hen I was twelve years John would also talk of the
old, I had bought and lastest electronic gadgets,
sold many shares of stock hottest stock picks, Trees,
on the NYSE. I was a motor mouth hunting stories, and about real
even then. I always was eager to estate. Just what I was interest
talk to anyone who liked to in. One day John came to our
invest and discuss stock picks. house. He was so excited that he
One of my fathers friends John could hardly talk to us. He
was such a person. John only had handed me a book and said,"
a 3rd grade education. His mother Re...re...re..re...re...read
was a prostitute and his first this. "It was a book on stock
job was collecting and selling options. The book detailed about
leaches to whores in Trenton to puts and calls and how powerful
be used to remove hickeys on they are in investing. At the
their...Well, you got the time there were few options
picture? offered. I read this book. I
reread this book over and over. I
John could hardly speak, he was amazed at how powerful an
studderd so bad that it was a option could be. I did not buy or
labor to talk to him. But John sell any as I did not have the
was no dummy. He had gone on to funds to risk on them but I said
become a noted designer of to myself , "This is something
transformers and had built up a that I am going to do some day."
large company. He lived on a
large estate that overlooked a Most options on stocks or
huge pond which to a twelve year commodities expire as worthless.
old was an eye opener. What ever Some estimates are that 80%
John would say or do had to be expire as worthless. Not a very
noteworthy. good track record for an
investor. Now for every option
buyer there is a seller. Someone the asset at and establihed price
is making money, not just the for an established peroid of
brokers. Option buyers aquire time.
what can be called leverage. An
occasional winner can make up for What I decided to do when I
a bunch of losers. The option purchased real estate is to
sellers don't necessarly lose acquire real estate options for
unless they trade options naked, farms which had long term
( they don't own the underlining contracts. I sought contacts that
security) they just don't have went out 5-10 years. If I could
potential gains that they would put together a contract that
have had. would run long enough, the rising
real estate market would make the
Options clearly define an contract price a bargain price in
investors loss liabilities. When afew years. I would offer yearly
you buy an option it defines the option renewal payments to the
price of the asset, the time you sellers. I made those payments
have to excerise the option, and applicable to the purchase price
the capital that you risk. If the so as time flies the property
value of theoption cotract goes becomes cheaper.
down the most you lose is your
inital investment. Now I know that your thinking
that this can't work. I know it
There are two basic options, a does for I have done many of
put and a call. A call allows the these contracts. Most people who
buyer of the option to buy the have sold me these contracts want
asset a established price for an just what this contract offers.
established peroid of time. A put They can remain on their property
allows the buyer to force the and have the option payment which
right to force the seller to buy suppliments their income. They
just don't own any appreciation contract is properly formed.)
in the property which they would
not have if they sold it. There Once this contract is in place
are also great tax reasons for one could lease the fields from
selling an option. When an option the owners. This could be known
is written it is considered an as a lease purchase contract. Now
opening transaction. Taxes are you have ground on which you can
assesed on completed plant trees. In many instances I
transactions. If a option is not have aquired land this way for
closed revenue is generally not less than the cost of the taxes
taxed. (see your investment on a yearly cash flow basis.
advisor and make sure the
About the Author:
Bill raises trees, plants,and shrubs on his farms, many located in Pennsylvania. He also has ranches out west for arrowhead collecting, fossil collecting and hunting for meteorites and big game. You can see Bill's web sit at http://www.seedlingsrus.com
