Disclaimer: All investing and speculation carries risk. Don’t risk money you can’t afford to lose. This content is for educational and informational purposes only. Nothing here constitutes financial advice. Consult a licensed financial advisor before making any investment decisions. This page includes some of the more high risk activities for theoretical explanation, not to endorse them; this page may contain more esoteric concepts and are included for breadth of knowledge and not to encourage these methods (even the brightest minds have lost fortunes attempting advanced methods, including greats like Issac Newton; who also failed in attempts at literal alchemy.)
Financial alchemy is about turning time, knowledge, and other people’s money into value. For example, if your business raises $1M to start but is worth $4M post-launch, you’ve created $3M in value.
The same applies in real estate through commission-based down payments (ie you buy a property, using your commission from selling it as the down payment), wholesaling (getting a property under contract and assigning it to someone purchasing it from you at a higher price), assumable mortgages, or 100% financing. Always ensure your rental income covers mortgage obligations and other expenses (taxes, insurance, operating costs, carrying costs in the event you don't have a tenant should be covered by other rental properties; if not then you'll be losing money while waiting for a tenant.)
With a 401k and good matching, you can put away $69k/year with a $184k salary. Stick to low-fee index funds of the S&P 500 or Nasdaq 100.
Roth IRA: $7k/year contribution can grow into millions. Writing covered calls on index funds in retirement are a solid income strategy. Don’t gamble in your Roth — prioritize stable growth.
Individual stocks: it's amazing how well individual stocks can do, it's key to really understand that company. In 2002, I thought Amazon was merely an online bookstore (at the time, that's basically what it was; this is pre-AWS) and thought 'it's already larger than Barnes & Noble, is it just going to grow at 5% a year?' but $3300 invested at that time would be a million dollars at it's peak. Tesla is another great example, car companies have not really performed that well; but Tesla is more than just a car company or even an electric car company and it's growth would yield a similar gain.
Most forms of leverage add risk—margin trading and options can expose you to significant losses, and even selling covered calls caps your upside while leaving you exposed to downside risk. But if you hold high-quality stocks you'd be comfortable owning indefinitely, there's a relatively low-risk way to boost returns: securities lending. When you lend out shares so others can short them, you earn a monthly fee, often ranging from 4% to over 100% annually, depending on demand. Some stocks earn little or nothing, and your broker typically takes a cut, but as long as your shares are loaned out, you should see some passive income. This strategy is particularly effective for in-demand stocks, which often overlap with the kinds of companies long-term investors prefer to hold. For example, Schwab’s program requires at least $100,000 in assets, but once you reach that threshold, you could use securities lending to generate autopilot income from just a handful of core holdings you’re happy to own for the long haul. Since the real money is in compounding, if you don't need the money from the proceeds; you can reinvest them into these core holdings.
Here’s a strategy to generate relatively low-risk income, similar in spirit to Roth IRA strategies—though without the tax advantage, but with the benefit of being immediately actionable if you have sufficient capital.
Suppose you own 500 shares of TSLA, a stock you'd be comfortable holding indefinitely. TSLA experiences large price swings, and its options carry attractive premiums. You could sell weekly out-of-the-money (OTM) call options at a strike price where you'd be content to sell, or at a higher strike where assignment would result in a windfall if the stock rallies.
For example, if you own 500 shares of TSLA (worth about $150,000 at $297/share), you could sell 5 call contracts. At current premiums, this might generate nearly $5,000 in option income for the week. If your $300 strike calls were exercised, you’d also gain an additional $1,500 in capital appreciation.
If you have a bearish outlook, selling closer-to-the-money calls allows you to lock in income while potentially forgoing gains you do not expect to realize. If you are bullish, you might choose to avoid writing calls altogether or instead sell far out-of-the-money (OTM) calls, accepting smaller premiums (e.g., $150–$500 on 500 shares) in exchange for the opportunity to capture significant gains (such as $30 per share, or $15,000) if the stock rallies. One of the lowest-risk times to write calls is after 10:30 a.m. EST on a Friday with less than a day remaining until expiration. While premiums on TSLA may be limited at that point given its high implied volatility, writing OTM calls on a quiet market day—with no major market events or upcoming Tesla announcements—can offer a relatively safe opportunity to collect premium income, particularly if no calls were written earlier in the week.
By structuring your option sales conservatively—targeting scenarios where exercise is infrequent—you can generate steady income while maintaining core equity exposure. Occasional assignment is part of the trade-off, but if structured well, the gains can outweigh the opportunity cost.
This strategy offers a pragmatic way to supplement income, much like dividends, but with greater flexibility and potential upside. For someone content with their current portfolio, it provides a disciplined, lower-risk alternative to speculative trades—capable of covering weekly expenses, funding a vacation, or even helping purchase a new car over time.
Short-term gains via leverage (like 4x margin) can double your money quickly — but come with risk. A 25% gain on 4x leverage = 100% return. Don’t do this unless you fully understand the risks.
Keep speculation in non-retirement accounts. Use retirement accounts for long-term compound growth.
Options are not investments — they’re speculative tools. Writing covered calls against stock you own can provide income with low risk if done right. Buying options requires timing and market skill.
Let's say you have 100 shares of TSLA and it trades at $295 today, you can write a 7 day $300 covered call and it might be worth $9.80 per share; if it looks like a high probability it's heading lower then this could be more profitable than sitting and merely holding the stock. For comparison, AT&T moves slower so they don't get the premium Tesla does; the stock is $28 per share and comparable options only sell for $0.15 which would be a dollar if getting the same premium and Tesla split to be $29.50 a $30 call would likely be $1 or so.
I think the best agressive tactic would be 1-5% in each option and up to 4 at a time, the bulk of capital spread in up to 4 stocks; using intra day margin on high conviction trades. However, my advice to 99% of the population is "60-70% S&P 500, 30-40% Nasdaq 100" and my advice to 0.9% is "investin the market leaders in the fastest growing industries provided they have $100 million in revenue and a market cap of $2-20b and either a PEG below 2 or positive operational cashflow." (even then, they should put an amount that will eclipse their trading over time if they over estimate their skill into those low fee index funds just in case. Only 0.1% of the population has a reasonable chance of trading success, the vast majority are better off with low fee index funds and any attempt at reducing risk only brings trading stocks from extremely risky to very risky.
Learn about options before trading. Losses can quickly exceed 40% if you're not well-prepared. Certain short-term option plays—such as BITX (bullish on Bitcoin), TQQQ (bullish on the market), SQQQ (bearish on the market), UVIX (betting on volatility), and SOXL or USD (bullish on chip makers)—can either become worthless or multiply rapidly during sharp moves. However, they typically degrade over time unless timed precisely. While they offer high reward potential, they are best viewed as high-risk speculation. Skilled traders may find opportunities here, but timing these plays is extremely challenging.
I experimented with spreads but found them frustrating. For example, I bought a TSLA 315 call and sold a 325 call (same expiration) on a day when TSLA rose from 318 to 325. The spread only gained modestly—rising from $4.50 to $5.00—despite the $10 move in the stock’s value. Because the time value of the sold call offset gains, the spread should have been worth closer to $9+. Options are always tricky and should only make up a small part of your portfolio. If used, consider low-priced at-the-money calls immediately after a confirmed breakout, or deep-in-the-money calls to keep time decay manageable. For stocks like TSLA, selling out-of-the-money covered calls can reduce risk, but beware—if the stock runs, your position could be called away.
This experience highlights the value of several strategies:
A balanced approach might allocate ~25% of your core portfolio to high-growth opportunities like these, while also maintaining side portfolios:
In contrast, the most reliable path to market-beating returns is long-term investing: buy and hold leaders in growing industries, or be satisfied with a surprisingly strong market average over the last 130 years and invest steadily in low-cost S&P 500 index funds. Consistently funding your Roth IRA and holding quality investments long term is the true alchemy of wealth building. Short-term speculation can turn gold into lead; long-term investing turns consistency into gold.
"If you don't get to 40 wins before you get to 20 losses, you're not going to win a championship." -Phil Jackson
Day trading offers both opportunity and risk. To improve your odds of success, follow a structured process each trading day.
To further enhance your trading success, consider integrating a few advanced practices. When using AI for decision-making, track its past responses on similar setups to calibrate its edge—log screenshots and results for review. For trade timing, remember that re-entry after 1 PM or 3:30 PM should be based on news-driven volume, VWAP reclaims, or key level breaks with confirmation. Include ADX as a trend strength filter alongside MACD/RSI to avoid overlapping signals. Define a position sizing plan—start with 1/2 size on first entry, add on confirmation (e.g., break and hold above resistance), and avoid full-size entries all at once. Mentally reset after any big win or loss to avoid emotional trades. If you’re frustrated or bored, walk away—discipline outperforms strategy alone. Finally, backtest your entire system monthly, including indicator settings, trade timing, and AI input, to continually refine your edge.
***An added note of caution***: I had a string of 39 successful trades (substantial gains equal to a day’s wages or more) using much of this method—though I was still refining it at the time—yet one failed trade wiped out most of those gains. To add insult to injury, had I held the position, I would have ultimately realized the profit I was targeting. The biggest challenges were the delay in receiving AI-driven responses (intended to help remove emotion from decision-making) and inherent market risk—since even top-tier AI, including expected future versions, will likely top out around 85% accuracy. Margin trading introduces additional risk: while marketed as offering 2:1 leverage for indefinite trades, in practice you’ll often be required to deposit more funds the next day (in my case, 50% of my account size), forcing me to liquidate the position and switch to deep-in-the-money, three-month options to replicate the trade. Options carry their own risks; for example, buying a $10 in-the-money option with 90 days to expiry at $11 effectively imposes a 10% time cost. As I continue refining this system, I’ll share key improvements—but even the best system imaginable (say, if you imported AI from 100 years in the future) would still likely only achieve around 85–90% accuracy.
If a clear read hasn't emerged by 10:30 AM, consider stepping aside for the day. Recognizing when not to trade is often as valuable as knowing when to enter.
For those using margin accounts that combine day and swing trading, maintaining at least 150000 dollars in total equity, with 25000 dollars in cash or cash-equivalents, is a prudent strategy. This avoids forced liquidations and ensures flexibility during drawdowns. A disciplined system, such as a Tight Base Accumulation strategy (buying breakouts from strong bases and exiting on trendline breaks), helps manage leverage and minimize exposure during uncertain conditions. Until an account reaches a size where normal volatility doesn't threaten margin calls, capital preservation should be the priority.
Identifying the best stocks to trade each day involves screening for volatility, volume, and technical alignment. Focus on highly active stocks, especially those breaking above key psychological levels like 100 dollars. Look for names that consistently appear on high-volume breakout lists and validate their historical performance with indicators like RSI, MACD, and Bollinger Bands. Stock screeners can help narrow candidates by price, sector, or momentum. Additional resources like Dan Zanger's OSB list may offer insight into stocks with strong breakout potential.
Pre-Market ScreenerThe Magic of Believing by Claude M. Bristol
Busting Loose from the Money Game by Robert Scheinfeld
The Invisible Path to success by Robert Scheinfeld
The 11th Element by Robert Scheinfeld