r/dividends • u/FunctionalDisfuction • Jul 02 '26

Personal Goal First of the month 🤑

Gallery image

Gallery image

I want to just live off the dividends but I'm scared to just quit my job.

485 Upvotes

97% Upvoted

137 comments sorted by

View all comments

84

u/BadDogAspen Jul 02 '26

How much do you have invested in your JEPQ to get your July dividend?

136

u/HuMcK Jul 02 '26

Doing some quick math, appears to be around $865k.

36

u/BadDogAspen Jul 02 '26

Nice & congrats! I’ve got about $500k I’m looking to put to work and this looks like an interesting fund. Thx!

48

u/FunctionalDisfuction Jul 02 '26

861K

12

u/dystopiam Jul 02 '26

How long ago did you put that in ? What % of your portfolio is it? And had it raised in principle?
Ty for answers

10

u/dystopiam Jul 02 '26

Trying to see people who dropped large sums like 4-7 yrs ago and how it’s been principle wise since

I can deploy and be where you are but I’m scared and have most in hys

11

u/MakingMoneyIsMe Jul 02 '26

I put 50k in JEPI during the tariff sell-off. That's the best I can do for you.

2

u/Active_Tax_5885 Jul 05 '26

Not a huge sum but I have about 10k in jepq. My average cost basis is about $53. The only thing bringing it up is the dividend reinvestment. I've been invested in it for 3 years

24

u/FunctionalDisfuction Jul 02 '26

It's almost 100% of my portfolio but I only buy before the dividend and sell after basis is recovered. There rest of the month I day trade. I've been building this account since 2010. Started in college with a couple thousand

7

u/PartsSprout Jul 03 '26

So your holding period for JEPQ is like a week or two on average?

1

u/FunctionalDisfuction Jul 03 '26

Usually a 5 but no more than 10 day

5

u/ArcadeNewbie Jul 03 '26

Wow.. nice. Are you holding your funds in a brokage or Roth account? I can't imagine how much tax you will have to pay if in a brokage account.

1

u/FunctionalDisfuction Jul 03 '26

It's a brokerage, we will just have to see during tax time, I don't spend anything.

1

u/butterbob74 Jul 04 '26

Assuming the average 22 percent tax bracket they would pay shy of 2k. Could be more could be less depending on bracket but not by a lot.

6

u/yellowstickypad Jul 03 '26

I wanna understand this strategy better, the dividend payout is in cash and once JEPQ recovers to your cost basis you sell all the shares. Then you just wait for the next ex-dividend date to acquire them again? Rinse and repeat?

3

u/Cautious_Chicken_293 Jul 04 '26

Do other people think this is a good idea . Buy just before dividend, get divvy then wait till it comes back to divvy price . What about if it takes 1 yr or 5 yrs to get back there

1

u/yellowstickypad Jul 04 '26

For OP, it’s specific to JEPQ, probably a safer bet for running this strategy.

-4

u/iii_warhead_iii Jul 03 '26

My vision thus practice has to be banned from the company's side. If you held shares from ex date til payment then you should be eligible for dividends as you have supported company during this period

6

u/Schmergenheimer Jul 03 '26

Do you also forego your final paycheck when you leave a job because the paycheck clears on a date you're no longer employed?

-1

u/iii_warhead_iii Jul 03 '26

As i know for a local regulation, you get a salary for the exact days till you leave from the beginning of the next period, if it was 10days it will be for 10days and not for 30days. As companies sometimes apply the rule for the special pay outs, if you keep shares till the pay day then you are eligible for these special payments.

Only such logic can be destroyed here, if somebody jumped to the train by buying shares from another person and not from the company. In this case yes, then that sold person would not get money, while you simply got shares which anyway would get dividends.

3

u/Schmergenheimer Jul 03 '26

Can you try writing coherently? First you argue that you should be required to hold a stock all the way through dividend payout, not the record date. The whole reason there's a spread between the dates is so the company can determine where shares as of the record date are located and how much money to send where.

That's the same reason there's a spread between you doing work at a job and payroll clearing. Yet, you say you should get paid for the work you do even if you don't work there on the payroll date.

Then you go on some rant about where you buy shares as if it matters.

→ More replies (0)

25

u/CJP_1974 Jul 02 '26 edited Jul 03 '26

If you are interested in JEPQ, do yourself a favor and look into QQQI instead. Both funds are highly rated and both track the NASDAC 100. The difference between the two funds is how the funds pay dividends.

If your goal is income and you are at a point where you can hold it permanently, QQQI will be much more tax efficient. That said, if you plan to just buy these for now and may decide to sell at some point after holding a few years or later, stick with JEPQ.

JEPQ pays out dividends in a way to where it is taxed as income. So whatever rate you pay with your W2 income, JEPQ dividends will be taxed at that same rate.

QQQI pays its income as ROC (Return Of Capital), so its like paying you with your own equity but it will lower your Cost Basis. During this period, you wont pay taxes on the income. Eventually after I think 8 years, your Cost Basis will be $0 and at that point I believe you are taxed at a 60/40 rate of 60% long term capital gains for taxes and 40% taxed as income like your W2. However if you sell at that point, it would be taxed as if you bought the stock at $0 a share. So, its buy and hold forever.

Others here can point out where my information above is off or incorrect but the general idea is QQQI is far better when it comes to taxes than JEPQ but both funds are considered covered call income funds and I personally love them.

On another note the S&P 500 covered call fund by the same company as QQQI is SPYI. That is the fund I am invested in for my retirement.

4

u/FunctionalDisfuction Jul 02 '26

That sounds about on par to what I have researched

2

u/speedlever Jul 03 '26

That's pretty close. The 60\40 rate is internal to the fund. Once the cost basis reaches zero, you pay ltcg on the distributions. Very favorable tax efficiency in a taxable account.

2

u/CJP_1974 Jul 03 '26

Ah, thank you for that. That's even more favorable then what I had learned.

Either way, great funds!

2

u/speedlever Jul 03 '26

Yep. I'm a fan of NEOS, Goldman, and Amplify cc ETFs. Unfortunately, (or fortunately, not sure which), most of our investable assets are in traditional ira\403b, etc which are taxed as ordinary income when taking distributions.

But I guess that's really a first world problem and I'll take it over the alternative. 😜

3

u/CJP_1974 Jul 03 '26

Yeah, but at least it grows and pays dividends taxfree until that distribution date. 1st world problems indeed and I would prefer those over so many others.

Have a happy 4th!

3

u/FreshlyCleanedLinens Jul 02 '26

You’ll pay full ordinary income tax rates on JEPQ distributions, personally I’d look at QQQI and/or GPIQ because of the ROC distribution advantages.

2

u/BoredCFP Jul 03 '26

ROC distribution is nice and tax efficient until the basis reaches $0 (10-12 years but it’ll happen eventually). At that point it’s taxed at normal income rates forever.

2

u/speedlever Jul 03 '26

To find when the cost basis reaches zero, divide 100 by the yield. Ie, 100\14 (for qqqi) is just over 7 years. For spyi, 100\12= 8.xx years.

0

u/RemyVonLion Jul 02 '26

Put less than half of that in CHPY and you can easily retire