Why I Stay Fully Invested (While Everyone Else Panics)

Hi, good morning everyone. It's Sean with Paycheck to Portfolio. This morning I'm going to talk about why I stay fully invested while everyone else panics. The last couple weeks in the market have been pretty choppy with some high volatility. So, I wanted to touch on my mindset during those times.

If you're new to my channel, all of my W2 income or my earned income rolls straight into my brokerage account at Erade. I don't live out of a traditional checking account. So all of that money comes in and gets fully deployed or invested into growth stocks such as SPY, McDonald's, and Costco. Closed end funds such as Cornerstone and Goff. Cornerstone um drips at the NAV, which stands for the net asset value. If you want to know more about Cornerstone, I made a specific video on my channel that you can check out as far as closed down funds go. And then thirdly, I invest in the high yield funds or ETFs such as QQQI and SPYI. These funds run a covered call strategy or a covered put type of strategy on the underlying assets and they pay you cash flow every month.

So that is what I use to cover and erode my living expenses and pay my margin interest in the form of a business spread. So essentially what my dividends don't cover, I will tap with a margin bridge or a margin float. So my dividends right now are between $4,500 and $5,000 a month. I need about $8,000 a month of core living expenses. So each month I'm intentionally running at a deficit to snowball my dividends, which will eventually exceed my monthly living expenses and set me free from a nineto-ive job. We call that FIRE, which stands for financially independent, retire early. And so instead of spending my money to zero on things like groceries or my mortgage or my cell phone bill, different things like that, and trading my time for money, I'm frontloading my investments with my full net income, which is about $132,000 a year to expedite the compounding cycle and to generate cash flow. So, I'm getting growth and compounding and cash flow in this system.

So, let's jump right into the portfolio update like I do at the beginning of every video. I'm going to focus on the year-to- date, the one-year, and the two-year because I'm going to talk about my two-year returns or my one and a half year returns cuz I've been fully living out of the brokerage account since June of 2024. So, I want to do my best to try to compare apples to apples in this video for that comparison. So, looking at the year-to- date performance, the time weighted return, I'm sitting at 35.6% performance. The S&P is at 15.5%. The NASDAQ's at 20%, the Dow's at 11, and the Russell's getting close to 13%. On the one-year chart, you can see I'm sitting at 42%, the S&P's at 17, the NASDAQ's at 25, the Dow's at 12, and the Russell's getting close to 14. On the 2-year performance, I'm sitting basically at 92% cumulative return. The S&P is getting close to 61%. The NASDAQ will call 79%. The Dow's at 42.5 and the Russell's at 49.5%.

Time weighted return does not account for any money coming into the brokerage or any money being deducted from the brokerage. It is just the growth of the portfolio and any dividends received. If you look at the historical values tab in ERA, this does account for inflows and outflows of cash. So over the last year, actually since November of 2024, um I was at $102,538. Yesterday before this updated, I was sitting at $160,237. Now, like I said, I'm living out of the brokerage, so some expenses have hit and some money has been deducted since that time, yesterday essentially. So you can see why fully living out of the brokerage I'm up basically $58,000 being fully invested and the portfolio growing while I'm spending. So that's the power of owning an asset instead of spending your money to zero is the accumulation of cash, the velocity of cash and creating assets that you own and continue to grow and continue to pay you. um and thinking about your portfolio like a business instead of a dollar in a dollar out and trading your time for money with that vicious cycle.

So, jumping right into the Excel file now. Um we talked about the foundation for the system, the business spread. I have a calculator here which I'll um which is actually uploaded to our membership Discord if you're interested. But let's say you have a $10,000 starting portfolio value. Let's say you started out with zero margin debt because you're just getting started and you invest into a blended yield between all of those three buckets of 25%. In my case, I have an 8.4% margin interest rate. At this point, I have a 100% equity. So in this system, you have to shift your brain from thinking about a dollar in a dollar out banking system and now you're thinking more along the lines of equity ownership and equity management. Just like a house is is the closest thing we have in our culture to where most of the population understands equity and how to leverage equity responsibly most of the time and um how equity actually works. So, you know, I if I own a $500,000 house and I owe $250 on that house, obviously the equity is pretty clear in that in that example. So, think about this as I'm describing it like you would a home with an equity percentage. So, in this example, you would be holding 100% equity. Your business spread would be the difference between the blended yield and the interest rate. So, you're looking at about 16.6% 6% blended yield there, which equates to $2,500 a year or $28 a month. You can update this however you would like and it will update those numbers for you. Again, this is available in the membership Discord if you're interested. I just wanted to show you simply how a business spread works and how you can create cash oncash returns with common sense business application.

Looking at my total return here. So, what I've done is is to try to create a visual graph just so you can see it with a table down at the bottom. So, again, I started living out of my brokerage account about June of 2024. I went back to August of 2024 just so it's a little bit visually easier to see. On the top, you can see my gross portfolio value. On the bottom, you can see my net portfolio value. So you can see in August of 24, my gross was $118,000 and my net was sitting at $103,000. If you look over to April and March, that's when we started to get into some tariff situations that got a little bit sticky. In fact, it was the definition of a market correction at one point. I think we were down 20% during that, you know, two week span. And um I know people make light of that because you know one we're Americans and we have short-term memories in the first place and our news cycle so fast across the world. But that was a legitimate market correction. That's the definition. It impacted everybody's finances the same. And so in my case you can see the lowest I got was basically 93,000 in March and 99,000 in April. And during that I wasn't panicking. you know, my W2 income keeps rolling in. I stay fully invested. I'm getting dividends that whole time and I have put option insurance on at all times, which I have a couple videos on my ch channel if you need more help with put options. But essentially, every 30 days, I'm keeping put options on QQQ and SPY. I go 30 days out, 10 to 20% out of the money or below the strike price depending on what the VIX is doing at that point. So I'm always keeping put option insurance on which is protecting my equity. So during this time I was buying. I always try to be very transparent. So I'll show you this on my portfolio view. I'm just going to use Nvidia as an example. You can see during the April situation it got down to $94 a share. And so just to prove to you I wasn't selling things I was buying. You can look at my Nvidia investments right here. All of this was right around the um tariff turmoil. So the lowest I scaled in and you can see I was just buying a little bit every day during those pullbacks. And you can see the lowest it got was right in this area here. So, I caught it at $9557, you know, a share at that point, right in the thick of of that downturn. And you can see I have a 95% return on that specific lot. So the key is to stay calm, to trust the process, and to continue to invest in funds you believe in, and to use wise application of a system and to change your brain from a long-term investor to a business owner.

And if you look finally at the very end, and again, some of these numbers have updated once uh since I I I did this um last night. So again, uh I had about $1,000 of dividends roll in overnight, but you get the point here. My gross portfolio value is $322,000 and my net portfolio value right now with transactions is $158,000. So you can see how quickly being fully invested I should be able to hit a million mark. you know, over the course of one year, my gross portfolio value is sitting at 322 now, and it was 118 in August of 2024. That's the power of being fully invested, and the equity is slowly tracking along while I'm living out of the brokerage account.

One thing I want to talk about um is this quote by Warren Buffett, and it's so true because you need to make sure that you understand the business principles and the application, right? I'm not a financial advisor. I'm simply sharing how I live. So, I want to call out a quote here that he he says, "Risk comes from not knowing what you're doing." So, you know, if you need help with this system, I have all of my resources under pin comments. I offer a white glove service, which is shoulder-to-shoulder um implementation, understanding, and coaching. I have a Discord with a a community of folks all learning alongside each other. You can set up calls with me. All those are available to you.

Looking at the table above the quote um from last night when I updated my data before my dividends rolled in overnight on the 2-year time weighted return from October 2023 to October 2025. You can see I'm sitting at 89% there at the time. On the one-year I was sitting at 38%. my gross portfolio growth from August 2024 to October 2025. This includes margin and paycheck contributions. I'm sitting basically at 173% there. My net portfolio equity and growth during the same time frame. My true ownership increasing after leverage is basically 54% and my real portfolio ROI net during this period is basically close to 39%. So you can see the power in this system when applied appropriately.

Looking at questions, every week I put out a survey. So in this one, you know, we talked about staying invested through market volatility, tracking total return mindset, and then I'll answer a few other questions. So I just want to read from uh each one of these just so I touch on them comprehensively. So when the market turns red, a lot of investors pull back. You know, we're emotional creatures. It's easy to get high and super high and super low, and you just have to stay the course and stick to the plan. So that's when I lean in. I stay fully invested because volatility doesn't mean failure. In my opinion, it means opportunity. I treat my portfolio like a business. I manage cash flow, not emotions. My paycheck hits Erade. I invest it all and let compounding do the work. Margin isn't a panic button or a frivolous um credit card line that I'm spending. It's a tool. The key is maintaining 50% or greater equity so the system stays safe and stable even when things swing. That discipline not reaction is what is what keeps growth consistent while everyone else panics. Like I said, I also maintain put option insurance at all times to pad um a market correction or a market crash so I can stay fully invested. Most people only watch stock prices. as I watch total return. That includes dividends, capital gains, and how my equity grows after leverage. It's no different than running a business. Dividends are your income, margin interest is your expense, and equity is your ownership. I track my portfolio using Erades time weighted return as we talk about every week for efficiency. But I also track gross versus net to see what's really working behind the scenes. You need to understand both of those elements. That's how I measure progress, not just performance, and why I treat this like a business, not a hobby or a long-term investor. It's easy to feel confident when everything's green. But the real test is when the screen turns red. That's where mindset takes over. You don't lose money until you sell conviction or where you sell your fear. Basically, paper losses don't scare me. Panic does. I stick to my guard rails again, maintaining 50% or greater equity, dripping at the nav to net asset value with cornerstone and staying longterm. I also use put options again as insurance to protect the portfolio when the market swings hard. Every red day is a discount on future growth. Just like I showed you with the Nvidia purchases, staying calm through it is what separates compounding from reacting. So, if you can stick to this mindset during the ups and downs, if you can gain competencies in treating your portfolio like a business, um you can live out of it and expedite your freedom from corporate America.

So, looking at a few questions just from the the poll I put out, somebody asked, "Could you do a part two to the video about put showing what happens after you purchase it, how you track it, what happens when it hits the strike price, and how do you know whether to sell it or to wait to see if the market drops lower?" Really, I'm looking at those put options as an equity buffer. If the market were to drop 20% on Monday, god forbid, it would pad my equity and offset those losses and I could simply close those positions and take that cash and infuse that cash back into my portfolio. There's no hard rule when to sell that. I can tell you during tariffs, I had put options that were up 2,000 to 3,000%. I would close those and take that cash and then immediately reopen those positions the same 10 to 20% below the current strike price just to keep that insurance on at all times. But it's really more about the equity padding than it is about the perfect timing of of selling even though the selling matters as well. Right? So, um, again, during a true market correction or a market crash, those put options contracts are what become valuable because everybody's trying to get them from a supply and demand perspective and from a fear in the market perspective. If you're hitting 2,000 or 3,000% gains, then it's probably time to take profits and to um you know roll those out with the same discipline that you you did in the first place just in case the market continues to drop.

Um another person said, "How to stay invested when everyone's how to stay invested when everything's read by managing your portfolio like a business." I just like the way that um this person worded that because that's exactly right. it's 100% of of how you need to respond. And so I I just appreciated that comment because they definitely got it from a holistic perspective. Um, and then another person said you should do a dedicated video on how much versus growth or how much uh versus growth and high yield. Um, you know, I ted on nav erosion in a couple videos ago. You know, I I think nav erosion can be a a straw man uh argument if you're not tracking the total return. And then, you know, he says, "Total return is for for uneducated investors." And I just responded, "Appreciate the vote and don't worry. Total return just isn't for uneducated investors. It's kind of the point of running a business style portfolio." Just like a business has a balance sheet, you don't want to look just at income and you certainly don't want to look just at expenses. You need to account for your income minus your expenses equals your bottom line. So, I'm looking at the portfolio much different again than a a buy and hold investor would. I'm looking at it like a like a company essentially and how that company's performing.

So, I hope I touched on all those topics today. Again, you can look at my resources. I pin those under every video. Everything's there for you from a free starter kit to a one-on-one strategy call to the Discord membership to the white glove setup and coaching. Reach out to me if you need anything. And I hope you found this useful. Please like and subscribe and we'll talk to everybody soon. Have a great day.