60 here. Sold out of the majority of my taxable brokerage growth investments in 2023 and now redeploying proceeds for income while enjoying the low risk 5.3% from ST Treasuries. I ended up with 7 of your 19 listed as part of my income portfolios after watching your initial reviews and doing my own validation this year. As you mentioned, many of these are too new to inspire confidence. Everything else is going into proven multi sector dividend ETFs (DGRO, SCHD, VYM, HDV) and a short list of dividend paying stocks. I'm slowly DCAing into all of them over the next 2 years so I'll have my "salary" replacement ready to go at 62. Thank you for this investing for income series. It's been very helpful this year. I'd like to put PBDC on your radar for a possible future review if have any interest.
Would be a cool analysis to show the effect of tax drag in a taxable account at different tax brackets and its effect on total return vs just holding growth focused index funds. Then same analysis in a simulated retirement situation where you’re drawing down the portfolio. Might be a good approach to have a solid base of index funds like SPY, QQQ, SCHG, SPGP, etc and then as you approach retirement, build a 20-30% allocation to a basket of high yield funds with the goal of an overall portfolio yield of 5-7%. Rebalance annually to keep income in line with needs and minimize unnecessary taxes, tax loss harvest, etc. Churning high income during accumulation causes really painful tax drag on funds and stocks that already underperform market benchmarks by a wide margin. Definitely something to consider close to retirement, and even then, only a small allocation most likely.
I agree. If you can stay in good funds and handle the additional volatility you will come out ahead. Simply sell as you need the income and pay lower long term rates. I will likely do a video to illustrate that in the near future. You still need those other products for growth.
As a retiree with monthly RMD requirements I have found that those etfs that maintain relative capital preservation such as JEPI, Jepq, and SVOL throw off sufficient monthly income to satisfy my RMDs. In this way I can reinvest dividends in all my other positions
Excellent job. I was waiting for a whole orchestra to join in with that bloke who is playing Sax in the background at the sign off but it didn't happen !
65 here not retired, not rich, been building two income div portfolios (taxable and Roth)... 4 categories: Risky monthys. Safe index/ income growth funds. Safe single stocks. REITs and BDCs.
Yo-yo yo, I got a very important question for you. First off, let me say I respect your financial analysis. Now with a question; if you were forced to choose between.TLTW and TMF which would you choose? Keeping in mind that you’re retired but don’t need the money. This is a very serious question. Thanks for the quick and honest reply. Keep up the good work.
I would likely cheat my way around your question and buy 50% TLT and 50% TLTW. I get the upside and some income. Or I would buy 50% TLTW and start selling TLT Puts to build out my 50/50 position. Can I do that?
Thanks! Are you concerned about what will keep you moving forward if you "retire" at 45? That is one reason I struggle to give up what I do. Or is it that you are moving to a different career?
@@wealthadventures I’m a professional musician so I’ll keep doing that of course, but I want to permanently retire from bartending and do more traveling etc. Love your channel!
With a continued pause or lowering interest rates by the Fed in 2024-25, I believe TLTW will continue its high distributions and recapture some of its degraded NAV seen over that past few years. It is my #1 pick because of this.
If they lower interest rates, you would want to be selling puts instead of calls. Wrong side of the option chain! Wish they were more flexible with the strategy.
Wouldn't a lowering of interest rates result in an increase in value of the underlying (TLT), thus capturing more premium AND increasing the NAV? Basically the opposite of what has happened over the recent past with good distributions but a depletion on NAV.
Good Stuff!! How about a SPYI vs GPIX video? Discuss each of their strategies, pros/cons of each, how each would perform in a bear and bull market...etc
I like the portfolio ,when you speak about total return you should also have a bucket outside of your expenses for total return Stocks, so that you do not miss out on bull markets
That is correct. ET is quarterly. I fixed it on my spreadsheet. However, I would say that it is tax efficient. The distributions I have received are largely return of basis so I have paid little tax over the years. Plus I already have other K1's so toss one more on the heap!
What’s your take on having all your money in an S&P and NASDAQ index fund, and selling a certain amount each month to live off of versus the other approach of having only income producing ETF’s and closed and funds that pay income each month for a retiree, with overall goal to keep the portfolio value at about the same level for 10-20 years of retirement . ?
I like that idea and in the long run it will typically win out. Especially for those that have plenty saved for retirement. That is my plan but I will also have a small % in monthly paying income "fun" funds.
I'm retired and invest in IVV, an S&P 500 ETF with expense ratio of 0.03%. It is in a Roth IRA. I would recommend young people use a Roth or 401K at work. This is not financial advice, it's what I would do if I was younger.
Great list and always very good breakdown, have quite a few of those and also have $BOXX very tax friendly and have $MTBA from simplify, thank for the great content
I am building a bdc fund w 32 of them and a senior loan cef fund and 2 pays every week of the year funds and a cef cov call fund w every one of them in it. As you can tell I was bored over Christmas break but in the process of funding them. Should be interesting
First off, great sheet and video. Thank you. Secondly, I’ve been trying to work out if it makes sense to buy JEPI/JEPQ and use at least some of the distributions to purchase say shares of SCHD. I caught that you mentioned this is the intro but just wondering if you researched it at all. It would be motivating to purchase shares each month but I don’t know if it would be actually worth it I put together a basic spreadsheet and if it’s correct it basically would give more yield at the end but less overall balance. I could of course be completely wrong so looking to see what you think? Thanks for all your videos!
You could do that but after paying for the taxes it will likely be less efficient in the long run versus just buying SCHD or another quality ETF. In a retirement account it makes more sense. However, I will add, It is a fun idea and something I do a bit in my M1 account... Part of investing should be fun (Not financial advice lol!).
SPYI should be about 10%. SPYI has been solid, out performing JEPI since creation date. Take from ET, REITs & all of BKLN. BKLN 10 year Total Return w/ distributions, a horrible 3% per year. Dump it. SVOL should be 10%+, outstanding results in up & down markets. Very high distributions.
Hi, Happy New Year! Thanks for all the great content! Of the 19, which ones, if any, are the most appropriate in a Roth account for a “senior” portfolio? Also, what about QYLD bothers you? Thanks so much.
I think they would all be fine in a Roth except for the MLP (ET) and the municipal bond ETF. Unless it has changed, QYLD sells ATM calls. I'm not a fan. That will produce high income but cap the upside completely. If you do have a down month in the underlying, you will essentially lock in the loss the next month by selling ATM again. I believe JEPQ > QYLD and it shows in the performance this past year... Maybe that will change next year but not my preference.
Great video, not sure if they are all supposed to be monthly paying but I don’t think ET is a monthly payer. I have O and SPYI on this list and EPD which is similar to ET.
@@wealthadventures Started buying at $22 and stopped at $25.... got up over 3000 shares and decided to trim when it hit 45ish .... it was a 10% dividend in the low 20's but not now. Still decent with room to run, especially when Fed cuts start....
Hey I really love the videos and the information you provide it's really awesome stuff and you make it where it's not so boring so please keep on doing what you do. This video that you did about building a dividend portfolio I loved but what happens if you're small time like I am trying to build one up with low amounts of money and reinvesting the dividend money into it to make it grow so I can have income in 10 to 15 years. You were kind of against that because of taxes but a lot of us don't have $100,000 + to dump what would be a good way to build up one from scratch with low income if you were to put $100+ a month and building something like that? If there's any information that you could share I know a lot of us out there would be grateful for that. Thanks again for all you do appreciate it. P.S I already have other 401k,457, brokerage accounts and pensions but just looking to build something with dividends. Thanks
Hi. With plenty of time on your side, I would look at dividend stocks and/or dividend ETFs. Some popular ones are SCHD and VYM. Those will not pay as much but the dividends will be qualified and you will pay less tax. I would also buy some growth funds like VUG, QQQ, or VGT. Or keep it simple with VOO. Just keep buying your $100 each week/month and it will build up. I still do this and it works. Thanks for the question!
@@wealthadventures thanks man really appreciate it, feel free to do a video for us simple folk regarding this issue if you ever get bored or run out of video ideas.... No pressure lol anyways thanks again for all you do and please keep it up you are greatly appreciated. Take care
If you are retired why wouldn't you put 50% in covered call (DIVO, JEPI, JEPQ, SPYI, QQQI) for monthly income and the other half in VOO, VYM, SCHD, QQQM for growth and inflation protection?
SVOL has performed well. I own a small amount. It was interesting to see the VIX spike and how it responded. If that spike lasted longer it would have been a bigger issue for SVOL.
Great video and recommendations, thank you for sharing. How are you determining estimated tax rates, literally? I use Seeking Alpha as well and it seems how the income is distributed, ordinary divs, etc. and even expense ratios are hard to find. Thanks.
That is hard to determine so I went with what made sense for my personal situation in a taxable account. It can change so much person to person. I lumped option income and other short term capital gains like REITs in what would be ordinary income. Long term / qualified dividends in another bucket. You also have some using index options which have some advantages. I'm certainly not a tax pro!
That is a good question. You lose some of the benefits but you don't have to mess with a K1. Info can be found here: www.globalxetfs.com/content/files/MLP-Tax-Primer-2018.pdf
Hi or should I say HELO? 🤭 Brand new to me but looks similar to HEQT on the options side which I have reviewed: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-2w4k1ghVY6k.html Looks like it could be decent... I'll take a closer look!
With ET they issue a k-1 do not put this in an Ira. Substitute for the etf AMLP as the fund pays the taxes while you receive the income and don’t get a k1
I like REITs for 2024 including LTC. I have been conservative with it. I'm following my LTC video advice and selling ATM and ITM calls which have been working well. LOL. That is, I'll buy at 32 and sell 30 calls. Currently I have 30 and 35 calls working and enjoying the distributions.
How about someone that wants to retire in 3 to 5 years? I’m 39 years old, 220k portfolio that I plan to retire in the near5 years , I just need to make 6k a month in income to retire in Thailand. My expenses would be no more that 4k a month but I want 2 k extra to pay taxes and whatever life throws at me .
Happy new year coach , from all these 19 which ones are anti-fragile ones ?? what I mean if a black swan event happens ( like China attacks Taiwan ) which ones keep its value THE MOST ( or drops much less) and which one can rebound faster after the black swan event ??? for example , after 2020 black swan event everything collapsed by 40 % but GOLD came back to pre -covid price in less than 6 weeks , but most other took almost 2 years .and my SECOND question is : if a black swam event happens and EVERYTHING collapsed by 40 % or 50 % , do I still get my monthly return or my monthly returned get affected by 40 % ?
Tough question. Depends on the event. After the fact, if the equity market blew up, the CC strategies would likely yield more from increased volatility but at the new price.
Trying to buy "good" stocks trying to time the markets all of these ideas are very idealistic.... think sears intc enron all were good stocks.... i think a nice dividend paying etf thats indexed and actively managed and rebalanced on a schedule to adapt to market conditions ... you could of bought tsla split adjusted at 18 bucks but who in at 18 held to 400 and sold perfection prefectly who bought it every paycheck all the way up? And is now lossing hair and years off their lives? When they could of jumped on that dividend calculator and followed a plan.....
So the SPY gave a much better price return for the 1 yr / 3yr / 5yr but not counting in the dividend. Why take the risk and invest in so many different assets when u can get 1 that is (almost) well diversified. Nice comparison though, good job.
ET (assume you meant ET) is an MLP and they pass through many of their expenses, such as large capital purchases, to shareholders via a K-1. This allows you to get your basis back as a return of capital (ROC) from their distributions. Often 80%+ will be a ROC and tax free. If you plan to hold the investment for many years it can be a good investment, especially during peak earning years. Here is a video about it if you can survive the intro: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-LY4LCZbUEd8.html
Still adding to SCHD routinely but I put that in a different category. If I was building a real portfolio, this video would be a portion. ETFs like SCHD would be the main building blocks.
Hi. VOO, QQQ, or several other growth ETFs (VUG, XLK, VGT for example) would be good for kids. Great way to teach and show them some of the basics. I told mine to pick individual stocks. No ETFs. I wanted them to feel max pain when it didn't matter as much. Lol! They have done okay with it.
Hi. For most of the "income ETFs" that I own, I'm using them as an alternative source of income. You could re-invest but I would personally only do that in a retirement account for tax reasons.
I really wish you would elaborate a little further on why you are so negative about TLTW? in the video all you say is, I don’t like it. i’m just curious why you would turn your back on over 13% yield after tax?
I just wish it had active management behind it. Selling calls with the FED teetering on the edge of interest rate cuts killed the return. Active management would have likely been on the put side of the option chain and raking in the money. Since start of October, TLTW total return is 3.89% versus TLT total return of 14.87%. Do nothing and get an extra 11%. Or sell puts and probably be up 20% over that period. Here is what I was thinking: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-bzIObFNlWPg.html
@@wealthadventures thank you for taking the time to express a more concise reason for your dislike of TLTW! also, I really appreciate your content on your videos.
I sold my positions with TLTW and LQDW (I have a selective allergy to red ink in my portfolio). I'm looking at UTF BXSL & BST. (I didn't think ET paid monthly?).
I personally would still be in growth stocks and ETFs versus income ETFs. However, you could always start building a position in some that you like in the coming years. I just setup a separate account and started buying a few shares.
Is it possible that you made a mistake for 3 and 5 year Price Return for at least fund such as SVOL? I do not remember this fund being having these negative returns and it's also a relatively new fund. There is no history for 3 or 5 years. Can you check please if possible? Otherwrise. great spreadsheet.
Yes. The blue/gray boxes on the spreadsheet are assumptions. SVOL has not been around long enough but it is down about 9.5% since inception so I went with that. After the first year it has stabilized nicely.
