Dividend Investor Earning $20,000 a Month Shares His 7 High-Yield Stock Picks – ‘You Just Need to Start’
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Dividend investing has long rewarded patient investors. Data shows that from 1998 to 2018, high-yield dividend stocks posted a compound annual return of 8.8%, compared with 6.6% for non-dividend companies.
In May last year, someone asked income investors on Reddit to share their monthly dividend income goals. Many investors shared their current income and long-term goals, but one comment caught attention.
An investor said he made about $20,000 a month in dividends and aimed to take this income to $30,000. In several comments on different posts on the social media platform, the investor advised others to start investing as soon as possible.
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“You just need to start, add where you can, re-invest divs and give it time. Consistency & patience is the key,” he said.
However, most of the investor’s portfolio consisted of high-yield and risky covered call ETFs. Based on the information he shared publicly on Reddit, let’s examine his portfolio holdings.
YieldMax COIN Option Income Strategy ETF
YieldMax COIN Option Income Strategy ETF (NYSE:CONY) was among the investor’s largest holdings. The fund makes money by selling call options on Coinbase Global (NASDAQ:COIN). CONY is a risky investment since its upside potential is capped due to the covered call strategy, and its performance is linked to a single company operating in the volatile crypto industry. The fund has a distribution rate of 110% and pays monthly. CONY is down 42% over the past 12 months.
The YieldMax MSTR Option Income Strategy ETF (NYSE:MSTY) generates income by selling call options on MicroStrategy (NASDAQ:MSTR) stock. Its distribution rate is about 108%.
The investor seemed highly bullish on the fund and said in various social media posts that he had fully recouped his investment in MSTY.
“I bought MSTY at inception and it paid off in 10 months. I use my divs to accumulate more shares and generate higher divs. If you need to create income, then join the party and disregard all the naysayers who can’t wrap their little heads around new investment vehicles,” he said in a comment.
YieldMax NVDA Option Income Strategy ETF
YieldMax NVDA Option Income Strategy ETF (NYSE:NVDY) makes money by selling call options on Nvidia (NASDAQ:NVDA). Recently, the ETF has gained popularity amid the buzz around Nvidia. The fund has a distribution rate of about 52%. NVDY suits investors who believe in Nvidia’s long-term potential but want to hedge against possible declines in the chipmaker’s shares.
The Redditor said his investment in the fund has already paid for itself.
“NVDY has turned into a nice steady payer. When I first entered it paid $2+ multiple times,” he said a few days ago.
The YieldMax SMCI Option Income Strategy ETF
The YieldMax SMCI Option Income Strategy ETF (NYSE:SMCY) generates income by selling call options on Super Micro Computer Inc (NASDAQ:SMCI). The fund has a distribution rate of about 86%.
Roundhill Small Cap 0DTE Covered Call Strategy ETF
The Roundhill Small Cap 0DTE Covered Call Strategy ETF (BATS:RDTE) generates income by holding small-cap stocks and selling call options with zero expiration days. Its distribution rate is 27%.
YieldMax MARA Option Income Strategy ETF
The YieldMax MARA Option Income Strategy ETF (NYSE:MARO) generates monthly income by selling call options on crypto mining company MARA Holdings Inc (NASDAQ:MARA). The fund has a distribution rate of about 82%. Its value has been down 29% over the past 12 months.
REX AI Equity Premium Income ETF
The REX AI Equity Premium Income ETF (NASDAQ:AIPI) invests in top AI companies and generates income by selling call options on stocks. Some of the fund’s top holdings include Palantir (NASDAQ:PLTR), CrowdStrike (NASDAQ:CRWD), ARM (NASDAQ:ARM), Nvidia (NASDAQ:NVDA), Meta Platforms (NASDAQ:META), Qualcomm (NASDAQ:QCOM) and Alphabet (NASDAQ:GOOG).
Lower interest rates mean some investments won’t yield what they did in months past, but you don’t have to lose those gains. Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities.
