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by picking individual stocks, YES. Consistantly, No. But many people tiny of stack as companes like Apple vision and Chevron. And it is hard to find the companies that will score big each year. Many don't think of ETF and CEFs as stock But they do sell stock. And these investment companies are in many ways they are similar to companies They don't often grow like companies but they do often pay a higher dividend. So you don't need to consistently make 14% or more to retire. 8% works just fine if it is consistent and you consistently by more shares of the ETF or CEF every year. These funds pay cash dividends directly to you. So $100,000 at 8%Will pay you $8000 a year. So 1 million will earn you 80k a year of income at 8%. And right now there are funds that pay reliable 10% dividend I am currently investing in funds like QQQI 13% ARDC 12%, SPYI 11%, EIC 10%, PBDC 9% which all yield more than 8% and I am getting significant intcome from these funds. So the key to a comfortable retirement is to invest for income. Growth can give you very large returns but it is not consistent. And when you need income you have to sell it off with lowers your future long term future earnings. Dividend give your income now without sacrificing your long term earnings. I have a mix of dividend funds and growth funds. I use the dividend funds for income. The growth is used to maintain my income and serves as an emergency fund.
This is why I switched from growth index fund to dividend ETF and CEF fund. I am currently invited in QQQi 113% yield, ARDC 12%, SPYI 11%, EIC, 10%, PBDC 9%, SCYB 7% UTF 7%, UTG7%, PFFD 6%. Overall these funds produce 5K a month of income. Most goes to living expenses including healthcare I retired at 55). But 1K a month is reinvested which will help minimize inflation. When the dividends come in they go straight into a money market. fund. So I always have cash on hand. But I plan on keep a sizable amount in growth index for emergency needs, Unexpected large bills, and if needed I can harvest some growth and use that to increase my income as an inflation adjustment. The funds can also be used to replace any fund if it starts having issues.
I am invested in PBDC 9%, SPYI 11%, ARDC 12%, QQQI 13% and am considering adding EIC 10%, ACRE 12%.OXLC 25% BITC 24%. SPYI and QQQI do best when the market is uncertain. And the other have some interest rate risk but overall I think you will find the risk is lower than what you imagine it to be. But if yours a wide variety of fund that invest their money differently you have a very good chance of getting a stable predictable income. Even if one has some problems. I also keep some money in growth index funds as an emergency backup and reinvest about 20% of my income to hopefully keep up with inflation. The rest is used to cover living expenses. I am retired. JEPQ and QQQI invest in the same index and and used covered calls to generate income. But QQQI takes an extra step to lower the tax you pay on the dividend and you get a slightly higher dividend. So I sold off JEPQ.
Not an expert, may be put the 401K in GPIX, GPIQ, SCHD, PBDC, SPYI, QQQI and CEFS. May be some part of it in IWY/SCHG to leave room for growth.
Not an expert, may be put the 401K in GPIX, GPIQ, SCHD, PBDC and CEFS. May be some part of it IWY/SCHG to leave room for growth.
Personally I find I like cash dividends for income. I have minimal ammount. in government bonds because the yields are so low. Right now some my favorite investments are QQQI 13%, ARDC 12%, SPYI 11%, EIC 10%, PBDC 9% RLTY 8%, UTF 7%, UTG 7%, SCYB 7%. PFFD 6%. I am getting about 5K of income a month from these sources.
SPYG is apparently a S&P500 index fund derivative. it has a lower dividned than other S&P500 funds which leads me to believe it is more heavily invest in the tech portion of the index. Bot this and VTI are good. But I would also suggest QQQI13%, ARDC 12%,SPYI, EIC 10%, PBDC 9% These are dividend funds and will over time greatly increase the flow of money into your Roth while you still deposit 7000 a year into the Roth. which will greatly increase the growth of your portfolio. If you don't reinvest the dividends and then spread the money equally over all of your r investments your entire Roth portfolio will benefit.
With CD the maximum yield you are likely going to find is about 6%. However with a und like QQQI you can get a yield of 13%. And there are lot of choices in the 6 to 9% ranks for dividend ETF or CEF funds. And it is also possible to find yields win the 20% range or higher. I am investing in QQQI 13%, ARDC 12%, SPYI 11%, EIC 10%, PBDC 9%, RLTY 8%, UTF / UTG / scab 7%, and PFFD 6%. And unlike CD they don't expire. meaning once you have built the portfolio the dividneds will continue to come in indefinitely. I currently get 5K a month of dividend income and I am retired.
I would not useChat AI for invesment advise. i would rather read the book The Income Factory. And youtube ArmChair income is an excellent resource. I am investing in these fund with the following yields; QQQI13% yield, ARDC 12% , SpYI 11%, EIC 10%, PBDC 9%, RLTY 8%, SCYB 7%, UTF 7%, UTG 7%, PFFD6% That work out to an average yeild of about 9%.
Just an example of what you could do with 300K. invest it in QQQI 13% yeild and put the dividneds into a money market fund. I April when you do your taxes the you will have to pay a tax on the dividneds. So use a portion of the cash to pay the tax, and then use money left over to pay off your home loan and any other debt you have. After the first year you will have an idea as to how much the dividend should be kept as cash for taxes and how much your can use immediently to pay off debt. Overall QQQI will generate about $39,000 a year pf Income before taxes. And as a further benefit QQQI takes steps to reduce the taxes you pay on the dividend. But keep in mind you will have to pay taxes on inherited money so in the end you might has about 200K instead of Also while the potential with QQQI it is just one fund and history has show you are better off using multiple funds, That way in the rare event that one goes bad the rest of your money will still be in god funds. So I have spread my money out over fund like PFFD 6% yield, UTF / UTG / scab 7%, RLTY 8%, PBDC 9%, EIC 10%, SPYI 11%, ARDC 12% and QQQI 13%. For my portfolio it generates enough to cover more than my monthly living expenses.
Most investors seek investments that earn around 10% to maximize ether growth of there protfolio Gold right now can be sold at a decent price but most of the time it isn't worth a lot and it doesn't pay a dividend. In may case I invest in dividend fund which earn me about 5K a month of income. 80% covers all of my living expenses. The rest is reinvested to grow my income Hopefully enough to keep up with inflation.I am invested in QQQI 13% yield, ARDC 12%, SPYI 11%, EIC 10%, PBDC 9%, RLTY 8% SCYB / UTF, UTG 7%, PFFD 6%
I would not expect your taxes to be zero but I don't know anything about taxes in puerto Rico. After you cover any taxes you will need to invest it. I would look at dividend investing. Over the last few years I started using growth I had to build a dividned portfolio. I retired earlier than expected and now I have 5K a month of dividend income. I have money invested in these funds PFFD 6% yield, UTG / UTF / SCYB 7%yield, PBDC 9%, EIC 10%, SPYI 11%, ARDC 12%, QQQI 13%.
I would open a taxable brokerage account. and move your mo money into it. put the money into into a money market fund. Then slowly move money into QQQI which has a dividned yield of 13%. Do not automatically reinvests the dividneds. The dividend payments should go directly into your money market fund.Eventually you will have a cash account that is bing fead by the dividends from QQQI. You could over time graually add other dividned funds. I have PFFD 6% yield, UTG / UTF / SCYB 7%, PBDC 9% EIC 10%, SPYI 11%, ARDC 12%. Any extra cash gets reinvested. Eventually you could build up the account to get enough income to cover all of your living expenses, utility bills, bills, food, clothing, car cost, insurance. and housing.
with your uneven limited income for now I would put put money in QQQI. this is a income fund with a dividend of 13%. IF you build up the money in QQQI to 100K that one fund will generate 10K a year of income that goes directly into your rothand you still can contribute 7000 per year of your taxable income. Once QQQI is at 100K you roth is basically self funded. So it will continue to grow even if you don't have money to depoist into the account. Once you have 100k in the fund you can divert the dividend from QQQI and use it to buy VTI VXUS in the end you want 50% of your portfolio in index funds like V%I VXUS. with the other 50% in dividend funds. That way the dividend funds can supply you with income while the index funds can be used for unexpected emergency cash needs, or periodically harvest the growth in the invest funds and use the money to adjust your dividned income. For the dividend portion of my retirment I am using funds like PFF 6%,UTG 7%, SCYB 7%, PBDC9%, EIC 10% ARDC 12%, SPYI 11% and QQQI. you basically want enough dividend income to cover all of your living expenses with some extra cash left over every month. And reinvest any extra money.
If you invite in a combination of dividend assets with a yeild close to 10% you would have about 50k of income per year after selling the condo. Which is probably enough to cover most of your living expense or all of the rent for the appartment. Some funds you could use are PFFA 8% yield, PBDC 9% EIC 10%, SPYI 11%, ARDC 12%, QQQI 13%.
I didn't see the yield of T-bills attractive especially since they were likely going to trend down. So I instead piracies a preferred stock ETF with 6% yield and then purchases a BDC fund yielding 9%. I now have about 5 funds with yield near 10% or a little higher, PBDC 9% EIC 10%, SPYI 11%, ARDC 12%, QQQI 13%. And I hav several funds yielding about 7%
You need to invest for pasive income. For example. you could open a taxable brokerage account and inis a dividned fund. QQQI is nice one. it has 13% yield and takes steps to reduce the taxes you pay.. IF you put the roth depoist limit in this account yearly ns ewincwar raw siciswnsa,. IN 10 years you will have $100,000 in the fund and the yearly earnings willl be 13,000 or about 1K month. IN about 20 years you will have 600K with a yearly income 75K a year6 K a month of in come. This is a simple example of what is possible. But you don't generally want just one fund generating income. IF one goes bad you could loose a lot of money and time. If you spread your money equally over 10 funds then the impact of one bad investment is only 10% of your income. It is not unusual for people to have 20 funds in a portfolio. I didn't realize this until I was in my 50s. But I have did built up investments in index funds and other growth stocks in a taxable account over the years. So I started converting that to dividned investments. suing ufund like PFFD 6% yield, UTF / UTG, SCYB 7%, PBDC 9% EIC 10%, SPYI 11%, ARDC 12%, QQQI 13% I now have 5K of income a month. 4K Covers my living expenses including health insurance while 1K a month is reinvested for inflation protection. It still will be several years before I can use my well funded retirment accounts. And I still have more assets still available in my taxable account to fix any issues with what I have and increase my income. I wish I had done this at your age! Now this extra income does does come with additional tax. So I make quarterly estimated tax payments to the IRS. But that issues comes with the benefit that I have retired early and don't have to work. Some good resource es to guid you on this is the book "The Income fFactory. And ARmChair income on your tube. Both invest this way and the book list 68 funds the author has used, and Armchair income list 38 funds. Armshair income also does detailed review of some of the funds he uses. Don't ever withdrawal money from your regiment funds and pay the penalty. It is notworkth it. But you can pause investing new money into them and use that money to build your passive inc ome. Now many people will say dividends are very risky or not worth it. But most of these comments are from people that have never invested for dividends. My dividend portfolio has had no issues other than the taxe. I am also reworking my Roth for dividend income that will not be taxed when I can use it. And moving money from my 401K into the Roth.
I use dividend funds in my roth I don't automatically reinvest the dividend back into the then that generated it. Instead it all gets sent into a cash moneyn market fund. And then once a month the money is split up equally into all funds into my roth I am currently using funds like UTF 7% , PBDC 9%, EIC 10%, SPYI 11%, ARDC 12%, QQQI 13%.
Short selling may only provide occasional income. For cash you want regular earnings. I would put some of your cash in a fund like QQQI with a 13% yield. Or you could use UTF 7%, PFFA 8% PBDC 9%, SPYI 11%, EIC 10% or ARDC 12%, or BTCI 24% But keep in mind you loose some liquidity when investing in these funds. Meaning if you need to withdrawal all the money you would have to sell shares, which takes a few days, and pay taxes on any capital gains. There is the possibility that you might sell at a loss. But with dividends you can build a contininous stream of income. Using funds like this I have drevolped an income protfolio and gernates 5K a month. Most is used for living expense and any excess is reinvested. I retired at 55.
you could invest in in funds like PFF 6% yieldUTG 6.7%, SCYB 7%, PBDC 9%, EIC 10%,SPYI 11%, ARDC 12%, QQQI 13% All of tese funds produce dividends. Cash payments to you. Dsividens ar a form of profit chasing mnayestablied companes do. These fund invest in these companies or bond issued by theese compnaies or use trading activity to improve the yield. If you invest in these thees funds in a taxable account you cinould build up enough income over time to cover all of your monthly bills. higher income is also possible. You could also do this in a roth for retirement. I am currently retired and make 5,000 a month from dividends. This stratagy is outlined in the book The Income Factory. Armature chair income on you also invest in this way. And each lists funds they have used. The only problem with this is in come contras tax or don't tax dividend and Other my or may not tax capital gains. If you plan to move to another country you need to know the tax laws for that country.
I invest in dividend stocks and have been buying PFFD 6% yield, UTG 6.7%, UTF 7%, SCYB 7%, PBDC 9%. SPYI 11%, ARDC 12%, QQQI 13%
Dividend funds are not terribly expensive funds like PFFA 8% yield, PBDC 9%, SPYI 11%, QQQI 13% Have a higher yield than bonds and 100K invested at 10% yield will earn you 10K a year. Year after year.
have owned off/on for years, great company along with DX and NLY, they are 3 residential MBS companies with high yields. Only own when most likely that 10yr yields are heading lower, then the MBS loans go up in value and so does AGNC's NAV -net asset value, and then so does it's price. With FED cutting overnight rate by 100bips in last 8 months and likely to cut more over next 2 years, the 10yr is more likely to trend down, FED is cutting due to inflation falling, the 10yr yield = inflation rate + GDP growth rate. IF both are heading lower, like now with Tariffs decreasing global demand and decreased M2 causing lower inflation last 3 yrs, since 9.1% july of 2022. Then very good time to now own mREITs like DX/NLY/AGNC. you can use any temporary rise in 10yr yields like April 6th to May 21st to buy low on AGNC It's a trading vehicle, not a long term hold when 10yr yield in a sustained rise, play the opposite side with BDCs, like BIZD or PBDC etfs
It is a very good idea but SCHD is not the best choice for this. They yield is very small. 100,000 in SCHD would only earn about 325 a month. Only enough to buy a little food or and maybe cover your utility bill. I did what your are proposing. I would use QQQI. QQQI has a higher yield 13% and the fund management takes steps to reduce the tax you pay on the dividend you receive. This ould generate about 1000 a month from your 100K deposit. Do not automatically reinvest the dividends. Instead they will appear as cash in your acount My brokerage put the money in money market account. Use the cash to pay billls or rebuild your emergency fund. At this point you have self refilling emergency fund. it will refill slowly but it will rebuild. As as much money as you can to increase the income Eventually you will have an eveThe rmgency cash in the money market account. And you could get enough income to cover er all of your living expenses. In my case that is 4K a mont. Enough to cover my living expenses (I live in high cost of living area).For 4K a month you would need about 400K in QQQI There are many funds you could use such as UTF 7% yield, PBDC 8%, PBDC 9%, BIZD 11%, SPYI 11%, BTCI 24% and many more. The key is to get the highest you feel ocmfortable with and if possible use a fund that payshas a lowe tax on the dividend you receive. Most of the funds I have listed are taxed as ordinary income. But they are useful for the income they create. Once I had enough income I started adding more funds until I had enough to retire early at 55. Also I reinvest about 1K a month to gradually grow my income. Hopefully enough income growth to cancel out inflation. No mater which fund you will use you will genrate taxable income. The best way to handle this is to estimate the additional tax you willl pay with the assumption that all of the dividdends are taxed as ordinary income. The highest taxrate to insure you have more than enough. Then you could put the money asside in monoy market account and use it to cover the april tax bill. Eventually you will start to charged with a lat payment of tax penalty. At this point start sending quarterly tax payments to the IRS.IF the estimate is low you owe more. IFyou pay too much you get money back.
Yes it is worth it to have dividends in a roth. The dividneds allow you to get more cash into the account without violating the 7K deposit limit. Let say you add a dividend fund that adds 7000 to your account per year. This would double the amount of money going into the fund. And this would double the growth rate. There is however one group of companes you don't want to add to to a Roth The earnings from MLP are taxed in a roth. So you want to void those. However everything else is not taxed. Fund you should consider re PFFD8% yield, PBDC 9%, SPYI 11%, QQQI 13%, UTF 7%, Onenot of PBDC this fund list an expense ratio of 13%. This is not a real expense number for the funds. SEC rules requires this fund list it expense ratio + the expenses the companes it invests in. The ETF never pays the expenses of the companies in the fund. So if you correct for that the expense for the funned 0.75. This fund invests in comapanes that are required by law to pya out 90% of their earnings. So the dividend is always high.
The problem iwht bogleheads investing is you have to liquidate stock to generate income. Which means you could eventually run out of money. The solution to the problem that preserves captial is outlined in the Book The income factory. And Armchair income on youtube also discusses this. There are funds and company stocks that pay out a portion of their profits to you quarterly or monthly as cash to you. Say you invested 100K in a fund with 10% dividend yield of 10% and it pays monthly. Every month you will,$833. Dollars a month. while you are working you invest the money back into the fund. The fund will grow. in 7 years the fund will have about 200K deposited and will pay a dividend of 1,666 every moth. Over 30 years you should also have about 1 million in ht account producing about 10K a month of incomce. If you invest for dividends in addition to your growth index funds you should have substantial income when you retire. So you live off of the dividned income . IF you don't spend all of the income you reinvest the excess money. Hopefully you can reinvest enough to keep up with inflation. IF you have a bit unexpected expense in retirement you can sell the growth funds to generate the additionally income needed. Or you could periodically harvest 4% of the growth and reinvest the money for more dividend income to adjust for inflation. I retired and now get 5K a monty of income from dividends 4K covers my living expenses. and 1K a moat is reinvested. I also have growth funds I can tap if needed. It is working out very well. Some of the funds I am investing in for income are FAGIX 5% yield, PFFD 6%, UTG 6.7%, UTF 7%, SCYB7%, PBDC 9%, SPYI 11%, ARDC 12%, QQQI 13%.
I like dividends. I would put it in QQQI. it has a yield of 13% yield and would produce about 1000 in cash a month. If you reinvested all of the dividend the funds would double in size in about 5 year. If you don't reinvest the dividend you can buy other funds. In addition to the yield the fund also takes steps to reduce the tax you payoff the dividend. So in a taxable account it can be an alternative source of income I am retired with an income of 5K a month from dividends. Enough to cover all or my living expenses. I have the following funds UTG 6.7% yield, PFFD 6% UTF 7%, SCYB 7%, PBDC 9%, SPYI 11%, QQQI 13%, ARDC 12%.
I think paying off your dept is probably your best option. But there are fund that return 6% per year. For example UTG 7% yield, UTF 7%, SCYb 7%, PFFA 8%, PBDC 9%, SPYI%, ARDC 12% QQQI 13%. THESE FUNDS ARE Different Than VOO. VOO earning come from the price per share increasings. They funds I have listed don't have much price appreciation, Instead they make quarterly or monthly cash payments to you. The money will go directly into your brokerage account Now you can set your account to automatically reinvest the money into the account that generated the money or you just leave it as cash and spend it. As long as you don't sell shares you will continue to receive the money. You could move your emergency find into a prokerage account and use a brokerage money market fund to earn interest on your funds (My fidelity money market account yield 4.5%. Then you could use one or several of the funds above to continuously add cash to your emergency funds. If you have more cash than you want you can invest the money for more dividends. I am retired and I get enough money a month to cover all of my living expenses this way without selling shares.
Most people start out with a retirment account, Some use taxable and some have both for various reasons. Many start out with index funds Like a S&P500 fund. These are good and reliable but they don't produce income so you have to sell shares to get money. But if you have to sell when the market is down you could loose money. Because they produce very little income your yearly taxes are small. You can save up 2 million in index funds and pay ver little in taxes. For the Most part you pay most of the tax when you sell. r/ Bogleheads is a good site to discuss index fund investing. Others want income from their investments and if they want this income before age 60 they have to use a taxable brokerage account. r/dividends is a good site for discussing dividend investing. There are also books like The Income Factory which is a good reference. Armchair income on you tube is also good. In europe you can still invest in ETFs or funds. EFTs are exchange traded funds Maning they show up one exchanges were people by hand sell shares of stock VOO, PBDC , SPYI are some examples. Now use funds are typically listed on USE exchanges so in europe you may not have direct access to USE exchanges. Only European evangel. But there are still ways to do it. But I live in the US and don't know much about that. There are also CEFS that trade like stock but are also funds. And Europe has some european specific funds.
For a good distribution yield you want a company that makes more in profit than it pays out as a diviedend. A bad distribution yield is one that pays out more than it makes. Or one that uses a loan to pay the dividend. Also don't use the yield as guid to a good or bad dividned stock. Many do this and they generally assume that if the yield is higher than the government b and rate it is unsafe. And yet you have compass OXLC that have payed a dividend it dividned for 14 years at a yield of 23% AR% And it is not hard to find companes that are struggling financially and pay a yield of 1% Basically you hav not look at the companies earning report and look at there profit and compare that to there expenses. The yield number honest tall you anythng about the stability of the company. Many buy individual stock but I like to buy ETFs that pay a dividend such as UTG6.7% yield, UTF7%, SCYB 7%, pFFA 8%, PBDC 9%, SPYI 11%, QQQI 13% ARDC 12%. I have a small ammount in individual stocks. My current income is about 60K a year. I don't automatically reinvest my dividneds. They go into a Cash account. 4K a month goes to living expenses. Mush of the rest in automatically spit up and use to buy a little bit of each fund I own. Generally I only sell shares when I don't wan the fund or stock any more.But am also moving funds from a 401k into a roth so I do pay capital gains on that. Since retiring I estimate my tax based on 401K roth convrsion ammount, may expected income, andanthing else I plan to sell. Make quarterly payments to the IRS and then in April I either get a refund or pay a little pit more.
Everyone assumes saving for retirment is the only reason to invest. A 22 year old may be more interest ed on a secure source of income she wouldn't loose if she loses a job bra has to take care of a child alone. After the maxing out a Roth I would recommend investing for passive income. in regular taxable brokerage account. Strt investing in a high yield dividned fund. My recommendation is QQQI . This fund has a 13% yield so 100K invested in this account will produce 13K of income. With dividends set to automatic reinvestment build this up. As long as she is working keep adding to the account. Keep building this up until the dividend is about 4K a year. At this point if she looses her job she can stop reinvesting the dividends and live off of the income. At this point she can stop automatic reinvestment of the dividend and divert the income for other uses. * Build up a cash reserve. * Invest in a low dividned index [fund.You](http://fund.You) same more than a million dollars this way and pay very little in taxes due to the very low dividend these funds have. * Use the cash to contribute to a roth acount. * Continue to increase the dividend income so the can retire early. * Deversify the sources of dividned income by adding funds like UTG 6.7% yield. UTF 7%. SCYB 7%, PFFA 8%, PBDC 9% ARDC 12%. Now taxes is an issue that must be addressed. QQQI not only produces income but it also taks extra steps to reduce the tax you pay in the dividend income. For the first few years you can just cover the expenses from work income because The dividend income will be small. Or you could set some of the dividends asside to as cash and then in april you will have enough to cover the additional tax. You could also estimate your tax and make quarterly payments directly to the IRS like you employer does when they give you a pay check. You might want to read the book The Income Factory. And look at the youtube channel Armchair Income. Both discuss this investment style
you can get the book The Income Factory. And has several incomes producing portfolios that could generate income from 60K up to about 90K fro the 1 Million you have to work with. The Author has invested his own money this way and managed the fund of some friends. He has a lis too 68 funds listed in th the book. Mostly from ETF and CEF (Closed End funds) There is also Armchair investor on you tube. similar investing style and he has a a fund list of about 38 funds he likes. You can do quite well on the income side with funds like PFFA6% yield, PBDC 8%, SsPYI 11%, ARDC 12%, QQQI at 13%. I am not a fan of gold so I don't have any recomendations there. And the low yields of bonds is not attractive to me.
MY head is spinning 20 years old and 500K net worth? At that age I was in college and my work income was barely enough to pay for rent and food. any way i would start putting you money in funds like PFFA 8% Yield, PBDC 9%, qqqI 13%, ARDC 12%. All these funds generate income you could get 65K a year from QQQI, or 40k a year from PFFA. So by buying these investements and siimply holding them would cover most or all of your living expenses. But Ideally you would spread out your income over many funds so that if one fund runs into issues you won't loose all of your income. You might also want to look at armchair income on yoututube, and read the book The Income Factory.
VOO and SPY are basically the same. Many use VOO in a 401K. For a Roth there are no taxes on withdrawals So my preference is in the Roth isto invest for dividend income. That way at 60 you ca live off of the dividend income it produces which would all be tax free. I would start with QQQI 13% yield in the Roth and then gradually add other high yield funds such as PBDC 9%, ARDC 12%, Scyb 7%, UTF 7% GLU 6.7%
For active ETF I would go with PBDC 9% yield, SPYI 11%, QQQI 13% these either pick the best investments or manage trading activity trading activity to generate income. Other than ETF there are CEF (very similar) like ARDC 12% yield, UTF 7%, GLU7%.
How can I really have this many swings and misses? Obvious answer you are not good cat evaluating the stocks you invest in. Less obviousis is that you are only investing for captial gains. and very little deversification in your investments. investing in index funds isn't going to help much because you are still investing for captial cains. Have you ever thought about investing for dividneds using ETF orCEF. Dividend funds typically are professionally managed to identify the good and the bad an invest in many stocks. Alos if you reinvest the dividend your money will grow even if the stock price doesn't move. So you don't have to worry about shar price as much. How long a stock needs to double in value is determined by the law of 72. so you take 72 and divided by the yield7.2. So for a fund with a yield of 10%. your money would double in 7.2 years. For exaple ARCC, a BDC. This stock and its shares price has been constantly around 20 dollar with major drops in 2008(The bank crisis) and 2020 (Covid) 52 week high and low is 23.8 and 18.3So other than the market crashes the price is stable. So not much capital gains. However ARCC pays a yield of 9% and they have payed quarterly for about 20 years. Sao if you just bought it and held it for 8 yours you would have doubled your money. Which means they parted the dividend through each market crash. Yield does very a little bit nut not a lot. I have this stock but I am not buying any more. Why it is only one stock. Instead I am buying PBDC that invest in the Best BDCs it can find. It has about 20 BDCs in its holding and pays a yield of 9% this speads out the risk over 20 stocks so it one goes bad you might not notice. I also Have SPYI 11% it invests in the S&P500 and writes covered calls..to convert market volatility. into dividnends. The target yield is 11% but can very a bit. 9% to 13% yields are normal. I now make 1000 a month off of my investment in that und. I have no interest in seeing my dividend stockSs or funds. Yes the protfolio value dropped a lot during covid and dropped some since aapril. But I am making 50K a year of income from dividends. So that is not enough to encurage me to [sell.So](http://sell.So) I will hold them for as long as possible. I will only sell if there is really bad new related to one fund or stock
Many retirees use closed end funds to a achieve what you’re looking for. You might try CEFS, an ETF of closed end funds. Dividend yield of 9.86% which is reasonable given that many CEFs have yields above 10%. You could also look at BDCs, a special type of lenders that have to be 90% of their profits In dividends. PBDC is a fund of those. Dividend yield of 10.18%. On $400,000 if those maintain their historic performance, your net in dividends would be around $40,000 per year.
There are two parts to your problem: 1. You re buying ETF without understanding what they are invested in. So you have multiples funds that are basically identical. 2. You are letting your fear of taxes to stop you from taking action. As to taxes the solution to the problem is to estimate your taxes. The IRS has instructions on how to do that on their web site. Basically you decide what you want to sell then start calculating what the tax bill will be. Once you know what the bill will be You can sell the asset and set some of the money asside in a savings account. Or you can pay the money now to the IRS. Then in april when you know what all of prior years numbers are you calbulcate the final bill.. If your estimate was right you owe no additional money. iF you estimate is low you pay a little more, If you payed too much you get a refund You might want to work with a tax professional to fluid you through the process. Then all you have to do is sell the asset, set money aside for the tax, and then reinvest the excess money or spend the money to cover living expenses. As to ETF they have assets they hold for you. So you need to know what it is holding before you buy. What you want is each ETF being invested in different assets. That way if an economic shift occurs some business may have problems were others will not. So you might have one or two that won't be performing well. For example in my Roth I have SCHG, QQQI, PBDC, ARDC, SCHD, SCHY, fagix. One is a bond fund one is aa growth fund, one generates cash from trading activity know as covered calls, on invest in companies that pay a high yield, one yield growth fund and one international fund. and one fund that invests in loan obligations. The dividends from these investments are currently generating 20K of cash a year. Which is all reinvested. Since it is a roth I can buy and sell without paying tax. hopefully when I reach age 60 it will generate enough cash to pay all of my bills.
There are two basic options depending on it you want to avoid taxes or not. INvest în an index fund with a low yield. About 1% or less. (VOO, VTI are popular). The only tax you pay with these funds is the dividned you receive yearly. A 1% dividend is trivial and works out to a rounding error for many people. You could save a million in assets this way and it would only generate 13K of insomnia that would be taxesd. compared to your work income this is a trivial amount of tax. These investment also generate impressive capital gains averaging about 11% per year. But in some years it can be a lot lower or a lot higher. As long as you don't sell the asset there is no capital gains taxes due. Invest in funds with a higher yield. You will pay a tax on the yield every year but it will only be a small portion of the income you get from the investment. But that said not all dividends are taxed at teh same rate depending on how the money was earned by the fund.. My favorite right now are SPYI 11% yields and QQQI 13%. This dividend is very close to captial gains of option 1 but in dividends. High dividneds often mean lower captial gains. >Honestly I’d like some higher potential returns and would like to pick some stocks individually for some fun. Based on that statement I sould expect option 2 is your preference. Additionally you didn't mention an emergency fund. but your 100K in HYS account could be that. But the problem with an all cash savings account is the once the money runs out your emergency fund is dead. A better emergency fund is a high dividned fund. As long as you don't sell the shares of the fund the dividends will keep coming in. So I would recommend slowly start building funds in QQQI and reinvest all dividneds. Keep building until the dividneds it generates is enough to cover all of your living expenses. That way when your cash runs out you could simply stop reinvesting the dividends to collect the cash. QQQI pays out a 1/13th of the yearly dividned each month. So you only need to wait a month for cash to start building in the account. Once you have enough dividned income to cover living expenses you can use the money to start other investments. Some will be like option 1 would be low dividend growth funds you can use for long term savings. Or you can deversify your dividned income with other dividned funds like PFF 6% yield, SCYB 7%, PBDC 9%, ARDC 12 %. There are many options between the 5 to 20% yield range. Look at ArmChair income on YouTube. He has a similar investing style and lists all the funds he uses.
I wouldn't use any of the fund you have listed in your roth. All a very low yield. You could put those in a taxable account and pay almost no taxes. You are wasting the capabilities of the Roth account. I would use funds like PBDC yield 9%, QQQI 13%, and ARCC 12%, PFFA 8% I f all your money in the roth is invested in funds like this the money value of the fund would double every 6.5 year. It could be worth almost triple its current value by the time your retire. And the dividned income it generate couple help you cover most of your living expenses without selling any shares or paying any taxes. Basically at this point in time you should be setting the account to generate passive income to cover your living expenses using dividends fund and bond funds.
Hisotrically investing for dividneds has done better than investing for growth in the stock market. I have been i retired a couple of years ago and have been loading up on funds like UTF 7% GLU 7%, PFF 6%, PBDC 9%, SpyI 11%, ARDC 9%. With funds like this you can easily build up enough dividend income to cover your living expenses. This would make following the 4% rule optional and help insure your retirment income will last longer.
government bonds, CD, and money market funds all have low yields. given the limited funds most people have in there retiement account it would be best to get the highest safe yield you can get. Preferably you want enough income from your investments to cover all of your living expenses. With enough passive income you would not be required to liquidate your saving using the 4% rule and your retirment fund will last longer. If you invest for dividends you can easily get a higher yield with little to no additional risk. If you invest your money in funds like FAGIX 5%yeild, PFF 6%, SCYB 7%, PBDC 9%, SPYI 11%, ARDC 12% you can easily get a higher yield. I you put an equal ammount of money in each fund I listed you could get combined yield of 8%. For every 100K invest you would get 8K a year of income. I have been doing this for the last few years and currently have a projected income of 60K a year. Enough to cover al of my living expense. And the thing that yould surmise a lot of people is that all of the bad news hitting the market this year has not had any impact on my income. Yes the value of my portfolio is down a lot but the income is continuing to come in. My income has not dropped. Investing for dividends significantly reduces my concerns about the lower share prices. I am now paying more attention to my income. This invetemtn strategy is listed in the book the Income Factory. And the book list 68 funds the author has used for his personal account and accounts he has managed forfriends. The you tube channel Armchair investor also does this and he post his list and discusses how choses the funds he he invests in for his personal retirment acount. These have a lot of information you can use to develop your own regiment portfolio.
There is one option you dividend list. Invest in dividend stocks that will sit you ld in loud sighing ghd 5 to 7 years. For example Let say you invested money in SPYI quirk its 11% yield. According to the law of 72 the value of the fund will double in 6.5 year. While we won't know what the sales price of the fund will be in 7 years. But we know based on its predictable dividned is 2 times its original size ini about 6 years.. Some funds I have in my portfolio with a high enough yield to double in a reasonable 7 years or less are SPYYI, 11% yield, QQQI 13%, ARDC 12%. I also have PBDC with 9% yield A little outside the 7 year window. I know there are fund that pay 20% but I don't have them and am note sure of the ticker. Now some will say that if you invest VOO your money will double in 6 years or less, in bull market. With the taariff and other political issues We likely won't have any growth for probably 2 years, maybe longer.
PFF invest in preferred shares which typically pay a higher yield. They have been in exstiance since before I was born( I am 53) Very stable. SCYB invest in high yield corporate bonds. There is a risk that the company issuing the bond default on the bond. But the average default rate is 4%. per year. So iit a fund manager buys bonds in 100 different companies the yield may fluctuate +/-2% per years. So despite the term "junk bonds" they have been a common investment for decades. PBDC were created by a law passed 40 years ago. These companes are required to pay out 90% of the earning So the yield is always high. Yet these companies often pay rather stable high yields. PBDC invests in the best of these copies. ARDC is a closed end fund which helps explain its high yield CEF unlike ETF have fixed number of shares, while ETFs issue new shares as the fund grows. ARDChas been paying a dividned for about 12 years. SPYI and QQQI are covered call funds while covered call funds are new covered calls have been in use for about 40years. Covered call funds have yields from about 5% unto (are you stilling down?) 100%. They yield can go up or down with the market. SPYI and QQQI are the ones I like the best. You have to look for high yield funds. If you don't look for them you won't see them. And there are a lot of people out there that just automatically list anything with a yield higher than government bonds as risky and just ignore them. If you go to R/ dividned you will see them more often than you do here. A good book is The Income Factory. The author lists about68 CEF that can be used for dividned investing. The Armchair income. Youtubechannel also focusses on this investment strategy. In my opinion the irskiest funds are those that pay very high yields (100%)or those that don't pay a dividend. The least risky investments are somewhere between these two extremes. To make a fund you need a lot of money to get it started. The means to start a fund you need a loan. Bank and other institutions will not loan money it they don't believe the fund will not last. give all the fund out there. I would say to stable yield range is about 1% to 20%.
One thing to keep in mind on investing is that the price of an ETF can go up and down a lot for no apparent reason at any time. Some stocks produce a dividend yield (similar to interest). The yield may go up or down a little bit. But most of the time it is very stable. So far this your the prices of stocks has been down between 15 6o 20%. However my dividend income has not changed. You probably have a low risk tolerance for change in share price. People like you typically do better with dividned investing. .Basically when I retired I started sell blocks growth of stock and reinvesting the money for dividends. For example I sold some growth stock and purchase AT&T I purchased enough to generate enough dividend income to cover myAT&T cellular bill. The share price of the stock has dropped some since the tariffs has been announced but my dividned income has not changed. So I see No reason to sell it. Overall I have buildt up enough dividned stock to cover my basic living expeneses which is an about $4000 a month. And so fare this year my income is stable. Some funds I am currently using are: PFF 6% yield, scab 7% yield, PBDC 9%, SPYI 11%, QQQI 13%, and ARDC 12%. In my fidelity account all of the dividends ae placed a money market account (similar to high yield savings (Currently earning about 4.5%) I have a fidelity debit card and checks. So I spend money to cover living expenses and then reinvest any unspent money back into my dividend funds. I have sold only one dividend stock because it didn't live up to my expectations. I have not sold any other dividend investments. In fact I am slowly aqumulating more. You can do the same with a high yield savings account. But your would need a million or more in the account. To get enough income to cover living expenses with the current interest rates. You should read the book The Income Factory. The Armshare investor on YouTube has a ver similar investing strategy.
The company has been in business for 35years and the dividend are consistent. So what is the risk verses teh risk of an index fund? If we are going to be able to answer your question we should know what you think the risks are. Most of us don't know the company as well as you do. Are you worried the dividend will be cut or your rent will go up while the dividend stays the same? or is it something else? But the one thing I can say is that is you have 600K to invest and your rent is $22,680 a month. You could earn a lot more than 22K a year. The ETF PFF has a yield of 6%, SCYB 7%,PBDC 9% or SPYI 11%. The lowest yield on this list will earn you 36K a year. The highest would produce 66K. Or if you invested an equal ammount in each fund Both of these would generate enough to cover the rent and the additional tax you have to pay for the increased income. With some left over to cover other cost such as your electric bill. And this income could last for the rest of your life. You could also use invest an and equal amount in each and get about 50K a year. And having multiple funds reduces the risk. What is the risk of this option?
Right now most of my pasive income comes from some individual stocks but most comes from ETF PFF 6%yield, SCYB 7%, PBDC 9%, and SPYI 11%. These are all in a taxable account. I won't be able to access my retirment accounts for about 5 years. There is another type of fund called Closed End Fund (CEF) In my Roth I just added my first CEF, ARDC 12% yield. ARDC invests in Collateral loan obligations. and other types of loan obligations. CEF are similar to ETF except in ETF the number of shares grows as more people invest in the fund. In CEFs the number of shares are fixed so that can cause teh yeild per star to be higher than many ETFs. .
but there are two ways for many to grow: Price appreciation. (Capital gains) Dividend income. As the last week has shown is that price pareciation can vanish quickly and it may take years for that to recover. in 2000 a bear market started and it tool 14 year for the S&P500 to recover all of its losses. Most people today are invested in index funds which mainly growth through price appreciation. Indes funds do pay a dividend but it is small about 1% and insignificant to most investors. The other mechanism is dividned income. May companes return a portion of their profit to shareholders by a cash payment known as a dividend. Bond pay interest. If you reinvest he dividend or interest from your investments are reinvest that into the asset that gene3rated it you portfolio will grow. Dividend payments are determine by last years profits. So current events mot of the time will no effect the dividned Payment. Current events may have an effect of dividend payments in a year or two. Especially if a company is seeing lower profits. Historically during bear markets the mean average dividned reduction is about 2% Not tbe nearly 20% capital gain loss we have seen in the last week. What I have been doing for some for about 5 years is creating a passive income portfolio by investing for dividneds I now have 4K a month of dividend income. The have been no dividend cuts since I reached 4 K a month.I used mainly assets that payed a dividned of 5% or higher. To my surprise I found quite a few stable yield up to about 10'5 or a little higher. Everything this year has has not bothered me because I have stable income. Some of the funds That have that have worked well are FAGIX 5% yield, PFF 6%, PBDC 9%, SCYB 7% and SPYI !!%. The higher the yield the less money you need to invest to get the desired income. To get eh same income from a S&P500 index fund with a yield of 1.3% But you would need need to invest 4 to 5 times more money that you would need with a higher yield fund.
**Despite the name all of your invested are essentially growth funds not dividned funds.** **You are overly concerned about tax** on the dividends.There are 2 ways to minimize the tax impact: * Structure you investments to avoid dividneds * Estimate the tax impact a pre pay the tax or set the tax money asside. Ormake quaterly tax payments to the iRS. If you select fund which pay no dividends you can ellimatee they yearly tax. You can do this by buying individual stocks that don't pay a dividend but with growth investing it can be hard to find god growth stocks. unfortunately for mutual funds or ETFs US tax law requires these funds pay any dividneds The law requires all fund or ETF to pay you any dividneds they receive. I don't know of any ETF that pays a zero dividned. Teh lowest ones I know are SCHG 0.4%or QQQM a0.61%.. Most of the funds you invested in produce a dividned of about 1% At that level you would need 3.6 million to produce a dividned income of 36000. Assuming 36K was your only income and you took the standard deduction your tax would be about $2000. Which would be covered by the dividned income. So if you estimate the tax you might be shocked at how low the actual tax is. Many believe the tax is is significantly higher. And as a result they fear taxes and avoid very sound investments simply because of dividneds. In 2024, I received just shy of $2k in dividends from these funds which made me want to rethink my strategy An you starting to adjust your strategy due to fear. Recently i asked myself how much tax would I pay for 100K of dividned income in a taxable acount to allow early retirement. For me that worked out to about 10K in federal taxes assuming all the dividned income is unqualified. If it is all qualified dividneds it likely would be about 1/2 that level. So Is 10K yearly tax payment that bad if you have 10 million in assets earning 1% yield so bad that you must change your investments to avoid the tax? No I wish i had 10 million invested in the S&P500. Now with a high yield fund like PBDC 9% yield or JEPQ 10% yeild, SPYI 11% and !QQI 13% you could build 50K of dividned income with 500K of money invested. This could 50K of dividend income a year that yould be a great emergency fund, vacation fund, or disability insurance. **Given the benefits of dividend income in a taxable account I would recommend you look into increasing your dividend income**. Also many retires may quarterly estimated tax payments to the IRS to avoid late payment of tax penalties or they they set some money asside to cove the tax payment in april. If you don't estimate your tax es and don't put money asside you could find yourself facing a tax billl you cannot afford to Pay.
You best bet is a dividned fund or stock that returns about 10% yield. At a 10 % yield the dividned cash payments will equal the purchase price of the fund or stock you purchased. So you are guarantied to get about all of you initial investment back from dividneds alone.after 10years. If the stare price goes up you will acan add captial gains fto your dividend income.I This assumes you don't reinvest the dividneds. If you reinvest the dividends the time needed is deterred by the rule of 72. If you reinvest the dividends the time needed to recover your initial investment with a yield of 10% is is 7.2 years. With S&P500 index fund or other similar index funds with about a 1% yield you would have to hold the fund for 100 yiears to get you money back from the dividneds. While the dividend income is very stable and predictable the share price is not. In a market crash is is not unusual to see share by 10% to 30% and yet most companes concubine to pay the dividned. What finds off reasonably stable yield yield dividends BIZD 10% and /PBDC9%. These two fund invest is a group of buisness development companes. (BDC). BDCs loan money to businesses. And they are required by law to return 90% of their earnings as dividneds. So most BDCs have high yields. Both of these funds are actively managed and picked the what they believe are the best BDCs to invest in. General consensus is PBDC does a better job of picking the BDCs it invests in. The dividned s from BDCs are always unqualified and are taxed as income. Now these funds are required by SEC law are required to add BDCs expenses to the funds expenses. So any tax or fees a BDC pays to run itsits buisnesee must be added to the ETFs expense. The ETF never pays the the BDC expense. So officially PBDC posts an expense of 13%. But is your read teh prospectus that and exclude the BDC expenses the ETFs expense is 0.75% Which is about in line with an actively managed ETF. Another option are covered call funds. These funds use a trading strategy know as covered calls to to changes in share price into divined. income. In my opinion some of the best ones for a 10 year investment are JEPQ 10%, SPYI 11%, and QQQI 13%. JEPQ and QQI hold the NASDAC 100 index stocks. while SPYI hold the SP500 stocks. ?EPQ produces unqualified dividneds while SPYI and QQQI take steps to reduce the tax you pay on the dividends. There are other covered call funds that have higher yields of 20% or more. But NAV erosion is a significant issues with these funds and instead of holding stock they write covers calls on the hold cash or cash equivalents instead. So these fund also have significantly less retention of capital gain. in the stock price. .
The dividned added to your 7000 per year it boost your deposit by 7%. If you replaces SCHD with SPYI and its yield of 11% it would boost your yearly deposit by 23%. Right now 90% of your portfolios growth comes from your yearly depoists. not share price or dividend growth. So based on the math I would drop it and go with SPYI , QQI 13% yield or PBDC 9%
The anulaied rate of return for gold is about 5%. 100 years ago it you want to you could go to the bank and give them 1n dollar and they would give you an equal ammount of gold. You cannot do that today more than 2 generations ago all currencies were pegged to the price of gold. That is not the case today. Gold is partially a Meme investment due to the pass gold standard of currecy. There are better investments today than gold. PBDC an ETF of companes that called BDC that has a yield of 9%. SPYI has a yeild of 11% and QQI 13%. Thee high dividends are CASH to you. not an increase in share price as you would get with piece of gold.
Which mens the 500K will ge eventually gone. Invest it in PBDC and that is 45K a year for life and when you die the your kids will have an nice inheritance.
ARCC is a BDC (Business development cooperation) with a yield of 9%. PBDC invest only in the best BDCs about 20 and have a yield of 9% and more deversification. the just one BDC.
that is much higher risk the SPYI, PEPI, or PBDC.
PBDC invests in al of the best BDCs available. 9% yeild with quarterly payouts. SPYI 11% yield these will do the job. If he does't spend the money he reinvests it for growth. SCHD 3.6% yield is too small to be seriously considered
PBDC 9% and SPYI 11% would achieve your goals.
Reliable high dividneds from PBDC 9% and SPYI 11%.
And even at the low share price they paired the dividned. PBDC is not a co versed call fund but yields 9%
PBDC yields 9% payed quarterly and is reliable. It is not money market fund. It is a stock dividned fund.
NO I have PBDC 9 % yield. SPYI 11% yield. and PFF at 6% yield. and there are other but I own these and they are reliable.
I have 50k a year of passive income. It is doable and practical. You can start with these funds PFF 6% yield, PBDC 9%, and SPYI 11%.
PBDC 9% yield, PFF 6%, and SPYI 11%. I have then and they are stable.
You will get a lot of replies that basically say it is too risky. Many believe anything above 5% is too risky. Furthermore most are not investing for income. But When I started looking at income investing I found quite a few good investments with yields of up to 10%. If you invest your 500K in a fund that yields 10% you will get about 50K a year of income. PFFA 8% yield, PFF 6%, PFFD 6% Some companes have multiple different shares they offer. Some have higher yields than the common shares. These funds target these higher yielding stock that are often call prefer stock. These fund target preferred stocks that and are highly reliable dividned payers. Some even pay monthly. BDCs funds BIZDn10% yield and PBDC. Business develoopemt corperatations were created by law about 40 years ago. These companes loan money to c9%ompany es. These companes are required by law to return most of their profit as dividend to investors. SEC also requires these ETF to list their expenses differently than regular ETFs. The . They must list The cany expenses tha the BDCs they hold as an ETF expense even through these expenses are never transferred to the ETF. PBDC for example list total expenses at 13% even through the fund itself averages 0.75% Many BDCs even payed there dividend through the 2008 market crash and the Covid Pandemic. Covered call funds KNG 9%, JEPI 7%, JEPQ 10%, SPYI 11%. Covered call ETF were approved by SEC only about a decade ago but are quickly becoming popular. These fund use a trading stratagy known as covered calls. Developed about 40 years ago have been in use by large trading firms and now some brokerages allow small investors to use covered calls. The main purpose of this stratagy is to oconver price volatility into income. Now some of the fund have become infamous for very high yield well over 20% and NAV erossion. But if you drop the yield down to a lower level NaV erosion is largely gone.N SPYI is notable in that it modified the covered call strategy to lower the tax on the dividend so your taxes are lower than they toerhwise would be. JEPI and SPYI write covered calls on the S%P500 JEPQ writes covered calls on the NASDAQ 100 index. Now covered call fund will not exceed there performance You can use mix of these fund to get significant income in a taxable account. As long as you don't sell the shares you the income will last indefinitely . If just reinvest the dividends you could have a million invested with a yield approaching Passive income is a great way to protect yourself from unemployment. Even the lowest yield of 6% I have listed will generate 3oK of income a year. I retired a at 55 using regular stocks and SPYI, and PBDC, and PFFD and now have an income of 4 K a month. with enough in growth funds to insure I can increase my income to compensate for inflation for some time.
Maybe consider some in a BDC like PBDC, some in a covered call strategy ETF and the rest in a dividend focused fund like SCHD
The SEC had a rule that applies to PBDC that doesn't make sense They have to add fees the companes they hold many insure to the fee listed by the ETF. Now these fees are not payed by the ETF. They are played by the companies theyinvested in.. The ETF fee is only 0.75% as stated in prospectus. This SEC rule may also apply to some usual funds or CEFs.
PBDC has an insane expense ratio haha
Dividends are bennifical but they are not loop hole. But funds that produce a dividend of 1.3% is too small to due much until your fund gets to about a million. But there are fund with a much higher dividend. For example PFF has a yield of 6%. 100K invested in hthis fund will result in a yearly cash deposit into your roth but you can still deposit 7000 from your work income.. that is a yearly deposit of 13k000. That is a 85 % increase in deposit. And there is PBDC with a yield of 9% 100K in that fund would produce 9000 a year With the 7000 deposit you have increased the deposit by 128%. This is very helpful to people that want to retire. You can use dividneds to creat a a passive income sufficient to cover more than you living expenses.Imagine having 100K of income tax free from your roth. And the nice thing about dividend income is you don't have to sell shares to get it.
What you did is classic for propel with a low risk tolerance. We have been in bull market for about 11 years. So your experience is that the market mainly moves up. However if we go back 25 years to 2000 the market was unlike anything you have seen in the last 10 years. The decade started out down 3 strains years. then in the next 4 ears the market didn't recover its losses. and then in 2008. In one year the market lost more than it did in 2000 to 2003. Look up [the lost Decade](https://www.pyrfordfp.com/post/the-s-p-500-lost-decade-how-to-protect-your-retirement) in google. No one knows when eh best time is to get back in the market. You are probably thinking sometime this year. In my opinion you might want to wait 4 years before getting back iN. But if trump does a lot of damage it may take a decade or more to recover. You might want to park your money in a dividned fund like PBDC9% yield. In4 years you will have about 140K in the fund. In eight years 200K. If you decide to leve it in the fund long term for 20 years you will have about 600K in the fund and the yearly dividned payment will be 54K And that is assuming you add no additional yearly deposits from your work income. Although this ETF is relatively new many of the companes in it were replable dividend payers during the lost decade. And many even payed the full dividend in 2008 when the stock market crashed.
An excelent option of CDs is dividend stocks Some companies return a portion of their profit to share holders as cash payment. Dividend yield very from stock to stock put can be from 1% up to and over 20%. Risk does increase with higher yields but the risk is quit low at the 1% to 10% range. For example ETF such as PFF and PFFD have a yeild of 6%. Funds like BIZD 10% an and PBDC 9%. And then there are covert call funds like JEPI 7%, KNG 9%, jEPQ10%, and SOPYI11% IF you had $100,000 in SPYI you would get about $11,000 cash payment. I currently get 50k a year from dividneds and I retired at age 55.
price growth in the S&P500 is inconsisitanct. Since 2010 it has generally been up and the prevues 4 years were really good. And sometimes growth is very low for decades at a time. From 1930 t0 1950 there was essentially no growth. Similar in the 1875 to early 80. Most recently 200 to 2010 were the average growth for those yours was about 5% My suspicion is that we cannot expect any growth as long as Trump is in office. The economy wan't so great in his first term either. The downturn in the 1930 was caused by a tariff passed by republicans in [congress.It](http://congress.It) was only on the books for 2 years but by that time many banks had failed and with no FDIC insurance e most bank customers lost everything. right now I would not put a lot of money into growth funds like the S&P500. Instead I would invest for Dividends Dividends are profits returned to investors as cash payments. Much more reliable than growth. you can get a 6% yield with funds like PFF or a 9% yield with PBDC.
you could take the RMD and invest that money in dividend producing funds like PFF, PBDC, SPYI and others to get pasive income from the dividneds. If done in a taxable account you could gradually build up enough pasive income to cover all of your living expenses. I invested in funds like this to generate 50K of income a year. Enough to cover all of my living expenses and retired early. Many prefer bonds for pasive in come put teh yield is low so it is hard to get enough income to cover all your living expenses. With stock dividend you can get double to triple the yield at little to no additional risk Meaning you need less money to get significant passive income. Hopefully by age 60 I will have 100K of passive income. IF you have enough passive income you wouldn't need to liquidate shares to generate income. So your retirement fund could last longer
Dividends are very helpful in bull market. When the share price is down you still willl get dividends. S&P500 funds have a long term average growth of about 10% So to get similar performance from dividneds you need a fund with a dividend as close as possible or higher than 10. SCHD has some good growth attributes but its dividned is very small, 3.5%. Some good options are: * KNG 9% yield, JEPI 7%, JEPQ10. These are covered call funds that use adding activities to convert share price swings (up and down) to income. So the long term growth is less than the index they follow but they have a high resonably stable dividned. There are covered call funds that produce higher yields 20% or more but they often have problems with NAV erosion and there are concerns about their long tern durability. I am not aware of any covered call fund that has failed. The covered call stratagy is about 40 years old and it is widely used. Only recently have covered call ETF become available.An old one DIVO has a field of 5%. All of these funds produce regular dividends which are taxed at the higher income rate. * SPYI 11% yield and QQQI 13% are some of the newest covered call funds but with a twist. They incoperagte tax loss harvesting to reduce teh tax you pay on the dividneds. Thee can be used in a taxable or retirement account. * BIZD 10% yield, PBDC 9%. These funds only invest in Business Development Corperatations These companes are required by law to return most of their invoke to sharholds as dividneds. So the dividneds are higher. Now these funds are currently required by law to to report teh funds expenses plus any expenses the BDCs they hold insure. However any expense incurred by the BDC is payed by the BDC not the ETF.IF you exclude this SEC requriement the expense for the fund drops form 13% too 0.75. These companes have a history of paying dividends in a bear market sucks h as the lost Decade of 2000 to 2010 when growth funds dividned have much growth.These funds all produce regular dividends. Just a note on taxes. Don't let teh fear of taxes dictate your investment choices. The tax on dividends is often less than people expect. Calculate the estimated tax impact before you invest. For my self I have determined that 100K of regular dividends in a taxable account with no work income would result in a tax of about 10K a year. leaving 90k of spending money. So 500K in a taxa le account with one or more of the above funds would make a great retiement i ncome fund or an emergency fund.
You don't have a lot of risk tolerance for downturns and if the emergency fund is invested in government bonds are you're not keeping yup with inflation. you might want to consider investing a portion of your emergency fund into a high yield income producing security. such as PBDC. PBDC has a high 9% dividend yield and you could over time convert your emergency fund into a passive income fund. Every 100k in PBDC would generate 9K in revenue. 500K of money invested in PBDC would earn your about 45K a year of income. Which is enough to cover most living expenses. If you loose your job the passive income would cover your expense for years.
The onlynoption you have is to sell the gains and pay taxes on the gains. But a cash position is not a good investment for the money. I would put the money in an income ETF such as PBDC 9% and or SPYI 11%. This could earn you about 14K a year in cash. which you can reinvest for more income or you could use it to cover expenses. Even in serious market downtruns the dividends keep coming in. There may be a small drop in dividned payments but the money will still come in. This cash could be very useful is you loose your job in the economic down turn that is coming. You could have an income of 4K a month this way and only pay about 2 to 3K in additinal taxes.
The big question which will need to be answered before you decide is how is the money invested now or is it all cash? IF it is mostly cash I would invest it in a dividned fund like PBDC 9% yield or SPYI 11% yield. That 500,000 would then kick ou ta steady stream of income of about 50K a year. With that you could max out the roth every year and pay off your home. The income stream would likely last the rest of your life. any income from the fund you don't spend should be reinvested.
the only thing you could do is sell your fund and leave the cash in the roth account. then buy into ab fund that doesn't have tesla. The only fund that i can think of is VXUS. VXUS does not invest in US stocks. It only invests in international stock but there are good dividend funds that don't There might be some small cap funds but I don't know of any the other option is to invest in a dividend fund. tesla doesn't pay dividend so it shouldn't been in a standard dividned fund. PFFA is a good choice. with its 8% yield,KNG, 9% or PBDC 9% These don't have nearly as much grwoth as index funds but but he dividned is quite high. So that are close to the long term average return for the S&P500 which is 11%
But before you invest the money you have to pay taxes on teh one million you reicied. Unfortunately that means about a large amount will have to be payed as tax. you will need a tax professional. My guess is that you would have about 600K left. You invest it in a dividnend ETF to generate bappsive income. For exmaple you could investing PBDC and SPYI get a yield of 10%. That 600K would then pay about 60K in cash a year of income. And this income could easily last 20years or more. If you continue to work all that income could be use to pay off all debt. And after the debit is all payed off you still have the pasive income coming in. You can reinvest some of the income to grow the income and pay bills to cover living expenses. . The key point is that you don't want to pay off debt first and then invest what is left. invest first and then pay off the debt slowly. your 12K in debt would be gone in about a year. You can continue to payt the mortgage at the current rate. and create roth IRA for yourself and one for your partner.
Most retires prefer a much more reliable passive income because they want to preserve capital as long as possible Traditionally that was done with bonds. However at the long term average yield of SCHD and bonds that amount of money you would need is simply out of reach of many people. 4000 a month today would be good minimum income level for a retiree. But with SCHD you would need about 1.4 million to earn that much pasive income. This is simply out of reach with many peppy today making minimum wage. bonds also don't keep up with inflation. Today you can get a higher yield with dividned funds. Yields of 6% or higher are possible You an get a 6% yield with funds like PFF and PFFD. 9% with funds like KNG, BIZD, and PBDC, and with JEPQ and SPYI you can get 11%. And even higher yeilds are possible.
BIZD 10%, PBDC 9%, JEPQ 10%,APYI11%kng 9%
diiviedned funds are great place to put money when you are worried about the market. You know about REITs and I completely with your opinion on then now. They were better in the past. REITs are required to return most of their profit to investors. So the Yield is typically higher than most other dividned funds. BDCs (Business Development cocmpanies) loan money to and sometimes invest in smaller companies. qqq They are also required to return most of their profit to investors. They frequently pay around 9%. BIZD and PBDC are two ETFs that invest in these companies. Now they are also required to list their expenses as well as the expenses the BDC insure. However in practice the BDCs pay those expenses not the ETFs. So these funds list total expenses of about 12 to 13%. The ETF only expense is less than 1%. BDC however do only produce unqualified dividends. These are a very good option. Also in the last 10 years Covered call ETFS have appeared. These use a trading activity called covered calls to gernate income. From 5 to about 13% there are a lot of good ETFs to choose from. Above that you start to get into the wild west of CC ETFs. Some generate 20 to 30% dividneds. but there can be considerable variability in the payout and NAV erosion is often visible in the share price. My favorite right now are DIVO 5%, JEPI 7%, KNG 9%, JEPQ 10% and SPYI 11% and QQQI 13%. I currently only own JEPQ and SPYI. These generally produce mainly unqualified dividends with some qualified dividends some like SPYI and QQQI also take advantage of tax loss harvesting (when possible) to help lower your tax.
It really depends on your risk tolerance. Maany that post these questions only look toUS bonds or other similar investments. Mainly because they extremely risk avers. And their voice appear to dominate ether discussions. Also many think the emergency fund must be highly liquid because the assumption is that you need the money right now, But a credit card is a good alternative because you can get a lot of cash very quickly with it. So after you pay with the credit card you have time to liquidate assets to pay off the card in full within a couple of weeks. Index fundsVOO and VTI make a create emergency asset in this situation. And they are most tax efficient of all of your options. There are people out there with several years of money in a taxable account for this reason. And these funds typically have an average realtor n of 10% which is vastly higher than most bond, money market, CDs. Many are aware of teh risks of index funds and already use them for their retirment savings. But once you reach about 5 years of savings you should consider adding passive income to your account. Now passive income does include US bonds and money market accounts. But it can also include cooperate bonds that pay a higher rate. SCHY and USHY are to such funds that payabout 7%Tehre are. But with stock dividends you could do much better. Some comapnies actually return a small portion of there proffict to investors in the form of dividend cash oayments, There are companies out there that have for decades Dividend Aristocrat stocks are companes that have been paying a dividned for at least 20 years (some for 100 years) and typically increase the dividend a little bit almost every year.A fund like NOBL invests in these copnaies The yield isn't great 2% but it is very stable. But there are other funds like BIZD that invest in difffertn companes and pay out 10% for about 11 yers. PBDC is similar but only appears a couple of years ago at 9%. There are a largenumber of funds trough 10% to choose from. With such a high reliable yield you could easily get several thousand dollars a month of income fringe your investments. I started converting index fund and stock growth assets in my emergency fund several years ago in dividned producing assets. I now have 4000 a month of income with several years of money in index funds or growth stocks. I retired at age 55. The passive income covers all of my living expense and if I have a large unexpected expense I have my credit card and index funds available. I don't expect to need social security until age 70.
Some conservative investments: You might consider a "managed futures" ETF. I have a position in CTA and I am quite pleased with it. I like BDCs. I have a basket of BDC holdings. The ETF PBDC is an easy way to take a BDC position. CLO ETFs also work for me. I like CLOZ and JAAA, I have much more in CLOZ than JAAA. Regarding individual equities, I'm pleased with LRN. I think it's a pretty conservative holding. UBER has a strong outlook. I bought in completely below $80 though. AMZN and TSMC have already been mentioned.
NO. it still hurts. someone with 3.3M would be getting $42,9900 in dividends Most older people prefer to not work for income. And the dividend is not enough to have a very comfortable living off of dividends alone. So most would be selling stock to generate the income. And For if that 30% loss lasts a long time as it didd after 2002 you could reapply broach a net worth of less than 2 million by selling stock at a loss.. after 3 years of lossees the market didn't start revovering until 2013. If you are still working and not selling assets for income a 30% loss doesn't really mater. For this reason dividend investing is popular. Dividned are much more stable than share price. So for the S&P500 a 30% loose of share price exits to about a 2% cut in the dividned. By design index funds often have a very low dividend. because they buy companies that don't pay a diividend with companies that do and include stagnate companies or failing companies that don't offer growth in share price or dividned. So dividned investors search out the ETF that pay a decent dividend and yet have stable company performance. If the stock also has capital gains it is icing on the cake. By investing in these companies people have been able to dividned income 100,000 or more for a lot less money than it taxes to generate the me income with an index fund. Many retires would love an income of 100,000 in retirment. To do that with * :For the S&P5000 1.3% yie.d you wold nee 7.6 million. * For the ETF PFF (6%) you would need 1.6 million. * For the ETF PBDC (9%) 1.1 million. * For SPYI (11) you would need 0.9 million. So obviously if you are about to retie with a 401K that has 1 million in it who'll you want to liquidate $% every year to generate income for living expenses? Or would you invest in a ETF that produces a dividned of 6% or more? If you choose to liquidate there is the possibility that you will run out of money before you die. Or do you want dividned income that will probably outlive you? .
Got it - It's interesting to see these "downside protection with cap" products coming out. I have been looking into how to best utilize my Roth and one area I have been researching are BDCs like PBDC and CLOs such as EIC. I'm past the five-year window on the Roth and could take dividends/gains tax free.
At 58 he need to build up source of passive income to cover living expenses. 550k invested in JEPI with its 7% yield would produce about 38,000 of yearly income. JEPQ with its 10% yield you provide an income of 55,000 a year. With that much income he could retie right now and not use his retirment account until 60 or later. And can wait on social security until age 70 to get the highest pay out. With dividneds you can easily get a yield of 5 to 6%. And yields much higher than I have listed are possible. My favorite high yield funds are JEPI 7%, KNG 9%, PBDC 9%, JEPq 10% and SPYI 11%. I also have a mix of stocks and other funds with lower yields to provide diversification When retired if his dividends are his only income he would pay no tax for 47,500 yearly income. Almost 4000 a month. So only a small portion of your dividend income would be needed to cover the any tax. If he continues to work he ca put the money asside use it to pay the additiaonal tax he will have and then reinvest what is left. The fund would be a form of unemployment and disability insurance.
you can put the money in a high dividned income fund like BID, 10%, PBDC9%, JEPQ 10%, or SPYI 11%. And that would earn you about an additional 1000 a month. I you just reinvest the dividends in 7 years you would have about double the income of about2000 a month. Anything you don't spend reinvest. You cold also reinvest some of the money in lower dividned stocks to reduce your your single fund risk.
I would rather lock in a guarantied 9 to 10% return using BIZD or PBDC. Yes it is not a spatial gains stock I They are dividend stocks and they cost a lot less than NAViDIA With dividneds reinvested your 40K would likely be worth 60K in 5 years with about a 6000 per year dividend. At 7 years it would be worth almost 100K with a 10,000 a year dividend. How many bits could you pay with 10,000 a year?
For BDC I would invest in an ETF like BIZD or PBDC which only invest in BDCs. So you aren't investing in one or two but many which should reduce risk.
Relistate (Reits are required by law to return most of their earnings through the dividend. So the wild is higher. BDCs (Business Developers companies) loan or invest ing developing companies. They also are require3d to return most of their earning through dividends. PBDC is an ETF that invests only in BDCs and has a 9% yeil. you could invest in the ETF or you could buy individual stocks of the companies that invest in. BIZD is a similar ETF but pays a slightly higher dividned. Note the SEC requires BDC fund list their expenses plus the expense the BDCs may incur. Typically expenses the BDC incurs are handed by the company and not passed onto the fund. As result of this PBDC list its total expenses at about 13%. But if you exclude ether BDC incurred expenses the funds expense are 0.75%. all the issues int With all the issues in teh realistic isalistate today bdcs might be a better choice. I have gotten good result with ARCC and recently added PBDC to my right.
You could use a mix of SCHD 3.6%, SCHY 5%, PBDC 9I% and JEPI 7%. The percent number id the dividend. . All have low volatility. I consider all of these to be safe enough for your purpose.
With the vas majority of people investing in index funds there is a lot of risk if the market goes into a long bear market. From 2000 to 2010, (the lost decade) were index funds did poorly. One group of stocks however did very well. Dividend stock did well. Dividend stocks have significantly less price volatility than index funds and pay cash dividends every quarter. During bear markets the average dividend drop is only 2% while the price of index funds will drop 10% to 20%. And index fund have a very small dividend.. So for a roth I would consider shifting money to dividend ETF. I currently have scud, SCHy and PFFD which collectively generate about 5% yield . I also have funds like PBDC and JEPQ that generate a higher yield about 10% 1 million invested in in ETF yielding 5% would earn you $50,000. Enough to cover most living expenses. At 10% you only need 500,000 to generate %50,0000. IF you dividend income exceeds your living expenses you wouldn't need to sell shares of your index funds to generate income.
A new Roth will only grow as fast as you put the money in. The maximum deposit limit is $7000.. but you can use an investment to greatly increase teh amount of money depoisteied into the account legally by using a dividend fund. You could start out with a high dividend coved call fund SPYI for example your fund will quickly stat liking out dividends which you can reinvest. by the time teh fund hits $100,000 invested the dividends will total $12,000 a year plus your personal deposit of 7000. That 19,000 a year cash deposits. At this point you could turn off the automatic and freeze sPYI at 100K. then reinvest the dividned s in other funds to deversify your dividend income and add one or two capital gains growth funds. For example you could for dividneds add SCHD, SCHY, PFFD and PBDC for dividends. For capital gains you you can use SCHG or QQQM. These will grow much faster than S&P500 index funds because they are capital gains specific with almost no dividend (0.6%). When you are ready to retie the fund should have substantial amount invested in growth fund plus dividend funds. Then when you retir only spend the dividends income and if you don't spend all of it reinvest the excess. If you need need extra income for an unexpected expense sell some of the gowth funds. to cover the expense. Or if necessary to compensate for inflation you can sell the growth fund and use the money to grow your dividend income.
Try a dividend stock PFFD you earn you about 6% on the amount deposited and as long as you don't sell the shares the cash will keep coming in every month. Then the is PBDC which has a di vivdned yield of 9%
Index fund a good general performers best suited for retirement accounts. They are not so good for taxable accounts. The index fund has a mix of growth and stable companies. As a result its dividend is greatly reduced and any growth it has is less than you would get with growth specific fund. For a taxable account you want to focus on dividend income. Enough to cover your living expenses. That way if you loose your job you will have long term passive income to caryry you through until you get a new job. have 6 months of case on hand for short term emergencies. These two portions the taxable account will help stabilize your life. These will generate taxes which you need to manage not avoid. people go crazy finding ways to avoid dividend taxes. This can lead to investment strategies that are more safe then useful. you also need a long term savings preferably with minimal tax. if you invest in growth stock that don't pay a dividen you won' pay tax on the savings. And since they are growth stock you savings will grow over time. For example if you invested in TESLA 6 years ago your initial investment wouldn't abbe been very large but today it would be worth 22 times your initial investment. Any would have paid zero tax during those 6 years. You can also use index funds. the low dividend would minimize taxes. But you get less growth. over teh last 6 year the S&P500 index has only doubled. A lot less growth than TSLY. a much getter choice is SCHG or QQQ. SCHG is 3 times larger thanks was 6 years ago QQQ is 6 times larger. And SCHD and QQQ have a dividend of about 0.5% while the S&P500 is 1.3%. If you use your taxable account this way you will have long term passive income, and emergency fund, and enough long term savings you can liquidate if needed to an expense that your dividend or emergency fund can handle. you won't get that with just he S&P500. Good dividend funds for you could use passive income are SCHD, SCHY, PBDC, SPYI, FUTY, FAGIX
The top holding of this fund is ARCC which I invested in about 2 years ago. This companies has been paying a 9% dividend for about 20 years. The company started doing business about 25 years ago. I added PBDC to my portfolio recently. abouta mot BDC and REIT are required by law to return most of their earnings as dividend. I believe is is just as safe as I think it is a good investment.
Yea well my portfolio is $2k consisting of 2 parts PBDC and one part each of GameStop and Kraft 😬
Cherish the good memeories. It helps. Well if you invest the money in PFFD you would get 6% dividend. and then there is PBDC that pays 9%. I have both of these funds and in my opinion the risk is low. PBDC invest in ibuisness development companies. They loan money to businesses. By law they are required to return most of their earnings as dividends. That is why the dividend it high. Even higher dividends are possible JEPQ uses trading activity called covered call to confer stock volatility into dividends. it has a dividend of 10%. I have all of these funds in my portfolio. A 10% yield will earn you 20,000 a year Which could be reinvested or placed in a money market account. You could use the money to slowly pay off any debt left over from your wife's medical treatments. or use it as an emergency fund that will slowly refill if you use some of the money. Or you could reinvest the dividends and let it build. in 7 years you would have an account worth 400K with a dividend of 40K a year. The you would have to pay tax on the dividends each year. you cold use a portion of the dividend income to cover the tax. I have a taxable account that earns me 4K a nomth that covers most of my living expenses. Over time you should also deversify the income with other dividend ETFs
many older people with index funds in there portfolios. Often hear of a market crash panic and sell most of their Locking in the loss. It happens all the time. So I would eliminate VOO don't focus on growth for now.. Focus on Dividend funds or stocks with yields of around 4 to 5%. These would provide income which you mom needs most. If she puts as much money as she can in dividends stocks she might get enough income from dividends to cover living expenses. SCHD is a good fund consider adding PFFD, PBDC, and VYMI. These three are very stable and have a higher dividend than SCHD. I also have no problem with stocks like KO, O, KHC, and T. which all have But AAPL and MFST are fairly old companies with high shar costs and low yields and don't grow like they did 20 years ago. So I would avoid these because they will suck up a lot of your moms money and provide little benefit to her.