 Have you ever thought about how amazing it would be if you could transform a growth stock company into a dividend paying stock? It's possible and I'm gonna tell you how. So dividend investing sounds amazing because all you have to do is pick successful, boring companies that pay you 3% to 5% in dividends per year. When you have a big enough portfolio, you can then just live off of your dividends and retire. This is a really beautiful thought until you realize how much money you actually need to live off of dividends. If you want $5,000 each month in dividends, you need a portfolio worth of $1.5 million. That's a big number, at least for me. So since dividend paying stocks don't grow that fast in value because they take part of their earnings and bring it back to the shareholder in form of a dividend, it's probably gonna take a while for you to accomplish that goal of $1.5 million. So growth companies do not pay dividends. Why? Because they reinvest their earnings, all the money that they make into the company, which then increases the value of the company and therefore your shares. But simply buying those shares doesn't really make you money unless the company increases in value drastically and then you sell at a profit. But that brings you back to the starting point because now you have a lot of money in your bank account and you have to reinvest it somewhere. But then you have to buy in at a higher price which defeats the purpose. So why did you sell in the first place? So how can you make your growth stocks pay you dividends? It's impossible. It's impossible to make them pay dividends but you can have them pay you premiums. They're taxed completely different from dividends but they can pay you out weekly, monthly or yearly. By now I'm pretty sure you know what I'm talking about. I'm talking about selling covered calls. A covered call is an option contract that pays you a premium for making a promise. The promise is that you're willing to sell your 100 shares of that growth company in the future at a specific price and at a specific time. For that promise, you will get rewarded. I give you a real life example out of my portfolio. I own 200 shares of Nvidia with an average purchase price of $337. And I just sold a covered call against them with a strike price of $360 expiring on December 31st. That's a one month covered call which paid me $1,200 for making that promise. Now, two things can happen to me. Number one, Nvidia trades below $360. I keep my premium of $1,200 and I also get my collateral of 200 shares back into my portfolio. So I don't have to sell my shares. Number two, Nvidia trades above $360 by the end of the year and my shares get called away from me. I have to sell my shares at $360 and the trade is over. But I still keep the $1,200 in premium. Not only do I keep the premium but I also have a capital gain of $4,600 because I purchased that $337 and then I sold them at $360 per share. If I don't want that to happen, I have a third option which means I can roll my position. Rolling my position would mean that I have to buy back the contract that I sold in the first place and then sell another one further out which pays a higher premium. So the idea is to spend $1,000 to buy back the contract, sell a new one for $1,200 and make a $200 profit. That way I don't have to sell my shares. I don't create a taxable event and I just rolled my position over. So rolling a contract is basically me saying I don't wanna keep my promise. I don't wanna buy back that promise that I made in the first place but I don't wanna lose money either. So instead of just buying back the contract I immediately sell another contract which is further out which pays me more money that I have to pay to buy it back. I hope that makes sense. That way I make sure that I don't create a taxable event. I don't have to pay taxes on the capital gain. I also profit from the uptrend from the stock itself. That way I ensure that I don't create a taxable event. I don't have to pay taxes on the capital gain. I just keep my shares, roll it over and then if it grows even further I profit from all of that as well. That's it. Selling covered calls is how you make your growth stocks make you money. One important note, the closer you are with your strike price to the actual price the higher the premium will be. The further away you are from the actual price the lower the premium but also the chance of getting a sign. A short timeframe like a week pays less premium than a month. I also have one more advice. It's a beginner's advice. That's how I started because I didn't want to risk any of my money. So here's what I did. When I first started selling covered calls I made sure that the strike price was so far out of the money that I had a 90% chance of my option expiring worthless on exp... This dog. Back of Platte. No. I love you too but I have to film this video. Very good. Okay, sorry about that guys. All right, so where was I? So when I first started selling covered calls I made sure that I chose a strike price so far out of the money that my chances of getting a signed were so small very unlikely to happen. For that I only collected a very small premium but I was fine and happy with that because I wanted to learn how it actually works. If you want to get started with covered calls I highly recommend doing the same because then you get an understanding of how it works. So don't start trading weekly options and get into the rhythm of just getting the risky trades and most likely at some point you will lose. Start very safe, collect a small premium, build that confidence and that knowledge and then come a little closer to increase your premium. The new year is around the corner. By the time you see this video we probably have 28 days left and before the year ends just make sure you learn some new skills that can possibly help you or make your life easier in 2022. Bye guys.