These High Yield Dividends Are Tax Free
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- เผยแพร่เมื่อ 29 ก.ย. 2024
- My Portfolio: / dividendbull
In this Patreon-requested video, we’re going to look at some higher-yielding dividend investments that are more tax-efficient. Because a lot of people like the idea of pursuing dividend investing outside of a retirement account so they can access the dividends earlier in life, but the taxes are always the biggest downside to this. So today we’re going to look at some options that exist that still offer higher than average yields and come with either low tax rates or tax-free distributions. I’m not a tax expert and you should seek a tax professional before making any decision when it comes to tax strategies.
My dividend journey began when I realized that two particular expenses in my budget were always going to go up and never go down. The two expenses were taxes and insurance. I realized that the dramatic rise in both will need some added income. So, I started buying shares paying dividends. I can now see that this will be the path I need to take to make sure those two expenses will not overtake my future income.
Yes, I've been in constant touch with a Financial Analyst for approximately 8 months. You know, these days it's really easy to buy into trending stocks, but the task is determining when to sell or keep. That's where my manager comes in, to help me with entry and exit points in the industries I'm engaged in. Can’t say I regret it, I’m 40% up in profits just in 5months with my initial capital of $160k
Finding financial advisors like Melissa Terri Swayne who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
I just googled her name and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a call.
I did my homework on which stocks and ETFs I like for the long run, made a plan for dollar cost averaging for a year and I'm sticking to it, trying not to panic...
I’m seeking to invest a good amount across various markets but don't know which is safe at this point of uncertainty, I was advised to diversify between stocks and bonds, since they can help hedge against inflation, or am I better off holding cash?
Asking for advice or assistance from a consultant or investment coach is the best line of action if you lack market understanding. Even though it sounds cliche or apparent, talking to a consultant has helped me stay afloat in the market and increase my portfolio to roughly 65% since January 2023. That, in my opinion, is now the most successful strategy for entering the market.
Would you mind recommending a specialist with a variety of investment options? This is extremely rare, and I eagerly await your response.
"Lauren Marie Ehlers'' is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.
Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her resume.
For those like me who are subject to AMT, there are muni CEF's that avoid that tax.
I like investing in close-end funds that pay monthly dividends. The trick is to hold long term and reinvest the monthly dividends plus buy more shares on a monthly basis or when ever you can afford to. This can be easily done because close-end funds are bought and sold on the stock market just like regular stock. That’d be enough to create a portfolio that would pay you between $50k to $70k in dividend income
Just because there are opportunities in the market doesn’t mean you should go in blindly. To understand the potential factors that contribute to your financial growth, I'll advise you to seek the help of a professional
I wholeheartedly concur; I'm 60 years old, just retired, and have about $1,250,000 in non-retirement assets. Compared to the whole value of my portfolio during the last three years, I have no debt and a very little amount of money in retirement accounts. To be completely honest, the information provided by invt-advisors can only be ignored but not neglected. Simply undertake research to choose a trustworthy one.
Impressive can you share more info?
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Aileen Gertrude Tippy’’ for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
Thanks a lot for this suggestion. I needed this myself, I looked her up, and I have sent her an email. I hope she gets back to me soon.
To boost my retirement income and those sweet tax breaks sound appealing!
Municipal bonds are the way to go for tax-free income! They're not super high-yield, but the interest is usually exempt from federal taxes and sometimes state taxes too.
I agree, munis are a solid choice. But if you want higher yields, maybe consider high-yield muni bond funds. They can be a bit riskier, but the potential payoff is there.
Have you thought about dividend stocks in companies like REITs? They typically pay out a good chunk of their profits as dividends, and those can be taxed favorably.
Interesting! REITs sound promising. What about the tax implications on those dividends?
REIT dividends are taxed as ordinary income, but there can be some tax breaks depending on the type of REIT. Definitely worth researching!
My portfolio doesn’t just cater to dividend stocks. I hold $VFIAX (S&P 500 index fund) in my Roth IRA and $VTI (Total Stock Market ETF) in my taxable brokerage account. Two of my largest holdings. The individual dividend stock positions all complement the index holdings.
I think the safest strategy is to diversify investments. Like spreading investments across different asset classes, like bonds, real estate, and international stocks, they can reduce the impact of a market meltdown
If you lack market knowledge, your best bet is to seek advice or support from a consultant or investing coach. Contacting a consultant may sound simple, but it's how I've managed to stay afloat in the market and increase my portfolio to roughly 60% early this year. It is, in my opinion, the best way to get started in the industry right now.
@@VanChuong-on2gh
How can I participate in this? I sincerely aspire to establish a secure financlal future and am eager to participate. Who is the driving force behind your success?
''LUCIA ALICIA CRUZ'' is the licensed coach I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
My dividend journey began when I realized that two particular expenses in my budget were always going to go up and never go down. The two expenses were taxes and insurance. I realized that the dramatic rise in both will need some added income. So, I started buying shares paying dividends. I can now see that this will be the path I need to take to make sure those two expenses will not overtake my future income.
As a beginner, educate yourself, Learn the basics of investing and the stock market. There are many resources available online, including books, articles, and online courses. It’s a good idea to diversify your portfolio across different stocks and sectors to minimize risk. I’ve heard of people accruing over $550k during recessions and inflation, its important to do your own research.
A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850K.
This is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? I'm in dire need of proper portfolio allocation.
Annette Christine Conte is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
I would think that a major benefit of dividend investing is that calculating portfolio size needed is not relevant. We don't care about the value of the portfolio. We care about the sustainable income it pays. As you invest you can gradually see the income rise as you invest more and pull the retirement trigger when it's high enough regardless of the market sentiment.
Calculating the portfolio size needed is very relevant. - How else do you know how much to contribute?
By calculating how much additional income the contributions produce and estimating how that income rises. the capital value will fluctuate up and down over time so the amount of income new additions give you varies. so capital value being high with a market yielding 2% is no worse for retirement than the same portfolio at a different timepoints where the capital value is half and so the yield is 4%. so long as the yield is sustainable in real terms the capital value being half does not matter. its the same income stream at a different moment of low market sentiment vs high market sentiment.
I'm sure the idea of an investment-Adviser might sound controversial to a few, but a new study by Motley-fool found out that demand for Financial-Advisers sky-rocketed by over 42% since the pandemic and based on firsthand encounter I can say for certain their skillsets are topnotch. I've accrued north of 880k within 16-months from an initially stagnant Portfolio.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
I definitely share your sentiment about these firms. Finding financial advisors like Marisa Breton Dollard who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Unfortunately tax specialists cost more than taxes.
Bull...love your content but c'mon man...there are a ton of high yield qualified dividend growers (and no K-1)...here are some of them: BTI (currently 9.01%), CHCT (currently 7.88%), HESM (currently 7.10%), OMF (currently 8.39%), RWAY (currently 13.73%), UGI (currently 6.5%)
Hesm is not qualified
Chct is not qualified
@@peoriaos6627 Mine and others 2023 1099-DIV had all 2023 HESM and CHCT dividends as qualified.
FWIW...I was surprised too.
I had to search hard to find high yield, tax advantaged yields for people seeking current income. MO and OKE made the short list of five, along with VZ, ED and PRU.
BST is my favorite, long term capital gains too.
SPYI pays around 1% per month and is somewhat tax advantaged. Since it uses index options, it is taxed at 60% long term and 40% short term capital gains. The fund also uses tax loss harvesting and ROC to lower tax liability.
SPYI and QQQI are pretty good, yeah.
Agreed. Smart fund management.
An excellent ETF. Decent yield, some NAV appreciation and tax efficiency.
Many of the Nuveen muni funds have raised distributions recently (40-50% in my holdings) and after suffering from interest rate hikes could potentially see a recovery with any rate cuts.
MLP distributions are often return on capital which is deferred taxation and can be high yield. Also certain REITS like GOOD seem to focus on making roc a high percentage of their distribution.
S0? 🤔🤨
ROC can be good or bad. Make sure it is the good kind.
Try facing that tax form K2 every year
But tell.people.about the K1
Just in case they dont know about it but for some.people its not a big deal
@@krakhour2 MLP ETF no K2
One of my favorite companies is Exxon Mobil chevron not so much
You're entitled to your opinion.
Have both, more Exxon
One that I know of which isn't too bad is the ETF PEY, it's around 4.8 to 5% yield paid monthly. They take the 50 largest dividend payers and invest in those, weighted by yield. They've increased total dividend payout year over year for quite a few years now.
🤑
5 year price return is 7.92% which is 75% less than the index or SPY ETF. High yield is good, but it has to be a balance between the two. If the stock/ETF return is 20% in last five year of bull market, I doubt it will be any good in the long term.
Not to mention 5% yield is not enough to if we just look to survive on it.
For that kind of yield, just get a CD at a fixed term instead? Those are yielding 5% with no risk of capital loss
Because a CD's yield doesn't grow. PEY has a 10yr compound annual growth rate (CAGR) of 9.8%
CD interest is treated as income and taxed. PEY dividends are treated as Cap Gains and if your income is under the thresholds you can pay $0 fed tax.
Also PEY will likely continue paying ~5% in a future low interest environment where CDs will drop with the market.
The calculus for someone looking to live off dividends boils down to the net % after taxes. If you can stay in the 10 or 12% bracket a 10% non qualified dividend is the better play.
I'm personally aiming for a 50/50 blend of non qualified/ qualified.
I buy bond funds like MMU, NDMO and PMX which are tax free and give around 4 to almost 6%.
What is yield in lower interest rate environment?
I have my SPYI in a ROTH so it's tax free
Qqqi is mine also
@@kevinkim2908 yeah, another good one.
Look at PAX bro. Fluctuating dividend but never below 5-6%. Sometimes up to 13-14%
Second the suggestion to consult a tax specialist, especially if investing in funds. One issue is recharacterization of distributions, which can result in corrected 1099s.
Making money off of misfortune no thankss.
If NVG keeps paying 8 cents a month/share then it will be 7.6% yield right now, tax free
What about CXE and CMU ? 😊
Exon has the lowest oil per barrel break even . Its around 7 dollar per share and has a existing way of processing that only lets them lower this further. Thus they will prosper and grow their pps and profit faster. I also have eaton vance. These are old school covered calls.
Altria group hell yes
Awesome video and topic!
😊
SPYI absolutely does not distribute the bulk of its distributions as "nonqualified". It is a tax advantaged fund.
Efficient market theory is just that, one theory. It is no more or less valid than the exact opposite, inefficient market theory which takes into account those, many, many, many stocks priced either far too low or far too high for extended periods of time which everyone knows exist. You yourself acknowledge this, so are confirming aspects of inefficient market theory.
What do you think of EPD?
It's a great stock but it's a mlp so it need a special tax form
Needs a K-1 tax form. Better off with MLPX so you can get exposure to MLPs without the extra complications of the K-1, which is a real pain in the ass.
CSQ has a forward yield of around 7%, and most dividends are treated as qualified or ROC. Its Total Return is very good, close to the S&P 500.
Looks like with the 2024 tax tables if you earn up to 100k$ as a single person, your effective tax rate is 17% for Non Qualified Dividends - not much more than the Long Term Cap Gains rate of 15% for Qualified Dividends. Im not a tax professional though.
12 years still 45 cents still dumping one billion monthly zero proof of usage nor signing parties 😂😂😂😂
Are you still just holding coins? Guys, what are you doing? Unimantic has been around for almost a year!
Have you done a video about OHI? I'm interested in this and would love your take. Thanks!
You don’t elaborate on why Closed End Funds have higher expense ratios than typical mutual funds and ETFs. CEFs can utilize leverage to increase their equity exposure. The expense ratio includes interest expense incurred from using leverage. Also, I was anticipating you would discuss holdings that make return of capital distributions, but you didn’t mention that
return of capital...
Hello saw your recent video about pending purchases I don’t have your stock screener but what about CAPL ??? They have a stable dividend it’s not growing but it also doesn’t get cut either it’s stable a 10k investment 5 years ago would have averaged 1K a year in dividends you would have your investment back or with drip possibly have grown your income by now what do you think??? Also what about these tickets some of these are in sectors you probably don’t look at regularly one of them is a shipping company ie moving containers by ship ? I would be interested in hearing your thoughts PBR , HAFN, MFA, CVR,WHF,NMFC
Not necessarily tax free
Master limited partnerships are great. Right up till they blow up and your investment vaporizes
DIA is the beter than SCHD in my opinion
Great video…you should do a video on qualified dividends for popular etfs like schd and Fdvv…thanks
I'm right on the line between the 12% and 22% tax brackets (what a jump!). Last year was our first year doing taxes with any significant dividend income... and it certainly added complication, but it wasn't as bad that I thought it would be. But looking into the future with my crystal ball, I think we will only have 1 more year at the 12% tax bracket, and then we are finally going to graduate into the adult income levels where we actually have to pay a real tax rate.
Still... I think we will stick with the non-qualified dividends for a while. All things being equal, I would prefer a 15% tax rate compared to a 22% tax rate; it just isn't equal. With unqualified dividends like RIETs and BDCs I am averaging 12%/yr of return (15% on cost as I got lucky with some of my initial purchases during the down market!). But with qualified dividends I would be averaging closer to 2-4%. Until I build the taxable brokerage account to the income goal that I have for it, it doesn't make sense to give up dividend income just to save a couple hundred dollars a year on taxes. Once I hit my goal, then yes, cap the income and slowly convert from normal to qualified dividend sources to gain efficiency. But the goal is income... sacrificing income for efficiency would be working against my goals.
Growth stocks in the 401k and HSA. High cashflow stocks in the Roth. And if I needed more untouchable long-term assets then I could contribute more to one of those. But the whole point of a taxable account (at least for me) is to pad income... so until I hit that income goal, I don't want to work against my goal by limiting the income the acct can generate. Hit goal first, then work towards hitting that goal more efficiently.
Another way to look at it is this;
BDCs (and RIETs to a lesser extent) have a very flat to down price valuation compared to qualified dividend stocks. So I will be taxed on the income... but if there is a really bad day and I am forced to sell the underlying asset, then there will be little to no taxes on the sale of the stock. Of course, because they generate more cash, I would also be less likely to sell, but if I am that desperate, then the last thing I want is to pay even more taxes.
More traditional stocks create cashflow taxed at a lower rate, but they also produce a lot less cashflow. This means that I would be more likely to need to sell stock in a crisis, and because the stock price itself is more volitile I would be more likely to be forced to sell at a loss, or have to sell more stock than needed to pay the tax burden of the sale. If I am in a true crisis situaiton, then I am getting taxed on the dividend, taxed on the sale, and I have less resulting income going forward... at a certain point that is just adding insult to injury.
As I build more assets and have more options, this complicaiton will be less of a factor as I will build other options and flexability over time. But while I am somewhat young and still in the early days of my investment strategy (year 2 in another month!), I like the peace of mind that BDCs provide the cashflow goal that I want sooner, and are less likely to be significantly up or down if I ever needed to sell. Its just the right tool for the job at the moment, and as my needs and goals change then I am sure that my investments in the acct will change to match.
Thank you so much for this!! I was just looking for a video like this a few days ago so this is perfect! Doesn’t SPYI offer a 60/40 benefit to taxes though? 60% taxed like qualified and 40 as normal?
GGN
Uk and HK
Maybe there is some good high yield etf for european investors? 😊
JEPG and JGPI. Quite new, since december 2023. Basically European versions of JEPI.
Nice video. I need to do more research on CEFs cause I've never seen funds like the ones you have mentioned before. I suppose in the future I can add more of them to my portfolio once I compounded enough dividend income.
Many CEFs pay monthly allowing greater impact for compounding if dividends are reinvested.😊 if you combined with tax advantaged cef it may well be wonderful tax wise in retirement. Double check with literature to be safe.
Ups 4.7&
4.7% lol and have raised dividends for the last 20 years I belive
IMPOSSIBLE!
Nah, MO, OKE and VZ are all solid. Just wait to buy them when their yield is at least 20% above their four year average. I bought MO several months back at just shy of a 10% yield. Just requires some patience to buy the dips.
no MLP?
Consider AMLP with no K-1's of course.
I say no to companies who's products kill its customers
whose
This is click bait. There are no "These High Yield Dividends Are Tax Free". Only real tax free are municipal bonds and they are FAR from being high yield. So this is bogus.
Yeah, better off buying spmo smh
A lot of my muni etf's have raised their distributions 50% recently. Many are yielding above 7% now (NEA for example) and after being beaten down due to interest rates are poised to recover.
Yes, Nuveen's closed end fund NEA is yielding over 7% and if you are higher income then the tax equivalent is @ 12%
No idea about the US but in canada the first 50k of elligible div is tax free
@@Yannick3585for qualified dividend it can be up to 40-80k depending on your marital status and state
MO Altria is near all-time price highs. US consumers are maxed out on their credit cards and consumer spending is falling. Inflation not tamed and Fed hasn't reduced interest rates. Important econ indicators announcements this Friday. People will be spending less on these products and you bet certain political groups want to tax this sort of company more. Oh and cancer. Hard pass. IF you invest, wait till the price tanks again.
During recessions people will always buy cigarettes, liquor, weed, and tattoos. MO covers 3 of the 4
@@chrisroman2177 I’m with you
Bought MO during 2008-2009 meltdown. Sold 1/4 of it couple years back made original investment back+
Just holding and collecting a nice dividend now
Unfortunately here in my country in europe theres no difference in qualified dividends and theres no tax free accounts so we are always stuck on paying 15% dividend tax and 35% on capital gains..
Not in every European country. E.g. I've always received dividends of PAGP free of withholding tax.
You sound like robot
He's not; he just talks like that.
He sounds fabulous
You comment like a troll
They mention Oneok in video but failed to mention EPD, ET, top dividends