Hey Ryne! (in a perfect world) I max out my contribution to my 401k up to my employer's match. Then I move to maxing my Roth IRA. Everything after that goes into my dividend growth portfolio.
Thank you for the reply, Ryne. No, not the Roth IRA. I forgot to mention I’m in Canada so what I have is my RRSP. I haven’t bought any NLY or AGNC yet but I did buy MPLX. I think it has a 9% dividend yield but it’s not a growth stock. I’m older so I might need a good cash flow. Thanks again, Ryne.
So much good information Ryne! Bring on the taxes because if I’m paying more taxes that means I’m making more dividends!! Great job explaining the difference between qualified and ordinary dividends 👊 and that ROTH IRA is the real hack. 🎉🎉
This will be the first year filing taxes on my own. I will use turbo tax, super easy to upload csv forms. I’ll share my experience once I get it all done .
I just came across some fun info. The distributions on BST, a somewhat comparable vehicle to JEPI, are classified as long term capital gains which is highly favorable. Another fun fact is that margin loan interest can be itemized if the funds are used for investment purposes. So you could theoretically yield the difference between the cost of the debt against the yield of a closed end fund and build this massive portfolio that just churns, rinse and repeat, where the debt you take on is yielding a higher return than the cost of the debt. Hella risky but fun to imagine. So if you take on the debt during a high rate environment you can write off the rate while you build the position. Reminds me of how banks sell our loans and pocket the difference.
@@bizzzzzzle it’s nominal, theoretical, but doable. M1 rates are currently 5.75% whereas BlackRock closed end funds/trusts like BST, BSTZ, and BIGZ are well above. Shorting, Options, House flipping can be easy too but not everyone is doing it, just to counter that last remark.
I've very glad I subbed. I figured the video was going to be like use a roth and rolled my eyes when I clicked the video....yet I learned next year I can go up to 6500 on my Roth now and also a bit about that itemized deduction. Great stuff man keep it up!
Don't have a Roth IRA, and currently my only income is from interest and dividends. Unfortunately, I found out that contributions to a Roth IRA have to be from income reported on a W-2. So, instead, I invested $10,000 in I-Bonds, because I don't have to pay taxes on them until I cash them in, and they are free from state taxes.
Nice overview. Two things: 1). You said that Roth IRA withdrawals were qualified dividends. My understanding is that Roth withdrawals are not taxed regardless. 2). Could you run those numbers with social security and a pension?
I have a SEP Account (Simplified Employee Pension) from my job, that match’s 5% of my yearly salary, only down side is I have zero control on where it is invested ( Mutual funds ) eww. But hey I contribute nothing so, free money is free money, can’t really complain.
Your SCHD Video got me into your channel because I was deciding how to invest in my HSA. Keep up the good work! I’m about to get a $37k bonus (so $25k after taxes). What would you do if you were in my position? Don’t worry, I have strong opinions of my own and won’t interpret anything as financial advise!
Thank you my friend! Happy to have you along for the ride. And man idk what I'd do with an extra $25k, definitely would invest a certain portion of that haha, but that's an awesome bonus. Great job!
@@rynewilliams thanks, it was very exciting and unexpected! Would you just boost your dividend account, go into something riskier or even just QQQ with covered calls, pay off debt, or upgrade lifestyle with a nice vacation/travel, upgrading phones, eating out more, etc?
If I had an extra $25k, I'd look into my investments and DCA on any stocks I wish to build on. Kinda spread it around in the portfolio but also leave a chunk on the side for bad market days.
Hello, I'm from Brazil, I have a wallet there in the United States of 53 thousand dollars. all my dividends are taxed at source at 30%, my question is, do Americans also pay this 30% already at source? that is, when you receive the dividends, do you also have this charge already at the source like us? already grateful.
Hey there! This is a great question. In America, we're taxed at the end of the year, and the tax rate can vary based on a few different factors. For most of us, the tax rate won't ever get as high as 30%, fortunately.
@@rynewilliams not in Roth account or hsa account. Other Ira accounts yes. I’m a firm believer in transferring money from IRA accounts to Roth if you can afford to do so
@@Bob-ut The new bill just passed increases the age at which individuals must begin taking required minimum distributions (RMDs) from their retirement account to 73 from 72, beginning January 1, 2023. In 2033, the RMD age will increase again, to 75.
What stocks, ETFs and index funds pay out mostly qualified dividends? I'm very heavy in non-qualified dividends and distributions, and want to balance out my portfolio.
I know this comment is 1 years old but wondering if you figured this out? I previously saw someone else comment on another video stating this was taxed ordinary income and was in fact not qualified on their taxes.
@@AwakenDF23 just google “does this stock pay a qualified or non qualified dividend” for ETFs it might be different , only securities that pay non qualified dividends are REITs , MLPs, BDCs, and covered call ETFs
I’m invested in growth, funds of America and I am given long-term and qualified dividends at the end of every tax year. Do I pay taxes on those even if I I do not withdraw those
I am interested in re-opening my position in EPD (Enterprise Products Partners). Big dividend, and the price is currently attractive. EPD is considered a "limited partnership" and issue a K-1 form every tax season. Do you know is that dividend is "qualified" or not? I actually sold my original shares at a $35 loss, so I never filed the K-1 that year.
MLP’s are interesting because it’s not even technically a dividend. It’s considered a distribution, which is why you get the k1 form. There are certain tax advantages to this that allow you to not have to pay taxes on these distributions. It’s best to keep MLP’s in a taxable account from my understanding
@@rynewilliams Thanks, Ryne. I am leaning towards EPD because the "dividend" looks sustainable. And, they provide many jobs in my town with their gas storage facility.
@@rynewilliamsbro, I found out something very interesting. You can actually have MLPs in a Roth as long as you don’t make more than 1k a year on that MLP…also, you can put XLE which is the ETF of MLPs..
With a progressive tax system we'll never out pay our income. In the grand scheme I'd rather keep paying a little more year after year than no longer continue to raise my income
If you buy bonds directly from the government Treasury direct no taxes on state level but only tax on fed level on the interest but if you buy municipal bonds the interest is tax free
@@rynewilliams Oh ok, im guessing thats only for people who make over a certain amount of $ in dividends. Because rn I make less than $1k a year in dividends so it wouldn't make sense if I were to have to take a standard deduction hahhaha.
I have several stocks, some that are oil pipeline stocks, and I receive K-1’s instead of 1099-Div. I think that affected my taxes this year. I’ve got to review it again. Any thoughts? Are they treated differently?
Ooooooh I've seen that video before haha. I mean once you reach a certain point you'll end up paying some taxes for sure, especially if you have active income coming in from your w2 job or something, but if you're retired it takes a lot of dividend income before you actually have to pay taxes on them
@@rynewilliams to his credit, he may be talking about UK tax law, but he's talking about American entities and exchanges for most of his videos. I am glad that you highlighted the standard deduction. Most people don't even consider that in wealth planning.
He could be talking about UK law. I also think taxes on dividends is a low hanging fruit for people who are looking for downsides to this side of investing. People often like to refer to dividend payments as a forced taxable event, or something along those lines.
Hi Ryne, I’m new to the stock market. Very much interested with high dividend stocks. Before Invest, can you let me know what is wrong with MREITs like AGNC or NLY? Thank you.
Hey there my friend. I don't really know much about NLY, but AGNC's dividend has been declining pretty steadily over the last 10 years, which is a big red flag to me.
