Kurt, Could you give up teaching RAT and Live by Trading Alone? What’s YOUR Motivation?

Q: Setting aside your income from seminars, selling the blueprint, subscriptions, martial arts, etc… Could you give all those up and just live off the profits you make from trading without sacrificing on your lifestyle?

You needn’t answer and if you do I certainly don’t expect figures. A ‘yes’ or ‘no’ would be completely fine.

You also might be interested in my motivation for asking such a question so in case you are I’ll tell you;

I’ve seen a lot of people selling a lot of ideas in different fields but in the same manner as you. From those that do, some play what I call “the long game” by starting a blog and detailing their journey as if they are “one of us”, being helpful and coming across as sincere and genuine. A few months later “swamped by all the interest, questions and feedback” they decide to put it all together in a rather professional looking package or priority subscription or both, etc.  I’m not saying they’re wrong to sell their knowledge and they needn’t be lying at all. But was their motive all along to get to a stage where there is sufficient interest to sell a product and make their ‘real’ income from the preaching rather than the practicing.

Are you acting out of a sense of altruism and genuinely not wanting people to get burned by following methods of other “gurus” after paying $x,xxx for the privilege. Or are you very good at marketing and what I call “the long game” with your real income coming from the sale of this information (preaching) rather than the practicing of such methods.

Answer to the question in the first paragraph: NO.

I make far too comfortable of a living from my martial arts studio, my writing, and some other businesses that I’m involved in. I simply don’t have the capital built up yet to replace all that income.

Plus dude, I’m a youngster! At forty-one years old, even if I could live off the proceeds of trading alone, why would I? I have way too much fun interacting with my Students and my Clients. I like to get out of the house. I like to do things that I know are contributing to others’ lifestyles, either their physical or FISCAL health. My work is too fun and profitable and fulfilling… for me to stop working. Nope, wouldn’t do it.

I think you may have missed my last “rant” on the RadioActive blog. I addressed the question, “Is it possible to create a monthly income from selling covered calls?” Please check it out.

I think I was pretty straightforward, and made it clear that the way to set up such an income stream was NOT by using the stock market as a cash dispensary: the stock market is a place to grow your stake. We do this by keeping losses low, cashing in our winners after letting ’em run… and if you want to have a “reliable, monthly flow of income” then the idea is to practice “laddering” bond funds, CD’s, Muni’s, etc.

I’m certain that I have never represented RT as a way to make a “reliable monthly income”. When posed that question, I ALWAYS respond that I don’t guarantee ANYTHING… except that when you play the market you won’t LOSE more than the amount that you agree to up front with your put option. Unless of course you sell a call below the put’s strike, or roll the put down… and to cover that I introduce the CEGA model and other rules to continue to keep folks out of trouble. Once we handle the issue of debilitating losses, the wins simply seem to take care of themselves.

Whew. Okay, on to the next para: “You needn’t answer and I certainly don’t expect figures”. I SENT you figures. That’s the video in the email that you replied to. And the figures are posted as well. Not only are the returns posted for anyone to review, the exact times, amounts, and the very THOUGHTS I had been thinking at the time are posted for Fission’ Members.

Now, I DO trade more than what I make public in the Fission’ Account, and I do just fine with that, thank you! But Fission’ was always based on trading RT publicly in an “airtight” account, one out of which I would take no income and make no further deposits, and give real-time updates. I’ve done so. Yes, I’ve taken more out of the markets than I show in that one account but that’s the one I’ve chosen to trade publicly and put the results of RT on for display.

I’ve also interacted with my Subscribers and Members… Guess how many friends I made last October? Listen, my account is up. Much, much more importantly… a LOT of people have done better with RT than I have demonstrated in the Fission’ account. Know why? Because they were better traders to begin with. Once they began to fully grasp money management principles of RT, that made their results that much better.

I hope that I’ve made it clear that I DON’T try and take advantage of people by selling them a pipe dream. I teach ’em how NOT to get hurt in their quest for market success. Folks that followed Fission’ for the last two years… heck, the last twelve months, even… did a lot better than folks that followed the mantras of the covered call and credit spread gurus. SO… finally… on to the rest of your email:

How did RadioActive Trading come into being, and do I act out of a sense of altruism or for baser purposes?

I did in fact start a blog of sorts (way before blogging became an art form, I had a five page website on which I posted my ideas, trades, and the contents of emails that I had written and sent to a list of ten, then twenty, then fifty subscribers or so) back in 2002. It was for the purpose of interacting with others that had been burned by trading WITHOUT sound money management principles, and both sharing with and learning from them.

I did in fact post my trades back then as well. In October 2002 I picked AMZN, YHOO, EBAY and others to trade RadioActively… and did very very well. Along the way I began to get a number of folks asking me if I had written a book and where could they get it.

Here’s the bare, honest truth: After the demand manifested itself I told everyone on my list that I was writing a book and that I would call it “The Blueprint“. I further said that I was taking pre-sell orders for the book and that it would cost $200 now, or $249 if you waited until after publication.

I figured that if nobody sent any dollars, I would not take the time to convert my little blog hobby into the RELIGIOUS experience that writing a book can be. In fact, I thought if just one or two people sent money, I could always send it back and apologize. It’s legal to accept money by U.S. Mail in exchange for a product that’s in any stage of production, provided that the date of production is clearly made known… and I DID have an outline and a couple of sketches.

When twelve orders, from a base of around fifty subscribers poured in, I knew that the information I had been sharing and learning as I went… was valuable enough to enough people… that I should divert some time and energy into writing and delivering that book, as well as supporting the purchasers.

And here we are!

Now, I DO teach Seminars all over the place… and I DO sell copies of my book still… and though it is not my sole, or even primary source of income I do make a pretty penny from doing it. So, I wouldn’t say I have a sense of altruism as pure as a Peace Corps worker or Mother Theresa… but I don’t lie to my Members and I certainly don’t represent RT as something it is not. I just teach folks how to stay out of trouble.

Once we address the hemorrhaging losses, the wins just seem to take care of themselves: hence an account that’s UP even after a crappy market.

Thanks for asking your questions in your email. I hope I’ve given them a fair shake, whether it’s the answer you were expecting or not. A final thought: “I’ve seen a lot of people selling a lot of ideas in a lot of different fields but in the same manner as you…” Well, there’s a certain technology to “selling ideas”. I just happen to not want to reinvent the wheel.

I’m certainly not ready to stop doing everything in my life and simply trade for a living. But then I’ve never made any claims otherwise.