third strategy that we add on top of that, which really boosts our returns considerably higher. So, between the four strategies, dividend paying stocks, called selling calls, selling puts, and then selling spreads, we can average anywhere from six, seven to 10, 12% per month in returns.
Tina Marie St. Cyr 10:48
Pretty remarkable.
Allen Sama 10:49
So, most people are saying, oh, yeah, I can do 8% In an index fund, or just put my money in index fund, that's a great place to start. But if you learn the strategies, you can cash flow your index fund, and making one to 2% a month, just from doing that, it's Child's Play, learn it, you can learn it maybe in a half an hour a day maximum, and then you'd be able to do it every single month. The way I do it in my retirement accounts, takes me maybe 30 minutes a month, I'll put the trade on. I didn't even look at it for a month, and then I'll look at it again, hey, do I need to do anything? Yes, no, and then I'll do it again and then it just continues. So, it's a very conservative way, it's a very safe way and it's just consistent it's every month you have you own the stock, you keep the stock, we don't want to sell the stock, we wanted to keep getting those dividends, we want to keep the asset that we have, but we want to cash flow from it every month coming over and over again. Some of the students that have more time, you can actually cash flow every week. So, there are weekly options that you could use, and they expire every seven days and you can make more that way than doing the monthly ones.
Tina Marie St. Cyr 12:04
I was going to ask about, people's risk tolerance. So, often, whenever you're working with an investor, I know my investor, my investment coach, he asked me, what is your risk tolerance in the market? What do you want to have your money do for you? What time do you want to bank that money, utilize that money in the future and you mentioned retirement account. So, there's different plays with the money, you could utilize the stocks, I guess, in the options to have that cash flow that comes into your household now and then you can have that cash flow that's building for that time in the future, which would be retirement. How does this work with different risk portfolios or the tolerances anyone would have on risk and their money.
Allen Sama 12:55
So, we've built it in a way that we can tailor to the risk. So, in one of our other programmes that we have is called the passive trading formula, which goes into a lot more detail than the book does. But the first thing you do is you take a personality test, to see what your personality is like. So, we can match it to other investors that are doing well to see how you fit and then you take a risk tolerance test to see exactly what is your risk tolerance. we have people that run the gamut. So, if somebody is a lot more conservative, what they can do is play safer trades. So, every option that we sell, we can mathematically statistically tell, what is the probability of profit on that option. So, we use statistics, and there's a Nobel Prize winning economist that came up with this formula about how to actually tell what is the probability that a particular option will make money or not? So, if you're more conservative, then you can choose anywhere up to like, 90%. So, every trade I do has a 90% chance of winning compared to a stock, if you buy a stock, it's either going to go up, or it's going to go down. But with these options, you can actually tailor it. So, if you're more aggressive, you can go to 80%, you can go to 75%, if you want to, some people go to 70%, I wouldn't recommend going less than 70% if you want it to keep it in a passive way. But if you have more time to do it, then yeah, you can get a little bit more aggressive and then the returns are just like I mentioned, 5 to 10% a month, if you go a little bit more aggressive, you can make 20% 25% a month. We have some students that are that are doing it that way. So, the returns, like you said, it's either can be done. All of these strategies can be done in a retirement account in an IRA, or they can be done in your regular trading account and then you can just take the money out every month to do whatever you want with it, or just leave it in there and compound it. That's awesome.
Tina Marie St. Cyr 12:57
That's awesome. So, let's do some one on one nomenclature. For those people that don't understand what an option is, help us understand the difference between an option and we mentioned stocks.
Allen Sama 15:07
Okay, so, an option is tied to a stock. So, let's say we're talking about Apple. For every 100 shares of Apple, you can have one option and there are two different types of options. So, there's puts options and call options and both work the opposite. Normally, if you want the stock to go up, if you think the stock is going to go up, you would buy a call option, which is cheaper than buying the stock. S, its less money invested when you're buying it, but there's not a good chance that you will make money with it. So basically, you know, if you heard if you've listened to any kind of advertisement, or whatever about options trading, they talk about, oh, you can make 1000s of dollars, you can make 10 times your money, you can double your money, those guys are all talking about buying options, which is basically a gamblers move, it's very speculative. So, yes, if you think the stock is going to go up, you buy a call option and if the stock does go up, you could make money, you could double it. But there are many ways that it could not work out, the odds are actually against you. So, because you have to be right on the move, it has to go up like you'd predicted, you have to know when it's going to go up. Because all these options, they expire, they have a time limit on them. So, if it doesn't go up, and your option expires, and then it goes up, well, you are right, but you still lost your money and then you have to know how much is going to go up as well. So, that's the hardest one thing, if you couldn't go up 2%, 5%, you don't know. So, that's why what we do is we sell options. So, I don't care if the stock is going to go up, or if it goes down, if it goes sideways, all I need to know is where the stock is not going to go. So, let's say Apple is trading at $100. Is it going to go to $150 in the next month, that's a 50% rise, probably not chances are against it. So, maybe I'll sell that option up there as long as it stays below $150, I win, I make money.
Tina Marie St. Cyr 17:19
So, there's a market for these obviously in the marketplace, because you wouldn't be able to sell something if there's not a demand for it. So, there's a demand for call, 150 in this particular example of Apple,
Allen Sama 17:37
Yep. So, what Warren Buffett does, he sells puts. So, puts are opposite of calls. If you buy a put and the stock goes down, then you make money. So, these large hedge funds, they have, millions and billions of dollars of stock, they want to hedge themselves, they want to protect themselves. So, they will buy these put options, and they'll pay for it as an insurance premium. I was going to say that sounds like insurance. For them, it is insurance. So, they will buy all these puts and if the stock market drops and all their stocks drop, then they're okay. They're hedged, because they have this put insurance. But now let me ask you, you have car insurance, you have life insurance. Do you ever want to use it?
Tina Marie St. Cyr 18:20
No, never.
Allen Sama 18:21
So, it's the same with these guys. They don't want the insurance to pay off and there's a very small probability that this insurance will pay off for them, but they have to have it. So, people like me, are willing to sell them the insurance. So, every month we go in and we see okay, what am I comfortable with and that trade, I will make it if I can get the right payment. So, like I said, Warren Buffett, he uses this strategy in a little bit different way. He decides hey, I want to buy Apple stock, but it's trading at $100. Right now, I don't want to pay $100 for it, I wanted to buy it at 80, I want a discount. So, then he'll sell the $80 put option. If Apple goes down to 80, he's happy to buy it. If Apple does not go down to 80, that option that he got paid for expires goes away and then he keeps the money for that option and then he'll sell another one that's all and every month he's getting paid to wait for the stock to drop to his price.
Tina Marie St. Cyr 19:27
So, it's also like an alert system I guess, telling you here's your stock now, it's made that and so whatever that happens with that call that was a put, I'm confused, there's like a purchase that's actually going to automatically go in.
Allen Sama 19:44
You can if that's the plan, yes.
Tina Marie St. Cyr 19:46
If you want to take ownership of that stock, awesome.
Allen Sama 19:49
There's also strategies where they have no stock at all it's only the option. So, like I said, I go to backdoor, Apple trade, I think Apple is trading, if apples trading at $100, and I don't think it's going to go to 150, I could do what's called a spread trade with only the options. So, it's a limited risk trade, where you're selling one option, and you're buying another one. So, you know exactly what your loss is going to be, before you get into the trade, whatever the worst-case scenario happens, exactly how much you're going to lose, how much you're going to make. So, we play the same way, we go very far away from where it's trading, have the odds, definitely in our favor, 80, 90% probability that this trade is going to work out and it's just another method of generating cash flow. So, you can do that if you don't have enough money to buy all the shares. So, those trades can be done with as little as 500 bucks.
Tina Marie St. Cyr 20:47
I was going to ask how much money are we talking about here to get started?
Allen Sama 20:51
Yeah, so, most of the brokers when they approve you for options trading, they will look for at least two or $3,000 in your trading account. I would always suggest anybody starting out, every broker has a virtual trading programme, it's like real trading, but with fake money. So, they give you, $100,000. So, I would say go in and do these type of trades, to learn them and pretend like you're doing it for real. Once you get the hang of it, then you can go in and decide how much money you want to put in, and how much money you need.
Tina Marie St. Cyr 21:29
That's awesome. Have you ever been in that place where you did the fake money, the Monopoly money trades and you went, wow, this was real.
Allen Sama 21:40
But I don't know how long the current economy is going to handle the way but the in the stock market, 2020 was really hard for a lot of people. 2021 is what has continued getting better. But for the stock market for us as traders as option sellers, it's been phenomenal. It's been amazing. So, it's a really amazing time to learn this stuff and to get in. I look at it as when we talk about retirement, , my goal was always was to retire early. Oher people, they have a goal, I'm going to retire when I'm 65, the ones you want retire early? Well, what does that look like? How do I do that because we're told b all these retirement advisors that you take your money, you work hard, you save your money, you give it to an expert, and then they grow it and then once it's at a big enough nest egg, then you can retire and you live off 4%, or whatever of that amount, and you be happy with that amount. But most of the boomers that are out there right now, they don't even have enough saved for retirement and its really heartbreaking situation. We talked to somebody in the office yesterday, a couple of wonderful couple in their 70s, they only have $20,000, to their name, the husband is desperate. He's like, I need to get some money and other people that say, oh, well, why don't you go get a job, he can't work. They're not physically capable of working, they have some issues, and he has to take care of her and all that stuff and it's just heartbreaking that the retirement system, the way it's set up now, is letting so many people fall through the cracks, and then their social security and stuff. But pensions are going away. Most of the companies that we work for now, they're all expecting us to take care of our own funds and retirements. So ,that's why I've always like, okay, how do we get to retirement sooner? Well, if you can make enough money every month as you are spending, then you're home free. So, that's where we're all looking for. So, that's what I'm trying to get all my customers to like, okay, hey, how much money do you need to survive every month? How do we get you there, so that you can use options and sell options as cashflow, to get that money out, and just live off of it and be retired. So, we do have a lot of people who are already retired, and they're like, hey, I just need a couple grand a month, and they take the more conservative strategies and then there's others who want to retire early and they're like, okay, I need to be a little bit more aggressive because I want to retire faster. I'm younger, I can handle it, it's okay. It's amazing. So, a lot of people ask, oh, do I have to do this full time?
Tina Marie St. Cyr 24:27
You're doing 30 minutes a month there.
Allen Sama 24:30
Yeah. So, depending on the strategy, it it'll change a little bit, but the basic strategies, 30 minutes a month. If you're somebody like me, you might want to check in more often because I'm interested in it. So, I check it, you can check in every day and be like, oh, how's my trades doing and you don't really have to do anything most of the time. So, a five-minute check during the day is good enough.
Tina Marie St. Cyr 24:54
That's amazing. So, we are talking with Allen Sama and he is the lead coach and founder of option genius, and I want to tell you the website, you're going to go over to his website, you're going to find out about his courses. I'm going to ask you a couple questions about those Allen in a second. So, it's optiongenius.com. You can also find Allen on Facebook and that is your Facebook handle, I guess as we'd say it would be Allen Sama. So, they could find you out there. Also, you have this book, which I have a copy of and in all honesty, I love that you did really big print. I love it. Because I'm over 50, it's not so intimidating. There's a lot in here, you give us great advice and great links and other resources to help us digest this and not feel, you know, in my case, there's a time in our life. We think I should know this by now. I diving into something that's going to be overwhelming, you really make it easy and applicable, and you have a gracefulness about yourself and educating us. Thank you so much.
Allen Sama 24:55
I do my best. I've been in that shoes, where it's like, what is going on? What is all this stuff?
Tina Marie St. Cyr 25:30
I love it. You also have the option genius podcast. Tell us about your podcast.
Allen Sama 25:44
So, we've been doing that for a couple of years now. We just crossed I think 100 episodes. So, really excited about that and it's been a lot of fun doing it. Sometimes, most of the episodes, I'm just me talking about different aspects of trading. And what we found out is that trading is 80%, mental 20% doing the stuff. Okay, so doing the stuff I can teach you, you could read the book, take a course, that's easy, the mental part is where it gets really hard. So, that's what I focus on the podcast and we talked about different strategies as well, bring on some of our students that are doing really well or other traders that are doing really well to see what they're doing and what's going on how the markets are working. But yeah, it's been a lot of fun doing that and hopefully, we'll probably plan on continuing it. But I haven't been as regular. I'd like to.
Tina Marie St. Cyr 27:07
Yeah, it takes dedication, discipline, I know what this podcast, it's every week thing. We're actually recorded all the way out till the end of the year, and so, it took a lot of dive in make it happen and that's what anything we do, you're listening here, and we're talking about money and how you can make passive income. I love that you say even while you sleep. So ,it's because the markets working for you and you're making the person with your education, and optiongenius to help your students understand what to do and how to know how to do it and the mentality of it, the mental aspect of it and once you have that all set up, then you get to watch.
Allen Sama 27:43
Because I don't know if it connected the dots enough, but I mentioned that the options have an expiration date. So, when you sell it, let's say you get $200 for an option, every day that goes by, there's less of a chance for that option to go against you. So, it's worth less and less and less. So, literally, while you're sleeping market is closed, that option is losing value, even though there's less risk, there's no risk. So, it's really interesting, though.
Tina Marie St. Cyr 28:14
I can't wait to dive in more and learn more from you. Thank you for doing all the hard work and thank you for losing because we learned, you learned and now you're taking your lessons and helping us not have to make the same mistakes you made early on.
Allen Sama 28:31
I was just going to mention that you showed the book earlier, we wanted to give all of your listeners a free copy of the book. So, it is a printed book, if they go to passivetrading.com, we'll send them just the word, the name says passive trading, we'll send them a free copy of the book, we'll print it out, we just ask that they pay shipping and handling. So, they can cover a couple of bucks for that. We'll send out a free copy and they can there's a lot of stuff in there, including, there's a couple of examples that people don't even believe, there are stocks that I owned, that went down, but I still made money on them. They're like how does that happen?
Tina Marie St. Cyr 29:10
Well, my mind is just blowing up on that thought. So, passivetrading.com and simply go there, and there's directions and you help guide them on how they can get their copy of your book passive trading. Awesome. How many students do you have this come that have come through your course.
Allen Sama 29:31
So, since we started in 2009, we have probably helped over 50,000 people in one way or another. But one of the things that I've wanted to do for a while is to come up with an award. So, we're working on that right now where hey, if somebody has made at least $100,000 trading our way or made 100% in a year, they double their money. We're going to give them one of these awards and we have well over 30 or 40 people that off the top of my head qualified for this award.
Tina Marie St. Cyr 30:12
I love it, you're keeping it interesting because I could see the analytical types, just stay in front of a computer and watch it. We need to engage our community of people that want to win. This is so cool. I've loved talking to you today. I hope everybody listening here, your life goes over to optiongenius.com. Learn more about Allen, his programme, book, get your free copy of the book, why would you not do that? So, simply go to passivetrading.com. Get your free copy of the book and dive in. I also love that you stimulate our thinking that the way that we would typically think retirements going to happen is in a fragile state and we need to really take control of our future money making and why not start right now? Thank you again, Allen, for being our guest here on let your life. It's always a great pleasure to learn more about wonderful people like yourself that have done this for us and are making it easy.
Allen Sama 31:07
Yeah, thank you. This was a lot of fun.
Tina Marie St. Cyr 31:09
Thank you. That was so energizing, I have takeaways that will help my life and I'm sure you do too. To get show notes bonuses, gifts for you from our guests, and more and over to light your life podcast.com and be sure to bookmark this podcast is one of your favorites. I am Tina Marie St. Cyr, founder of Bonfire coaching and creator of the Bonfire method. Thank you so much for being connected. Now my homework for you, summon the courage to light your life a little more, and go make progress on your dreams today.