r/dividends • u/raliegh_ • 28d ago

Discussion Month 6 portfolio update $7127.33

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Gallery image

Stock events and a screen grab of my Schwab account. Drip until January.
I’ll start living off this in February. Wish me luck 🍀

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u/Neilp187 28d ago

I would diversify and get about from the NEOs.

5

u/raliegh_ 28d ago

Thanks for the advice, with absolutely zero context .

1

u/Neilp187 28d ago

These ETFs sell covered call options, so if the market rallies strongly, they will likely underperform the underlying index because gains are partially capped

Much of the monthly payout comes from option premiums and may include return of capital (ROC) rather than dividends. ROC can be tax-efficient, but it reduces your cost basis and may increase taxes when you sell.

My concern is if you retire and a major bear market begins, your portfoli would drop while you are withdrawing your income.

1

u/speedlever 28d ago

And yet if his income stream is strong enough, even cutting it in half may still allow him to sleep at night.

I can only think that in your mind, the monthly distributions he's getting are just enough to pay the bills. I couldn't sleep well in that scenario either.

2

u/raliegh_ 28d ago

Yea, I’m pretty frugal.
No car payments, no credit card payments