hey everyone welcome back uh this video is going to be for mainly beginners there's going to be a few people that are experienced with managing their account managing their money and they already know all this stuff so this video might not be for you but for any beginners or anybody that just has trouble managing their account or has had trouble managing their account in the past this is going to be the video for you and let's just jump right in so how do I manage my account I'm I'm going to be speaking upon personal experience
this is exactly what I do there's there's only three positions that you have in the stock market you have stocks you have options and you have cash uh here are some other ways to uh explain these these terms here so this is long-term Investments this is short-term Investments for like weekly income or monthly income and this is just your your horde this is where this is your bank account basically where you're keeping money to save okay so let's go through this so when it comes to stocks I like to keep 65 to 70 of my
money in stocks and long-term Investments and right off the bat a lot of you are now thinking what okay why would you do that isn't there a lot more money in playing options well here's the thing the market can turn just like that okay you could be in a bunch of calls and the market starts going going down like five percent ten percent there could be a crash and if you're all in if you're 100 of your money in options and the market completely shifts guess what you just lost so much like thousands you probably
lost half your account if you sold out in time okay that's that is the risky way when you when you trade options now this is what I do personally when we get into call options for instance where we're betting on the stock going up in the short term instead of me personally just buying an options call yes you'll make more money but since my account is of bigger size you know it's not like I'm putting a thousand dollars into it it's more like I'm putting five six seven thousand dollars into a stock believing that it's
gonna go up in the short term and I'll just buy the stock outright because even if I'm wrong if the stock ends up ends up going down I can still hold that stock for the long term and end up making my money back if not more uh in the long term so you see what I'm saying when it comes to options you have that expiration date you have that time Decay you can only be in that contract for two three weeks if you're buying out for two months so you've got a very short window here
when it comes to options trading but with stocks you can keep your money in for as long as you need uh there's no window uh you know the limit is the sky essentially so 65 to 70 percent in stocks and a lot of that's just long-term Investments because the long-term Investments have been proven to be the most successful form of trading it really is guys I mean look at Warren Buffett he buys and he holds he's dude this guy's been buying stocks and holding it for 30 years okay and you know if you have a
small amount of money it's not going to make that big of a difference whether you just buy it outright or buy an options contract because if you lose a hundred bucks an options contract 100 bucks you can go and you can make that back in a day at your job you know half the day basically so uh with stocks you can't lose money unless you sell okay now there is a situation where you could buy a stock at the wrong time you could buy an overvalued stock and it never recovers it never comes back to
where it was um stuff like that so that's why we have the long-term portfolio which is actually my portfolio on our service here on the 20 a month service the long-term portfolio is a spitting image just a copy of my portfolio so if you want to just see what stocks I'm getting into I do a lot of research so um I do pretty good at picking stocks in my opinion so so when it comes to options I keep 15 to 20 of my funds on standby for any flash decisions or opportunities so I I set
aside 15 to 20 of my my options money just on the side button so what I'm trying to tell you is I'm not putting 100 of my options money into one contract so if I do see an opportunity in the options world I will put maybe 10 percent or five percent into that contract because there might be another opportunity uh to place an options call or put on a different stock so in rare occasion will I be all in on my options money like this 20 here is all going to be invested that's that's very
unlikely um I have a very small amount of my money and options because it is short-term trading and Warren Buffett famously famously said uh don't lose money or I think it was like rule number one don't lose money and rule number two is don't lose money something like that so just don't lose money period so you just got to look at you're gonna weigh the risks with options it can be very risky so you just have to play it smart now when it comes to cash I like to keep 10 to 20 in cash and
even sometimes up to 30 in cash and I'll speak on that why I would even consider keeping 30 cash so keeping 20 cash is if the market is high so if everybody can think back to 2020 2021 when the market was just going up and up and the Fed was printing money like crazy and they were handing out the stimulus checks like it was nobody's business stuff like that when the market is just going high and there's a lot of euphoria in the market place and everybody's getting super greedy and when you start to hear
people from the bottom I'm talking like people that are making minimum wage like they're working at a minimum wage job and they're talking about the stock market and they're getting into the stock market okay that's a very good indicator of this is a bad Market to be in if if everybody's getting in the marketplace that means stocks are reaching all-time highs the valuations of the stocks are just insane and it's a bad time to get in because you know just like a stock market crash when stocks are really low and cheap and they're they're just
an insanely good value for the price that doesn't have that doesn't last very long because when the stock market crashes it will recover in a couple months or at least start reversing in in Market Trend it'll start going up and that's the same way with a market that's super overvalued just like we saw in 2020 and 2021 the bubble burst it only stays up for so long and then it goes it all evens out over the long term it just evens out in the case that everybody's getting into the market you're you walk into Walmart
and the employees are talking about Tesla stock and all this stuff okay that's clear indicator you should only have like you should have 20 to 30 in cash which could be a lot so just for instance if you had a thousand dollars to invest with you should have 200 to 300 in cash in my opinion okay because once the market does come back down to reality you will have 30 in cash and you can go ahead and push that into the marketplace and getting at a better price because you don't want to be it doesn't
make sense to be spending money constantly uh when the Market's like reaching all-time highs and everybody's getting hyped out of their minds okay and it's the complete opposite for if the market is low keep ten percent in cash if the market is low and the reason why it's ten percent in cash and not zero percent in cash is because the market can always go lower just just like how it keeps going higher like there is no limit the market could keep going down just when you thought the market couldn't go down any lower it goes
down another 30 percent okay just when you thought the market couldn't go up another 20 goes up forty percent okay like the market can be completely outrageous sometimes and so it's always smart to keep cash because if the market keeps keeps dropping then you've got to keep spending money on these cheap stocks you have to your dollar cost average down on your positions and then long term you'll be rewarded so much essentially that's what I do and it's a really good strategy because you can manage your money perfectly and it's it's honestly it's the best
way to maximize your gains because now you you actually have a plan you have a strategy in place instead of buying stocks randomly and buying options calls and just hoping that it goes up this is a real strategy you can use this this strategy right here I want you to take a picture I want you to write it down in your notebooks I want you to actually practice it I every single month you should evaluate your your portfolio you should see how much percent in each section here you have okay it's a very good good
rule to live by and good key book right here so just for anybody that had a hard time understanding I'm going to give you more of like a visual uh right here we're going to get some examples on the board here so let's just say that you got ten thousand dollars and that's what you're going to be investing with all right so you got 10 grand first thing I would do and let's just let's just say that you got our 20 a month service or whatever it is and you you have the options portfolio and
you have the stock portfolio so let's go ahead and pick out some stocks from our stock portfolio and we'll go ahead and put 65 of our cash into stocks like right now so you would do sixty five hundred dollars in your stock portfolio and we'll just label it s ort of stocks okay to 500 in stocks and a whole other thing is how do you diversify your stocks I mean do you just buy six thousand dollars of one stock or do you you switch it up and this is however you want to do it it
is safer technically it is safer to be in as many different stocks as possible just like with the S P 500 um you're you're buying a whole Collective amount of stocks you're buying 500 different companies for one set price and you own little fractions of each company so if for on the flip side if you bought one stock and it happened to just it went bankrupt essentially and you the investment went to zero dollars you'd be screwed you'd be out six six thousand dollars but if you bought a whole clump of stocks like the S
P 500 or like 10 different stocks or 20 different stocks all at once then if that if you owned that company unfortunately and it still went bankrupt it still went to zero you'd only be losing out on you know one twentieth of your account or one tenth of your account you'd lose 10 or 5 instead of one hundred percent if that makes sense so it's safer to be in you know a lot of different stocks okay don't keep all of your eggs in one basket either so let's just say we've got a basket here and
this is all technology stocks so Tech and then let's say there's another category over here and it's more of your brick and mortar stores like you got your Walmarts and uh this is terrible but you got like Walmart and you know Home Depot stuff like that so it's it's smart to completely diversify and get in different sectors in the market as well very good idea to do that so our next little section here is going to be our options portfolio and so with the options let's go ahead and just make a box with an o
in it so you know it's options so we said 15 so 15 is going to be this the lowest amount of capital you want to set aside I'm going with the lowest amount on each bracket because it all needs to equal up to a hundred percent so like that with this one we went uh 65 of your portfolio needs to be in stocks all right now options the lowest amount is going to be 15 percent in options so what I want you to do is set aside 1500 bucks for your options portfolio and this might
allow you to get into up to maybe three because we like to give ourselves at least two months we'll set the expiration date out two months um and but with time Decay and all that you probably have like three weeks I want to say three good weeks where the stock can move in the direction that you want and you you still make money so you've got like about three weeks in there so 1500 bucks would probably be good for three contracts and you know it's not always ideal to have all of your options money tied
up in options like I was explaining just before the market could change it could shift the market could could in the long term it could be going upwards but when you zoom in and look into like a like a one month period the stock market could shift and just start going down in one month like it could look like this so you start the year right here and then the Market's trading up and then you're you know month one month two month three and then the end of this month or leading into the next month
it starts going down like that and then it starts coming back up and you could have been in calls right here but the market just went down and now you're losing all those contracts your contracts actually expire right here but now that that time Decay has taken place now now even if the stock goes up to that level it's not going to be profitable you'll probably still lose money and so it's it's smart to not be completely tied up and that's why I only put a very small amount of my money into options because rule
number one and two don't lose money so that's that's what I do with that and then we have another section here which is Cash Cash is good so how much are we going to put into cash so we got 70 80 so 20 here is going to be in your cash Supply so that's going to be two thousand dollars in cash and like this one this one is more living and breathing you're going to be moving the percentages up and down and it's always smart to save paychecks save some money and continually increase your cash
Supply because um you know if there is a huge opportunity in the market where stocks become extremely cheap then you know you're going to want to buy some stocks trust me okay because you're gonna double your money you're you know you're going to have a lot of great opportunities like just last October uh look this up metastock Facebook stock uh went down to like in a five or six year low I bought it and then half a year later I'm up 100 percent so there will be opportunities like that and it's it's honestly it's saddening
because the bulk of people the majority of people they'll get into the market when it's reaching all-time highs and everyone's talking about it and they get in at these insanely high prices and then the stock market literally it just straight up crashes and in most cases it doesn't even crash it just corrects it goes to where it should have been the whole time but they think it was a crash okay now they're burned they're not going to get in the markets and then when the market actually starts crashing then they're really like I would never
get into the market again are you kidding it's it's crashing again like this is ridiculous that's the time you want to get in trust me because when the Market's going like this that's a bad time to get in when it starts going like this okay start buying start buying start like are you kidding me bye and these people are scared to get in bro you guys are just missing out and the market goes back up and I'm telling you it repeats cycle every time and this is when they all start fomo buying again like all
the Market's coming back it's coming back and then all like it's inside buy when it's low stop buying when it's high in fact sell when it's high so you can increase your cash Supply so if you're running on 10 cash and the Market's up here okay start selling stocks sell stocks for profits take your profits and then then you build up to 30 cash again and then when it comes down then slowly go from 30 cash to 25 cash to 20 like you you get what I'm saying selling a Time buy when it's low it's
it's that simple and it's not going to be this won't happen in a month's time frame this might be over the course of a couple of years you'll have a like two years where it's really high and then you'll have a year or two when it's low so you'll be buying the entire year okay so you'll have situations like that and that's just how you manage your money and if I must recommend you guys watch any investors I want you to look up Peter Lynch and I want you to look up Warren Buffett and just
watch watch and learn because they are geniuses at the stock market and Ben is going to make a video on how to control your emotions and how to handle loss and handle gains and all of that because it really does take a toll on you I've gotten to the point where I can open up my trading account and I can see my countdown two grand and I don't even my heart doesn't change my like I don't freak out none of that because I just know I've been in the market long enough I've been in the
market for like almost four years now when you have a bad day you have a bad day okay as long as you know that you're in a position where you can't lose money like this you CA you just can't lose a whole lot of money at least um you're not going to freak out because if most of your money is tied up in long-term Investments where the only time you lose is when you sell for a loss then it really starts to get easy in the marketplace and you won't freak out as much um but
yeah you got to get rid of that emotional uh aspect of the markets because that's what's going to screw you every single time that's what screws up all these investors because they'll be buying at all-time highs they won't think it through and then when it starts going down they'll get burned they'll get out of the markets forever they say and then when the market bottoms and all the smart people like me are buying the stock at the extreme bottom and then it climbs all the way back to the top now they're starting to get back
into it because they think the market came back okay that is the most idiotic logic I've ever heard so you know if you're just if anybody here was ignorant to that now you know everybody's ignorant I'm ignorant and I had to learn this the hard way too so that's just how this works this is my method of you know organizing my account and that's going to be it I'm signing off and can't wait to see you in the next video
