I’ve decided to track my new journey online. And you’re more than welcome to follow along.

For my wife and I to become debt-free we need to pay off $150,970. To do this we have three options:

  1. Cut our spending, and use the money to pay off debt faster
  2. Stop investing, and use the money to pay off debt faster
  3. Increase our income, and use the extra money to pay off debt faster

Because we are dealing with low interest none consumer debt I decided not to go with any of these options. Instead, I’ll be using $20,000 (more specifically $22,352) that’s in a Roth IRA to trade my way to $150,000 to pay off the debt.

It may not happen. I may change my mind and pay it off using money from somewhere else. Or I may just do so horribly I lose all the money — naw I wouldn’t take it that far lol.

But, for now the challenge I’ve given myself is to successfully trade our way to a debt-free life.

This is the plan

We’ll continue to make our normal monthly payments and I won’t be adding any additional money to the trading account. The only way the trading account will increase is through successful trades. Once, and if, I reach enough to pay off our debt in full the challenge is complete.

Remember this is something I’m doing that’s based on our specific situation. The only reason I’m sharing this information publicly is to…

  1. Keep myself accountable and
  2. Keep you entertained. Nothing I share here is advice, nor do I recommend you try it.

Investing is risky, and you could lose all of your money if you don’t know what you’re doing.

Strategy 

I’ll be using options spreads to trade pullbacks. In other words, when I feel like a bad business’ stock price is too high, or a good business’ stock price is too low, I’ll buy vertical option spreads to benefit from the reversal.

Current Trades

Docusign (DOCU)

Offers a suite of applications and integrations for automating and connecting the entire agreement process. Mainly known for e-signature.

Why I entered this trade

Fundamentals – Sales up 39% in year over year and gross income up over 37% during the same period. Source.

Technicals – Strong channel up pattern and price above 20, 50, and 200 day moving average.

 

Entry signal – The 30-day chart showed an oversold signal. Price bounced off the 20-day moving average forming a hammer.

When will I exit – Sell call debit spread when the price reaches $210 for a gain, or drops below $180 for a loss.

Square (SQ)

Creates and sells tools to help anyone start selling online or accept card payments.

Why I entered this trade

Fundamentals – Sales are up 44% in the last year and gross profit up 36% during that period. Source.

Technicals – Price above 20, 50, and 200 day moving average.

Entry signal – The 30-day chart showed an oversold signal. Price bounced off the 20-day moving average forming a hammer.

When will I sell – Sell call debit spread when the price reaches $133 for a gain, or if price falls below $114 for a loss.

Zoom (ZM)

Creates software that enables online collaboration.

Why I entered this trade

Fundamentals – Sales up 169% in the last year and income increased from $1.6 million to $23.4 million in the last year. Source.

Technicals – Channel up pattern.

Entry signal – The 30-day chart showed an oversold signal. Price bounced off the 20-day moving average forming a hammer.

When will I sell – Sell call debit spread when the price reaches $275 for a gain, or if price falls below $240 for a loss.

Current Balances:

Roth IRA Trading Account Balance: $22,352

Debt Balance: $150,970

All data is as of 7/19/2020

I’ll try to post updates regularly so stay tuned.

If you want to learn how I pick the best stocks and how you can start investing in those stocks with as little as $100, download my free $100 Investing Blueprint.

Remember, this is my personal trading journey that I’m deciding to share publicly. Again, this is only for your entertainment. Do not follow my trades. This strategy may be totally inappropriate for your financial situation.

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