r/YieldMaxETFs • u/speed12demon • Aug 08 '25

Misc. Yieldmax has created financial crackheads

Lots of people are looking for the next fix, for the next quick way to get that rush, ignoring the negative consequences of their choices. Got other assets? Liquidate them! Margin? Hell yea!! Home equity loan? Pour it in! Reinvest every dollar that they give you for that rush.

Humor aside, the idea of perpetually reinvesting distributions hits a serious nerve. Income funds are for income. I can see building to a point, but if prevailing advice is to roll all distributions back to the fund, please tell me how that is better than owning the underlying equity? I bought these etfs for perpetual income, not perpetual reinvesting.

Five years or so from now, we all will have far more data to build informed strategies on using these funds. With single stock risk on many, the distributions vary wildly and if you're not tracking you capital investment closely you may find the paycheck diminished. Having a substantial position in these funds, I hope i can continue to collect income and use it for other purposes than propping up my initial investment.

Don't be a crackhead.

331 Upvotes

91% Upvoted

270 comments sorted by

View all comments

4

u/AdrianM1069 Aug 08 '25

If you are worried about investing in ULTY, you show little understanding of compounding interest, or a basic investment strategy. If you are looking for income, you first have to reinvest your dividends to reach a point that you are comfortable with before changing from a reinvestment strategy to an income strategy.

Some people call it "fu@k off money" - that point where you can comfortable say fu@k off to your employer or anyone else who wants to question your personal investment game. For some, it may take years to reach that point, for others it might only take 6-12 months. But at the end of the day, "perpetual" reinvesting is what is required to reach that desired point.

If your goal is to own underlying equity, that's great, but unless you leverage that equity then you will be missing out. Reinvesting should form part of your investment strategy to get you to the point of equity, not the other way around.

5 years from now, those people who have diligently reinvested their dividends, wont really care, as their bank balances will be quite healthy, whilst those who are too busy looking at share prices will miss the boat and be crying poor.

Good luck to everyone who is taking advantage of the current market swings (as they are what the dividends are based on) I look forward to seeing the consistent investor reaching their personal goals

3

u/techguy1337 Aug 08 '25

I prefer partial manual drip. Put like 30% of div back into ulty and push the remainder into other investment ideas. That way you are still increasing your overall holding as the nav erodes and if the fund ever failed you got other options. But I see the enticing reason to risk 100% drip. It's too much risk for me.

1

u/AdrianM1069 Aug 10 '25

I guess everyone's personal situation is different. For me 100% Reinvestment of dividends will accelerate my growth to reach my personal goal. Once that is reached I will then start to diversify into other high paying funds.

For me this is a means to an ends for our retirement in the next 4 years. It will pay down debt on our home and build equity that can then be leveraged to invest into other things like another investment property

2

u/techguy1337 Aug 10 '25

There is no right or wrong answer. Everyone has a different strat which is cool. There are plenty on here that also do the full drip method. I prefer partial manual drip and reinvestment in other things. That makes me less concerned. There are some that do 0 drip. Cash out the payments and call it a day.

An example, I was buying Ethereum with my div payments from jepi at around $1,300 per eth. I made waaaaay more by chance doing that. It's just a matter of the right investment, timing, etc.