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What’s Responsible For The MLM Explosion in the United States?

What's Responsible For The MLM Explosion in the United States?

Social security had a deficit of 68 billion dollars last year. They collected less than they needed to pay for overhead and benefits. Could this explain why thousands of individuals in the U.S are signing up as distributors in MLM companies every week? Below are reasons people join MLM brands like doTERRA and Cutco:


Escape from 9-5 Drudgery

Some people don’t find satisfaction in their 9-5 jobs. This is why, according to Workplace Psychology, results-only work environments have been growing in popularity since 2001. MLM companies encourage distributors to aim at personal financial independence. While a majority of those who join MLM companies fail, there’re some who succeed. People who work hard and do the MLM business right may one day afford to quit their jobs.


Desire to be Self Employed

Almost every employee dreams of becoming their own boss someday. Some professionals start side businesses while still employed. But running a small business while holding down a full-time job can be challenging. MLM companies such as Mary Kay Inc. and NuSkin can help you start your inventory with minimal startup capital. Moreover, MLM corporations own systems that handle many business operational aspects for their marketers, making them attractive options for hedging against risk. Sole proprietors in traditional businesses usually manage everything and incur all the accompanying risk personally. Even when a major brand is providing you with a lot of assistance, though, you still need to be careful about how you manage cash and investments in order to keep the sales pipe flowing.


Make Money

There’re two ways you can make money in MLM. First, you can make money selling the MLM Company’s products. Second, you can make money when your underlines sell products. You, therefore, have to recruit like-minded people into your organization continually. Failure happens a lot, and many quit. Those who endure can make considerable amounts of money in MLM brands.


Desire for Personal Freedom

Full-time distributors work for themselves. There’s no manager to give orders. Distributors draw their schedules. Furthermore, direct marketers manage their time. Independent-minded individuals might find the MLM model suitable for their personality.


Networking Opportunities

Network marketing offers new distributors an opportunity to meet and interact with successful direct sellers. Successful distributors may inspire you and other marketers down the multilevel structure to work harder and become successful too. Additionally, you could become friends with some of the network marketers you will meet.


Having a well-paying job is nice, but there’s a lot of economic uncertainty today. Relying on one income could be risky. Fortunately, there are many ways to create as many income streams as possible. But success in the network marketing industry requires hard work and dedication.  Once you’re making serious dough, you’re going to need help investing it wisely. You need someone in your corner to help you understand and execute on investment strategies. Let me be in your corner.

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Posted by Martin November 15, 2017
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Transportation index (DJT) points to economy slowdown, so they say…

Transportation index (DJT) is usually considered a good indicator of the US economy.

An old say goes – “manufacturing makes, transportation takes”. Transportation is considered a leading indicator and usually slows down first before we notice in any major indexes or economic reports.

Some investors use DJT for economic forecasting.

There is however a major issue with this. Even transportation works in waves. You have weeks or months of slowdowns and weeks or months of strong transportation demand. Saying that we are in trouble because DJT is in decline may not show the entire picture.
It is definitely a concern to pay attention to but not to panic and close all your position or go 100% cash.
Below is a chart showing DJT in correlation with DOW (violet color) and S&P 500 (blue color). As you can see, we saw three slowdowns in DJT and three times the markets responded to it. But then the index rebounded and the markets saw another all time high rally.
So add the overall economic growth (GDP reached 3% for the first time in a decade) and you will see that this is probably just a dip.
I added 5 year and 20 year charts for perspective. As you can see, the transportation is still growing well and there is no concern over the economy and its growth. Of course, it may change all on a dime so keep an eye on it but do not overreact.

S&P 500 intraday

S&P 500 intraday

S&P 500 intraday

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Posted by Martin November 15, 2017
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Those were the days

There are days when you don’t want to have too many trades on. Today is one of those days. S&P500 was down 20 points in the morning (it recovered all morning losses already, or almost all).

Selling like this have negative impact on the comfort of your trading. So if you have too many trades on, short on available cash (or God forbid all in) days like today will crush your mood significantly. When you wake up in the morning and see all your positions red you will start panicking and acting irrationally (if this ever happens to you, than before you touch your keyboard, close the computer and go outside. Go away from it and forget that there is any Wall Street out there. It’s not worth it to act under a heart attack…

So, stay small. Set a limit of how much money you can commit to trading and do not exceed that limit. No matter how tempting it may be to open yet another trade. Set a limit which will make you comfortable. Start with 10% for example and as you gain confidence, add a bit more to it. But never exceed that limit. Unless you are happy to lose all your money.

S&P 500 intraday

S&P 500 intraday

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Posted by Martin November 11, 2017
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IRA positions November 10th 2017

AAPL call spread

AAPL put spread

AAPL put spread

ABBV put

BA Iron Condor

BAC Put spread

COF put roll

DPZ call spread

DPZ put spread

SPX call addition

SPX iron condor

Closed positions


SPX iron condor

COF roll

AMZN spread closed

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Posted by Mark Pokorny November 10, 2017
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Going Bankrupt Over Medical Bills: What are Your Options?

Going Bankrupt Over Medical Bills: What are Your Options?

Medical debt is one of the most common causes of bankruptcy. With the ever-rising costs of medical care, more and more people find themselves in debt for a variety of medical procedures. Medical debt is not only a problem for those without insurance. In fact, many people who have medical insurance have ended up in bankruptcy court due to deductibles, copays, and the expense of medical care that is not covered by insurance. For those feeling buried in medical debt, there are a number of different bankruptcy options to consider.

Chapter 7

Chapter 7 bankruptcy wipes away all a person’s unsecured debts which according to bankruptcy attorneys, makes it the most common type of bankruptcy filed in the United States. This includes medical debt. All debts are included together, and there is no distinction between medical and other types of owed money. There are certain income guidelines that people need to meet to qualify for Chapter 7 bankruptcy. The income guidelines vary depending on geographic location and based upon the average income in the area and the local cost of living. The court will consider a person’s income and debt amounts to make a decision whether or not to allow the debts to be discharged.


Chapter 13

In Chapter 13 bankruptcy, the court looks at both a debtor’s debt and income to determine a new debt amount. The court then also sets up a payment plan for the debtor. Medical debt can be discharged or reduced in a Chapter 13 bankruptcy. It is important to note that the amount of debt that can be discharged in a chapter 13 bankruptcy is capped at an amount that changes periodically. However, the limit is quite large at about $400,000.


Debt Settlement

For those who have some ability to pay, debt settlement may be an option to consider. Debt settlement involves negotiating with the creditors to lower the amount of debt that is owed. This is a common practice with medical debt, but it is not always easy to do. Settlement is particularly difficult when the debt is owed to various creditors.


The decision as to whether to file for bankruptcy or not, and what type of bankruptcy to pursue can be a difficult one. However, an experienced attorney can help to make an informed decision based upon specific needs. An experienced bankruptcy attorney will be familiar with the local laws and regulations and can provide a wealth of knowledge to help those who are in debt to make the right decision. No matter what medical situation you face, paying it all back is possible, and bankruptcy can be a good route to go when overwhelmed with payments.

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Posted by Martin November 07, 2017
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Capital One (COF) roll down and out

My original trade in COF is slowly turning against me. Today, COF dropped down by 2.36% and there is a higher chance that the selling may continue.

Although, the trade has 70% POP and 2 days to expiration I decided to move the trade out and down.

I am trying to spread my trades to have expiration every week and as of today, I have expiration on every Friday in November. My next “free” expiration is in December 8th so that is the expiration week I will try to roll this trade.

Here is the original trade link:

With this roll, I am lowering my current 89.50 put strike down to 87.50 put (which sits at the support) and move the trade into December 8th.

COF adjustment

COF adjustment 1

COF adjustment 2

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Posted by Martin November 07, 2017
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Sold Domino Pizza (DPZ) vertical (IRA)

Entering a new trade for tomorrow morning using DPZ:

STO 1 DPZ Dec15 150.00 put
BTO 1 DPZ Dec15 120.00 put
@ 0.50 credit limit

DZP vertical

The trade executed this morning for 0.50 credit.

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Posted by Martin November 04, 2017
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October 2017 results

October is over and it brought a few significant changes to my accounts.

When I changed my daily job, I begun a 401k transfer to a self directed IRA account. At first I transferred my old 401k to TD Ameritrade. I also asked TD to adjust my fee schedule to get better assignment fees and have the same fee schedule as I had on my other accounts.

To my surprise they didn’t provide me with better fees. I was also surprised by how uncommunicative my “account manager” was. I tried to call her many times, left messages and she never got back to me. So I contacted the client support and asked them what fees can I get to my new IRA account. They offered a standard schedule of $6 per ticket + 0.75 per option contract and $10 for assignment.

My old accounts had $1.50 per option contract, no ticket fee, and $15 per assignment. I hoped to get a similar schedule as Tasty Works offers. It didn’t happen.

So, I transferred my new IRA account to Tasty Works ($87,600 worth account).

I also transferred my existing ROTH IRA account ($23,000 worth account).

I transferred all my other margin accounts (only about $200).

And I will be transferring my business accounts as soon as some of my existing options trades end ($25,000 worth account).

Once all my accounts will be transferred, TD Ameritrade will lose an actively trading client worth of $135,000 dollars. It is probably insignificant to them so they do not bother. I think, after TD bought Scottrade, they think they have big enough clientele so they do not have to worry about a speck like me. Their choice.

However, the transfers will have impact on my account reporting as I do not have access to the old accounts as of now, so I will be skipping my ROTH IRA detailed reporting this month.


 · ROTH IRA account:


As I mentioned above, I transferred this account from TD Ameritrade to Tasty Works this month and thus the report is not complete and some data will not be available or accurate (for example, I was able to retrieve my dividend income, but my options income is skewed by the transfer as TDA shows it as a small loss and Tasty Works doesn’t show it as of yet; or it shows it as a statement not available).

October 2017 net-liq: $22,858.87  ▼ (down by $396.37   -1.70%)
October 2017 dividends: $88.60   (down from previous $89.45)
October 2017 options: -$4.04   ▼ (down from previous $74.40)
XIRR: 9.03%    



Monthly dividend Income:


My dividend holdings:

Current data not available.

Options Income
(Click to enlarge)


 · TD account:


Our trading account continued its recovery mode and growing well. We weren’t taking many new trades but rolled old ones only. We will start trading actively this account again once all old trades are gone.


October 2017 net liq: $25,182.88   ▲ (up by $1,859.01;  7.97%)
October 2017 options: $523.34   ▲ (up from previous $108.87)
XIRR: -23.52%    


Month-to-moth trading results

Trading results

(The red dots on the chart indicate income estimate, blue bars actual earnings.)



We are presenting you our month-to-month business performance review:


 · Lending Club


Lending Club investing keeps annoying me again. I simply cannot stand that I have to deal with irresponsible stupid people who go to you via P2P lending, borrow money from you evidently with an intention of not paying it back. What bothers me is that I have absolutely no control over the lending process and eventually recover the losing money. With options, I can use all sorts of strategies to repair a trade. With stocks I can use a stop loss to minimize my loss. Here, I can do nothing. Once a note goes bad. It is most likely a 100% loss on that note. You can do nothing to fix it. All you can do is taking more notes to dilute this loss. It still looks like throwing good money at bad ones. Where is a guarantee that more notes will dilute the loss and not add to it? Nowhere.

The single note I mentioned in my last report is still bad. It went from a Grace period into Late period and is close to becoming default. I consider this note already lost. This once again convinced me that investing with Lending Club is not investing but a crazy hazard and I advocate you not to put money in this vehicle. Lending Club advertises opening an IRA account with them and I recommend not doing it.

Nevertheless, I deposited $500 dollars in this investment and that’s all I am willing to do. I will keep investing according to my rules and see if this gets any better, but I am very skeptical.


October 2017 net liq: $497.24   ▲ (up by $83.10   20.07%)
October 2017 interest: $5.17   ▲ (up from previous $2.28)
XIRR: -13.32%  



 · IRA Account


I started trading this account in October 2017 and so far it went well. I set the following strategy/rules for this account (and actually, I will be using it for my ROTH IRA too, but my ROTH will need some consolidation before I will be able to apply these rules):

1) Trade against dividend stocks only.

2) Do not exceed 50% of available capital.

3) Trade cash secured puts to generate income (avoid spreads as much as possible, limit spreads to one or two trades at a time only).

4) Avoid opening a trade around earnings of the stock, choose a different stock then.

5) For 2017 & 2018 year only trade 9 trades (1 contract per trade over 9 weeks) at one time, use same stocks if possible.

6) Spread expiration of contracts to have expiration every week, use 45 DTE, use calendar to spread the trades across months.

7) Open a new trade only when the old one expires.

8) Roll in the money puts as much as possible, if rolling not possible, let puts assign.

9) When puts get assigned, keep the stock, collect dividends, and sell covered calls.

10) If the stock gets too much in the money when selling covered calls at or above purchase price will be worthless, wait holding the stock to avoid rolling calls if the stock recovers sharply or use covered strangles.

11) Roll covered calls as much as possible, if rolling not possible, let covered calls assign or convert to puts or covered strangles.

12) Build a portfolio of 30 dividend growth stocks (DGS) using options selling and money allocation management as described below.

13) When the monthly income reaches $1,000 or more, use 50% of the income to purchase dividend growth stock (DGS). Use stocks in the watch list.

14) If the monthly income is below $1,000 a month, use 50% of the total 6 months income. Twice a year evaluate 6 months income and buy dividend growth stock if the 6 month income reaches $1,000 or more; (for example, if from January to June the total income will be $1,800, use 50% or $900 to buy dividend growth stock, then repeat the same process from July to December).


October 2017 net liq: $87,594.86   ▼ (down by $51.37;  -0.06%)
October 2017 options: $313.00   ▲ (up from previous $0.00)
CAGR: 12.64%    







 · Conclusion


Although I issued a small warning about slowing economy my market and economy outlook is still bullish as the latest earnings season once again proved that the economy is still strong. It had no impact on the market and we saw new all time highs. I still think no investor or trader should be selling their positions based on the valuation. If inflation is included into the equation then this market is still very cheap and may run higher.

Since May 2017 I keep saying that the US economy is improving and accelerating that we saw increasing year-over-year sales, earnings (the second best since 2011), in June 2017 I showed you the numbers on consumer confidence. increased capital expenditure, corporate profits, all up. And this trend continues as recently financial media reported revised GDP above 3%, something I have been saying since June 2017 that our economy is increasing from lack luster 1.4% (and back then to 2.5%, now to 3%).

As long as we see this improvement there is no need to be selling your stocks on valuation. Instead, buy every dip you can.

What do you expect from the stock market in October? What is your strategy for the rest of the month?

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Posted by Mark Pokorny October 31, 2017
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Is Credit Score an Accurate Tool for Evaluating Mortgage Applicants

Is Credit Score an Accurate Tool for Evaluating Mortgage Applicants

Is Credit Score an Accurate Tool for Evaluating Mortgage Loan Applicants?

In the US and most countries, credit scoring is usually the first thing that a mortgage lender does upon receiving a application. The importance of credit ratings in the mortgage industry cannot be undermined, that’s for sure. But are they as accurate and effective are they are said to be? Well, we don’t think so for the following reasons.


 · Past behavior is not always a reliable indicator of future behavior


The basic concept of credit scoring is to use past patterns to determine future behavior and consequently the creditworthiness. It however, doesn’t account for psychological issues or outside events that might have occurred and affected the individual’s ability to repay.


 · Credit scores are variable


In the US, three major bureaus deal with credit scores. They are; Experian, Equifax, and TransUnion. There are also thousands of sites that claim to show your credit scores for free, such as Credit Karma. Most of them get this information from the major bureaus while some use credit scoring software such as FICO.

It is very difficult to get the same score from all the bureaus since each of them has their own scoring methods. This discrepancy is even more on the free sites which usually provide equivalence scores which are far from accurate. As such, the lender cannot fully rely on credit score as an ‘Exceptional’ score from one bureau might just be a ‘Good’ on another.


 · Mortgage is not ordinary credit


A mortgage is a long-term loan and usually matures in 10 to 20 years. Ordinary loans take less time to mature and are more likely to be defaulted. Additionally, the terms and interest rates in mortgages are very different from the ones in ordinary loans. Credit scoring doesn’t account for this difference and treats both of them the same way which affects the accuracy of the final score.


 · Unreported loans


It is difficult for informal lenders to report debtors who have defaulted on payment. This means that a person may have a perfect credit score from one or two past loans, but still have unpaid debts owed to his local shylock, friends or family. For a mortgage lender, it might seem like a good idea to lend such a person since their defaulted loans are unknown, only to end up with a defaulted mortgage and unwanted expenditure such as repossession and real estate litigation costs.


 · Conclusion


Credit scores are important, but should not be the sole determinant of creditworthiness. As such, mortgage lenders should incorporate other methods of ascertaining the credit risk such as net income, job security and tenure, and age among others.



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Posted by Mark Pokorny October 30, 2017
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5 Reasons Buying a Home is a Worthwhile Investment

5 Reasons Buying a Home is a Worthwhile Investment

Buying a home is one of the smartest investment decisions you can make. Despite being a huge expense you’ll likely be paying off for the next 10 years or more, it gives you added freedom, stability, and peace of mind. Here are five reasons you should entertain the thought of investing in a home.


 · Has Emotional Benefits


Owning your own home makes you more invested in the local community. It leads to the development of interpersonal relationships with your neighbors and creates a more reliable support system around you. By spending on a home, one also gets a sense of pride invoked by being a homeowner. Additionally, no landlord can kick you out of your own house (though if you go for long enough without paying on your mortgage, the bank will foreclose on the mortgage and seize your home). Investing in a home purchase plays a significant role in restoring one’s faith in their dreams and preserving it for decades.


 · Supplements Retirement Income


When buying a home, always think about your future. It can act as a storehouse for your retirement funds, and unless you’re buying after age 35, it’ll also be paid off by retirement. This will allow you to tap into home equity to fund your retirement benefits. Unlike rent payments that go straight to the landlord, mortgage payments are an investment for the future. The remaining balance on the mortgage is reduced, increasing your home equity and padding your retirement account. It saves you from spending your money on short-term expenses like rent that don’t give you value later.


 · Builds a Second Income Stream


There are many ways a homeowner can monetize their home. If there’s a basement with an outside exit, you could turn it into a basement apartment and rent it out. You can also rent out a spare bedroom, or even the whole house if you want to move elsewhere. A house doesn’t have to hold you to one spot, if you don’t want it to. Outside of the physical house, though, you also have the property you can potentially make money off of. Rent out part of the driveway to commuters, or create a large garden that people can pay to use, to grow vegetables and such.


 · Provides Freedom of Customizing Your Space


Have you ever rented a place and wanted to put up a shelf or paint the walls, but the landlord tells you no? As a homeowner, you can do whatever you want with your space. If you want shag carpet and fluorescent green walls, go wild. Knock down a wall (as long as it’s not load-bearing), and redo any room you want to. Decorate it in your style. You never have to worry about a landlord withholding a security deposit. This property is yours.


 · Buy More Permanent Furniture


Renters may have to constantly move, which can not only damage furniture but they also might have to get rid of some pieces of furniture if it doesn’t fit in the new location. Homeowners don’t have to worry about that though. If you want to buy a new end table, or a deck set for your backyard, you can do that. The only time your furniture will need to be moved is if you choose to move it. It’s all about your wants and needs.


Buying a home is an expensive endeavor. It’s a decision that should only be undergone by people who are financially able to handle it. Take stock of your financial situation. And if you’re on the fence about whether you should or not, if you can afford it, it’s an investment that is almost sure to pay off.

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