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Show Summary
In this conversation, Pro Trader Mike shares his extensive experience in trading and real estate, focusing on the concept of covered call writing as a strategy that parallels real estate investment. He discusses the psychological aspects of trading, emphasizing the importance of having clear goals, self-belief, and patience. Mike also contrasts the capital requirements of real estate investing with the opportunities available in trading, particularly through prop trading firms. He concludes by offering resources and coaching to aspiring traders.
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Investor Fuel Show Transcript:
Michael (00:00)
Getting rid of the fear, having a system based on positive expectancy that you can without emotion know that it’s going to produce a positive outcome for you and you’ll make money from it. And that’s in real estate, stocks,or anything, you have to have a system that you build that’s based on positive expectancy. And if you do, you’ll win. And if you don’t, you need to find it.
Quentin (01:58)
Hello everyone. Welcome to the Real Estate Pros podcast. I am your host, Q Edmonds. Excited. You know what I always say, I’m excited to be here today. Always a privilege and a pleasure when I get to meet new people and see things through their lens. And today is no different. I have someone who has a ton of experience, 30 years of experience to be exact at what he does, what he does do, does. And I’m excited for you to get to know, he loved teaching people.He’s in the financing market and I’m sure he’s gonna tell you everything about what he does. And so I wanna introduce you guys to Mr. Michael Rich. Mr. Michael, how you doing today,
Michael (02:37)
I’m doing well. Thanks for the intro and the invite. Looking forward to speaking.Quentin (02:44)
Absolutely. Now you’re more than welcome. Like I said, really excited to get a chance to talk to you. And so I want to dive right in. I would love for you to tell the people what your main focus is these days. ⁓ Maybe just a little bit of an origin story of how you got into real estate. And then if you can tell us what markets you’re operating in. Mr. Michael, the floor is yours, sir.Michael (03:08)
Thanks for the intro. So my name is Michael Rich also known as pro trader Mike I run a company called mojo day trading. I’ve been trading financial markets for 30 years I have done a lot of real estate also and there is a transaction in the financial stock market which relates to everyone doing real estate and If you want to grab a pen and a piece of paper, I’ll explain it to you and you can also Google it. It’s verypopular term it’s called covered call writing have you ever heard of it Quentin
Quentin (03:43)
I have not covered call writing. have not.Michael (03:46)
It’s like receiving rent on a stock like you do on a property that you own in order to collect rent on a property. You have to put down a big down payment. Yeah. Also that’s locked up. You also have to invest in the property for a long period of time and collect the monthly rent off of it. And, ⁓ there’s a lot ofbells and whistles and things that must be accomplished in order to be a landlord. Everybody knows that. So let’s say Apple stock, for example, let me pull up a quote on it. It’s $200 per share. Everyone knows Apple. Okay. Or you can go for a more of a like stable stock. I Apple’s more of a, uh, more of a volatile stock than was. Let me give you an example. Like on a,
a General Motors or one of these larger stocks that pay like a dividend. And it has each month a very tight range, maybe 30 to $35 per share, whatever the price of the stock happens to be. an investor would buy a thousand shares of that stock.
So you can write down, buy 1000 shares at $30 per share of General Motors. So now you own a thousand shares.
of General Motors, put $30,000 into it. Simultaneously, you sell 10 contracts of a $35 strike price for $1 for next month. Everyone write that down, sell 10 contracts, which represents the thousand shares.
You’re going to sell it for $1 and it’s going to expire in one month. That brings you in on 10 contracts at $100 each, $1,000.
Quentin (06:36)
Mm.Michael (06:37)
So here’s what happens in 30 days from now, General Motors is going to be, you bought it at 30. If it’s at the same price, you collect $1,000 and you do it again.Quentin (06:52)
Hmm.Michael (06:54)
It’s like collecting rent. If it’s above $35, you have to sell it at $35 to the guy who bought the option. So let’s say your house is worth $350,000. Okay, I think there’s gold underneath it. It’s worth a million. I’m willing to take an option out on your house for a half a million dollars to buy it next month. Because once they find the gold, they’re going to value it over a million.I’m going to have an option from you, which is currently 350,000 to buy it for a half a million. And I’m going to sell it for a million when they find the gold next month. I’m speculating. I’m a buyer of that option. You’re the seller of the option. You get to receive the premium for letting your house go at a half a million, which it’s currently worth 350,000. It’s the same exact thing as I’m describing with the stock. If the stock’s above 35, you sell it.
for 35, you bought it for 30, you make five grand and you get to keep the thousand dollars of the income. So you made $6,000 on a $30,000 investment in one month. It’s an amazing return. If General Motors goes to 29, you’re down one point or a thousand dollars, which every investor in the world would be.
but you get to keep the thousand dollars. So you’re not really down a thousand, you’re break even. It’s an insurance policy when you buy stock. It’s called covered call writing. It’s collecting rent while holding an asset. It’s the same thing as real estate. But you don’t need to get a credit check. You don’t need to put down a down payment for it. It’s as liquid as you want it to be. And there’s no paperwork for it.
Quentin (08:51)
Mm.Michael (08:53)
And you can get around eight to 10 % per month off the premiums from holding the stock. So if you do that, can make $12,000 a year by collecting $1,000 a month on a $30,000 investment. That’s almost a 50 % return. You don’t really get that in real estate. Sometimes you do, but yeah, and that’s what I do. I hope you understood what I explained.Quentin (09:22)
No, no, you explained it. You know, of course, you know, had to follow, you know, you introduced me to a new term, but you explained it well and made total sense as you was explaining it. And so covered call writing, like collecting rent on a stop, portrayed a mic to have with some good stuff. That’s some good nuggets that I’m sure our viewers love to hear. That’s some good stuff right there.Michael (09:45)
Because there’s an options market just like there is on real estate. You know, if you’re you have a house in Texas and the land there’s oil underneath and I know that but you don’t. I’ll take out an option to buy your houseat a higher price and you’ll collect that money. If it doesn’t go to the higher price, you just collect the money and my bet was wrong. But if it is right, you get to keep the money and you’re willing to sell your house to me. And that’s
And that’s the game. It’s a really great game.
Quentin (10:52)
Love it. Love it. Listen, pro trader Mike, let me ask you this, sir. I would love to know some strategies that you use in two ways. I would love to know some business strategies that you use that you have found to be core business strategies. don’t know, you know, consistency, discipline, not sure, but I would love to know some business strategies and also some personal strategies that maybe helped you out along the years. you know, some people do the gym.Michael (11:19)
I something I can add. We can end it on that. So I teach trading and I teach ⁓ for a long time. And I like to follow some of the best winners in the world. What have they done to win? Tiger Woods, LeBron James. Back in the day, Tiger Woods in his heyday, his mental.psychologist was a sports psychologist named Dr. Geo Valiente. And Dr. Geo made these four things with Tiger that can apply to every aspect of your life. The first thing is outcome goal. You have to have an outcome goal that is so lofty. I want to make this or I want to win Jack Nicholas’s record in
⁓ in open tournaments and be the greatest record of all time. That’s his outcome. Something really to achieve. The process goal is the second part of it. And that’s the daily routine. What you do every day, building the boat to accomplish towards the outcome goal. And Tiger had his team and he practiced more than anyone. And he did what he needed to do to be the best with his process.
And he did it night and day. And the third thing is self belief. You have to believe that everything you’re doing is going to work or that process and that outcome. And the last thing is patience. You have to have patience to see the whole cycle. And that’s what Dr. Geo is called social cognitive theory. And I’ve developed it into trader cognitive theory.
where a golfer, when he steps up to the shot, fear and bad thoughts build up in his mind. And it doesn’t make him free to hit the shot where Dr. Geo releases. It’s okay to lose. It’s okay to accept loss and free yourself from that. So you can execute at the highest level.
And that’s what social cognitive theory is, which applies to golf and that applies to trading. And that’s what I teach.
Quentin (13:53)
Mm.Michael (13:54)
Getting rid of the fear, having a system based on positive expectancy that you can without emotion know that it’s going to produce a positive outcome for you and you’ll make money from it. And that’s in real estate, stocks,or anything, you have to have a system that you build that’s based on positive expectancy. And if you do, you’ll win. And if you don’t, you need to find it.
Quentin (14:22)
Social cognitive theory, outcome goal, process goal, self belief, patience. Dr. Gio, I love that. Pro-Trader Mike dropping them gems. That’s incredible. We all need a system of positive belief. And yeah, that’s absolutely.Michael (14:46)
It’s not believe it’s expectancy meaning if I hold up I hold up a quarterIf I you know hold something above the ground then I drop it it’s gonna hit the floor
Let me pick it up again and drop it. It’s gonna hit the floor Let me test it again. Pick it up and drop it It hits the floor how much you want to bet the next time I pick it up and drop it. It’s gonna hit the floor
How much you want to bet that’s a system based on positive expectancy that I built and that’s what you need to do in real estate figure out what’s working Journal it and repeat it
Quentin (16:10)
Hmm. So good. That is so good. So let me actually pro trader, pro trader Mike, what’s your next real goal? Like what’s the next thing you’re talking and focusing on?Michael (16:22)
focusing on building the boat?Quentin (16:24)
Yeah, there you go.Michael (16:28)
Like Noah.Quentin (16:29)
There you go. Like Noah. So that means, so do you see rain coming? I mean, you’re building a boat. Is the boat. ⁓Michael (16:37)
There’s always rain coming, I’m always building.Quentin (16:40)
Yeah, yeah. So, yeah, and Noah since you know, he wanted to build it to save people. So when you build, are you expecting that so let’s get into relationship building. When you build the boat, is it to build partnership relationships with others? Like, what’s the what’s the idea of building a boat? What how does it look? What is it for?Michael (17:00)
It builds my business and my community.Quentin (17:04)
Mmm. Mmm.Michael (17:06)
I have one of the largest discord chat rooms online today of traders that come watch me trade and watch my screen as I trade the markets. Charge a monthly fee for that or an annual fee. That’s what I do for people to come trade with me. And I coach, one of my main things that I feel is from the 13 years that I’ve been doing this,Quentin (17:17)
Wow.Michael (17:35)
You’re not going to watch a video on trading and become a trader. It’s too much. It’s too, you can’t do it alone. You have to get coach and mentor it. Find someone that’s already done it that could bring you under the coot-a-ledge and show you what to do. Once that happens, you’ll make it. I could go steal Tiger Woods’ golf clubs and go watch 10 of his videos, but I’ll never ever hit it like Tiger.unless he brings me to his house, brings me in the backyard and says, Mike, grab the club like this. This is what you need to do. I’ll show you how to do it first and then you do it next. Sound good? I’m like, let’s go, Ty.
Quentin (18:18)
Yeah, yeah. I love it. You mentioned Tiger a lot. So is Tiger one of the people that you kind of really like follow? Like, you have like heroes? I don’t know if to put that word out, but do you have heroes people that you really hold close to you of us?Michael (18:33)
Well, I’ve been an athlete my whole life. So Michael Jordan, LeBron James, the greatest athlete of all time and you know what they’ve done to, to build themselves. And it’s really weird because it relates to your investments as well. The reason why you see that one guy always succeeding, making investment after investment and doing like amazing and Tiger Woods and Rory McIlroy and the golfers that win every weekend.over and over and over. Do know why they win over and over and they do that?
Quentin (19:10)
I would say consistency, practice, discipline. ⁓Michael (19:14)
Everyonehas consistency, everyone practices, and everyone has discipline, and everyone is really good at the game. But why is Rory win every week, number one or two?
Quentin (19:28)
Man, I don’t know. You’re gonna have to teach me, pro trader, Mike. Teach me. Show me the way.Michael (19:33)
because those guys are seasoned and they don’t make mistakes.Quentin (19:40)
That’s why.Michael (19:41)
The other guy is gonna go for it and make a mistake in the round that Rory wouldn’t have made. That’s why he comes up a little ahead of everyone each week.Quentin (19:52)
you. I can get down with that. I’m a Baltimore Ravens fan, so was literally watching the game yesterday with the Patriots, and it came down to the mistakes. So I can definitely buy into that for sure.Michael (20:08)
That’s who wins the football games. Everyone performs great. But you have to perform great and don’t make mistakes.That’s the way you win the championships, man.
Quentin (20:25)
Yes, Well, listen, I mean, let me ask you this. Is there anything that we have not said or talked about that you would like to talk about bring up? Like, is there any other words of motivation, education, anything that you feel like our viewers would benefit from before we get out of here?Michael (20:41)
In my business, to be a real estate investor, you need a lot of capital. You need to put up a hundred grand to get a million dollar house. In my business, you need a hundred dollars to get a million dollar trading account to make money. It’s called a prop firm. And your only risk is the hundred dollars, but they’re looking for traders that know how to trade. So they’ll give you a practice account and evaluation.where you have to pass that without losing a certain amount and you have to make a certain amount. And if you do improve yourself, it turns to a real account. And that only costs in the prop firm business, $100, you can get $100,000 trading account where if you make money, you get to keep the profits. And if you lose, you only lose the $100 you put up. It’s quite an amazing game. That’s what I do.
And if you’re interested, I’ll show you how to do that also.
Quentin (21:38)
Well, there he is. Mr. Pro Trader Mike. Listen, if someone wanted to reach out to you, connect with you, learn more about what you’re doing, yeah, he’s pointing to it. There you go. There you go. Is that enough?Mojo, T-Trick.
Michael (21:58)
DMs me, Quentin, I’ll give away, I have a beginner’s futures course, I’ll give away the free course and I’ll give away a $50,000 trading account evaluation to whoever messages me from your show.Quentin (22:19)
there you go my name is attached to work to a discount that’s all I love it it’s to a promotion I absolutely love it well listen definitely y’all gotta go definitely reach out to pro trader Mike ⁓Michael (22:32)
freecoaching session. I’ll give you a $50,000 evaluation trading account. I’ll show you how to pass it and make some money on it. And yeah, mojodaytrading@gmail.
Quentin (22:45)
Listen, this is pro trader Mike. Thank you, sir. Thank you so much, man, for being here today. Thank you for your time. Thank you for your story. Thank you for your perspective. I really appreciate you being here today.Michael (22:55)
Have aQuentin (22:57)
Noproblem. Listen, y’all heard Mr. Pro Trader Mike. Y’all heard him. You got the value. You got the promotion discount code. Listen, make sure you check them out, but definitely make sure you’re subscribed here. We’re going to continue to bring up amazing people just like Pro Trader Mike. And so thank you, sir. And everyone else, we’ll see you on the next time.
