The first few sections of this course are text based and essential in order to build a solid foundation for a successful trading career. The latter part is video based and will really cement what you will learn in the first part of the course. To help me with my trading & investing, I use multiple third party services such as Sentimentrader, Morning Star, Interactive Brokers subscriptions, Marketwatch, Yahoo Finance, etc. Some of these services are fee based whereas others are free. Any service that I feel gives me an edge, I usually snap it up. Anyways I sincerely hope you learn heaps in this course.

To The Top

In this course, my aim is to go through practical examples on how an investor/trader can make money in the markets consistently. Personally I learn more by numbers and practical examples which we will go through in detail in the latter half of this course. The last video in this course is vital to your mindset so make sure you stick around until the end of the course. Firstly though, we have to cover some theory which will explain the reasoning behind why we trade and invest the way we do. The whole premise of this course is earning “income” from the markets over capital gains. So many investors chose to invest for the long haul by not touching their stocks for decades on end. Whereas this strategy has worked in the past to some degree, it is still a risky one considering this current bull run in US equities will have to come to an end eventually. We want to speed up the process. We are going to take more control of our investing by being far more proactive and far more hands on.

Each investor/trader needs to ascertain their own trading style. I sincerely hope this course will steer you in the direction of your heart. Whether that is managing your portfolio on a monthly or quarterly basis or aggressive trading on a daily basis, you need to find out what makes sense to you. That is why you should develop yourself to the best of your ability in this field. A successful mentor is fine in the short term but over time, you need to start taking more responsibility so you can call your own shots and control your own future. At the end of the day, you are unique which means following a mentor over the long term will be difficult especially if you have a completely different risk profile. The amount of time one can put towards this is another huge variable which many do not take into account when following a mentor or coach. Just remember this going forward.

“Fear & Greed”. These are the two emotions that primarily exist in the stock market. However if you really think about it, these two emotions can be eradicated if one adopts an income mindset instead of a capital gains one. Fear is present for example when one of your positions is tanking at a rate of knots. The position may be profitable, may even have excellent fundamentals but may be loosing paper profits every day. You become fearful and eventually sell. On the other hand greed occurs when one of your positions may have rallied hard and you want more. Maybe you even take out some form of leverage to fund more shares. Unfortunately the house of cards comes tumbling down in the aftermath when you come to the realization that you bought at the top of the market and to add insult to injury – with leverage. !!!

This whole nonsense can be done away with by adopting an income or cash-flow mindset. However I must say that only the minority will be able to adopt this mindset. Why? Because the stock market and its associated commentary will do its very best to lure you into a false sense of security on a whim. In fact, it is so easy to change one’s game plan in the markets when so much commentary on stocks is right in front of you on a daily basis. Articles on stocks going to the moon are not only there for click-bait reasons but also to lure you back into the markets at a moments notice. Furthermore many of these articles are written by professional finance writers and on the surface look really slick.

However here is the critical issue. All of them bar none focus on timing and that is the key word. The articles are usually based off improving fundamentals or improving financials in a stock and you become worried or “fearful” that you could miss out on a move. What happens as a result? One’s portfolio gets dragged from pillar to post as it always chooses the perceived best stock at a given point in time. This strategy long term is set up for disaster as one’s emotions are heavily involved due to trying to time the market (reactionary). Our portfolio does things differently. We are going to call the shots and not be at the behest of the market at any given moment.

The first crucial step one can do before getting their feet wet in the market is to lay out a plan with end objectives in mind. Having a clearly laid out plan as well as being income orientated is how to become laser focused on your goals. In fact, your brain is a servo-mechanism which means it will deliver the goods for you (and change....) if you program it properly. Therefore before you get your feet wet, a key question you need to ask yourself is how much income do you want? This may sound strange but it is absolutely crucial.

The end goal here is money, or cash flow would be a better way to coin it. You need to decide right now how much cash flow do you require every month and in what time frame – 3 years from now?, 10 years from now?, etc. These are the steps that many investors don't take initially when they start out investing. They blindly go long some stocks and index funds and take a “see how they will do” attitude which is far too general and risky. I’ll say it again if it hasn’t sunk home yet. The reason to invest is for cash flow or money, period. It is not to have your shares stacked away in a portfolio for years on end as you wait for your ship to come in. No, we want to work on our income goals straight away.

We want to structure a portfolio where cash flow is king. We are not interested in speculative capital gains. If you can get this mindset down pat, you are most of the way there. For example, in the great recession of 08 and 09, most of the investors and speculators that went to the wall were primarily invested for capital gain. At the top of the market (Late 2007), investors piled into both real estate and stock markets and many of them got wiped out in the process. You can see the sentiment chart below where emotions among retail investors ran extremely high at the height of the boom as investors believed markets were going to the moon and they were going to get rich in the process.

Source : Sentimentrader.com

This brings me to another important lesson in investing. If you do the opposite of what the crowd is doing at any given moment, you are setting yourself up for success in a big way. For example, we will not be buying stocks for our portfolio when everyone else is buying. Our aim to be buying quality stocks for as cheap as possible. Our portfolio will be heavily diversified so one position alone will not be able to hurt us. Let’s revert back to the great recession though as there were powerful lessons to be understood there. Income derived investors that had solid diversified portfolios didn’t lose any sleep. Remember the value (in terms of $ amounts) of the portfolio was secondary to the income being produced by the portfolio. In fact, astute investors used the steep decline in equities to buy more quality stocks at really attractive dividend yields. The same could have been said about the real estate market. Investors who focused on positive cash flow came through the great recession unscathed as the price of their assets was secondary to the yield their real estate was giving them. On the contrary, investors who needed capital gain appreciation (usually speculators or “flippers”) got wiped out when investors ran for the doors.

So make the decision today – the decision to be primarily a cash flow or income investor. It may not be the “sexier” choice but believe me it is by far the most predictable strategy when looking for long term gains in the stock market. Investing for income should definitely form the lions share of portfolios, especially investors who do not have meaningful savings or a pension as it involves far less risk and is far more predictable over the long term. The advantage of income is that it forces you to look for returns now, not in months or years from now like in other types of portfolios. We want to be always focusing on the present (yes right now – as you are reading this course) as now is the only time you will ever have. Therefore shouldn’t we make “now” the most important and productive time ever?

Remember that the whole stock market industry wants to take you away from the “now”. They want to sell you on the next and best thing that will generate huge returns for you in the “future”. Nope that’s not us. We want results now. We are not dreamers. We are action takers who will not be swayed by consensus or opinion. If you are still with me, let’s get this show on the road..