The problem with a small equity stake is that even if you manage to make a decent return in the month, the profit can so easily get consumed by other day-to-day expenses. This month we have the following:
– My dentist has written to me, kindly reminding me that it’s time for a check-up (£15). My teeth can wait.
– My gym accidentally cancelled my account and is charging me for last month’s missed payment. It’s perfectly fair, but it stings because I didn’t go to the gym during that month and it’s an extra charge of £30 that I hadn’t accounted for.
– I have been driving my car untaxed, hoping to save a few pounds. I’ll have to stump up the £96 sooner or later, but in the meanwhile it’s a little like writing naked put options: I earn a theoretical premium every week that I don’t pay for the tax, but the longer I leave it the greater is the probability that I will get stung by a hefty fine from the authorities.
And the month has just started! I have nothing left to spare, yet they keep knocking at my door. I have cancelled my magazine subscriptions, even my monthly charity payments, but the leakages are too many in number. Costs, costs, around every corner I turn.