i just went $4,000,000 into margin debt | how I'm getting out

this video is brought to you by youtube

influencer kevin paffraff

what up and that's because now i'm four

million dollars in margin so i have to

sponsor myself hey everyone meet kevin

here yes obviously check out the

programs linked down below with that

price expiring on october 29th for the

programs on building your wealth but

i've got to talk about this why am i now

four million dollars in margin well

folks for a variety of reasons but the

biggest of all it has to do with taxes

take a look at this folks it is a pretty

painful but i had the cash set aside and

i'll tell you what i did with the cash i

had the cash set aside but things you

turned and i had to uh pay

3.036

337 always 337.

million dollars in taxes to the good old

ah the ah and the s but the good news is

i don't live in a dumb state like

california where i'd have to pay these

crazy income taxes to the state as well

oh wait actually i do and i had to pay

about a million

81

000

to the franchise tax board thanks a lot

i divided it into a million dollar

payment and then the 81 thousand dollar

payment that i sent uh as well but

anyway yeah so um

now uh now i did send this back in may

so but anyway i did i did go into about

four million dollars of margin

nonetheless about 3.3 from those fed

taxes and i kind of had the money set

aside i had five and a half set aside

but the problem is i literally blew

everything on stocks and crypto

throughout september and october well

mostly just the first few days of

october it was pretty much all september

i went on this crazy long-term buy

frenzy

for stocks and things that were on sale

like ada 25 000. uh hot 850 000 ethereum

twenty five k eight of fifty k eight of

fifty decay again uh matterport uh this

is a matterport trade that i did it was

a longer buy sell anyway uh sold some

leftover peloton that i had there as

well but uh then uh end phase bought uh

more end phase shares that's a 250 what

is that 250 times 162

40 000 a firm 49.5 k another 7.7 k of a

firm then added 100k of enphase

added 13 300 uh

shares of cardano actually a little bit

higher than where it is now 10 000 or

i'm sorry 1 000 shares of a firm at 107

added 300 shares of end phase uh that's

at 153 it's like 173 right now another

100k on end phase on a further dip then

look at this adding end face 200k 100k

hippo 100k lemonade 50k docusign

ethereum ada btc uh i mean you could

just tell i'm going nuts uh shopping

over here look at this 400k goog 300k

end phase amd 50k i mean i i went

shopping 100k a firm 29 btc 420 shares

of enphase you've got ethereum

matterport palantir

uh a firm again

yeah

let's let's just say things went a

little nutso here and those are just

long trades this is in addition to

obviously just trades that i do as well

like for example uh selling puts on

lucid or

uh over here closing some options right

here like closing calls on hud 8 or

closing options on sofi or sold calls on

a firm covered calls on tesla oh my gosh

i'm so glad i closed my covered calls on

tesla i'd be screwed if i had not closed

my covered calls on tesla right now so

good thing i closed those but anyway the

point is folks

i uh i i am now in a place where i'm

gonna have to figure out how to pay down

my margin again because uh now i'm about

four three three and a half to four in

on margin some of it's over at m1

finance a little bit over at weibull and

then most of it's over at jpmorgan chase

which is nice because their credit

facility is only like 1.49 interest but

still

i'm now going to have to switch a little

bit into this mode where if prices keep

going up and we get this end of the year

rally i'm probably gonna have to close

out some call options that i have uh

profitably fortunately things are

turning very profitable right now it's

nuts

and i'll probably have to

consider trimming some of my winners

just to make sure i reduce my margin now

i did also go into margin because i

bought two properties for a total of

about 1.8 million dollars so in fairness

a good chunk of that is real estate

then of course the taxes federal taxes

california taxes and the crazy shopping

spree i went on for stocks

so uh

i'm really glad i bought the dip but i'm

back on margin i just want to be

transparent about that

i'm not very happy about that because i

don't like margin but i am very happy

about when i bought because the timing

has been perfect now we got to work

together on getting this margin down and

usually what i recommend is strategies

for getting margin down is you can do

this but it's risky because you could

end up deeper in margin as you could

sell puts

another option is selling calls against

positions that you want to trim so for

example if you made really big attendees

on certain stocks

and you're thinking all right well i

want to get out of margin so i'm going

to sell some of these shares instead of

just selling the shares do a 45-day

contract on covered calls for that

position that way if the market falls

your covered call kind of hedges you

obviously not financial advice you're

not going to be completely hedged

depending on what you do it's up to you

right

but covered selling covered calls again

could be very interesting on things that

you want to trim on things that have run

nicely things where you're like ah this

is borrowed money i should just get rid

of this and get rid of my margin do a 45

day sold call

ideally look for things with elevated

volatility because if you have elevated

volatility in the stock you're going to

be able to take advantage of a

generally a better premium

of course you could look at open

interest as well but typically when you

set volatility up you're going to get a

nice extra premium so that might mean

it's time to sell some calls on things

like uh end phase maybe you do uh some

out of the monies right uh a firm i hate

to say it but maybe even just a little

bit of tesla uh maybe even neo a little

bit i did a little bit too much on

buying is the problem now i don't want

to close out any of these companies and

i'm super bullish on all these companies

but they've done so well over the last

really two weeks here that i got to be

realistic if the market does rotate to

the downside i'd rather be hedged with

covered calls and that way if the market

does rotate down i i have that that's

going to gain in value and allows me to

minimize some of the impact of my margin

then once i finish fixing up these two

properties i got to do some cash out

refinances pay off that margin again so

my hope is that uh by january or my

birthday i'm completely out of margin

again but it's gonna take refinancing

those properties it's gonna take some

big covered call moves so i'll be

working on that uh probably next week

probably monday through friday working

on trying to get my covered call

strategy going

hopefully hopefully hopefully hopefully

all of next week is just a nice green

week because that's going to make

getting rid of this margin a lot easier

i'm going to feel a whole lot better

about doing covered calls on some of the

things that i just need to

reduce my exposure to so these are some

of the thoughts i have i don't love

doing covered calls but the fact that

now i had to go into margin because of

these real estate purchases because of

taxation

and uh and now the market's running the

market's rallying you know what the

timing works out it's just the perfect

time to do it it all comes after i

bought the dip big anyway so

may as well take advantage of some of

the attendees right now maybe even this

is another consideration maybe even

extinguish some positions that i'm down

on that i'm not as optimistic about

anymore like

i'm not sure about this one because it's

sold off quite a bit but what's up with

pinterest what's up with redfin what's

up with coinbase right some of these

other companies has my has my position

shifted on them at all i don't know but

they'll be something that i'll

definitely look into potentially

trimming on a little bit so that way if

there's some losses i could use those

losses to offset gains on other things

like options

or or just straight shares that i have

and

and get rid of this margin as soon as

possible

now just for perspective about four

million dollars of margin on about a

23.8 million portfolio is about 17

margin i never ever like to exceed 20

but quite frankly i like being at zero

percent so that way when there's a buy

the dip opportunity i can go shopping

that is of course the kind of stuff that

i talk about in the stocks and

psychology of money program and if you

like my insights and the way i think

about things so the way i look at the

market perspectives things i teach take

a look at those programs link down below

many on real estate investing property

management you've got being an agent

making youtube content and of course

stocks psychology of money options and

crypto i'll link down below thanks so

much for watching and folks we'll see in

the next one thanks again bye like and

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