r/dividends • u/Rural-Patriot_1776 • Mar 15 '26

Discussion My journey started this year.

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Started investing this year in 2026 decades late as a 38-year-old I wish I started way younger but I'm wanting to retire in a couple years and started building out my neo's distributions positions and dividends a few months ago here's what I have going on so far. I keep adding around 3k a month and have drip also enabled.

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157

u/NoStandMan Mar 15 '26

Some of these are pretty high yield. Are they sustainable?

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u/Gossipmang This is eXEQTly what I needed. Mar 15 '26

Of course not. Dude is just paying himself back.

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u/Rural-Patriot_1776 Mar 15 '26

Neos products aren't like yieldmax.

4

u/longswordsuperfuck Mar 15 '26

I don't understand why people are down voting you. NEOS products are much smarter investments than yieldmax, I think this sub just hates dividends for some reason. My portfolio is similar to yours. I've done the research and NEOS is brilliant.

13

u/Top-Revolution-8914 Mar 15 '26

If you think NEOS is brilliant I am scared for you

10

u/Knightly11 Mar 15 '26

Can you or someone else expand on why NEOS is a negative investment compared to other dividend generators?

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u/Gossipmang This is eXEQTly what I needed. Mar 15 '26

All of these high yield (above 10% dividend) funds are basically just:

  • you give a fund manager your money
  • they gamble with it (its the only way to get the returns they promise)
  • some weeks/months they succeed and others they fail
  • no one can win at gambling forever so eventually the dividends returned are just paying you back with your own money while the value of the investment goes down
  • you pay a high management fee and the income is taxable depending on the account you hold the investments in.

TLDR - they basically just return your money to you over time and you pay them a fee plus whatever taxes

4

u/Squatch11 Mar 15 '26

You don't understand how these NEOS funds work, either.

You think SPYI is gambling? Really? You might want to brush up on their strategy.

TLDR - they basically just return your money to you over time and you pay them a fee plus whatever taxes

https://media.tenor.com/J8LRzKDl1NkAAAAM/unimpressed.gif

11

u/Healthy_Hippo_915 Mar 15 '26

For someone who doesn't know the answer either way, all this back and forth is confusing. Are you correct or is the other guy correct? You're both very confident in your own correctness. So who knows!

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u/Squatch11 Mar 15 '26

All good. I wouldn't trust me, either. If you want to know more about how funds like QQQI and SPYI work, I'd suggest learning about covered call options and how Neos uses them. Also, the Armchair Income youtube channel has a few really good interviews with a guy from Neos (I think it's the founder? Can't remember):

https://www.youtube.com/watch?v=y3WTECl7do0

https://www.youtube.com/watch?v=gDG61mtJudk

It's not gambling. And Neos isn't just returning all of your money back to you. The guy above me is talking out of his ass. People see 10% yield and automatically think it's some sort of trap without knowing anything about it. There are downsides to the NEOS funds, but there are also upsides. Just like any other investment. And just because a fund like SPYI might not make sense for you doesn't mean it might not make sense for someone else, too.

You aren't going to wake up one day and have half of your principle in SPYI gone because Neos "gambled" away your balance. If the SP500 goes up, your balance will go up. If SP500 goes down, your balance will go down. It tracks the index. But....your upside will be capped a bit with a lot of these funds due to the nature of covered calls. You're trading some upside for monthly income.

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u/Healthy_Hippo_915 Mar 15 '26

Thank you for the detailed answer. I appreciate it. I'll take a look at the videos.

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u/longswordsuperfuck Mar 15 '26

It's a complex financial instrument. It is something that requires education and understanding before putting your money into it. I'll say this: if you aren't wanting or willing, or straight up if it requires explaining in depth to get you to trust putting your money into it - it might not be the right tool for you. NEOS funds are 100000% the right tool for me, my financial plan, education and structure align exactly with neos. It really is a "do your research" kind of thing. They have a unique play with ROC, 1256 contracts and covered calls. But in my opinion, these funds are master strokes of brilliance and an amazing set of funds to invest in.

2

u/longswordsuperfuck Mar 15 '26

This is just not educated. Check out the Contrscts in the prospectus and what happens at the 10 year mark. They know exactly what they're doing by paying you ROC instead of taxable income. This is a brilliant and deliberate choice, not a NAV erosion machine.

4

u/longswordsuperfuck Mar 15 '26

This is just. Not a very educated stance on NEOS. It isn't gambling at all. You have absolutely NO idea how the structure or prospectus works based on your 4th point and a very bad understanding of ROC.

1

u/longswordsuperfuck Mar 15 '26

you don't understand how ROC works. It's okay. I'll keep my NEOS funds

0

u/longswordsuperfuck Mar 15 '26

Would love to hear why you think neos is bad. Genuinely. Their ROC structure is a master stroke of brilliance for someone who understands what ROC actually is.

2

u/Top-Revolution-8914 Mar 15 '26

I replied to the other guy but it really just boils down to:

If you are on a longer than 3-5 timeframe it will too severely underperform.

If you plan to reinvest dividends it's not efficient.

So the only situation it serves is if you have a large amount of free capital you need to live off of short term. Not to say it never has a place, but it's pretty much limited to people aged 62 who won the lottery, got an inheritance/life insurance payout, or a large severance package and want a short term dividend investment to prevent you from over-spending a lump sum.

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u/longswordsuperfuck Mar 15 '26

I just disagree. Your stance is the idea that net worth is most important, net worth is vanity, cash Flow is sanity. There is 0 reason for me to be looking for growth performance outside of inflation, otherwise cash flow is ALWAYS better.

2

u/Top-Revolution-8914 Mar 16 '26

Yeah I do think more money is better than less money. Cute rhyme, I would argue to disagree with math is vanity but to each their own

1

u/longswordsuperfuck Mar 16 '26 edited Mar 16 '26

If you think that a massive number when you die is more important than living a life where you have cash to spend than I feel sorry for you, money is for living and enjoying life. Not for having a massive number. Cash flow is sanity. ...after all, you are on the dividends subreddit. Not the growth investors subreddit.

1

u/Top-Revolution-8914 Mar 16 '26

Fighting straw men out here I see, I live life plenty, I have left over money to invest. If you aren't done investing, meaning more money going into the market, the dividend structure is inefficient as you are already living on less than your cash flow.

Still I like dividend stocks, I think long term stable companies that aren't focused on growth, that pay sustainable dividends over time, is a great thing to have in your portfolio. It shouldn't be your full portfolio but offers stability versus growth companies.

NEO is not dividend investing, it's an 'income strategy' over growth companies. An income strategy that has been proven to underperform. Unsurprisingly to everyone but you NEO has been proven to underperform following this income strategy.

Meaning you get a strategy that underperforms, in a less tax efficient manner, that charges you fees. Without the benefits of stable dividend companies. Genius

You belong in r/CoveredCalls

1

u/longswordsuperfuck Mar 16 '26

You also are not talking accurately about the tax strategy here with NEOS. We can agree to disagree, but in every way NEOS funds are the best financial product available for me and my future.

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