Why Stock Options are Ideal for Busy Professionals Looking to Build Additional Source of Income
There are many ways to build additional sources of income.
I have watched numerous YouTube videos and experimented with various methods.
Eventually, I found personal success through stock options, achieving a regular 12-15% annual return.
With a busy full-time job in tech, I believe stock options are an ideal way to generate additional income.
Three Key Reasons:
1) Time Leverage:
Juggling a full-time job, two young kids, and building a side income can be extremely challenging. Time is my most precious resource. I knew from the start that I did not want to trade time for money when creating a new income stream.
I have tried offering coaching and consulting services—both excellent ways to leverage my professional skills. However, these activities are time-constrained.
With stock options, once I learned the ropes and developed a winning strategy, I only needed 10-15 minutes per day to evaluate potential opportunities. This level of time efficiency has been a game-changer for me.
2) Scale Leverage:
Income from full-time employment has a natural ceiling. That’s why I wanted my side income to have more scalability.
- With consulting or coaching, scaling up means acquiring more clients.
- With an online business, scaling means increasing sales and marketing efforts to attract more customers.
- With stock options, I can scale through capital leverage.
A 10% return on a $10K capital base yields $1K, while the same return on $100K yields $10K—all while using the same system and strategy.
I have learned that I can increase my capital base through:
- Savings from my full-time income.
- Profits from stock options trading.
- “Borrowed” capital from the stock market with fixed and low funding costs.
(Of course, risk management is crucial, but that’s a topic for another day.)
This has significantly increased my earning potential.
3) Complementary to Equity Investment and Wealth Building:
Like many full-time employees, I already invest in high-quality companies through the stock market.
While equity investment is crucial for long-term wealth building, it is not ideal for generating regular cash income. (The S&P 500’s average dividend yield is under 3%.)
However, with stock options strategies like covered calls or cash-secured puts, I can generate cash income by trading options on companies I have researched in depth.
This allows me to capitalize on short-term stock market volatility to generate additional income, which I can reinvest into my long-term wealth-building strategy.