QYLD for Early Retirement: A Genius Move or a Dangerous Gamble?
ฝัง
- เผยแพร่เมื่อ 19 พ.ค. 2023
- QYLD for early retirement? QYLD is supposed to be a retirement cheat code. The rationale goes something like this: if it pays a 10.4% dividend yield, you only need to save $480,000 in order to generate $50,000 per year in income. Why save 4x more than you need to?! In this video, we'll explore what happened if you tried this strategy back in 2014...
If you want to support me on Patreon and access member-only content, you can do it here: / nathanwinklepleck
Or if you want to join on TH-cam, you can do it here: / nathanwinklepleckcfa
✉️ CONTACT ME
If you want to get in touch with me, my email is: nathan@dividendgrowthmachine.com
😀 Thank you all supporters!
📚 AMAZON #1 BEST SELLER
- I wrote a book on dividend investing. 700+ reviews later, it's been quite the hit!
- Read it here: amzn.to/3gVJBZY.
- Audiobook version (read by me): adbl.co/3h3IaLA
💾 FINANCIAL DATA 💾
- My favorite resource for financial data is QuickFS.net: quickfs.net/?via=nathan.
BUSINESS INQUIRIES
- If you're interested in doing a collaborative video with me, having me on your podcast, or sponsoring one of my videos, you can email me at nathan@dividendgrowthmachine.com.
#QYLD #FIRE #dividends
DISCLAIMER
This is entertainment only, not investment advice. All opinions expressed are my own. Any stocks or ETFs mentioned may be owned or taken a position within the next 48 hours. Neither the information nor any opinion expressed it so be construed as a solicitation to buy or sell a security of personalized investment, tax, or legal advice. This is prepared for informational purposes only. It does not address specific investment objectives, or the financial situation and the particular needs of any person who may receive this report. The information herein was obtained from various sources. Dividend Growth Machine LLC does not guarantee the accuracy or completeness of the information provided by third parties. The information in this report is given as of the date indicated and is believed to be reliable. Dividend Growth Machine LLC assumes no obligation to update this information or to advise on further developments relating to it.
![Best Dividend ETF [2006-2022]](http://i.ytimg.com/vi/64NEiyoNBIM/mqdefault.jpg)
I feel investors should focus on under-the-radar stocks, considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises plummeting stocks that were once revered. I don't know where to go here out of devastation.
The safest approach I feel to tackle it is to diversify investments. By spreading investments across different asset classes, like bonds, real estate, and international stocks, they can reduce the impact of a market meltdown.
@@MelindaMatsuda It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
@@ShellyHuerta This is considerable! think you could suggest any professionals/advisors? I'm in dire need of proper portfolio allocation.
@@KacieLehman My CFA ’ is “Victoria Carmen Santaella”, a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
@@ShellyHuerta I will give this a look, thanks a bunch for sharing.
About a year and a half ago I began hearing everyone talking about how covered calls and QYLD were a great way to juice your returns. So I did a backtest of QYLD to see how it performed over the past 10 years. I'm very glad that I did it. I am currently living off of dividends, so QYLD sounded like something that would be very useful to me. But once I saw that my investment value would have fallen over those 10 years I said "I'm OUT!" I also opted out of writing my own covered calls on my investments, as I worked very hard to buy the companies that I wanted and I would have been gutted if they were taken away from me on a contract that went against me. Sure I may have received some great distributions or income, but I understand that inflation is a huge risk in retirement. If I need to live off of my investments for 30-40 years, then having assets that will not keep up with inflation and possibly even lose value over time would be silly. At the time I made this comment to people watching other TH-cam videos and it was not received well. I'm glad to see that you and others are now diving into this and informing people of the risks.
I came to that same conclusion. I owned BST for a while and as of late, the payments have been return of capital. I own SCHD and VIG as my core holdings. I recently sold BST and added VGT and QQQ. I would rather sell off shares of those investments when profitable than hold BST where the payments are ROC which at this rate might lead to either a distribution cut or long term NAV erosion.
How did you backtest QYLD?
@@lockbert99 I did a historical data lookup for QYLD on Yahoo Finance. Picked a date 10 years in the past assumed I had bought $10K of shares and then ran that investment forward to today assuming that I had reinvested dividends as they were paid. I also did the test assuming that I had spent the dividends. the results were certainly eyeopening.
So everything you mention is correct. However look at it from the view of a factory. Take Coke for example - besides the accountants no one cares how much the Coca Cola factory is worth. They only care about how much revenue the factory can create. If your buying dividends stocks with the plan on collecting dividends and never selling why would you care if your principal goes down? All you should care about is the revenue (dividends) it creates. Obviously everyone buys particular stocks for their own reason but I for one love QYLD.
@@letsgorangers9329 As long as you understand the investment and it fits in with your strategy, then it is good for you.
I'm confused....If you never plan to sell the shares and just plan to live off the yield, even into retirement. Then what does it matter if the share price goes down and the principal is worth less?
For example, if I spend $100K on QYLD and get ~$1K monthly and keep dripping back and purchasing more shares. Essentially, I'm just growing my monthly income through compounding. Regardless, of where the share price is.
As I'm getting paid dividend per share and not on the portfolio value of the investment. So more shares I acquire, the more dividend I get as long as the dividend per share holds in the same range.
I agree i just think he just trying hard to be unpopular
I agree, I also never plan to sell stocks and just want regular income every month. So QYLD is a good start to get certain amount of cash flow, just to reinvest into other stocks such as SCHD etc
Covered calls pay you cash right now. That gives you more options to do things with it, like re-invest into other ETFs that are on sale. Backtesting won't show you that. They are doing especially well right now in a sideways to slightly downward market. QYLD has beaten SCHD by over 12% in total return the past year. The tradeoff is they tend to underperform in the long term. Especially during bull markets. There are always tradeoffs.
This is total return, but in an upward market. Covered call wins in sideways market, so a hedge against that.
Great video! It’s refreshing to hear a TH-cam content creator who actually knows and understands what he is talking about.
Thank you! It seems that I have you fooled... MUAHAHAA (lol just kidding!)
Excellent description of the workings of QYLD. I owned it for a few months last year until I had my light bulb moment and realized how it worked. it also helped me to re-read Seth Klarman's Margin of Safety. There's a section in it about Bond funds that were marketed in the late 1980s with covered call options juicing the yields. Klarman called it "Greed and the Yield Pigs of the 1980s." 'Nuff said.
In that case you missed out. QYLD has beaten SCHD by over 12% in the past year.
Thanks for sharing! Klarman is brilliant.
Good to see one more great video for you. Over an year ago I heard about it, as I don’t have at least basic knowledge on covered calls I just stayed out of it.
Smart! 😜
You continue to be one of the only rational voices out there on products/strategies like these. Keep it up! I just put out a video on covered call ETFs the other day but yours focuses much more on the math and mechanics.
Thanks! I’ll check out your video. Post a link to it here maybe others would also be interested?
The Rational Reminder channel/podcast also has a really great video on this. I think everyone should watch this episode before investing in covered call ETFs.
Here's something I took away from the episode from RR:
Despite being marketed as high-income strategies with attractive risk-adjusted returns, covered calls often underperform, have higher costs, and can mislead investors with higher Sharpe ratios. Empirically, funds implementing these strategies have typically trailed plain vanilla funds in the same asset class by a significant margin.
@@NathanWinklepleckCFA Sure! Thanks! Mine is here: th-cam.com/video/KOPcFCS1Lyg/w-d-xo.html
@@rzqletum Great summary of the RR episode, Robert. Good info in that one indeed.
I put 100k into QYLD about 6 months ago at $17.50. It went down to about $15.50 but is now back up to the $17.50 range. Every month I reinvest the payout and plan to just pay the tax out of pocket. The investment represents a very small % of my portfolio so I’m just having fun with it. My hope is in 7 years when I retire I can start using the payout as a stream of income so if the underlying value of the fund goes down I’m ok with it. When the market jumps up the fund doesn’t capture the full market gains and when market goes down QYLD just keeps going down. It’s not a great play but I am totally seduced by the 12% payout. If I had to rely on this money to retire I would never buy QYLD.
100k? Omg that's a lot of money
Exactly...I'm after the dividends
I wish I could do 100k 😢
@@slabbygabby Don't we all
how many shares of QYLD do you have now?
Very easy to understand thank you!
I think JEPQ/JEPI or QYLG/XYLG will have better prospects for growth with covered calls same with the new YieldMax synthetic call ETFs which are also out of the money. Huge fan of options strategies in general. Great hedges, lowers your beta, and you benefit if the market stays within the implied moves
JEPx ETFs use out of the money calls. So yes, they will be able to participate in some growth. QYLD is not actively managed and uses in the money calls. So quite different. Also almost 2x higher management fees.
Thanks for the great video! Another excellent example of how poorly CC ETFs are performing is BXMX, it’s a buy write fund that launched in 2006, very clear degradation of income and principal over time.
Great video and a great explanation of how dividend traps can actually kill your portfolio!!
So this is the type of investment theme/talk that I believe uninitiated investors can grasp well. Goo presentation.
Thanks, Glen! Good to “see” you again, my friend. Hope all is well. Gonna start that investment firm up again?!
Great insights Nathan. I Shared on Twitter and tagged you!
I use QYLD to generate income in my TFSA/ROTH where I'm limited on the max contribution. These funds allow me to have cash flow in the account to further support purchases of core holdings like QQQ.
Why not just buy QQQ directly?
@@NathanWinklepleckCFA thank you for the reply!
I still own QQQ the cash flow from QYLD supports dollar cost averaging by giving extra cash flow which I can buy opportune investments I.e. on a dip
@@69MrUsername69 "Cash flow" is just mental accounting and "buy the dip" is demonstrably suboptimal over the long term to just buying the underlying (QQQ in this case) regularly the entire time from the start.
I agree with your general description and the danger of buying covered calls. But as a buyer I am not buying a options, buying QYLD is buying in a bunch of people who are constantly buying and selling options for me.
So in my view that is a significant difference.
Second is and important variable that you have left aside:
If the goal is to take 50k/yr out of the portfolio we have this situation: 480k$ portfolio
Year one:
QYLD, 480K$. (480 x 10.2%) 49k revenues, sell 10 shares @ 100$ = 50k$
SCHD, 480k$. 12k revenues, sell 380 shares @100$ = 50k$
Year Two:
QYLD, 479k$. +/- 48k revenues, sell 20 shares = 50k$
SCHD, 100k$. +/- 2.5k$ revenues, sell 480 shares = 50k$
Year three:
QYLD, 459k$, 47k, sell 30 shares = 50k$
SCHD 52k$, 1,3k$, sell 48 shares 50k$
Year four
QYLD, generates 50k$
SCHD, busted.
Personally I use QYLD & JEPI, together they represent about 20% of my portfolio. I have removed and re-invested in more traditional stocks and ETFs that money until the cost of owning JEPI & QYLD got to zero and I now just let them be and re-invest the $ they generate in different stocks & ETF while bying/keeping JEPI & QYLD at +/-20% of my portfolio.
Are you taking into account the fact that the share price and percent distribution in QYLD decrease every year?
@@masoncnc Of course, the share price varies regularly between +3 & -5% on a daily basis, I would tolerate 7% and the yearly balance is close to, 0%, you do not lose unless you sell... Once you have sold stock to cover your investment, the cost of holding the stock is: Free.
Thank you very much for this video
You are welcome
Do you have any strategies for using options in retirement for generating income? In the case of QYLD one could generate 1% a month on their QQQ holding by selling their own out of the money options giving them much more upside opportunities at a lower cost. The risk of getting called away would be much less (today anyway) at a 33 delta for the same premium generated as QYLD. I’m curious how or if you would use options.
What do you think of QQQY and JEPY ?
I was happy to see investing in a covered call like qyld at least extends the cash out better than leaving in a bank account , and may even outperform a flat market
Definitely better than cash if you don’t need the money and can stomach a downturn. Although, the short-term T-bill is offering around 5% risk-free, which is probably better on a risk-adjusted basis.
Love your channel! Seems to me, a low cost ETF like VOO or SPY is really the way to go. Long term, I’m banking that the market as a whole will be a good bet. Don’t need a home run, I just need to get on base year after year. And baseball is boring. Boring is good!
Thanks as always Nathan. Love SCHD!
Great ETF!
I plan to soon try to knock out debt and begin maxing out my ROTH 401k and ROTH IRA. My target date is 27 years from now.
My ROTH 401K is all in VFIAX (S&P500) and I want to just let that sit as long as possible.
But my ROTH is mostly SCHD and growth ETFs, which I plan to use for something like a covered call ETF (XYLD, JEPI, or something similar) when I retire. Having Social Security and the VFIAX as a backup will make it worth it, I feel.
If you let the covered call get assigned then yes you would lose the upside. You could also roll the option but you’d have to keep track of the stock price which I guess would make it more “active” rather than “passive” income. Lotta people probably don’t want to do that. Also, although QYLD has gone down in value ideally it should eventually go back up. But because of its covered call strategy it might take a while for that to occur. Also think that if you’re using it purely to live off of it would be a good idea to put like 10% of the monthly income back into it to offset any decrease in NAV. Or maybe just use that to invest in something else like SCHD! 😂
My exact plan... When I retire I will reinvest 10 percent of the income back into the fund.
Re: range bound. I bought some QYLD for exactly that purpose. BUT, even range bound is not good. I caught the nasdaq bottom so thought I had no concern about NAV down side, but not so, The problem is every down is a locked in down. They can't sell enough premium to compensate for the down. Nasdaq up 20, down 5, is not net up 15 for QYLD. It is down 5. Even the yield is misleading. Even thought the rate is consistent, it is against an ever decreasing base, thus a decreasing payout.
Yes, however in a stagnant market, QYLD can be a good vehicle, especially if you reinvest dividends. I like both of these ETFs, however there are different seasons for each of them. Dividend stock strategies have outperformed for a long time, and may not continue to do so as much, and maybe will be arbitraged away by the noosphere.
Yes, QYLD a good hedge against a sideways market.
@@NathanWinklepleckCFA But is it really? Intuitively, I would think that QYLD can be a good hedge against sideways markets only if the realized volatility happens to be systematically lower than the implied volatility of the call contracts sold. Which is far from a sure thing.
@@paolovita1720 I would say, yes and no and maybe; you are correct that the returns could be modest depending on the pricing of the options and the premiums received, however low premiums in a sideway market are still better than no premiums.
@@jazzbeau507 Low premiums may be worse than no premium at all even in a sideways market, if they are offset by your call contracts being exercised often enough (and in-the-money enough), which happens when the volatility is higher than expected. Moreover, all these strategies have the non-negligible hurdle of transaction costs, which makes their expected return lower than that of the market.
Completely agree
covered call etfs should be considered if one cannot work anymore and has a weak account. many people have less than 450k in an account while being elderly, so the question would actually be, how much of a covered call etf would be utilize-able before reinvesting the remaining amount, and how a realistic withdrawal would compare to a standard dividend stock?
Would be even better if you added a chart showing asset A and B in comparison when compounding the premiums/dividends. Maybe next video?
Can you make a video on SPYD, is that safer than QYLD or JEPI?
QYLD is NOT a good investment. I bought some foolishly during the initial hype on TH-cam. As you describe in this video my distributions slowly declined over the year I owned it. And because the etf price also decreased they were able to tout the same percentage return. Going into the weeds of my 1099 for 2022 I discovered that over 88% of the distributions from QYLD were "return of capital". This etf does not generate enough income to cover its distributions. To maintain their advertised high rate of distribution they have to sell off some of their holdings. They're basically just returning our money to us. So while you don't want to say QYLD is a bad investment I am happy to say so without qualification.
Last year was a particularly bad year for QQQ and, thus, QYLD since it owns many of the same. I’d imagine results moving forward won’t be THAT bad. But thanks for sharing your experience!
@@NathanWinklepleckCFA If I felt that was the case Nathan I'd still have my position in QYLD. Alas, I'll continue to assert that this etf does not generate enough income to cover it's stated distribution goal of 1% per month. They'll continue to have to sell assets to make these distributions. The only way they can make money on their covered call strategy of selling "at the money" calls would be for QQQ to trend down. And I just don't think this is likely over the long term. But I also want to say I enjoy your videos and find them very informative. So thanks and keep up the good work.
I went through the same circumstances.
If you are not going to sell then I don't see the problem.
Nathan, what if I don't need the income to live on and I re-invest all of the dividends back into the fund. Would it then make since to purchase a covered call fund, whether it be QYLD or JEPI or others? Thanks
Only if you believe that you’re in for a sideways/down market; otherwise, it makes more sense to be in traditional equity funds since the upside is not sold off.
@@NathanWinklepleckCFA Thanks Nathan.
@@NathanWinklepleckCFAI don't agree with this. I think the answer is more complicated then that. We all know what the math is. The issue is life and circumstances don't always care about MATH. I have QYLD to protect my growth stocks and ETFS. I'm currently reinvesting but I make over 2000 in income from it and if something happened I would dip into my dividends and I would still have my QYLD and growth stocks. Otherwise you have to sell your shares. If my qyld works out the way I want I can live off my qyld and pass on to my kids growth stocks and etfs that have been going got a very long time maybe 50 years
I would probably pick SCHD and JEPI over QYLD.
Could you pls do the same deep dive on 0DTE ETFs like $QQQY JEPI if 70% all DRP,d back in vs SCHD? or NEOs ETFs SPYI or Canadian ETF $SMAX or QMAX where 50/50 so upsides are still there. Thx so much!
What if I only have enough to last 8 years, and I don't want to worry about selling a stock each month more that month's income
I think it's best to consider any investment that has an unusually high dividend payout to be a "wasting asset." The very high payouts are coming, directly or indirectly, out of your principal.
Probably not far from the truth, unfortunately…
Hi Nathan
I love your channel. Did I hear you say in a past video that M1 finance could give me a auditable track record of my investment results? Are there any other that you can think of off the top of your head?
Any custodian should be able to get you a return. But, yes, M1 Finance does that. :)
I think QYLD is only worth it for a very specific group of people. The overall decline in stock price over time isn't worth it for me.
Same here. Thanks, Justin.
Could you do a similar video about qylg or qqqx?
I know that Jepi can’t be back tested for years, but will it have the same issues as QYLD?
If you spend 10%, yes. That’s the part that causes trouble
I agree strongly with your video although i do think there is a time and a place for QYLD. Which may not be the majority of FIRE or retirees
Agree there can be a good use case. I’m just afraid it’s overhyped as a retirement cheat code and am afraid people will not have a good experience with it for that purpose
IMO what most people don't seem to realize is those "times and places" - a flat or mild bear market - tend to be short lived, thus it makes little sense to hold these products long term.
@@OptimizedPortfoliowhat?
@@NathanWinklepleckCFAThey are not overhyped at all. What they can also be used for is a type of income hedge. I have put in a large lump sum investment into QYLD and u now DCA 30 pounds a month on top and reinvest all my dividends. As it is I'm making over 2000 usd pa from qyld alone. Say in 10 years something happens and I need some cash, I can stop reinvesting for a while without selling my growth stocks (and yes I have an emergency fund). Additionally, the trick to taking the income in retirement is to reinvest a percentage of the dividends which nets of any reduction in share price by increasing the no of shares. I have huge investments in IT index funds as well as other shares but I have the QYLD for a completely separate purpose.
@@slabbygabby What?
Maybe avoid the "either/or" mentality, also known as "all or nothing." It gets more complicated to model, but perhaps 50:50 or 75:25 SCHD:QYLD would both accelerate and sustain financial independence. (I own mostly individual companies, some SCHD and some JEPI and JEPQ - no QYLD or any of the other *YLDs)
JEPI is far better than QYLD, in my judgement. Having that as a small part of a portfolio wouldn’t bother me in the least. My only concern is people expecting these ETFs to be able to support them in early retirement at a 10% distribution rate. Not a good plan imho
What about for someone who isn't using the income to live on? Essentially, just using a drip to keep reinvesting the dividends? Does something like QYLD still not make sense long term?
Total return all that matters then and, based on 2014-2023, QYLD is not a good bet.
@@NathanWinklepleckCFA Thanks for the quick reply! Would a better bet be then something like VDY that doesn't use covered calls or leverage but still has a good monthly payout?
Now... I am completely out of knowledge here.. Is not JEPI using covered call as well? What is the difference with QYLD? I understand JEPI is broadly considered a better investment but not sure why
Less volatile securities vs. QYLD underlying is the QQQ.
Isnt the yeild locked in? So you'd keep making 50k even if share price or nav goes down.
Nope…
Can you please compare the total return after 10 years for QYLD and SCHD? You said QYLD will decrease the value to 1/2 but it also giving 500K income over the 10 years. so after 10 years the total return for QYLD is (480k/2) + (50k X 10) = $740,000
SCHD has destroyed QYLD
What about JEPI?
I think it can be just part of your investment
The far better option than buying any dividend stocks would still be to purchase dividend-paying, whole life insurance from a mutual life insurance company with a track record of paying annual dividends every single year for the last 100 years or more. Then you could build cash value within the policy on a guaranteed, tax-free basis and use the annual dividend during your working years to purchase more death benefit within the policy, compounding the cash value growth and likely increasing your dividend for the following year. You could then leverage your ever-increasing cash value throughout your life for investments or large purchases or whatever you want, and later in life take the now very substantial dividends as passive income for retirement.
Using properly-structured whole life insurance rather than dividend stocks means that (1) you can postpone or even eliminate the tax liability for your entire life, (2) you don't need to worry about "drawing down your investments", because your cash value is contractually guaranteed to increase every single year, and will do so faster and faster, (3) you don't suffer from the free dividend fallacy because life insurance dividends don't reduce your cash value the way stock dividends directly reduce the stock price when they are paid, and (4) you can leave a large, tax-free death benefit to your children or other beneficiaries.
If you are still insurable and you live in the U.S. or Canada, then why would you even bother gambling in the stock markets when you can displace all the risk and uncertainty of the future onto the insurance company? Makes no sense.
Maybe, it depends if you have straight life or universal life and if the premiums are fixed for life or not. In universal life if premiums increase the the net amount each year gets smaller and smaller. In the last 10 years bond yields had become paltry so some insurance companies may have reduced interest payments.
Dave Ramsey has entered the chat
And if you die, your insurance company steals all your money. Fact.
Any chance of a strategy study to mitigate long term currency linked risks ?
What country are you in?
@@NathanWinklepleckCFA Dubai but all of my investments are in USD which worries me (just a little)
Would you think think the same scenario about HYLD?
Dont worry. See my comment above. This guy is a tool.
Not sure about that one, but if covered call ETF then similar applies.
You were selling shares of QYLD to cover the gap in dividend gap, but you were not touching the shares of SCHD? Isn't that not really comparing both?
They were both withdrawing the same
sorry, it's only last 3 years or so, since JEPI only exists since then. Just saying that maybe because QYLD was the first big covered call ETFs it's not necessarily the best example these days.
What do you think about QYLD? Am I wrong about this “dividend” ETF?
Since JEPi uses etn’s would it avoid the same issue?
Not necessarily. ETNs still face issues and are extremely complex; they also introduce counterparty risk.
I’ve held jepi for 3 years and received about $5 per year and my average cost is about 56 so I’m way ahead right now. It’s in my Ira and I reinvest. I’d love to see you do a segment on it and jepq. 😊
I see you already have a segment on jepi, watching it now
@@MrJimmaguire Hope you find it helpful!
For me, dividend payout investing is not the best idea for income. Growth stocks tend to historically outperform all others. It is why the QQQ has done as well as it has. VUG is another growth. Large cap stocks tend to be in the sweet spot for government policy and they tend to be able to handle inflation very well. Dividends come later when you have hit your financial target. If there was a variation in QYLD, I would like to see a 4% payout per what you have said. The greatest weakness of mutual funds is that they fail in that instance of long term. A lot of the information in the stock market has survivorship bias so some stock types and sectors look better than they should. It is kind of like a channel that creates two videos about the Red Sox winning the game and losing the game and then they delete the one that is wrong so that it looks like they accurately predicted what it will do. Dividend cuts are bad and are a high risk for the stock market. Going back to stocks that I have owned. Most if not all either went bust or private. They then disappeared and so does the data with them. Dividend focus is not as good as it is taxed at 40% and then 20% when it is paid out. Not really a good tax efficiency. VUG and QQQ are the two buys as it will long term be something that you can do. Then sell it and prevent that high tax fee. It is just that people don't want to time the market. My recommendation is a 90% growth and 10% Cash or CD fund and then take out of the CD fund when you can and rebalance when it is highly different or you hear in the news about how great the stock market has done or stocks have hit interest. Growth stocks all the way and if you use M1 finance, it can simplify this incredibly well and if you do 90% QQQ and 10% SHY, you can collect dividends and gain annual growth with SHY on top of that and it will appreciate in the dollar amount. If you need emergency cash, then you take out that 10% and then rebalance during a good year.
Maybe I missed something. What if you dropped 400k in say QYLD or even a JEPI and didnt touch it. Just let it go for 10 years. Are you saying the account will have Less in it in ten years after not touching it. And I mean leave the prophets in the account and let them buy more shares
No, if you don’t touch it will likely have more in the end. This was a situation where you were drawing $50k per year increasing with inflation.
@@NathanWinklepleckCFA Ok I thought so but didnt want to miss your point. Good video. Wife and I are waiting on SCHD and JEPI to drop a little maybe around 54.30 for JEPI and 69.50 for SCHD and we are going to do 250k in each one. Just let it ride for the first year and see how they do.
@@jimdixon6688 I've $340K in JEPI and $195K in SCHD and small positions in JEPQ and SCHY since last year. Overall returns (JEPI -5.73% and SCHD -6.1%) I'm taking monthly dividends from JEPI and buying SCHD with it. overall they provide $43K income per year However, for now I'm reinvesting! If I were you, I'd DCA now rather than waiting...
Yes qyld has been a huge disappointment. However, jepi seems very stable unit price with the income of a conservative eln/covered call. Out of money Covered calls do work. Ive even started selling my own short duration out of money covered calls on a very good large cap, cash rich, business growth stock that doesn't pay dividends. Also looking at selling cash covered out of money puts on stock I want to buy.
Sounds complicated!
What about JEPI? Cuz technically jepi is not a covered call etf. It invests in Eln. 😊
The ELN's have covered call mechanics baked in. So same idea, albeit JEPI buys Value stocks.
@@OptimizedPortfolio thx bro
A Deterministic Approach of Early Retirement.
Maybe because you didn't reinvest your dividends ?
That's exactly why
1st view :)
Always!! ;)
I had a feeling that Dividend Bull was a FAKE GURU and leading his subscribers down the road to financial destruction. Thank you for opening my eyes. I have Disliked his videos and Unsubscribed from his channel.
I have QYLD and I would say this video is the one that is misleading
Unsubscribing. Not satisfied with your Elon Musk highlight.
what? lol I don't think I've ever talked about Elon Musk on this channel