Comments on: Money For Nothing: And Your Stocks for FREE – Book Review http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm Building Wealth through Saving and Investing Fri, 19 Mar 2010 03:14:59 -0400 http://wordpress.org/?v=abc hourly 1 By: G Money http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82846 G Money Sat, 16 May 2009 20:14:19 +0000 http://www.milliondollarjourney.com/?p=869#comment-82846 Wow! Tough crowd on Foster. Unfairly in my opinion. I've read books by Warren Buffet, Peter Lynch (ex-Fidelity), David Chilton (Wealthy Barber, etc), etc. etc. etc. You know them all, I know. They were all outstanding books and I learned great lessons from each, that I do try to apply to my financial planning / investment strategies. Foster's right up there with these guys in my opinion. I gotta say that Derek Foster really opened my eyes to enhanced possibilities through his 2 original books and got me started on a real retirement plan (I am hopeful to be in semi-retirement within a few years in early 40's). Like everything else in life you have to filter the message and absorb what works for you in your personal situation. I really enjoyed his book 'Money For Nothin'. Although I have not moved $500K into cash to execute the selling put options strategy, I can see how adding this kind of strategy as a compliment to my current plan could work under the right circumstances. Wow! Tough crowd on Foster. Unfairly in my opinion.

I’ve read books by Warren Buffet, Peter Lynch (ex-Fidelity), David Chilton (Wealthy Barber, etc), etc. etc. etc. You know them all, I know. They were all outstanding books and I learned great lessons from each, that I do try to apply to my financial planning / investment strategies. Foster’s right up there with these guys in my opinion. I gotta say that Derek Foster really opened my eyes to enhanced possibilities through his 2 original books and got me started on a real retirement plan (I am hopeful to be in semi-retirement within a few years in early 40’s). Like everything else in life you have to filter the message and absorb what works for you in your personal situation.

I really enjoyed his book ‘Money For Nothin’. Although I have not moved $500K into cash to execute the selling put options strategy, I can see how adding this kind of strategy as a compliment to my current plan could work under the right circumstances.

]]> By: Dividend Growth Investor http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82657 Dividend Growth Investor Fri, 15 May 2009 07:00:51 +0000 http://www.milliondollarjourney.com/?p=869#comment-82657 I wonder what the title of the next book is going to be? How to survive in a homeless shelter? I wonder what the title of the next book is going to be? How to survive in a homeless shelter?

]]> By: cannon_fodder http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82638 cannon_fodder Fri, 15 May 2009 04:09:31 +0000 http://www.milliondollarjourney.com/?p=869#comment-82638 Perhaps one should give him credit for being a good self-promoter rather than a shrewd investor. Perhaps one should give him credit for being a good self-promoter rather than a shrewd investor.

]]> By: Canadian Finance http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82595 Canadian Finance Thu, 14 May 2009 20:22:21 +0000 http://www.milliondollarjourney.com/?p=869#comment-82595 I haven't looked too deep into options, but I take issue with the title of his book... makes it sound easy and risk free. I haven’t looked too deep into options, but I take issue with the title of his book… makes it sound easy and risk free.

]]> By: longtimereader http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82568 longtimereader Thu, 14 May 2009 16:06:32 +0000 http://www.milliondollarjourney.com/?p=869#comment-82568 okay you guys are a bit harsh to the Foster. I enjoy reading his first book and wish him the best . He adjusted his investing strategies that's it , as a dividend growth beliver I guess only time will tell ... okay you guys are a bit harsh to the Foster. I enjoy reading his first book and wish him the best . He adjusted his investing strategies that’s it , as a dividend growth beliver I guess only time will tell …

]]> By: Penny Pincher http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82561 Penny Pincher Thu, 14 May 2009 15:42:19 +0000 http://www.milliondollarjourney.com/?p=869#comment-82561 Whether it works or not, ethically, I have a big issue with Foster's overall approach to what he calls "Money for Nothing". Part of his original dividend strategy was based on earning just enough to get by while relying on the government to subsidize him as a low income family so he and his wife don't have to work. In other words, this is a guy who is able to work and yet he's actively promoting living off the system. Mind you his income from writing books now means he no longer qualifies as a low income family but I still find it really distasteful that he promotes this. Whether it works or not, ethically, I have a big issue with Foster’s overall approach to what he calls “Money for Nothing”. Part of his original dividend strategy was based on earning just enough to get by while relying on the government to subsidize him as a low income family so he and his wife don’t have to work. In other words, this is a guy who is able to work and yet he’s actively promoting living off the system. Mind you his income from writing books now means he no longer qualifies as a low income family but I still find it really distasteful that he promotes this.

]]> By: Mark Wolfinger http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82439 Mark Wolfinger Wed, 13 May 2009 17:37:35 +0000 http://www.milliondollarjourney.com/?p=869#comment-82439 1) Foster's idea on put writing are not 'wrong' but they are simplistic. If you truly want to buy stocks (and the inherent risk that comes with stock ownership) then writing out of the money puts is a viable strategy. 2) Recent times, and the volatile markets, suggest more conservative strategies. That means selling puts (and/or calls) but also buying protection to limit losses. That protection is a less expense put and/or call. 3) Yes Preet, iron condors are the bulk of my trading. Intro to topic here: http://blog.mdwoptions.com/options_for_rookies/2008/06/recommended-o-3.html 1) Foster’s idea on put writing are not ‘wrong’ but they are simplistic. If you truly want to buy stocks (and the inherent risk that comes with stock ownership) then writing out of the money puts is a viable strategy.

2) Recent times, and the volatile markets, suggest more conservative strategies. That means selling puts (and/or calls) but also buying protection to limit losses. That protection is a less expense put and/or call.

3) Yes Preet, iron condors are the bulk of my trading. Intro to topic here: http://blog.mdwoptions.com/options_for_rookies/2008/06/recommended-o-3.html

]]> By: Steve - Montreal http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82437 Steve - Montreal Wed, 13 May 2009 17:05:37 +0000 http://www.milliondollarjourney.com/?p=869#comment-82437 That dude just markets what you can get for free. He doesn't even follow his own advise, yet preaches it like gospel whenever and where ever he can for free or for exposure. Go on to the Canadian Business discussion board under the Early Retirement sub category and you'll see a lot more of what people think of this guy and his books. That dude just markets what you can get for free. He doesn’t even follow his own advise, yet preaches it like gospel whenever and where ever he can for free or for exposure. Go on to the Canadian Business discussion board under the Early Retirement sub category and you’ll see a lot more of what people think of this guy and his books.

]]> By: WhereDoesAllMyMoneyGo.com http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82426 WhereDoesAllMyMoneyGo.com Wed, 13 May 2009 15:25:21 +0000 http://www.milliondollarjourney.com/?p=869#comment-82426 @FT - yes I do, but I use a number of strategies for both the active and passive parts of my portfolio, including buying and writing puts and calls, collars, spreads and condors. Best way to explain a condor really quickly: 1. Take Foster's put writing - you get to collect the premium. 2. Buy a put for below the strike of the sold put - this limits your loss on the downside of the underlying declines. 3. Do the mirror image with calls - write a call, and then buy a call with a higher strike price. You collect a premium and use part of it up to buy the call option with the higher strike price (which limits your loss on the upside). You have two net credits, you make the most profit (keeping all the credit) if the underlying stays between the strike prices of the the two innermost options. Profit declines as the stock moves outside these ranges. Works well in a sideways market, but you can tweak it if you want to try to guess the direction of the market, and you can always adjust your position if you see it isn't working out for you. Mark Wolfinger trades these almost exclusively if I'm not mistaken... and writes about them often on his blog. @FT – yes I do, but I use a number of strategies for both the active and passive parts of my portfolio, including buying and writing puts and calls, collars, spreads and condors.

Best way to explain a condor really quickly:

1. Take Foster’s put writing – you get to collect the premium.
2. Buy a put for below the strike of the sold put – this limits your loss on the downside of the underlying declines.
3. Do the mirror image with calls – write a call, and then buy a call with a higher strike price. You collect a premium and use part of it up to buy the call option with the higher strike price (which limits your loss on the upside).

You have two net credits, you make the most profit (keeping all the credit) if the underlying stays between the strike prices of the the two innermost options. Profit declines as the stock moves outside these ranges. Works well in a sideways market, but you can tweak it if you want to try to guess the direction of the market, and you can always adjust your position if you see it isn’t working out for you.

Mark Wolfinger trades these almost exclusively if I’m not mistaken… and writes about them often on his blog.

]]> By: Nurseb911 http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82423 Nurseb911 Wed, 13 May 2009 14:28:13 +0000 http://www.milliondollarjourney.com/?p=869#comment-82423 I'm still convinved that Foster does little to educate vulnerable investors on any fundamentals of investing. This latest book throws risk completely out the window and makes little to no sense from a rational perspective. He is advocating taking 100% downside risk for a 1-2% premium while missing all the upside gains that would be available if markets rebound (which they have slightly). I’m still convinved that Foster does little to educate vulnerable investors on any fundamentals of investing. This latest book throws risk completely out the window and makes little to no sense from a rational perspective. He is advocating taking 100% downside risk for a 1-2% premium while missing all the upside gains that would be available if markets rebound (which they have slightly).

]]> By: FrugalTrader http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82418 FrugalTrader Wed, 13 May 2009 13:59:07 +0000 http://www.milliondollarjourney.com/?p=869#comment-82418 Preet, do you use any options strategies with your personal portfolio? Preet, do you use any options strategies with your personal portfolio?

]]> By: WhereDoesAllMyMoneyGo.com http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82417 WhereDoesAllMyMoneyGo.com Wed, 13 May 2009 13:55:15 +0000 http://www.milliondollarjourney.com/?p=869#comment-82417 I didn't read this book, and probably won't based on all the reviews. Sounds like he is focusing in on one specific option strategy - I don't need to read a book on that - it can be summed up in one page. Further, if you are going to trade options, you should have an understanding of all the options strategies (you don't have to use them) - to get a better understanding of options in general. It would be like giving someone a car and showing them how the gear shift works, but not explaining anything else. Why stop there? Doesn't seem appealing to me... I didn’t read this book, and probably won’t based on all the reviews. Sounds like he is focusing in on one specific option strategy – I don’t need to read a book on that – it can be summed up in one page. Further, if you are going to trade options, you should have an understanding of all the options strategies (you don’t have to use them) – to get a better understanding of options in general. It would be like giving someone a car and showing them how the gear shift works, but not explaining anything else. Why stop there? Doesn’t seem appealing to me…

]]> By: Four Pillars http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82414 Four Pillars Wed, 13 May 2009 13:28:20 +0000 http://www.milliondollarjourney.com/?p=869#comment-82414 I didn't really read this book - I agree "Stop Working" was a pretty good book, especially for the living within your means lessons. Derek should have stayed with the investing ideas from Stop working and not gotten into income trusts so heavily. He might have been able to stay the course and not gotten out of the market at the absolute worst possible time. I didn’t really read this book – I agree “Stop Working” was a pretty good book, especially for the living within your means lessons.

Derek should have stayed with the investing ideas from Stop working and not gotten into income trusts so heavily. He might have been able to stay the course and not gotten out of the market at the absolute worst possible time.

]]> By: FrugalTrader http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82413 FrugalTrader Wed, 13 May 2009 13:21:08 +0000 http://www.milliondollarjourney.com/?p=869#comment-82413 Yes, Derek did sell his portfolio at close to the bottom of the market in Feb. If he's following his put strategy, he's probably still all cash as the market has trended upwards. It'd be interesting to hear what his strategy is now. Yes, Derek did sell his portfolio at close to the bottom of the market in Feb. If he’s following his put strategy, he’s probably still all cash as the market has trended upwards. It’d be interesting to hear what his strategy is now.

]]> By: Michael James http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82410 Michael James Wed, 13 May 2009 13:10:36 +0000 http://www.milliondollarjourney.com/?p=869#comment-82410 Thanks for the mention. Many people ridicule Foster for "flip-flopping" on his buy-and-hold strategy. I respect people who can change their minds, if they go from wrong to right. However, Foster went in the wrong direction. Thanks for the mention. Many people ridicule Foster for “flip-flopping” on his buy-and-hold strategy. I respect people who can change their minds, if they go from wrong to right. However, Foster went in the wrong direction.

]]> By: FrugalTrader http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82396 FrugalTrader Wed, 13 May 2009 11:43:45 +0000 http://www.milliondollarjourney.com/?p=869#comment-82396 Hey CC, I enjoyed the options portion of the book. Derek explains how put options work in an easy to understand manner which, even though I understand how they work, is great for newbies. Otherwise, I thought the book was a bit "thin", probably b/c I already knew about the concepts that he was writing about. Hey CC, I enjoyed the options portion of the book. Derek explains how put options work in an easy to understand manner which, even though I understand how they work, is great for newbies. Otherwise, I thought the book was a bit “thin”, probably b/c I already knew about the concepts that he was writing about.

]]> By: Canadian Capitalist http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82395 Canadian Capitalist Wed, 13 May 2009 11:31:27 +0000 http://www.milliondollarjourney.com/?p=869#comment-82395 Thanks for the link! What are your thoughts on the book? Did you like it? Thanks for the link! What are your thoughts on the book? Did you like it?

]]> By: Dividend Growth Investor http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82388 Dividend Growth Investor Wed, 13 May 2009 11:13:02 +0000 http://www.milliondollarjourney.com/?p=869#comment-82388 Derek Foster is well known for selling all his stocks in February 2009 and completely abandoning his strategy of buying and holding dividend growth stocks. Instead he is going to sell cash secured puts against dividend paying stocks, earning some premium in the process while missing on any gains in the stocks themselves. Sooner or later however he would realize that his put options would be exercised and he would have no cash but only stocks in his portfolio. Unless he sells those stocks or raises more cash by writing another book, Derek Foster would not be able to get any more" money for nothing". Derek Foster is well known for selling all his stocks in February 2009 and completely abandoning his strategy of buying and holding dividend growth stocks. Instead he is going to sell cash secured puts against dividend paying stocks, earning some premium in the process while missing on any gains in the stocks themselves.

Sooner or later however he would realize that his put options would be exercised and he would have no cash but only stocks in his portfolio. Unless he sells those stocks or raises more cash by writing another book, Derek Foster would not be able to get any more” money for nothing”.

]]> By: Four Pillars http://www.milliondollarjourney.com/money-for-nothing-and-your-stocks-for-free-book-review.htm/comment-page-1#comment-82386 Four Pillars Wed, 13 May 2009 11:09:25 +0000 http://www.milliondollarjourney.com/?p=869#comment-82386 Thanks a lot for the link! Thanks a lot for the link!

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