I’m sure you have heard the saying, if at first you don’t succeed, try again. Well, that sums up my relationship with the stock market.
Shortly after graduating from university, I took my first plunge into the stock market. However, it was not a source of instant wealth. In fact, the first two times I ventured into the world of stocks, I lost money.
My First Attempts at Buying Stocks
My first attempt at buying stocks was Lululemon. At the time, their stock was selling at $19 a share. Considering the fact I saw their clothes everywhere; I was feeling pretty confident going in. However, a couple months after I bought the shares, their stock dropped to $11 per share and I panicked. As a result, I sold my shares at a loss, unaware that one day they would reach their current price of $300 at the time of writing this.
After that, I was set on trying to find the next big thing. So, as a loyal Blackberry customer, I took the dive again and tried to buy their stock at $80 a share.
We all know how Blackberry ended up. So it goes without saying I sold my shares at a loss.
Shifting to Real Estate
Eventually, after swearing off stocks (or so I thought), I found myself entering the world of real estate. I bought myself a $400,000 townhouse in Toronto, which at the time was very expensive to me. In the moment it felt like I was signing my life away on that mortgage, but little did I know it would help me find the success I’ve been looking for.
When I met Erwin (my husband), he showed me the book “Rich Dad, Poor Dad,” and helped ignite my passion for financial independence. Then, he explained to me how refinancing could help me continue investing.
After giving it a try, I was certain I had found a winning strategy.
Losing Cash Flow in Real Estate
Real estate was a solid standalone strategy for a while, with each of my properties generating a healthy amount of cash flow. However, it came with its own struggles.
Renovation Expenses and Damages
Even if a property is generating a healthy cash flow, sudden, unexpected renovations and damages can quickly eat away years’ worth of income that you otherwise would have been able to enjoy.
One tenant I had in my Toronto townhouse had two massive dogs. During their tenancy, these dogs caused a ton of damage to the hardwood floors and carpet. Naturally, when they moved out we went ahead and got to work renovating and repairing the property. In total, the work cost about $50,000 to complete. This essentially wiped years’ worth of cash flow off the map.
Similarly, another property I had bought was a student rental in St. Catharines. As a student rental, turnover was a fairly common occurrence. As students moved between semesters, graduated or moved on from school, we would need to take the time to prepare the property before moving new students in. Of course, this was also expensive in its own right and practically every dollar the property made in cash flow went straight back into repairing it.
Finally, one of the most common ways you can lose your cash flow as a real estate investor does not call for a story. If your properties are sitting vacant, you are not earning any cash flow because there is no one to pay rent.
However, despite their simplicity, vacancies have the potential to do more harm than turnover costs and maintenance because while the others eat away at the income you have been making from the property, a vacancy actively loses you money. Despite no income coming in, the month-to-month expenses for the property remain. This means the risk of you being forced to sell the property or default on your mortgage skyrockets.
Using the Stock Market to Generate Cash Flow
While my properties continued to appreciate, their cash flow had taken a massive hit. So, I needed a new option – or should I say options?
In 2017, Erwin started talking to me about options trading. At the time I wouldn’t consider it, options trading just seemed too risky.
Yet, despite my concerns, we hosted a stock option trading course in 2019. We learned only one strategy. Meanwhile, the people around me started trading and I was beginning to feel like I was missing out. So, I sought out a coach to teach me everything there was to know.
That did not work, the coach I found tried to teach me over hour-long calls that put me to sleep.
Then, once the pandemic hit and my accounting revenue began to drop, I gave it another shot. I took the Stock Hacker Academy course. Through that, I began to see some real success.
I paid close attention to the coaching sessions as well as the bonus sessions sure I understood the theoretical as well as practical way of how to perform stock hacking and make consistent returns using it.
In 2020, we had an excellent year and made just under 100% return on our account balance. Then, in 2021, we still performed quite well generating a 36% return.
This was definitive proof that I could find meaningful cash flow through stock trading.
The Importance of Diversifying Your Investments
If there is one lesson you should take away from this, it is to diversify your investments.
While my investment properties were steadily appreciating, it was stock trading that helped me earn a healthy cash flow.
Despite both investments coming with their own risks and difficulties, once combined, I was able to enjoy the benefits of both investment strategies.
This fall on November 12th we will have the Wealth Hacker Conference where there will be a Stock Hacker Academy course presented that can potentially help you learn how to cash flow with stock hacking the same way me and Erwin have been able to!
And don’t forget, those who never stop learning, never truly lose. Let’s win together.
Your Fellow Stock Hacker
What do I do with this information?
Continue to educate yourself by joining our mailing list and receive free content along the way. For those who would like to take action, we have premium (paid) products and services. With the stock market and the general economy at crossroads, it is time to get educated so that you are ready for the next opportunity and/mitigate against the next potential dip in the stock market.
That’s all for now.
Happy trading and investing,
Your fellow Stock Hackers,
🍒Cherry & Erwin
P.S. The market dropped almost 20% between January and June this year. Many are worried it could keep going. Will the market crash? What are you supposed to do if it does crash? We unpack all of these questions in our latest FREE report, “What to do if the Market Crashes in 2022.” Download your free copy now!