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Chapter Four On a financial statement, we can draw a picture of that sale “that puts money in our pocket.” It would look something like this: INCOME STATEMENT Income $13,292.50

Expenses

BALANCE SHEET Assets

Liabilities

945 PUT option provides income

It’s interesting to note at this point that a lot of people criticized Robert for saying that “your house is not an asset” because it doesn’t put money in your pocket. I could see myself drawing similar criticism for placing a short stock, or a short option, in an asset column. So be it. The fact is, they produce income. On your brokerage statement, it might look something like the picture below. Notice that the adjusted cost is zero, so the adjusted return is infinite (or undefined) when the option expires.

Reprinted with permission

While it can be difficult to predict the direction the market will go, finding a range in which it is likely to reside for a short time—be it up, down, or sideways—is much easier, in my opinion. 158

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Unfair advantage ebook  

by Rich Dad, Robert Kiyosaki

Unfair advantage ebook  

by Rich Dad, Robert Kiyosaki

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