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Sure Steady Wealth Building Plan

Updated on August 18, 2020
Randy Horizon profile image

Hub is based on my life experiences and the joy of succeeding in things I enjoy. Pure and simple - Life becomes what we focus attention on.

Easily Build Wealth and Have Fun Doing It

Financial Freedom is not happiness, but it is nice and it is possible.
Financial Freedom is not happiness, but it is nice and it is possible. | Source

As Many Streams of Income as Possible.

Try to maintain seven streams of income to build wealth.

  1. Full time and / or part time job
  2. Rental units to create monthly income
  3. Internet Publishing and affiliations with other companies
  4. Internet Sales using websites to market and sell products / services / consulting
  5. Retirement and Savings plans
  6. Stocks and Bonds paying or re-investing dividends
  7. Buy, remodel and flip properties

After retirement social security can be collected while still doing all of above. Building a nest egg to invest, grow and pay dividends will add to your monthly income.

Some ideas are listed above. Some of them may or may not work for you. There are more ways to earn extra money than listed here. Saving and being frugal will always puts more money back into your wallet.

Financial Independence is when Passive Income Exceeds Living Expenses.

Active Income means income earned from working or actively selling your time for money.

Passive Income means income earned on investments such as rental property, stock dividends, royalties etc. Any income earned without manual labor or actively working to earn it.

Financial freedom is achieved by both increasing income and/or decreasing living expenses or any combination of the two.

When financially free one only has to work if they want to and live anywhere they choose.

Dreams Do Sometimes Come True

Life is our dream, make it what you want.
Life is our dream, make it what you want. | Source

Full time job and corporate benefits

Many companies offer their employees retirement packages that at a certain level of employee pay deduction will become vested with the company adding their money to the fund or 401k. This is FREE money and its always best to get the largest percent of free money the company will offer. Not getting the largest amount offered is in effect losing money and over time that could add up to a significant amount.

Money held over time can grow exponentially. Compound interest with enough time can allow small amounts grow to large piles. Creating a savings and retirement plan while one is still young can assure one of wealthy retirement.

Currently banks and bonds are paying very little interest and if the Fed adopts negative interest rates people will lose money saving it in the bank. This is already happening in some countries around the world. Imagine going to the bank to withdraw your money and its less than it was before withdrawing it. If a bank charges -1% interest in a savings account it would cost $1 to withdraw $100 = $99 and over years it can eventually eat away to nothing. On top of that the Fed calculates inflation to be about 3% per year, but it is probably more than that. So banks and bonds are not a profitable way to save your wealth in 2020. But there are still dividend stocks and ETF's that pay 3% and more in 2020.

The impact of the Fed giving us and companies stimulus checks adds to inflation. The money they give is nice and I am enjoying it, but its a little like selling our grandchildren into financial slavery. Over my life this has already happened. The standard of living in this country is much lower than it was when I was young. The only way I know to beat this is to learn to become financially independent and this is why I am sharing some of this. Children are not taught how to make money or successfully play the stock market in school, they appear to be groomed for financial slavery. The rich get richer and the poor get poorer. Finances and playing the stock market is kept as some kind of secret for only the few who go to college to learn this. Its not that complicated and this is a sin, as college has become a very expensive ordeal these days. To make our kids leave school with a mortgage on their education before they even have a job is just pure greed, I am not a fan of the modern banking and fiat system. I want to share the secrets of getting wealth that I have learned with everyone who wants to learn, as I learn more I will share that too. There is more to life than money, but not having enough consumes our lives in the pursuit of making ends meet. It is high time for this to change, humanity needs to grow and prosper, not be trapped in their circumstances. Selling your time will never make you rich, but it does lead in the right direction until we can find better ways. Sorry this is not meant to be political, as politics too has gotten out of control.

House For Sale

Buy a house and then use the equity to buy two and rent one out to pay mortgage for you.
Buy a house and then use the equity to buy two and rent one out to pay mortgage for you. | Source

Real Estate Investments.

Buying a home to live in will naturally grow equity in time as the value of real estate increases. As compared to renting and building your landlords equity.

Purchasing a house to remodel and then sell or rent out is a great way to build wealth over time. This does take down money and works well over longer periods of time then trading stocks in theory. We can be sure that the value of real estate property will grow over time and not lose money.

To use your home as equity on a property investment works well. Purchase a house that can bought at a discount because it needs work and then either flip it or rent it. Is a sure way to grow wealth. Bank owned homes or homes going into foreclosure can be purchased at a discount, but it will take money to remodel. It is possible to acquire a mortgage for the value of the house after its fixed up, over the price. A house near me was going for $150k cash and worth at $225k after it was remodeled comparing the value of the neighborhood houses in the same location. I had it all set up to buy, but someone offered more and I was limited to the cash I offered and so lost the deal. But the point is I had a mortgage ready to go for $180k, so it is within the realm of possibilities. Now my mortgage guy is a good friend, but that shouldn't matter. It may be a bit harder to do this with a bank mortgage, but if you already have equity and good credit it should not be too much of a problem.

Use Your Interests to Create an Internet Business

Working online from home on one screen while trading stocks on another screen.
Working online from home on one screen while trading stocks on another screen. | Source

Internet Publishing and Sales

This you probably already know about. Writing and posting articles on Hub Pages and using WordPress are two places to do this.

Setting up an internet shop is a bit more difficult because you need to compete with Amazon and they could be labeled a monopoly, but still possible. This is easier to do if you set up an account with Shopify or Salesforce or another like those. A few important points to be successful with this.

1. Find a good line of products to market that are not easily found on Amazon and people want to buy online.

2. Create a niche - something that allows you to stand out from the crowd of other online stores.

3. Become an affiliate of other online stores that relate to your niche. That way you earn a little money when they buy from your competitors and this money is all profit.

4. Effective marketing of your store. This is an art more than a science, but its actually both. If you have the profit margin it may be wise to buy marketing space from Google and others in the form of ads.

Stock Chart Displaying Moving Averages

Current Rocket Stock 50 SMA (Blue) above 200 SMA (red) PSAR dots beginning to trend up again today.
Current Rocket Stock 50 SMA (Blue) above 200 SMA (red) PSAR dots beginning to trend up again today. | Source

Trading Stocks

This subject can take up several books, but I will lightly touch on it. Trading in the stock market is my passion and the way to make very much money in a short time. But one can also lose money just as fast or faster. Just a couple key points.

Buying a stock is buying a piece of a business. Buy companies that you use and like. Companies that will do good over time. Make a plan and time line for the amount of money you want to invest and how much you want to grow it in what frame of time. Write it down, how much money you want it to become and when.

What is your style of trading - dividend stocks, safer ETF baskets of stocks, momentum stocks, rocket stocks, value stocks, day trading or a combination of all.

I don't buy or sell on news, I buy or sell on market reaction to news. Try to keep in the back of your mind the market is looking out three months or so and prices it in now. Think on that a bit. Don't trade on emotion, make a plan and stick to it, very important.

When the market opens, wait about 10 minutes or so to see how it trends before doing anything. This is not a race, earning profit is the only goal when trading. Even though I do have what I call "Solid Rock" stocks and ETF's that pay dividends and I hold them no matter how they move, as they are my base security blanket, if you will.

When you find a company that you like, look at how it has grown over the past by checking charts. Look at its financials also called fundamentals, Earnings, balance sheet, etc. Make sure the company is in profit and its assets are higher than its liabilities. How much float does it owe (loans) compared to its earnings. How many years would it take this company to pay off its loans with its earnings, should things go down and it needs to. Simple obvious question - is it making profit and has it been doing so over time and how long? If it pays dividends how much 3% to 5% annually is great, but too much more can be a sign of trouble.

Next create a chart displaying the 200 day simple average (SMA) and the 50 day simple average. Moving average shows trends of the past and they tend to repeat, but not always. I like to also use Parabolic SAR showing reverse trends. The dots or dashes of your Parabolic SAR combined with the two simple averages will give you an idea of how the market is trading the stock. I look for the 50 day SMA crosses over the 200 day SMA this is a time to buy as long as the trading volume is high for that day and if all the other factors I spoke of line up. So you want to find a stock with a good market cap, maybe + or - 1 million, not a small penny stock they can be difficult to predict. If when the market opens for the day and the chart gaps up (has a gap from the day before), volume is good, market cap is decent and the 50 day SMA crossed over or is trading above the 200 day SMA, financials are good it may be a good time to buy.

We have all heard buy low and sell high, that is true but not always cut and dry. I like stocks that are trading near or above their 52 week highs. If all looks good I buy and put a 10% to 12% trailing stop on the stock and wait it out until the either stop order knocks me out or the 200 SMA crosses below the 50 SMA. That can be anywhere from hours, days, weeks or more. If I like the stock and got stopped out I may buy it when it all happens again.

I use this strategy in both Bull and Bear markets as it is my style of trading. Sometimes I pick bad stocks, but usually this works well enough to keep me in profit. There are also covered call and cash secured put options that help to earn profit, but that is for another article.

I watch the stock market every day that it is open and will adjust my portfolio daily if needed. Know that if you buy and hold a stock for a year or more the taxes are less than short term trades. Also, day trading in the US has restrictions from the SEC, so check it with your broker before doing more than 4 day complete (buy and sell same stock) trades in one week. You could get locked out of your account until you make a deposit. I think the law is to day trade you need to hold $20k or 25k in your account. Be careful and have fun.

This is NOT trading advice, just a simplified version of how I like to trade. Before investing discuss it all with your financial advisor.

Learn How to Trade by a Professional Trader

Matt Kratter is the author of the book shown above and he has taught me very much. I own most of his books and also attend his online school "Trader University". He is a very good teacher and his books are very inexpensive, he also offers Kindle books on Amazon that cost only a few dollars.

If you are interested in learning how to trade and profit from the market he is your man.

Invest in Gold and Silver

As the Federal Reserve Bank prints money to help keep the economy afloat in these times of the Covid-19 virus, the value of our fiat money system declines steadily due to inflation. As more money is printed our dollar buys less and less over time. This is presently happening at a faster rate than ever. As the value of the USD erodes away, the price of gold, silver and other precious metals rises along with bitcoin and crypto money. We are currently witnessing the value of gold, silver and bitcoin reaching new highs. This is a very good time to invest in these commodities to preserve our wealth. Interest rates have fallen and treasury bonds are no longer the secure investment vehicles they once were. Most banks are paying less than 1% interest on savings accounts and should they go to negative interest rates we will be charged for saving our money in the bank. The only investments that still grow at a decent rate are real estate, the stock market, gold, silver, precious metals and bitcoin. We can look at other countries that have degraded to negative rates to see how this effects their economies. There are several around the world that currently have negative interest rates. Many Wall Street Banks believe we are coming to the end of our current fiat monetary system. It may take many years for it to happen, but the writing is now on the wall.

Bitcoin and Crypto Investing

I invest in bitcoin and a few other crypto coins. I do not trade them as I do stocks. Bitcoin is a long buy and if held for years may grow into quite a nest egg. Bitcoin and Ethereum is best to buy and hold, but they are quite risky. I have only about 1% to 5% of my wealth invested in them because of the risk.

They will either go to the moon or drop to $0, only time will tell. They also could be stolen or lost much easier than anything else. These can be traded 24/7 and so I watch them daily. Once again this is NOT trading advice, just my style and joy.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2020 Randy Horizon


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