Ep 169: How to Beat the Market with Mark Yegge

The problem is information is doubtful sometimes, right? And so Hilton doesn't come and build that huge resort and the, and they, they don't buy a lot and therefore the hundred thousand dollar value stays there and Jim just keeps the $10,000 and finds another bob driving down the street six months later.

Welcome to the Next Level Income show where it's our goal to take your income, your investments and your life to the next level. I'm your host Chris Larson. If you haven't yet, get a copy of our book from free at our website nextlevelincome.com that's www.nextlevelincome.com. just click on the book link and I'll even send you a copy if.

You put your address in. On today's show we have Mark Yeage, the wealth architect. He has spent his entire life learning and teaching people about wealth and the importance of a success mindset. He started investing when he was only 12 years old and he actually made enough to buy his first car. At 16 he started and later sold his Wall street software company. The company ushered in after hours trading and then retired. Where we don't like here at Next Level Income. But he retired at the age of 39, not before growing the company from nothing to over $30 million enterprise. And along the way he garnered awards as small business of the year, the 4 to 100 Inc. Magazine Fast 500 which recognized the fastest growing companies in America. Mark has authored books and courses including Hacking Money, the Cash Flow Machine, Negotiate to Win, Win, the Secrets of Business and others. And today Mark manages several investment funds funds, is a wealth architect for seven and eight figure investors and provides wealth education through his learning ecosystem@destinycreation.com he's also the host of the Wealth Architect podcast, wealtharchitectpodcast.com that I've had the fortune to be on. Mark, great to see you again. Welcome to the show.

Hey, thanks for having me, Chris. Great to be here.

Yeah. And thanks for reading the notes. So we're wearing the same color shirt. Not all the guests really get that and it's really hard to coordinate. So you make, you know, you really make, make me feel good about that. Although I think yours looks better than mine, so.

Well, maybe it's the lighting. I don't know.

It might be, it might be. Mark, I'm excited to have you on today. I know we've, we've talked several times about what you do. I'm excited to use some of the strategies that you do actually with my, my son and you know, I fell in love with the stock market back in college as I write about in my book. But you know, kind of before we dive into some of the things we're going to talk about today, if you would, you know, I know you got a lot of background here, but if you could kind of summarize it for the audience, I'd love for that.

Dude, I'm so, I have a big, long background, a lot of experience. But, but the stuff that's important is I've, I started investing when I was 12 years old. Bought first car with the money that I made in the stock market and I invested all through college. I even taught my stockbroker the actual strategy of what I'm doing today in 65 year old guy. I taught him, I taught him what covered calls were. And, and today I run a couple of hedge funds in covered calls. I run a bitcoin fund and I just have been, I've always had a love affair with the stock market. I don't know what it is. I think it's, I think it's that there are so many stories, Chris. Like there's a story, story about Apple. You could just look at Apple and just invest in Apple, right? Or you can look at Tesla, just invest in Tesla. What a great story that is. And, and that's primarily what I'm in today and have been for the last three and a half years. And you know, it goes up and down and it's not for the faint of heart, but it is a story and there's thousands of stories, right? You could turn on CNBC at any time of the day and, and we'll probably talk about that too is the myth of watching tv because they're not giving you angel advice, they're giving you stories to sell ads. So. But you know, there's lots of stories on. It's just fun, right? It's like you could get into politics and there's lots of stories. You could get in sports and there's lots of stories and you can get into finance and there's lots of stories. So for me it's exciting and it's led to where I am today, which is, you know, I help people not invest their money but learn how to do it properly because Wall street doesn't always give us the things that we need to know, unfortunately.

Yeah, no, and you know, that was one of the, the things I enjoyed during our first conversation is, you know, you have a lot of the same kind of topics under your mission with your company as we do. Which is really to help not only educate people financially, but also help them, you know, get to financial independence. But if you wouldn't mind sharing, you're saying there's three things that you tell people that they need to never let go of.

Yeah, you got a great memory. It's. I. My favorite saying is never give up your power in your health, your wealth, or your time. And so many people give up all three of them, and that's why they feel powerless. And you've got to take over the power in those three areas. Your health, your wealth, and your time. You will be way more successful if you're in control of those things.

Yeah, and I love that we talk about all those things. You know, surprises some people. I actually have my. My personal doctor come on the podcast every. Every three to six months to do some updates. Because, you know, if you don't have your health, then what does it matter? What if. What does it matter if you have money? And I think it's really interesting that in this country, because I. I spent, you know, two decades in the medical device industry and the healthcare industry. We have a broken health care system. It's not health care. It's sick care. And we have a broken financial system in a lot of ways. And, you know, it's amazing that children can go all the way through grade school and even through college and not learn the language of money. And, you know, you made a comment. You know, we. We think that we're being told something, but by, you know, our doctor. We think we're being told something by our financial advisor. We're watching cnbc. We think we're learning financial education, but really it's just entertainment. And they're trying to try to rope us in, to keep our eyes glued to the TV.

100%. 100%. And we can start with that. And. And that's what people think financial education is. And let's go deeper into that. Why don't we teach people financial education? I think there's a deeper reason. Like we don't want to have people knowing too much about what's going on underneath what's happening with the money, Right? The. The infinite Fiat Ponzi printed by the Fed, right? Just whenever we need money, they just created out of thin air. Well, you and I can't do that. And you and I would be thrown in jail if we tried to do that. But yet the Fed gets away, and so do all the other central banks in the world. But most people don't really understand that. And then you get Something like Bitcoin that comes along, that's. That's solid hard money. It's almost like a digital gold. And then people just don't understand it. They don't understand that there's benefits. They think it's some crazy Ponzi scheme, when, in fact, the real Ponzi scheme is the stuff we use every. So I'd like to. I'd like to maybe launch into that, because that's a major pet peeve I have is financial education is so lacking in our. Not just our world, but really the world.

Yeah, let's do it. So, I mean, I have. I have an MBA in finance and portfolio management. And what I learned during that was that the financial industry, it's not full of financial experts. It's full of, a lot of times, salespeople.

You're 100%, right?

Yeah. And what we. What we advertise and what we give to the average person, or what a lot of people call the retail investor, is not what the rich people are doing. So what the quote unquote, smart money is doing.

So. So let's start with that because, yeah, I got so many ways to go on that, but. So let's. Let's just start with the macro. And I've. I have my own brokerage firm on Wall street and, you know, sold it. And, yeah, I've been on all sides of the market. Customer, broker, stockbroker, you know, the whole thing. Owner of a firm. And I could tell you, you're absolutely right. The. The Wall street is set up to gather your money, to gather assets. Oops. To gather assets. Okay. And when they gather assets, now, they don't want to get sued, so what do they do? They put you in something average. Right. And about you. But I don't wake up in the morning going, oh, it's a good day to be average. Right.

But you know what? I just told my son that yesterday. Mark. He said, he said something about being normal. I said, I said, look, buddy, you really don't want to be normal. And he looked at me, he's like, yeah, I do. I said, let's talk about that. I was like, you want to be an average lacrosse player? He said, no. I said, well, that's kind of normal. And what normal is, you're right. I don't want to be average.

Yeah. Yeah. So. So that's where it starts, is they want you to be average because they don't get sued. So. So Wall street is really. And I could tell you this because I'm. I've been on Wall Street. They, they are by salespeople to gather the assets and lawyers to not get sued. How do they not get sued? They put you in something average. Now let me go off on this little thing. Most people don't even think about it, right? So to go go at things from common sense. So Warren Buffett goes. He's in five main stocks that are, that are 80% of his portfolio. He's been invested for 60 years and he's in five main stocks. He's got other ones that are a small part of his portfolio, but five major ones. And Apple's a big one, right? I think Apple biggest one in his portfolio. And just a few years ago he didn't have any shares. So he focuses in on good solid companies. I'll talk about that in a second. But Warren Buffett does not run around looking for mutual funds. He doesn't go, you know, I think the best fund is this Pimco fund or it's this Vanguard thing or this black. He doesn't look for mutual funds. He concentrates. So that goes to my first. Well one of my myths. I don't know if it's the first one, but that's the myth of diversification. And they teach us well, let's diversify. Let's buy an ETF, an exchange traded fund like the SPY, which is the S&P 500 index fund, which is of 500 companies. The ones that we all know, right? Coca Cola, IBM, Apple, Tesla, they're all in there, right? All the ones that we know and some ones that we don't know. But that's 500 companies. So you got some really good ones at the top. You got some lousy ones. Some of them go out of the business, right. And some of them are average or less than middle. And then you have a broker that's taking a fee to run all that. Okay, so that's a diversification. Like why not just buy the top 10? Yeah, you said than done. I know, I know. I did a study a few years ago and over a two year period the stock market had appreciated 29% but the top 10 of those investments had appreciated 185%. So why would you want the other 490 stocks in there if does is weigh down your portfolio? So going back to my one, one of my myths is you diversify within, sorry among asset classes and you concentrate within asset classes. So you focus really deeply in a certain number of stocks. 1, 2, 3, 5. Like Warren Buffett, the best of all time, you know if he's got five, we should only have, what, one or two. It sounds crazy.

Yeah, and that's, that's a great point. You know, a lot of people don't realize that Warren Buffett, he really is buying businesses. He's investing in a big way. He's analyzing businesses, he's buying business. And, you know, that's one of the things we talk about, is how do the, how do the ultra rich. How do the rich that are worth a hundred million dollars invest? Or how do they make their money? That's even a better question. They probably made their money in business or real estate, and those are the top ways. So if you're like Warren Buffett, you understand that and you're buying those businesses. And to kind of emphasize your point, I was looking this morning in preparation for this, the Vanguard Total Stock Market Index, which encompasses not this, just the U.S. but all the world indices as well over the past four years. So I was like, let's take. Right before COVID hit. It's. It's actually been, it's been down. So it's been down, I think over four years, it was up 2.5% in 48 months. That's it. And two and a half percent.

Wow.

Over four years. Yeah. And you can go back depending on, you know, when you start that measurement and do that. That was November of 2019 is when I looked at it. But yeah, two and a half percent over four years. Not great to have an average there. And I think you probably know this with all the gains in the stock market this year made up from like five stocks to your point. So. Yeah. So how do you. I guess so that's the first thing I think, you know, is the average investor is, is getting average returns, but those average returns aren't the average of the stock market index. They're getting the average of the gm. They're actually getting the geometric mean. And, and I went back and looked this stat up that the average investor is actually getting an annualized return of approximately 5.5%. And that's before paying fees, which, like you said, maybe it's about a percent. So your average investor is probably getting four and a half, maybe 5% if they're lucky.

Yeah. So that brings me to the next one. You mentioned that word, fees. And I believe everybody should have the right to make money. The problem is they're making money on your money, which is fine if they're doing well. Right. So I don't know if I'm aligned with the, the, the way that that funds and Wall street makes money is that they make money no matter what. So you might get a wrap fee or an asset management fee. They call it of, let's call it 1% like you mentioned. So your million dollars to your broker and every year he gets to make $10,000. He charges you 1% whether your account went up or whether it went down. If it didn't go up at all, you'll money to inflation and I'll get off on a tangent on inflation in just a second, but you know, you're losing money to inflation. But the broker is still making his 1%. Now he's putting you into average investments because he's pooling the money and he's saying, well, we need to have diversification in large cap stocks, bonds and maybe some old stocks. And he's got you way over diversified so that you get a muddled up portfolio. If you put it all together of maybe 5 or 6%, the average percentage of fees that are taking out, taken out of all of your assets is not just him gets paid. Right. But the people that are running all these big funds, they have big buildings and Lamborghinis and nice cars and you know, have houses in the Hamptons. Somebody's got to pay them. It's your money. It's 3, 4, 1% per year on average. So if you're making 5 or 6%, you're losing. They could tell you, you know, whatever they want to tell you. But let's, you're 5% and it's way more than that by the way. But an inflation, right, that you're already at zero plus now you're losing 3.4% and you haven't made any money yet. You know, it's, that's, that's the, that's the issue with fees and that leads into the whole situation of safety. Right. I was getting growing up and helping people manage their money. I learned that you should take 100 minus your age and put it in growth. So if you're a 50 year old person, you put 50% in growth and the rest you put in mostly bonds, right?

Yeah.

And if you had put money in bonds in the last couple of years, it safe money. Right. You make your 2 or 3 or 4 or 5%. It's safe. Last year bonds are down 50%. That's not very safe.

Yeah.

So that's the other myth is the safety in addition to that diversification.

Yeah. The 6040 portfolio quote unquote broke last year in 2022, which surprised a lot of People and that's why we're getting more interest in the alternatives because it's like, well, hey, where can I get yield in this environment where actually bonds are now paying a decent yield compared to what they have historically. But yeah, it's not always as safe as we think it is, especially if you're heading into retirement and if inflation's double digits, if you're getting 5%, that sounds pretty good with your, you know, inflation's 10%, that ain't so great either. So Mark, you know, I think again, Wall street is, is not what a lot of people think it is. And you know, financial advisors by and large are salespeople. There's some good ones out there. There's RIAs, there's different people that you know, are fiduciaries that actually, you know, are response are responsible to you first and your money first. Actually, do you mind sharing like what a fiduciary is versus just what a typical stockbroker is for the audience?

Well, I, I mean a fiduciary really goes at it by like you said there, they're supposed to be looking at it for your whole financial well being.

Right.

And so they're, they're basically like the, the, the, the advocate for you, the person that's on your side. They're looking for the right investments, things. A stockbroker is really there just to recommend things to you, let you kind of decide. It's your responsibility. They're there to facilitate transactions, kind of the way I explain it.

Yeah, yeah, that's a great point. And again, I don't think a lot of people realize that there's, there's differences out there. And you know, I think something that's surprising to a lot of our investors in the alternative space with real estate is they don't realize that their advisors are actually prohibited from selling away from recommending anything outside of their portfolio that they can sell in house, which surprises a lot of people. So people are like, oh, I'll talk to my advisor about this. And like, oh, they say you shouldn't do that. It's like, well, why not? They say, oh, it's too risky, you know, it's. Or. And then you look at the fine prints like, oh, actually they can't, they can't even say that. And we have advisors that invest with us or their parents or their family members invest with us because they can't contractually. Which is, which is quite interesting when you look at this. So, all right, so you said that most investors end up over diversified and we should just pick a couple, you know, two, maybe a half dozen at the most, really good companies to invest in. How do you figure that out?

Yeah, let me back up a little bit and make sure that I'm clear. I'm just talking about in that case in the stock market, right. So you, but you can get it in the real estate market. So people go, well, I want to be in real estate and they buy, you know, two or three rental houses. They buy a couple of duplexes, a strip mall and a self storage and they don't become expert at any of those business. So if you're going to go into real estate, same advice applies, you know, go deep into strip malls if you're going to be a strip mall person, understand the cap rates and, and the depreciation schedules and how those things work. So just, just never give up your power and your health, your wealth or your time, you know, understand what you're doing so you're not just trying to wait all these different investments that are not apples and apples. So, so then how do you find those stocks? Well, listen, I tell you, go to my program. But that's not, that's not your question because anybody can find the stocks. Like there's really good quality stocks out there that don't fluctuate a huge amount. So if you're not looking, if you're looking for non volatile stocks, they're out there. IBM, Exxon, you know, things that don't, things that are just big and quality and they're just lumbering. They're like a blob. Right.

I remember a company like, kind of like a conglomerate. Like I used to work for Medtronics, very similar. Yeah, yeah.

And so over diversified too. So they don't go up and they don't go down. You're not going to make a huge amount of money with them. I mean you look at the chart on Coca Cola, it's like just a flat line. Right. But it's a solid company. Is that an investment? Are you buying a business that's growing? So for me, I'm a growth oriented investor to buy things that have accelerating earnings, accelerating revenues, don't lose money. Our leaders in their, in their field have a huge amount of institutional ownership. So they hold up when the stock market goes down because those big mutual funds kind of can't have a lot of trouble getting in and out of stocks. So you want big money. So I like to buy quality. Now we can get a little bit, you know, esoteric on what quality is, but I Think, you know, if you got a company that's opening stores or selling more widgets or has the newest technology, has good management, you know, great. I mean, I had a friend of mine that used to invest in pot stocks, right? I'm like, why are you investing in pot stocks? Well, it's going to be legalized. Okay, what if it isn't? And it was. Ish. It wasn't legalized, federally legalized in a few states. And these companies that were waiting for the legalization weren't making money. And so the pot stocks, one of them I remember, went from like 45, 50 bucks down to 2. These aren't quality companies. They weren't making money. You need to be in a company that you would want to own, that you'd want to be invested in. Back to your your thesis about being invested business like Warren Buffett.

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Yeah, I love that. And you know, we, you know, what we focus on are typically stable properties that we buy. Mark. So we have a value add strategy in real estate. So, you know, I talk to investors, you know, especially in a market like today, capital preservation is number one, income's number two. And then we focus on appreciation and also tax benefits, kind of wrapping all that up. You know, how do you rank those? Like you say, okay, you know, you want a stable business. I heard that. Do you, do you take into account the dividend in any of these stocks or how do you look at that? I know dividends have kind of decreased on average in the stock market over the last several decades. But does that factor into, you know, how an individual picks out quality company or quality stock?

Yeah, it can. Here's the problem with dividends. Most people end up chasing yield. And so you'll see that the average yield in minute bonds is three and a half percent, let's say, for example. And then you'll say, well, let me, let me buy a McDonald's bond. They're paying 6%. I'm just making this up. But let's say they're paying 6 this up if you want, but let's say they're paying 6% and then you find some real estate investment Trust that's paying 14 and you go, well, it's a no brainer. I'll just go into that real estate investment trust. Well, there's a reason it's paying 14. Maybe the asset value of the company has come down, they've lost their tents and the price of it has come down. And so it's now paying that same amount of dividend with a, with a higher yield because the asset's cheaper. But what happens when they lower the, the, the, the payout? Let's say they were paying a dollar and it gives you a 14 yield. And they say, well we can only pay 40 cents because we've lost a lot of our sense. Well, now you have a 60 decrease in your yield. What do you think people are going to do if that we're buying it for yield, they're going to sell it. So some of the ones that have the highest yield that people chase, they end up getting hammered because the yield gets changed by the board of directors without warning, without notice, and the stock goes way down. It's not safe anymore. So dividends are important and they can be if you're a dividend investor. But to me you can kind of create your own dividends with other strategies. But you know, dividend investing is, you know, you have to be really, really careful about how you invest in dividends. Like we talked about a yield in a Treasury bond. If you were invested in Treasuries, you, you might still be getting that same amount of money every year, but your asset has gone down incredibly.

Yeah, and I think that's where a lot of investors, like you said, they chase yield. And I had this discussion with an investor. No, it was probably, it was about four years ago. I remember I was on vacation at the time, so it was like June and we were, he sent me a message and I looked at it and he was talking about REITs. And I think it's interesting because you could buy a REIT and you could actually buy it at a discount to like its holdings and those sorts of things. But Larry Swedrow did an analysis several years ago and what, what he showed was that you can actually get the same risk and return profile and volatility of a REIT by synthetically putting other asset classes together. And his argument was if you can do that, it's like primary colors. It's like, well, if you can make this color from other colors, it's not actually a color. And his argument was, you know, yes, it's a quote unquote asset class, but you can, you don't need a REIT to get the same, same benefit or risk profile that a REIT provides. So it was, it was interesting to read that. And I've had that discussion with some financial advisors and investors over the time and nobody, nobody, I've showed them the data. Nobody's ever come back to me and argued differently. So I think it's, yeah, it's. And you know, so you can again, some of these newer asset classes that are out there, which, you know, REITs have been around for several decades now. But I think again, back to our original point, it's not always what it seems to be on Wall Street. And if, hey, if you can't sell real estate or add allocate towards real estate, then put together a product that you can sell real estate if you're a, if you're a financial advisor. So I think that's interesting. So Mark, you, you were working on Wall Street. How did you come up with the strategy that you use and teach to your students today?

Well, it's interesting. My dad had a book on his shelf, an old tattered hard book by a guy named Edward Thorpe. Edward was a MIT professor. He's still around, by the way. He's about 95 years old now and he looks 65. But. But he is, he was the, he wrote a book called the Market. But the interesting about.

I'm sorry, say that one more time.

The book was called Beat the Market.

Beat the Market. Yeah.

But before he wrote that, he wrote a book called Dealer because he was a mathematics professor at mit. And what he did is he figured out first how to beat the roulette tables. He had another person that was running rudimentary computer across the, across the way and where the ball dropped. And I don't know how, I don't know how you do roulette, but he figured he got kicked out of Las Vegas and playing roulette. And so then he turned his math skills to blackjack. And he's the guy that, if you've seen the movies. Yeah, right. And they, the MIT students all Las Vegas used the system of counting cards mathematically.

Yeah.

And he got banned from Las Vegas. And then he wrote beat the Market. So you can tell he's got some math chops. You know, his, his bottom line is he in, in today's parlance because he used warrants and we don't really use warrants today. He used options to create income. You asked me about dividends. We make our own dividends from good quality growth stocks, right. And so we'll take a good stock and we'll find somebody that wants to. A gambler will just like the house, right? We'll find a gambler that wants to get a cheap leverage position on a stock going up. For example, let's say that he thinks Apple is going to go from whatever, 170 to 190. So he buys an option for two weeks out that says I'm gonna, I'm gonna bet $1 that Apple's gonna go from 170 to 190. And if it does, I make $20 on that. I, you know, I can, I buy it for a dollar, but it's now got intrinsic value of 20.

Go ahead. So I know a lot of people know this, but if, if you don't mind taking 30 seconds and explaining what an option is for the audience.

Yes. Okay, back up. And I'll use a real estate analogy because most people can understand real estate analogy. Let's say that you look out your window and you see that this guy named Jim across your street, he has.

One my neighbor's name.

There you go. And you see that Jim decided to sell his house, right? And, or sorry, not his house, his lot. He's got a one acre lot and he put us on it, says for sale by owner $100,000. Let's say that's what he's invested in that. Well, this guy named Bob is driving down the street, but Bob knows that some huge developer, Hilton wants to put a huge development right next to Jim's lot. Well, Bob thinks Jim's lots worth not just 100,000, he thinks it's going to be worth 500,000, let's say. So he goes, well, he goes to Jim, knocks on the door, you know, finds out where he, where he lives and listen, I know you got that lot for sale on Elm street. You're asking 100,000. I don't have 100,000 to give you, but I'll give you 10,000 if you'll take it off the mark for six months. And anytime in the next six months, I can buy it for 100,000. I'm going to, I'm going to take an option to buy your property for $100,000. And Jim says, wait a minute here. You're going to give me 10 grand that I get to keep no matter what. And the only thing I have to do is take my property off the market for six months and, and anytime in that six months for the price I'm already asking, that's a no brainer. He shakes his hand and they got a deal. Now let's analyze the two positions. You've got Jim that makes the $10 no matter what, right? He gets the 10 grand and gets to keep it on $100,000 property. He gets a 10% return if the, if, if nothing ever happens. Bob, on the other hand, has spent $10,000, but more. He's hoping for that home run, he's hoping for that lot that he gets to buy for 100 and turn around and sell it for 500. On his $10,000 investment, he gets to make $400,000 in return. So it's huge amounts of risk and huge amounts of return if it gets it right. The problem is information is doubtful sometimes. Right. And so Hilton doesn't come and build that huge resort and, and they, they don't buy a lot and therefore the $100,000 value stays there. And Jim just keeps the $10,000 and finds another Bob driving down the street six months later. That's what an option is. We want to be the Jim in this situation. We don't want to be the Bob. Bob can make a lot of money or he can make zero, but Jim always makes the 10,000.

Got it.

If he does it 10 times in a row, he owns the property essentially for free.

So you need to own the property, or in this case, you need to own the stock to do this.

Yeah, to own what we call a base position. It can be a stock or it can be what we call a synthetic. But yes, let's just call it the stock. You'll buy good quality stock, you know, and you know what the good quality stocks say, for example, maybe Amazon or Apple or you know, Tesla or Google. You know, companies that are going to be around for a while that you want to own. Right. Things that have grown, earnings, good management, all those things we just talked about. And then you'll find a gambler like Bob driving down the street willing to take a shot and he's going to buy option from you, you're going to sell it to him and it's going to expire. And when it expires, you keep all the money that he gave you when you sold it. And so that's really the strategy. It's very simple. Buy the stock, sell the option, and do it over and over again.

Gotcha Now I know a lot of people are thinking, well, what if, what if Bob comes back and says, I'll give you that a hundred thousand? So you have somebody that says, hey, we need that stock. How does that work?

So it automatically happens in the stock market, in the broker business, when, when your stock is above your strike price. So let's say you buy Apple for a hundred dollars, right? And Apple Ghost and the, and the, and Bob has bought $105 call, right? And you sold it to him and you picked up a dollar. You made 1% for a week. Let's call it right. And, but it went up 5. So Bob invested a dollar and it went up 5. So now it's over $105. Anything that's over the $105, which we call the strike price, is over the strike price. The brokerage firm automatically takes your stock and gives it to Bob and gives you the cash value at 105. You don't lose any money. You end up actually making the money that you promised to sell it to.

Him originally at perfect. So it's just the automatic trigger that takes place. Got it? Now, you know, one of the things that struck me when I first started day trading, I said, you know, what is this? Is this really investing? Is this really investing? Mark, you know, what, what is this, what is this really called? Like, is this an investment? Is this, what, what is this type of strategy called? Does it take a lot more time than just going and buying like an index or indices?

Well, it does take some time to learn if you don't understand. I mean, just getting your brain around the concept of an option or call option, you know, does take some time. And so, you know, you, there's free, free stuff you could find on the Internet, free stuff on YouTube, people that teach you, I have free stuff, but I think, I think. Let me talk about two sides of this. First of all, you can lose money in the stock market even if you have an income strategy like this. My whole, my whole thing is based on Edward Thorpe's probabilities theory. You get probabilities on your side. If you have earnings growth, sales growth, return on equity, good quality management, a great product, an uptrending market, you're getting probabilities skewed to your side. When we collect the premium, when we collect income from the option seller, we're getting another big chunk of probability on our side as well. But it doesn't prevent losses. So in that app example, you buy Apple at 100 bucks, you get a Dollar a week. Okay. But Apple can go up and it can go down. If it goes down, yeah. Okay. If it goes 95 and you collected a dollar, well, you know, instead of owning it at 100, now you own it at 99. Okay? So you. That's better. If you owned it for 10 weeks, you're still in the money, you know, now you have a basis of 90. And so the. What we try to do is we strip out. We. We own a good quality company. So we have four cornerstones. Let me just get back to our. What we. It's easier to explain it this way. We have four cornerstones for our program. Our program is called the Cash Flow Machine. You're not really asking, going. I'm going to tell you about it anyway. It's the easiest way to explain this thing.

Oh, I was going to ask if you didn't tell me.

Okay. It's called the Cash Flow Machine, Tom. It's a covered call system. It's a system, and I'll get into that in a second. We go with four cornerstones. We buy the right market, or, sorry, the right stock in the right market at right spot on the chart because there's, There's a couple of better spots on the chart to buy than just anywhere. And what we do is we squeeze the juice, we collect the premium from that seller. You put all four of those cornerstones together, we try to skew our probabilities up towards 70% chance of being right, and we're not always right for sure. And then we just sit there and we use the asset to collect a dividend, basically collect a yield on it from that gambler out there that. To sell us that option that we want, that wants to buy that option from us. So that's basically how we do it.

Got it now, okay, so if. I think I understand you, but what if you're in a down or sideways market? Does this strategy still work?

Yeah, so the strategy works, especially the way we do. And it doesn't always work. You know, there's, there's times and, you know, I've had some pretty. I've had a couple of rough years because I'm getting the juice every week. I'm still making the income, but the value of the account does fluctuate with the stock market. And so you have to realize, look, I'm in a stock like Tesla. I'm in a stock like Apple. And I'm not in it to be in it for the week or the month or the year. I'm in it for the long term, I'm in it because I believe in the company, just like you would normally invest anyway. The edge that we have is that we collect income lowering our basis price, but it doesn't mean it protects all of the decline when it declines. You just have to have the tenacity to be able to stay in it. Now we have, in our system, we go really deep into covered calls, right? Deeper than any other system that I've ever seen. We've got, you know, over 150 videos in our program. Some are bonuses, and you don't have to watch them all, but, you know, the core strategy is 70 videos. And we try to analyze stocks going up, stocks going down, markets going up, markets going down, earnings, dividends, dates, those things, and selling deep in the money to protect yourself. When things are going down, there's a time to be, to be really conservative, and then there's a time to push that accelerator when the, when the, when the probabilities lean in your favor. And so we try to all that. There's no perfect system. It's just the best system that I've, I've seen. And it only works over time. It doesn't work, you know, if you're, if you're going to measure it at the bottom or measure. The answer is it's probably somewhere in between there. We shoot for 1 to 2% a week, 2 to 4% a month. That's what we go for. We don't always get it. Sometimes we exceed it. Yeah, about that.

Love it. So, Mark, I always, I always want to talk more every time, every time we're together here. But if listeners want to learn more about what you do, what's the best way to get your website? Look, look into your courses and all the resources that you have out there.

Well, thanks for asking. You know, love, love to have new people. My goal, try to expose as many people to financial education as possible. So whether you do it with me or you just start with the rudimentary David Ramsey or Susie Orman book or, you know, get your book. You know, these are all good things. And as long as you start to. Look, we use money every day, right, Chris, shouldn't we know about it, like, absolutely exposed to it? And if you're already exposed to it now, get even more educated, start to hone in on what you really want to do. But to answer your question, it's. You find out more at cash flow machine I.O. cash flow machine I.O. and, you know, we got all kinds of information there, and we have a program called Regular Paychecks. It's a, it's an ebook. You can download that. It's a bribe to get people's email address. Right. But if you give us your email address, then I send interesting stuff every once in a while and. But you get that free ebook called Regular Paychecks, how to take regular Paychecks out of the stock market.

So yeah, Mark, I've been on your, I've been on your email list, entertaining emails. Love, love your story, love your mission. That what you're doing. If you want to learn more about that, you can find the links down here in the show notes. If you're listening, check out the show notes on podcast. Mark Yeage, thanks so much for joining us today.

Thank you, Chris. It was a lot of fun. We didn't even get to talk about the Fed or anything really fun like that. We'll do that.

Well, we'll have to bring you back on and we'll really dive into that. Absolutely. Yeah. Yeah. Thank you for it.

Thank you.

Hey, Chris, here again.

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