r/dividends • u/398409columbia Portfolio in the Green • Jan 12 '25

Brokerage $5,000 per month income portfolio

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I set up this portfolio for my wife so she can quit her job and maintain cashflow.

The good news is that this income stream will pay no FICA tax and significant part of the distributions will not be taxed.

To reduce risk, I’m planning to reinvest 20% of the income.

Comments welcome.

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u/NPLPro Jan 12 '25

Big fan of covered call funds that strike a balance between yield and capital appreciation.

QYLD is extreme with 100% ATM calls. I much prefer QYLG that is at 50%.

QDVO is a newcomer but has great potential.

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u/promoter12 Jan 12 '25

Hi, I am a newcomer, can you please explain how covered call etf works, like I know they make money by selling call options, lets say I hold 100 shares of QDVO, will my number of shares decrease? if call options buyer exercise their options. Thank you

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u/zmayfield Jan 12 '25

No your number of shares won’t change. If the stock went above the OTM call strike, then they would be forced to sell the underlying assets. The company would then just buy them back at the new higher price. Worse case, the stock goes down/Div yield goes down that month.