Compound Stock Earnings: What to Do with Premiums

Once you begin using the covered call strategy with your stocks, you may find that you have extra money lying around. The team at Compound Stock Earnings has a few tips for getting the most from your additional income. You can put it back in the stock market or stash it away in a bank account. You can also use it to reach a financial goal.

Use Premiums to Reach Goals

Covered calls allow you to earn up to a 10 percent return on your investments each month. That’s a significant amount of money, especially considering the lack of risk involved. A beneficial and enjoyable way to use the money is to save for a goal. Here are just a few ideas to get you started:

• Save for college. Stash the premiums you earn from call options in a 529 account or other college savings plan for your children or grandchildren.
• Save for a vacation. You’ve always been meaning to travel the globe or go on a cruise. Give yourself the trip you long for by saving up.
• Pay off loans. Put the extra income to good use by paying down the principal on your student loans, car loan or even your mortgage. Even a small amount each month makes a big difference in the interest you’d owe, according to the staff of Compound Stock Earnings.

Compound Stock Earnings: Choosing a Savings Account

If you want to keep the income from premiums out of the stock market, Compound Stock Earnings recommends you put it an interest earning savings account. Not all savings accounts are the same, though. Look out for these features:

• Fees. It makes no sense to put your money in an account that charges you a fee each month.
• Minimum balance. Most banks have a low minimum requirement. If that balance requirement is more than $100, look elsewhere.
• Interest rate. Interest rates change regularly and vary from bank to bank. Shop around and find a savings account with the highest rate available.
• Access to your money. How easy is it to withdraw funds when you need to? Online banks, for example, usually take a few days to transfer funds.

The team at Compound Stock Earnings knows that you work hard to earn and keep money. Put that extra income from covered calls to good use. Of course, if you want, the pros at Compound Stock Earnings can show you how to re-invest your premiums. Your money won’t be insured, warns Compound Stock Earnings, but you could stand to earn more than if it were in a bank.