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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: jaytee who wrote (11876)	11/22/1999 8:06:00 AM
From: Herm	Read Replies (2) \| Respond to of 14162

I work for a non-profit institution. I have a tax shelter 401K annuity that I invest in and that money is not taxed as income on the front end. One of the features is that I can take out a personal loan from from my tax shelter funds and pay it back over five years at a very small interest rate. It cost me about 1% net. So, by deducting the contributions off my salary I save on taxes. The tax shelter money earns typically 20%+ in the funds I get to choose. When I do grab a few thousand here and there I invest it in stocks to generate even more CC premies which pays back the loan at 1%. I get the best of both worlds. This only works because I'm able to generate more money as a ROI than the taxes on the original bucks. So, as long as I can generate 40% to 60% between capital appreciation and CC income, I'm ahead of the game. You have to be a really bad stock picker and chart reader not to be able to generate 40% per year. :-) I don't recommend this practice for the average investor. It does assume a great deal of more risk and it is not suited for everybody.