Baker's By-Laws

President Dick Baker explains his personal guidelines that have made Income Works a reliable investment source, currently managing nearly $60 million in assets (as of 01/21/2015):

1. The monthly statement you receive is only a snapshot of sorts. It tells you what you would receive for a check if you sold every asset at the 4 P.M. price of the last day of any given month. I do not get excited about the statement figure—good or bad! And I do not want you to either. It is a forever-moving target that has already changed by the time you open your mail.
    

2. My goal is to invest to generate income, just like owners of apartments who collect rent. I love dividends. I love income from covered call premiums. Once dividends and/or income from call premiums are received, they can provide you cash flow irrespective of market conditions. That money is already yours.
    

3. I am in the collection business. Every quarter, we calculate the total dollar amount we have collected in dividends, interest, and call income for you. My goal is to have those "collection" dollars match or surpass your income needs. If you do not need the income at the time, those dollars can be reinvested for potential growth. Additionally, those dollars help manage the risk of your initial investment.
    

4. I am never sad when a security is "called away." In most cases, it means you made a profit. This is not a strategy of greed; it is a strategy of income and risk management.
    

5. I believe in taking advantage of the opportunities made available through the frequent ups and downs of the stock market (active management). For example, sometimes stock positions will be called away after the third Friday of a given month (the expiration date of all option contracts), and the following Monday the market could be down, say, 200 points. This is advantageous because there is more cash available to initiate a new position. Conversely, the market could be up 200 points on that Monday, making it timely to sell another round of call options, taking advantage of higher premiums.
    

6. We do not need the stock market to go up; we just need it to reasonably hold up.
    

7. The Yogi Berra rule: "It ain't over 'til it's over." We are under no obligation to sell a fundamentally sound security at a price that is unacceptable due to short-term market chaos or temporary negative news within the company or its industry. We still adhere to our strategy, and purchasing more shares at a lower price actually lowers your average cost.
    

8. My investment strategy for adding a security to the Baker's Dozen is this: the company has to be one I would hold on to for a long period of time if need be; the potential annualized income from call sales and dividends must match, or surpass, your projected income needs.
    

9. Be assured your account is constantly being monitored, even if we have not recently spoken.
    

10. Investors often feel whichever direction the market is going, it is going to continue "forever." Hockey legend Wayne Gretzky was once asked during his playing days why he was so successful. His answer was, "I go to where the puck is going to be, not where it is." Income Works follows this philosophy with our investment strategy. We do not follow the crowd.
     

11. I consider myself a financial educator. People have many other life obligations to consider. I am more than happy to spend whatever time is necessary to share as much knowledge with you, as you feel you need, for your comfort level.
     

The strategy does not guarantee against loss, may not meet an investor's objectives, and participating in options involves risk and is not necessarily suitable for all investors.

**Supporting documentation about option trading, the covered call writing program, option expertise, recommendations, or other technical data are available upon request from Richard Baker of Income Works, LLC.