Get paid to own stocks.

Are you a risk-averse, long-term investor that just wants a way to have your money make money for you without you having to fiddle, and manage, and watch it every second of the day?

Then you might like the Stock Market Landlord strategy.

This strategy combines dividend investing with a pinch of options trading for maximum income.

This strategy looks at each stock like it's a rental property. If you own a property that's going up in value, but it's vacant and not paying you rent, then you're not getting the most out of it.

In the stock market, the "rent" is each stock's "dividend". Dividends are paid by companies large and small, public or private.

Any company will break into 2 camps: 1) they reinvest profits into the company for higher "Growth" and stock price or 2) they make a profit and pay dividends to shareholders (ie You). Tech stocks fall into the first group and give a nice payout if you get in early or wait for their share price to rise. The second group has "Dividend stocks", which have smaller stock growth but payout cash to your portfolio.

So what does the Stock Market Landlord strategy do? The strategy invests in dividend stocks, collecting the "rent" from each of those stocks. Where the strategy goes a step further is to sell Covered Calls on the dividend stocks for extra profit.

This strategy gives you cash for your stock that's (almost) guaranteed, and you get more money from writing Covered Calls and collecting premium.

If your a beginner, here's the step-by-step that I'd recommend:

1. Find a company with a Market Cap. over $50B and a dividend yield over 5%. The market cap means they're stable and the dividend yield is the percent of the share price that you'll get in cash each year. One company example is Altria (MO). They're also a "Dividend King" meaning they've paid out and increased their dividend for at least 50 years straight. It's as close to a guarantee as you'll get with investing.
2. Once you have 100 shares of a company, sell a covered call with a Delta of 0.1 or less and an expiration more than 1 year in the future.
3. Hold the stock for at least a year to collect the dividends and pay less tax.

This will give you money with each dividend payment and money from the covered call. And it minimizes your taxes. Options contracts with expirations over a year and dividend payouts are taxed as long-term capital gains with a maximum 20% tax rate. On top of that any long-term capital gains under $50k are tax-free.

Most companies will give you between 5-10% dividend yield. So for every $10k invested you'll get $500-$1000 per year. Selling a yearly covered calls should add another $50 to your yield.

This is one of the weaknesses of the strategy: It has low returns. And it needs a large portfolio to have any diversification. Compared to an S&P 500 index fund, this strategy doesn't seem worth it.

But these weaknesses can be overcome.

If you liked this post, make sure to subscribe so you're notified when I post part 2, where I go over how you can tweak this strategy to turbocharge its profit.