How To Create a Money Tree

A money tree is a little bit different than a money farm. As I mentioned, a money farm produces RENEWABLE “crops” of money every season. A money tree, in theory can do the same, but all too often, the tree produces limited fruit season to season and is prone to suffering more adverse affects. Worse yet, is if the money tree dies and the seeds weren’t harvested in time to replant; you could be left without a tree or a harvest.

The key to money trees is planting them in fertile soil (at least initially) and then picking the best fruit off the tree as quickly as possible.

The money tree I’ve planted and have been blogging about over the past few months involves Exchange Traded Funds. My strategy involves buying Exchange Traded Funds (trees) which trade options (produce fruit) in a short period of time. You can actually read about the trees I planted (XLE, GDX, SMH) over at http://www.etfcoveredcalls.com and how I harvested their fruit (options) over the past twelve months.

I’ve written extensively about the ETF Covered Call money tree here, here, and here and I won’t cover it in this post in detail but I encourage you to check out the links.

I’m also in the process of planting a different type of money tree. I like to think of this money tree as a Redwood Tree. The second money tree involves purchasing Real Estate property and renting it out to generate income (fruit). This type of tree requires a great deal of care, patience and work but it can bear fruit continuously and has the potential for growing into a giant tree than can be worth a great deal of money over time. Like a Redwood Tree which grows by leaps and bounds every year, real estate can appreciate in value year after year.