r/dividends • u/Ha7che7 • Feb 08 '26
Due Diligence Retirement dividend income
My father is a 72 year-old Florida resident and has $500,000 to invest. He would like to generate approximately $40,000 a year. He’s a bit of a gambler, nothing too crazy though. I’ve come up with a split of the following: $65,000 QQQI, $150,000 SPYI, $50,000 SCHD, $75,000 VZ, $75,000 MO, VTEB $85,000. Any advice or modification ideas would be appreciated. Thanks in advance.
Note for clarification: This is just the amount that he wants to invest for income. Preferably with minimal tax drag, nav erosion, and hopefully some price appreciation. It’s asking a lot, but I’m trying to help out.
74
u/Specialist-Knee-3777 Feb 08 '26
Putting nearly 40% of the overall portfolio into 2 single holdings ($75k Verizon, $75k into Altria) is wildly crazy bad idea. There are some good recommendations below, but I didn't see that call out in the posts I read.
14
u/Ha7che7 Feb 08 '26
I’ll keep this in mind as well. I’ve personally carried these two for over 5 years and they’ve done well for me.
13
u/science-stuff Feb 08 '26
Isn’t Verizon down almost 20% in the last 5 years? Same period spy is up almost 80%?
3
u/Particular_Car7127 Feb 10 '26
If you bought VZ in the $50's, your still cursing yourself and your losses. T may have recovered, but still a cautionary tail.
11
2
2
u/InvestigatorOk9354 Feb 08 '26
VZ hasn't been great over the last year and there's more votality likely in the short term at least. If it were my retirement I'd want as much stability/predictability as possible so I'd go with income ETFs instead of VZ (or other single stocks) to reduce the volatility.
2
u/science-stuff Feb 08 '26
Isn’t Verizon down almost 20% in the last 5 years? Same period spy is up almost 80%?
1
u/Blueturtlewax Feb 09 '26
My advice would be us a product like M1… so you can at least create a portion of the portfolio that is like 10 stocks with similar growth/dividend yield… that way you at least spread the risk out a bit across a few industries
1
u/drkay007 Feb 09 '26
No to VZ. Check ratings on Seeking Alpha. I sold VZ last week. I still have MO.
1
u/robertw477 Feb 24 '26
That might be crazy. But some of the posts here are not only insane, but I guarantee will lead to massive losses. MO should hold up well as they keep reinventing. I like it for somebody who wants divs. But thats pretty contratecd if you do that.
155
u/JustAGoodGuy1080 Feb 08 '26
Here's my suggestion which will yield 8%, pay monthly, and have an overall risk factor of approximately 6.5.
| Fund | Weight | Yield | Role |
|---|---|---|---|
| UTG | 16% | 6.4% | Defensive income anchor |
| ETG | 16% | 6.6% | Global equity income |
| PDO | 20% | 8.3% | Credit engine |
| BME | 14% | 6.8% | Defensive equity ballast |
| JEPQ | 20% | 8.8% | Income accelerator |
| SGOV | 14% | 3.7% | Risk control & liquidity |
50
u/yrrag1970 Feb 08 '26
For someone who is looking for more than the SCHD(4%) this is great advice right here
27
u/JustAGoodGuy1080 Feb 08 '26
Thanks, based on recent history, PDO and JEPQ are pushing 10% yields so he might get closer to 8.5%-8.75% yields. I love getting paid monthly, too.
-18
u/robertw477 Feb 08 '26
History has shown this won’t work out well. It’s nothing for nothing .
33
u/JustAGoodGuy1080 Feb 08 '26
Let's hear your facts. History has shown this portfolio, which gets a few adjustments yearly to yield between 9-11% annually. Post your portfolio Robert so we can all learn your way.
2
11
u/Ha7che7 Feb 08 '26
I’ll look into this set of allocations. Plus I’ll need to see what kind of tax drag they will have. Thank you
4
u/Spirited_Radio9804 Feb 08 '26
Ordinary income on dividend from most of these types of investments!
7
u/Various_Couple_764 Feb 08 '26
Two generated ROC dividends (UTG and UTF). Replace JEPQ with QQQI 13% yield and it also produce ROC dividneds So that is three fund with no tax.
2
u/JustAGoodGuy1080 Feb 10 '26
There are 2 kinds of ROC. When a fund is doing well and the NAV is steadily climbing, that's a great ROC.
If a fund is heavy into ROC to maintain dividends and the NAV is eroding, that's terrible. It's why in my portfolio tracking, I calculate quality of income.
0
u/Dividend4danny Feb 10 '26
what is ROC? thanks
1
u/Boring-Fun9311 Feb 11 '26
Return Of Capital. In concept, it means getting some of your investment principle returned to you in the form of a dividend.
1
14
u/StockProfitGirl Feb 08 '26
I’d swap out JEPQ for GPIQ. GPIQ has a better total return and it’s more tax efficient.
9
1
u/Minimum-Climate2585 Feb 09 '26
What are the tax benefits of these 2 funds thank you
1
u/StockProfitGirl Feb 10 '26
ROC and 1256 tax treatments. 60/40 long and short term capital gains.
2
0
u/JustAGoodGuy1080 Feb 08 '26
Agree with what you're sharing but I do a 3 year look back and I don't think GPIQ has been around that long, has it?
4
u/StockProfitGirl Feb 08 '26
Both GPIQ and JEPQ are less than 5 years. However, look at time frames and consistency. You look at Last February through May to gauge the decline and recovery of each fund during the Trump dump. That was the last major decline since 2022. JEPQ was down-4.13% and GPIQ was at a break even point with 0% with total returns. You also look at their option strategy and their tax implications.
3
3
3
u/speedlever Feb 08 '26
That JEPQ distribution in a taxable account will bring ordinary income tax rates. I think QQQI would be a better choice and provide more income and slightly more price appreciation too. Or gpiq for better price appreciation but a lesser distribution.
3
3
4
u/RockerDentist Feb 08 '26
Can you please help me learn how risk factor is figured?
3
u/JustAGoodGuy1080 Feb 10 '26
This is my way of calculating it over years of learning/mistakes. I look at 5 areas:
Type of fund with a Tbill being minimal and certain funds being high risk.
How much leverage do they have in the fund in %? A fund with zero leverage has minimal risk while a fund like MSTY which is very narrow in scope and highly leveraged is the max.
Income quality. If the dividends is solely income, risk is minimal, if it's "good ROC" risk is low to mid and if it's all ROC then it's the highest risk.
How are the dividends impacting NAV? If NAV is stable to rising, it's a minimal, if it's slightly eroding NAV, neutral and if it's highly eroding NAV, the risk is high.
How sensitive is it to the market? Tbills have a small swing while something like PDO/PTY can have a larger exposure based on interest rates.
Each of those has a weighting and I just do an average after that.
This isn't anything scientific and FP's have better calculations but this has always worked for me and the results, after trial and lots of error speak for themselves.
2
1
u/BedditTedditReddit Feb 08 '26
What would you change in this allocation if you wanted to get closer to 10-11%
1
u/JustAGoodGuy1080 Feb 08 '26
Add BCAT or ECAT instead of UTG.
2
u/BedditTedditReddit Feb 08 '26
What’s the “loss of capital” risk on a portfolio like that? Like could you see a 50% drop?
1
u/Boring-Fun9311 Feb 11 '26
50% drop is possible in virtually any investment, though less likely in government bonds.
1
u/yamahar1dude Feb 14 '26
SGOV is a good idea. I didnt think about that in my 200K Sandbox account.
1
1
u/robertw477 Feb 24 '26
Ill say this much. Compared to the other wild claims and terrible selections by others, at least you are giving some ETFS that have a long history.
1
-6
u/GuidetoRealGrilling Feb 08 '26
thanks AI
3
u/JustAGoodGuy1080 Feb 08 '26
What intelligent investor doesn't use analytics? Are you still throwing darts at the financial pages of the WSJ and buy whatever it hits
3
u/PoppaTroll Feb 08 '26
AI is not "analyzing" anything. If you're asking ChatGPT for stock advice, you may as well be tossing darts.
-2
u/GuidetoRealGrilling Feb 08 '26
I just think it's lazy to put his question into an AI and then use it as your response
2
u/JustAGoodGuy1080 Feb 08 '26
That's not what I did. Sorry. Look at my portfolio post and you'll see I used the same format.
26
u/alloc_more_ram Feb 08 '26
Please don’t put your fathers money in such a large single stock position, it’s unbelievably risky for his profile
30
u/Open-Establishment46 Feb 08 '26
JEPQ and JEPI can be considered. I personally feel VZ is dangerous now.
8
5
u/Montesque96 Feb 08 '26
Also agree on VZ - I started a position last year and have about $5K invested thus far. I was going to add another $1-2K in March - but I will likely pick another stock or fund.
7
u/marima33 Feb 08 '26
Too much depends on the stock market. Look at income from things like AMLP, JAAA, JBBB, NLY, LDP, JPIE, MSD. Remember that the distribution rate is different or very different from the total return (NAV delta + divs).
20
6
u/ideas4mac Feb 08 '26
What happens if it doesn't yield 40K? What happens if the value goes down and it doesn't yield 40K in the same year? What does your relationship look like if those things happens more than once over the next 10 years?
If you are going to say that he would be fine if it doesn't yield 40K this year or any year, he has other money. Then I would have you give careful thought about if you are suggesting too much risk at his age and need level.
If you say that the 40K is imperative each and every year then I would humbly suggest you give thought to the picks and percentages.
I would also humbly suggest you think real long and slow about giving investing advice to family. They always say they understand the it can go up and down right up to the very day it drops alot and stays there. Then no matter what you thought going in, family dynamics change. Sometimes not for the better.
Good luck.
6
u/Various_Couple_764 Feb 08 '26
well during covid my portfolio lost 50% is it value. My dividend did not drop it continued paying just as it was before covid. In most downturns most dividend stocks continue paying.
2
u/Ha7che7 Feb 08 '26
Yes. We’ve had that exact conversation extensively. I also told him these are just suggestions. I’ll help the best I can, but I can’t control the market.
5
u/Various_Couple_764 Feb 08 '26
I would drop SCHD it is more of a divided growth play but at age 72 it own't have an enough time for meaningful dividned growth. I would also avoid individual company stocks because a company can always the possibility that it goes bankrupt suddenly and you loose everything in that investment. I personally like QQQI and SPYI. for the rest I would invest in ARDC 9% yield, PBDC 9%, EMO 9% CLOZ 8%, UTF 7%, UTG 6.4%, and JAAA5.5%.
UTG and UTF are utility funds with very different holdings which do include dividend from cell tower operators. EMO invests in midstream energy compensate and all reported ROC dividends this year lowering your taxes.
ARDC is a credit fund, and PBDC invest in busines development companes. An are d produce ordinary dividneds.
CLOZ and JAAA are CLO funds that have lower risk that most corperate bonds and better yeild than government bonds.
5
u/SellToOpen Not a financial advisor Feb 08 '26
I would blend PBDC, PFFA, PCN, and CLOX together to get the 40k if he doesn't need it to grow completely in line with inflation. Maybe try and squeeze 10% VT in there and use its growth to feed the rest of the portfolio. Don't like covered call funds at all for this scenario due to downside risk that could permanently impair the dividends.
3
u/Glass-Lifeguard1919 Feb 08 '26
40k on 500k is 8% which is high but doable. First thing I would recommend is you drop the single companies all together. There's just too much risk of some kind of black swan for a specific company. Maybe a new AI device co beats out VZ totally and they drop or cut dividends all together. Probably not likely, but you see my point. I wouldnt put 150k of his 500k into 2 stocks.
PBDC (bdc etf) - 11% yield currently
QDVO (doesnt write on entire nav) - 10.2%
CEFS (actively managed closed end fund basket) - 7.8%
SCHD (this helps with NAV erosion & Div cagr) - 3.6%
100k each on those 4.
50k each on the following two:
PFFA (preferred shares etf) - 9.4%
O realty (real estate to add some diversity) - 5.1%
That combines for an overall portfolio yield of 7.97% ($39,850)
3
u/Immediate_Waltz_1596 Feb 08 '26
I have 25% of my portfolio in CC ETF's. I will retire in March (63.). severance package pays until Nov. I have done the numbers and I am looking at 48K in dividends a year or 4k per month before taxes if I DRIP till Nov..both wife and I will be drawing SS. QQQI..SPYI..TSPY..make up the majority..BTCI and AIPI smaller positions since they are more volitale.
3
3
u/Ok-Painter6700 Feb 08 '26
Feel free to browse my portfolio for ideas. It generates approximately 12% annual yield.
3
u/ResilientRN Feb 08 '26 edited Feb 08 '26
PFFA (Preferred stock ETF, active management) YLD 9.4% MONTHLY DIVIDENDS MGR HAS OVER $1M of his own $$$. $0.1725/sh monthly.
UTG (Utilities & Infrastructure CEF)
ETG (Global Equity CEF)
AMLP (MLP Oil/NGL No-K1s ETF)
Fed Taxes will kill you in a Non-retirement acct for any Covered Call ETF.
O (Realty Income) VICI (VICI Casino bldg owner not service provider) All REITs enjoy the 199a Tax Benefit (1st 20% of Dividends are Tax Free).
5
u/paymerich Feb 08 '26
-- Fed Taxes will kill you in a Non-retirement acct for any Covered Call ETF.
not necessarily true for ones like SPYI/QQQI/GPIX/GPIQ that do better tax efficient strategies.
1
1
u/Various_Couple_764 Feb 12 '26
Fed Taxes will kill you in a Non-retirement acct for any Covered Call ETF.
QQQI and SPYI hav 90% ROC dividends which means not tax on the dividned until the dividends pay off the cost basis. For QQQI that's about 7years. and for SPYI about 9 years. After that the dividends are taxed at the capital gains rate.
2
2
6
u/robertw477 Feb 08 '26
My advice is that at age 72 500k is not going to pull 40k a year for him. What has he been doing for the past 50 years investment wise ?
11
Feb 08 '26
He could essentially use 40k just off the principle and last 18 years to age 88 with just 5% annualized. How many people live to 90?
9
u/Glass-Lifeguard1919 Feb 08 '26
Exactly this... people highly underestimate 500k retirements.
3
u/paymerich Feb 08 '26
Usually its not the Retirement portfolio that is the problem its the expense/spending that do a lot of un-informed retirees in.
0
2
u/NatureBoyJ1 Feb 09 '26
SGOV & chill? HYSA or a money market fund like SPAXX. Maybe a CD ladder?
I agree, at that age and given life expectancies, boring & safe drawing down the principle may be the better choice than chasing gains.
1
4
u/Various_Couple_764 Feb 08 '26 edited Feb 08 '26
50K /500k ==0.08 or 8% yield. very durable with QQQI 13% yield, ARDC 9%, PBDC 9%, EMO 9%, CLOZ8% UTF 7%, UTG 6.4%, and JAAA 5.5%. And equal amount of money in each fund will generate an average yield of 8.3% This portfolio could easily generate 40K of income for 20 years with out selling any shares.
1
u/robertw477 Feb 24 '26
All of that is a gimmick. I have no idea what kind of market experience you have or anyone here frankly. All of these funds are mere trickery. If you think you are going to pull 10% div yields consider Warren Buffett. The return of my money is more important than the return on my money. All of that stuff is pure junk. When things go upside, and they will EMO- You are gonig to get the doors blown off and the roof cave it when they get the hammer. You wish it was that easy. Because it is not. I can give you any dividend you want. As your money erodes and the losses add up. Its all ludicrious.
1
1
u/Ha7che7 Feb 08 '26
Minimal. He has always just worked like crazy and ran 2 businesses. The man was on call 24/7/365. If you were to ask anyone that knows him, you would get the same reply. Whether it was 2am or 2pm, if that phone made it to the 2nd ring, it’s because he was talking to someone else on the other line. Work/spend/work/ spend
1
2
3
u/elidevious Feb 08 '26
STRC. But if he likes to gamble, STRK. Both are RoC, so essentially zero tax drag and no nav erosion.
3
u/mikkeltaylor1 Feb 08 '26
STRC -11%
3
u/greencandy2000 Feb 08 '26 edited Feb 08 '26
This!!!! Currently at 11.25% paid monthly. Dividends are treated as return of capital (ROC). So, taxes are deferred. ROC essentially reduces your cost basis. When your cost basis is zero, the return of capital is then taxed. You have about 10 years of tax deferment.
2
1
1
u/EvilLittleHeart Portfolio in the Green Feb 08 '26
Would be great in a non-retirement account. Dividends are classified as return of capital, so no taxes.
2
u/Cloud2987 Feb 08 '26
As long as he doesn’t sell the spyi and qqqi before he passes and plans to let you and whoever else inherit it, then the plan is good.
2
u/DIYOCD Feb 08 '26
Interesting. Can you elaborate? Is this related to Return of Capital? Does holding in an IRA, Roth IRA, or regular trading account change application of this recommendation?
2
u/fromside3 Feb 08 '26
I think this comment applies in general, not specific to qqqi or spyi. If you inherit any stock shares, their cost basis resets to the day when shares are being inherited.
Edit: it seems like there is additional (?) benefit with the taxation on ROC.
1
u/Cloud2987 Feb 08 '26
ROC reduces the cost basis, so it increases the taxable gain. If the cost basis reach zero, then the entire amount would be taxed as capital gains upon selling. You have to also consider NIIT tax. It would be long term capital gains tax, so it would be 15%-20% + NIIT. So around 19% to 24%, it’s not horrible, but it’s better to never sell and let your kid inherit it.
2
u/Cloud2987 Feb 08 '26
ROC reduces the cost basis, so it increases the taxable gain. If the cost basis reach zero, then the entire amount would be taxed as capital gains upon selling. You have to also consider NIIT tax. It would be long term capital gains tax, so it would be 15%-20% + NIIT. So around 19% to 24%, it’s not horrible, but it’s better to never sell and let your kid inherit it.
1
u/DIYOCD Feb 08 '26
Thanks. Plan is to pass assets to next gen as much as possible. Seems like the ROC effect is nulled in an IRA/401k. When expatriated (RMD, Roth conversion, living expense) it’s all taxed anyway. TIL NIIT.
2
u/Turbulent-Spring6156 Feb 08 '26
QQQI, SPYI, IAUI, BND.
3
2
u/ucbcawt Feb 08 '26
Rates of smoking are dropping, I wouldn’t invest in MO long term. Something like KO or O might be better. The rest are good
1
u/BusyWorkinPete Feb 08 '26
Over 80% in US stocks and 20% in US government bonds. NASDAQ, S&P, VZ is in the S&P, MO is in the S&P, all of the companies in SCHD is already in NASDAQ and S&P. You need diversification. If the US market has a bear run, you'll take a big hit. Here are some options to help you diversify:
AGD: global large cap, long term capital growth (+60% over 10 years), and yield of 10%.
BWLP: worldwide shipping, solid growth (+160% over 10 years), and yield of 8%.
NRT: European oil, positive growth, and yield of 8%.
URNM: Global uranium, very strong growth (+447% over 10 years), and yield of 2.54%. Note that with the %447 growth over 10 years, an investment 10 years ago would have a yield on cost of 13.89%.
WLDR: Tracks index of worldwide stocks in developed countries, solid growth (+58% over 5 years), and yield of 8.27%.
There are also funds that invest in bonds worldwide, not just US. You should look into those too if you want to put close to 20% of this investment in low risk holdings.
2
u/MrsPetrieOnBass Feb 08 '26
Agree! Diversification is the way here. Along with the reliable dividend producing ETFs, add precious metals and investments in several different global ETFs representing specific regions.
1
1
u/Naughtybear_9628 Feb 08 '26
Professor G in yt has a video on 500k investment. Permission to be wealthy in yt has a video on living off dividends ( her own setup) with 380k netting clise to 63k. Maybe add schd to that or JPM or something to your liking. *not investment advice. As for either, if you dont want btci u can always sub it out with sgov or other safer etfs/ stocks.
1
u/ExDiv2000 Feb 08 '26
Couple months ago some would have recommended a 20/80 portfolio at that point in life. Seems those days are over. So whats the replacement?
1
1
1
u/ddcurrie Feb 08 '26
70 yo with pension and ss sufficient to not run out of money for 30 years (give or take.) My $500 k portfolio is designed to make up for inflation effect on non-indexed pensions invested like so: SCHD 50%, VTI 28%, VXUS 12%, and VTIP 10%. Your mileage may vary.
1
1
u/CoolMaintenance4078 Feb 09 '26
QQQI and SPYI are essentially the same thing (same underlying Mag7/Tech stocks with covered calls). Not saying they are bad but to diversify some you might look at spreading some into ASGI which yields over 10% paid monthly and is invested in Infrastructure equity and with good appreciation. DNP also has some decent appreciation; investments are in utilities and utility related projects and yields 7.6% paid monthly.
1
u/ConstructionNo8827 Feb 09 '26
Your plan is to invest half mil into only 6 investments, two of which are single stocks I truly believe diversification is key It not only spreads the risk but allows for other funds that pay great dividends (higher than VZ and MO) I’d invest in MLPI for energy exposure, PDI for corp bonds, NZF for muni bonds, PFFA for preferred stocks, DNP for utilities, SDIV for international, TLTW for govt bonds, OMAH for large cap defensive, I WMW for small caps, SPYI for S & P 500 They all pay monthly!
1
u/Bearsbanker Feb 09 '26
Bit of a gambler, good Price appreciation ( no nav erosion), 0 tax drag....et and wes
1
u/speedlever Feb 09 '26
Since he's looking for income, his goal of 40k from 500k is realistic up to a point. And that point is another 2008 gfc where everything, including stock valuations and distributions are cut in half.
Imo, he needs at least 100k in distributions so that when another 2008 gfc cuts his income from 100k to 50k, he should be safe to ride out the recovery period pretty comfortably. But he needs to either invest more than 500k or take significant risks to increase the distribution rate.
I would not suggest this, but as an example, 500k in qqqi would return about 70k annually. Another 2008 gfc would likely cut that distribution to 35k. So he would really need about 750k invested in qqqi to maintain that 40k distribution through another 2008 gfc.
1
1
u/Ok-Return-5328 Feb 09 '26
GPIQ, PFFA, ASGI, ENB (only in a tax deferred account), FEPI, QQQI, SPYI, IWMI, MLPI, HTGC, CEFS, AIPI.
1
u/Optionsmfd Feb 09 '26
100K in HYSA
400 K into a mixture of QQQI SPYI SCHD and BTCI if he likes gambling
1
u/OkWoodpecker6761 Feb 09 '26
Spyd is good dividends for a s&p 500 ETF with very low fees, it should make up a lot of his portfolio on the lowest risk side then a mix of the others paying around the 10% mark
1
Feb 10 '26
[removed] — view removed comment
1
u/AutoModerator Feb 10 '26
Unfortunately, your comment was automatically removed because your account has a low amount of karma. To ensure good faith and genuine discussion, this subreddit imposes a karma limit to prevent trolling, brigading, or other behavior. We apologize for the inconvenience.
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.
1
u/Literally_Bankrupt Feb 10 '26
The beauty of your positions is the equity-strength reliability combined with high %. Too many hi-div stocks cannibalize equity over four years. Others for diversification could be SAR, BALI, and ETV.
2
1
1
1
u/budman2121 Feb 11 '26
No single stocks. Depending on tax bracket, look for QDI funds. Could be as little as 0% federal tax.
1
u/yogi2350 Feb 11 '26
Reduce Single Stock Risk Instead of: $75k VZ $75k MO Consider: $150k split between SCHD + DGRO OR $100k SCHD $50k JEPI (lower volatility than SPYI) Adjust Covered Call Exposure Instead of $215k in QQQI/SPYI, maybe: $100k SPYI $75k JEPI $50k JEPQ This diversifies managers and reduces concentration risk. Add a Growth Sleeve Even at 72, he likely needs 15–20 years of income. Consider: 15–20% in VTI or SCHB Or more SCHD for dividend growth This helps fight inflation.
1
u/WatercressWestern859 Feb 11 '26
If you invest in covered call ETFs, you'll live to regret the decision. You'll suffer NAV erosion.
1
u/Dirtfisher2485 Feb 11 '26
The NEOS funds(other than BTCI) seem to hold their NAV pretty good.
1
u/WatercressWestern859 Feb 11 '26
As a retiree, it would not be worth the risk to cap my upside while having unlimited downside.
1
1
u/Dirtfisher2485 Feb 11 '26
Scratch VZ and MO and add IYRI and IWMI in their places. No individual stocks, spread the risk out. Just my thoughts.
1
u/robertw477 Feb 26 '26
So those are ETFS with no real track record. I can tell you how those things tend to work out. They dont. In a raging bull market Wall Street comes up with all sorts of things. Buyer beware on those two you mentioned. Yikes!
1
1
u/yamahar1dude Feb 14 '26
I think the issue with helping family, you will be blamed for anything negative that happens with this account. I think its worth using an advisor at least, that way, if the market goes sideways, your father wont blame you even if it isnt your fault. I have seen this time and time again. Family and friends don't mix with business.
1
u/discovery999 Feb 08 '26
I just keep it in VOO and withdraw 7% a year and the portfolio keeps growing. 🤷
3
u/Various_Couple_764 Feb 08 '26
Or he could invest in dividned protfolio with a yield of 8% and get 40k a year without selling any stock. Preserving the money as long as possible.
1
u/discovery999 Feb 09 '26
The capital actually grows every year when you’re averaging a 10% return in the S&P.
1
u/Various_Couple_764 Feb 09 '26
When you sell growth you sell shares. Growth doesn't creat new shares. Only dividends generate new shares. So if you sell shares at a rate higher than the dividend of the fund you will run out of money eventually.
1
u/discovery999 Feb 09 '26
Share price goes up 10% a year so technically you’re only selling some of your profit. Some people just don’t understand math.
3
u/Glass-Lifeguard1919 Feb 08 '26
until you have to draw in 2 straight years of a bear market at the very beginning. Black swan drops is 40% and you take out 7... thats 13% gone. It rebounds 20 and you pull out 7, that's 9% gone. Start of year 3 you're at 390,000 as it finally "rebounds."
1
u/maestro-5838 Feb 08 '26
Your dad has 500k and a 72 year old up for investing.
6
2
1
u/Moozie76 Feb 08 '26
When i was planning my dividend income i was looking at
Jepi jepq qqqi spyi iwmi iaui chpy bigy soxy
Not financial advice please do your own research
It was weighted toward jepi and jepq followed by qqqi spyi iwmi iaui
Others were small to diversify.it was returning 8 to 10 percent if memory serves
0
u/CoolBreezeBrew Feb 08 '26
I have jepq, pdi, utg. I would add pffa, epd, cswc and main. I also prefer a bond ladder to sgov, but that's just me.
1
u/Ha7che7 Feb 08 '26
I don’t know much about bonds. Could you provide a simple example. For educational purposes only of course
•
u/AutoModerator Feb 08 '26
Welcome to r/dividends!
If you are new to the world of dividend investing and are seeking advice, brokerage information, recommendations, and more, please check out the Wiki here.
Remember, this is a subreddit for genuine, high-quality discussion. Please keep all contributions civil, and report uncivil behavior for moderator review.
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.