Have you heard of the FIRE Revolution income strategy yet? If not, let me give you the low-down.
Financial Independence/Retire Early
FIRE stands for Financial Independence/Retire Early. It’s a rapidly growing movement that aims to turn conventional financial wisdom on its head.
You know the wisdom. It says you must slog away at a job you hate until you are almost 70. Then be grateful for a few years of retirement and ill health.
Instead, proponents of FIRE aim to save enough of their hard-earned cash to escape the rat race and live the lives they desire at a far younger age.
In some extreme cases, they have achieved this in their thirties. Personally, I was a bit of a slow starter. I didn’t manage to drop out of regular mainstream employment until my early forties.
I should think there are many folks who would love to get off the merry-go-round whilst they are still young enough to enjoy life. But the obvious question is how?
The key is to live within your means, maximise your savings, and develop passive streams of income.
In the early years, the wonders of compounding allow FIRE aficionados to recycle that income and build sizeable nest eggs. Then, when they are ready, they simply flip the switch and use those same income streams to allow them to step away from the daily grind.
In other words, they become Financially Independent. And — if they want — Retire Early from the 8-6 slog and pursue interests that truly interest them.
Over the last couple of decades, I have researched, implemented, regretted, improved, and written about pretty much every source of passive income available.
And whilst I would always advocate diversifying your savings amongst different asset classes, one income strategy has leapt to the front to become my weapon of choice…
The FIRE Revolution income strategy
I’ve spent the last six months designing and building a programme designed to teach it to regular Joes. How they can generate regular income payments from some of the biggest and safest companies in the world.
Although I base much of it on my own real-world experience, the techniques I cover in the programme are well known and understood in the investment world. But as with many of these things, the experts like to keep them to themselves.
Your financial advisor is unlikely to tell you about this as there is no profit in it for him. And your bank manager is probably too busy trying to sell you their latest convoluted structured product.
However, many financial institutions regularly use these concepts. In fact, a certain Warren Buffett is known to love this strategy for acquiring new positions in the companies he buys.
Buy low, sell high
The basic concept is to sell ‘buy low’ contracts (cash-secured puts) to acquire shares of blue-chip companies at a price lower than they are currently trading at. Then we sell ‘sell high’ contracts (covered calls) on those same shares to ensure that we exit with a profit.
But here is the best bit. We earn a pretty penny for repeatedly selling those contracts and can often pick up hefty dividends to boot. If you do it right, FIRE Revolution can be a veritable income machine.
No guarantees, but it’s quite possible to achieve annualised premiums in the teens or even twenties using this strategy. And that income can be ploughed back into your pot. Or spun off to provide the passive income you need to achieve financial freedom.
If you’ve ever subscribed to my newsletters or services then you’ll probably have guessed that I’m talking about selling stock options. And I know the very word options can make people turn off…
Safe and straightforward
Let me reassure you right from the start, the way the FIRE Revolution strategy uses stock options is safe and straightforward. In fact, it involves less risk than simply buying the underlying shares. And we are already talking about the biggest and most boring shares on the planet.
If you have ever bought shares online or are reasonably savvy with investments, then you already possess many of the skills you need.
In addition, if you are the sort of investor who can appreciate the income-generating benefits of dividend investing — or indeed property investing — then you already have the mindset required.
Selling stock options this way is a very conservative income-generating strategy. In other parts of the world, many regular investors use it for producing that elusive passive income stream from their savings.
And, if you are wishing you were doing something else with your life, check out the FIRE movement.
Or better still, get in touch and we can have a chat about you joining the revolution. The Fire Revolution.
Third Friday Ltd are not regulated by the Financial Conduct Authority and the FIRE Revolution training programme is purely educational in nature. Under no circumstances do we provide any financial trading or investment advice. Any examples used are for educational purposes only and should never be construed as advice. We accept no responsibility for any investment losses you may incur. Please consult a financial advisor or other qualified professional if you are in any doubt as to the suitability of the strategies we teach.