Is it possible to take a modest $5,000-10,000 grubstake and generate an income of over $100,000 a year? The answer is yes. All it takes is a plan, a willingness to learn, an open mind, perseverance and patience. You don't need a fancy college degree, special connections, luck, or even a surging job market. The world is full of opportunities and choices. By keeping an open mind and believing in yourself, you will make discoveries beyond your wildest dreams.

The choice is yours. If you like, you can work the rest of your days for a fixed income. Getting paid by the hour or even by a set yearly salary is earning a limited income. Whether you make $5.00 an hour or $500, there are still only so many hours in a year you can work. If you have found your dream job, or are working toward having your dream job, congratulations are in order. If you are making $500 an hour or more, you can skip this article and get back to the golf course. Finding work you truly enjoy and living your dreams is a masterful accomplishment.

Now, suppose you are looking for something other than working for somebody else. Maybe you want to be your own boss and operate your own business. There a several ways to go about starting a business. Forget the get-rich-quick schemes and consider the five steps mentioned at the beginning of this article. They are the keys to your success in generating an unlimited income. The following is a plan that can work provided you are willing to take a few risks and give it a chance. The choice is yours to make.

The plan is to learn how to trade in the financial markets. Trading is a business that can be learned. . You will start out spending small and end up spending big and still be dependent on some outside source for ideas. The best route to take is to learn how to trade for yourself. Find a system and adapt it to how you want to trade. Once you know how to trade, you will have a skill for lifetime and won't have to depend on anything else for trading ideas. There is no free lunch and no magical system to pluck profitable trades out of thin air. Once you learn this skill and apply yourself, you can trade in the markets as much or as little as you want. It will even give you a source of income for "retirement" as you can be a trader at virtually any age.

After completing your education, there are any number of markets to become involved with. For this example, options will be used. In any event, you want to start out trading small and increase your size (contracts, shares, etc)over time. Do not let the word "option" scare you. The options you will be trading are no more riskier than stocks. Learning about options is not as difficult as many would make it seem. Basically all you need to learn is how to trade a call and a put option. Calls are used in up trending markets and puts in down trending. And you will be trading deep in-the-money options which will behave just like trading a stock with no additional risks.

Assuming you have started with about $7,500, you should have about $5,000 to work with after educational expenses. Take $3,500 and put it in an option account. The remaining money is held for reserves in a money market. Starting out, you will be buying only one option contract. In this example, we will trade the ETF for oil service companies; the symbol is OIH. The OIH is currently priced at around $145 a share. This is an active and liquid market, which is perfect for this situation.

As you will have learned in your trading course, you will be looking to make consistent profits by taking a few points at a time out of the markets. In any given day, the OIH will move 4 or 5 total points. This might be in one direction or zig-zagging up and down. The main point is that for the OIH and many other markets, small moves of 1 to 3 points occur on a regular basis. Those moves are your targets. Or, you can also target larger moves of 4 to 7 points over a period of 2 or 3 days. These moves happen far less often, however.
Let's say that the OIH is trading at $145 a share. And we are expecting the price to move up near $148 in the next day or two. We would then buy a deep in-the-money call option to take full advantage of this price move. So, we buy one December 130 call option for $15.40 or $1,540 plus commission. We use part of our $3,500 for this purchase. At various times of the month, this option might cost a few hundred more or less depending on the price of the stock and the option's delta. Delta is simply a time/price relationship in a range from -100 to 0 to +100. A deep in-the-money call option usually have a high delta above 80. This option has a delta of about 90. This means that it will move .90 cents for every $1.00 move in the stock price.

If we have been correct in our trade assumptions, the next day the OIH is trading up at $147.40 early in the morning. This is a gain of $2.40 points or $240. Closing the position at that price, we sell the option for $17.50 ($1,740) yielding a $210 profit before commissions. One contract is equal to 100 shares of stock. Trading the stock would require $14,500 verses under $2,000 for the option. By trading the deeper in-the-money option, we can take advantage of the price move in the same way as buying stock. You would have placed a stop loss with this trade in case the price fell and our analysis proved wrong. This would keep the losses small and protect the account.

The object is to capture a "net" of 15 to 20 points a month in profit. By trading for smaller gains, the probability of success greatly increases. Starting with one option contract, profits can be built up in the account. Then more contracts can be added over a period of months. In effect, you have learned how to consistently make profits over and over, month after month. If you can do it with one or two option contracts, you can do the exact same thing with 10 or 20 contracts. Learning how to trade is the difference. Taking the small, consistent 1 to 3 point gains and keeping losses under control, is the way to make money verses waiting for the bigger price moves that are much rarer. By the way, in the future, options will be traded in penny increments which will decrease the difference in the bid and ask prices. This will be a bonus for traders and will help to increase profits.
As you become more experienced and profit over time, you simply trade bigger size. This can be done in many markets, as you will learn from taking the proper trading class. To continue on to making over $100,000 a year the math might look like this: Trade 10 option contracts, net 15 points profit /month at $100/point...trading for 10 months with this kind of success could haul in about $150,000 a year. Considering that the OIH will generate about 60-80 points a month in profit opportunity, catching 25 or 30% of those moves yields a fine income. All this with a trading account of about $30,000. Trading the OIH stock itself would require at least an $175,000-200,000 account or about half that using margin.

Extending the unlimited possibilities further, the income that could be extracted from consistent trading is indeed spectacular. Trading 30 contracts X's 20 points/ month X's $100/point = $60,000 a month. No complicated Internet strategies, selling, employees, bosses, or illegal scams. The markets are real, established, easily traded and there for you to become involved in. If you have the desire to trade, get an education first and go on from there. Create a trading plan to your liking, keep an open mind to the possibilities and mix in some patience and persistence. Remember to keep things simple and enjoy the process.