Not Having Income Costs Money

The title of my post, "Not Having Income Costs Money" seems like it deserves a big, fat DUUUH!

Obviously, if you don't have any income, you're not going to GET any money.

However, I'm saying that it actually COSTS you money.

Today, my main industry (REITs) are doing really well. If I had a job (or some other form of sustainable income right now), I would be selling covered calls to create income.

I'd sell covered calls that expire in March 2011.

So why aren't I doing this?

I need to keep my money source LIQUID, meaning that I have to keep my stocks in a position that allows me to sell for quick capital, if I need. My stock would be "tied up" until I got enough money to buy back those options that I sold.

(Note: They're called covered options, because I have the stock to cover the call options that I would be selling. If I did not, those would be called NAKED options.)

So how is this costing me money?

Besides the income lost from NOT selling the covered calls, I also lose my chance to invest in another stock that I think is ridiculously under priced right now. So I'm losing money from that (currently unrealizable) profit. This is the BIGGEST cost to me.

Sometimes when things like this happen, I later learn that I benefited from not "being able" to do it. Hopefully, this is one of those times.

Today, it's very frustrating!