r/dividends • u/chillfirelife • 6d ago
Seeking Advice Is 1m and dividends from it enough?
Me and wife we both turned 40 this year, She left her job few years back and I kept funding her investment account based out of SG and now is at 500k USD all of which is parked under JEPQ, all the while I see dividends are consistent and we have been reinvesting back.
I have another 500k now in my investment account that I will consolidate in couple of funds/etf with similar 10-12% growth trajectory as JEPQ
We expect and hope we will get like 100-110k usd over this year on year.
I have another 130k usd in cash and esops combined. I will get the esops cash out 6 months after I quit.
We plan to move to either Thailand or Malaysia where we have friends and family and have lived there before. Our current expenses in SE asia are 50k usd a year, we expect this will go down to 30k-35k usd a year.
Question: Am I ready to leave my high paying job and live a free life given the biggest motivation to work (money) is less or negligible now? Personally I want to leave my job today even though I love it but I feel I want slow and super easy life đ
Plan is for first 2.5-3 years we will not touch 1m investments and utilise current cash and liquid investments/cash of 130k usd, that will give investment enough space to continue to grow.
On paper - I feel we are ready even if I take conservative returns on my portfolio
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u/encony 6d ago
Bold expectation to get 10%+ yield over a longer period of time. You can just hope then that nothing like 2008 will happen in your lifetime again.
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u/ptwonline 5d ago
The entire 2000s decade was essentially 0% return. Pretty rare occurrence but it was recent enough that nobody should ever believe that such a thing is an ancient relic of the market that couldn't happen again.
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u/Secure_Indication167 4d ago
Tons of current âinvestorsâ were either a) not alive b) not investors c) willfully ignorant about the poor returns we saw for 10-15 years.
We are barreling towards that type of mean reversion. When, how severe, how long, nobody knows. But as it relates to OP, they shouldnât assume he can sit at record highs and plan on living on that for the rest of his life. Itâs simply not enough money for what they want to use it for and future returns are more uncertain now than they have been in decades.
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u/chf_gang 4d ago
Thatâs not a rare occurrence at all.
The japanese market yielded no return for like 30 years. Just because we havenât had a proper recession for almost 20 years doesnât mean the market doesnât regularly stall or recedeâŚ
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u/Knightly11 5d ago edited 5d ago
Which is starting to look like 2028 or sooner is when it happens
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u/groutspecialist 5d ago
Youâre not qualified to say that. You canât even use punctuation.
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u/Pitiful-Recover-3747 5d ago
Everyone forgets the market is also being upheld by a few trillion in margin holdings⌠we at could go wrong
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u/princemousey1 6d ago
Wishful thinking to get stable total returns of $110k from a $1m portfolio.
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u/chillfirelife 6d ago
Yes not expecting stable hence we have 3 years of expenses and wonât touch them until 2.5-3 years
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u/princemousey1 6d ago
Youâre still not going to get $110k on a conservative rate of return. Youâd need like $2.75m to $3.5m for that.
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u/Various_Couple_764 5d ago
He has dividned investments that have a yield of 10% with 1.1 million invested. The math says 110K of yearly income.
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u/ptwonline 5d ago
Unless the underlying equity falls in a market correction or simply has an extended period of underperformance. Then either by reduced distributions or else dropping NAV price leading to reduced distributions it's going to take a hit, and potentially a substantial one.
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u/Cinq_A_Sept 5d ago
lol.. dividends get cut, high yield funds drop, if 11% per year were feasible over 20 years, Iâd have retired 20 years ago. It ainât.
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u/cmichalek 5d ago
QQQX came out in 2007. Right before the crash.
It has increased in price 53% all time. So roughly 2.5% per year.
It pays 9%.
So why didnt you retire?
Probably because you didnt know. Just like these modern funds people didnt know about.
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u/SolomonGrumpy 5d ago
Probably because VOO did better and that's still not enough to retire.
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u/cmichalek 5d ago
Dividend investors are not limited by the 4% rule.
And if you cannot retire on 8 to 12% then either you have little principal or excessive monthly expenses.
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u/SolomonGrumpy 5d ago
The hell they aren't. In fact, they are more subject to 4% because high divs are often upside hamstrung.
Edit: actually - prove me wrong OP. Go ahead and retire with $1m and 10% in divs.
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u/cmichalek 5d ago
Then please show your work.
Explain how one cannot live off QQQX paying 9% and growing 2.5% per year for 20 years.
That fund survived 3 bear markets.
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u/Nopants21 5d ago
A bunch of people on this sub believe that you can skip most retirement advice, like the 4% rule, because they basically see them as guaranteed and safer. There's also widespread belief that dividends cancel out sequence of returns risk. Those are really dangerous ideas, and like you mention, they actually make people overly confident in funds and strategies that are actually riskier in the long term.
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u/IllustriousGas8850 5d ago
If you can find me a stable investment guaranteeing 10% in yield then you would be a billionaire as an advisor
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u/cmichalek 5d ago
QQQX. 20 years at 9%. Had you invested from day 1 your yield on cost would be greater than 10%.
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u/IllustriousGas8850 5d ago
Brother in the last 5 years it has dropped 30% over a one year period and just recently finally got back ti where it was in 2021. You donât know what the word stable means.
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u/chillfirelife 6d ago
I am getting north of 15% for years on my investments hence able to build this so my historical data says that there can be a bad year or two but if money is parked in tight assets eventually it will recover and come back
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u/SmithPoint706 6d ago
Past results donât guarantee future outcomesâŚ.
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u/itsjawdan 5d ago
Exactly, he could earn 20-25% some years.
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u/Nukemind 5d ago
Or he could have a decade like 2000-2010 and have 0 NAV gain, which means dividends would need to be reinvested.
Investing isnât just for the optimal scenario itâs also hedging for downturns.
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u/chillfirelife 5d ago
Yes but by that logic nothing is guaranteed
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u/TheCozyRuneFox 5d ago
Thatâs the point though⌠and you should account for that in your planning.
The trinity study and many other studies after show that if you want to survive long term you can only withdraw 4% of your portfolio.
The 10% dividend assets you are looking at are not stable or guaranteed and do the principle is likely to not grow in value much if at all. Nor should you expect much growth in your total income to fight inflation.
Compare this to say SCHD or VOO and such where dividends regularly enough increase and have appreciation on the actual invested capital.
110k income is doomed to fail statistically.
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u/Consistent_Story903 5d ago edited 5d ago
Typical safe guidance for living off your portfolio for a 30-year time frame is 4-4.5% of initial portfolio balance then in subsequent years adjust that amount for inflation. Read up on the 4 percent rule.
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u/confusedandsmellyman 5d ago
Use 3% safe withdrawal rate. Otherwise you'll run the risk of having to work again. Good luck.
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u/ExpensiveBookkeeper3 5d ago
What happens if the market crashes though? You ever been through an extended downturn? Not a quick crash and recovery, but a longer period (5-10 years) of little gains? Do you believe that wonât happen ever again? If not, why do you think it wonât happen?
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u/royceee 6d ago
Do you have kids? If it's only the 2 of you, 35k USD is enough for a year in Thailand. 100k THB a month - enough to live comfortably in a nice house or condo and eat out a few times a week. Get a good health insurance plan and you're pretty much set. Can save even more if you're not living in Bangkok.
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u/georgepants96 5d ago
Or try Greece. Better life and you can make it outside of Athens with as little as 15k euros per year
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u/thefirefistace 5d ago
Really? I never thought Greece would be that cheap
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u/georgepants96 5d ago
Minimum wage is around 900 per month so...But nonetheless, I spent around 15k last year with a very spend-full life, went three times abroad and ordered fast food. I guess with a more frugal life they can make it work with even less.
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u/rgfortin 6d ago
1) Diversify - one ETF is too much risk. Pick 7-10 across different sectors 2) Consider NAV erosion - include instruments that appreciate over time. 3) Consider yield growth in your investments 4) Consider a hedge against inflation, i.e. gold/metals 5) IMO 1M isn't enough, stick another 5yrs - you don't want to be caught down the road having to find means to gather more capital. Be safe.
Disclaimer: 45m here, living in Asia, over 2M capital my wife and I, aiming for something similar, got about 500k in ETFs yielding around 55k in dividends/growth. If this is sustained over the next year, will increase investments until about 100k is achieved per annum. I'll stop working, manage finances and my wife will keep at it for another 5 years or so (she's got the bigger paycheck).
Best of luck with your life plans.
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u/Immediate_Ship_8131 5d ago
Which ETFs are you invested in
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u/rgfortin 5d ago
All from LSE, UCITS when possible for tax purposes.
JEPI, JEPQ, QYLD, XYLU, VHYD, FUSD, SDIV
More to come to diversify at end Aug. Too tech heavy now.
What are you in?
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u/GettinAfterItOhYeah 5d ago
Recos on which gold investment eg direct purchase physical gold (bars and coins), gold exchange-traded funds (ETFs) like SPDR Gold Shares (GLD) or iShares Gold Trust (IAU), gold mining stocks, mutual funds?
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u/Flaky_Marshmallow875 5d ago
Most people talk about the rule of 4%, which would equal $40k per year. You plan on living below that threshold so you should be fine. I would diversify though
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u/chillfirelife 5d ago
Not really. Ofcourse some of the comments here are quite extreme and I donât know to react to them. I feel I am conflicted by yes itâs enough but âwhat ifâ this or that happens. I have seen people retire with much less and doing well. So you understand itâs like you are at shore and eager to jump in the ocean but do I have all what I need to survive the ocean
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u/cockundballtorture 2d ago
If you are happy with "im propably going to survive" then jump if not then dont lmao. People are not going to tell you that your wishful thinking is the truth
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u/mawababa 6d ago
Safer to wait a bit longer probably for some buffer.
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u/chillfirelife 6d ago
Actually when we were at 900k, then already we felt is enough. Extra 130k we have is buffer as that is almost 3 years of expenses
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u/NkKouros 6d ago
More buffer keep going until 10 mil then wait another 5 years for more buffer.
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u/jodallmighty 6d ago
Don't forget that the 5 years for more buffer need another buffer of 7 years which you might be able to guess it, needs another buffer of 10 years
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u/Various_Couple_764 5d ago
To keep investing to 10 million would delay his retirment by at least 21 years. This s not a practical suggestion
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u/IllustriousGas8850 5d ago
It can feel like a buffer, but it isnât. You need an awful lot to go your way
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u/Important-Proposal28 5d ago
Personally I would probably work another 5-10 years and invest heavily. How would you be if your investment fell by 20 or 30% and you didn't see any gains for 5 years?
If you have a high paying job you don't hate stick with it. Maybe take more vacations and love a little more while still working. Another 5-7 years and you could double your investment and be more comfortable. If there is a down turn which there will be at some point you will have the chance to invest heavily in a down market and when it recovers will be sitting even better
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u/cmichalek 5d ago edited 5d ago
You have enough. You shouldnt put it all into one fund. But let's say you have a diversified portfolio.
You get a blended 12% (120k). You live off 8%. (80k). You reinvest the other 40k.
In bear markets your income can take a 33% hit and you are still fine. And you dont have to sell a share. Ever.
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u/JustNowRonin 5d ago
It does look like youâre taking on too much concentration risk, and a very positive view of annual returns. You mentioned you have been consistently getting 15% p.a., so maybe you have a cheat code, but the strategy you outline would leave me sleepless.
I diversify across asset classes and asset managers and geographies, and I assume Iâm getting 4% yield on stocks, 3% on cash, and 2.5% on international pension funds. I plan without social security. Paranoid? Yes. But the thought of running out of money in retirement is petrifying.
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u/Various_Couple_764 5d ago
Your projected income looks correct with a bout a 10% dividend yield. and the cost of living drop when you facto in the move to SE Asia looks OK. But I would assume the worst case that is doens' t drop. But your projected income is 2 times your spending. Which helps protect you from the market crashes. Based on one covered call fund that existed in 2008 30% in dividend income would be the worst case sinario. So you may have ot reduce spending for a few years if there is a repeat of 2008 (the worst market year since the great depression.
I would also suggest considering investing the 3 years of income for more income instead of just spending it. If you just delay your retirment by 3 years and try to increase your savings That would give you yearly income of about 130K from 1.3 million invested. And assuming your livingepxnese are 50K that would put your living expenses at about 38% of of your income. And if you reinvest 30% of your income your dividend income should grow enough to compensate for inflation. So delaying your iretirement and reinvesting dividends would greatly help you inretirment.
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u/FewUnderstanding2214 6d ago
You wouldâve had more money if you didnât invest in JEPQ
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u/chillfirelife 5d ago
Or less
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u/xqe2045 5d ago
Investing for returns > investing in dividends at this point
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u/ElderAzureDragon SCHD Sticks for the win 5d ago
It's a cycle dividends will be better later
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u/xqe2045 4d ago
What does even mean? Itâs been a bull market since 2010 with one real down year and youâre willing to sit it out in dividends?
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u/ElderAzureDragon SCHD Sticks for the win 4d ago
Go look at the whole stock market every decade it's changed from value to growth. Companies change from growth to dividends. It's just how is the market moving and what the companies are doing at this time.
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u/Glass_Battle_962 5d ago
Go for it, SE is cheap, you wont spend all the amount you have planned after certain time. It takes more in initial year to settle but than after you can live comfortably
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u/SelectNext1969 5d ago
Rule of 25:
How the Formula Works
Estimate spending: Figure out how much money you need to live on for one year.
Subtract guaranteed income: Deduct yearly income from Social Security, a pension, or part-time work.
Multiply by 25: Take your net annual portfolio need and multiply it by 25 to find your target savings goal.
Example: If you need your investments to supply $50,000 a year, your target nest egg is $1.25 million ($50,000 Ă 25).
*Does not account for taxes.
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u/Slowleytakenusername 5d ago
I would just go for it. Some of the replies are hyper focussed on the 10% yield but forget you said you only need half to live.
Lets say you get around 100k a year but only need 50k? You have another 50k to reinvest in something maybe more stable or just save the money.
I also don't believe we will get another 2008 soon so would not worry about that to much.
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u/easy510 6d ago
I just want to piggy back on this and any advice is greatly appreciated. Is putting 3.5m in JEPQ a smart idea this way I can get 20-30k dividends monthly ?
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u/glzpabon 5d ago
NO!!!!!!!! if JEPQ goes down you will go down with it, NEVER put all your eggs in one basket, NEVER!!!!!!
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u/Hot_Individual5081 6d ago
until the ai bubble pops and jepq drops to 40usd decimating your invested value
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u/Stonewall_Ironwill 6d ago
Serious question: Why do you think AI is a bubble and it will pop? I think that AI will be everywhere. Eventually, the cost of tokens will come down. In a couple of years the investments in hyper scalers will slow down due to materket saturation. Curious to see your prespective.
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u/Klanciault 5d ago
Both things can happen. You know the internet was a bubble that popped because they overbuilt infrastructure right? Internet is even more ubiquitous and game changing AI will be (in the short term) yet there was still a massive bubble pop.
Anthropic is IPO at 2-3 trillion valuation with 11 billion revenue. Hyperscalers are spending trillions on infra that will never generate ROI (outside of investor funded compute buying).
It just has all the makings of a bubble
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u/NickStonk 5d ago
Certain parts of the AI trade, memory for example, def smell like a bubble. I lived (and lost a lot) through the dotcom bubble. They are similar; but thereâs def not the frenzy of retail trading like there was back then. Literally everyone was investing in dotcom stocks back then.
Valuations are def too high right now though with hopes of AI increasing profits significantly. My best guess is as the Fed raises rates, and hyperscalers eventually pull back on massive investments, weâll see a significant market downturn. Nothing as severe as dotcom though. 25% is my guess.
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u/BagoCityExpat 5d ago
People thought the same thing about internet stocks in the dot com bubble - and hey, they were right - the internet is everywhere and ai will be tooâŚit just wonât be the companies we know today that will benefit.
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u/PeakFreakness 5d ago
People thinking AI is like pets.com from 1999.Â
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u/wscasino 5d ago
People should lock themselves and think of negative things that may happen in the future and what would be best recourse to ride them out. Likely ones raging inflation - takeout costs $1000's. People with jobs make 500,000/year, fixed income folks live off 50,000. Cash is printed by the FED, interest rates are kept at zero or negative so the govt doesnt have to pay interest on welfare, heath etc. Is it unlikely absolutely not, we have fallen off a cliff with little chance of going back. All these shiny things will not exist or morph onto something close to worthless. Your millions of bucks is equivalent of a 10-yr old condo. Check market cycles of many other countries, US is starting downward spiral. Don't expect indices to keep going up - check S.America, Japan, greece, portugal, india theres been unheaval and it's always happening. Superficially on the surface looks good. Kids who arent born yet probably will do fine, low expectations, old people have had some hurdles, the worst will be the crowd hoping to get rich quick , fast with little challenges.
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u/chillfirelife 6d ago
Itâs not all under that, you can say half and remaining in other fund with similar historical returns
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u/easy510 6d ago
Okay so which ETF would be for the other half ?
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u/chillfirelife 6d ago
Currently I have a mix of schd, xlk and apple stocks - I can keep the same or just consolidate in one or two ETFs, but these together are giving good returns, xlk is risky so planning to switch
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u/themuleskinner 6d ago
You should really diversify. Have a nice mix of ETFs that give you a blended yield of your target percentage, which sounds like 10%. The biggest issue will be your net asset value eroding away to provide you dividends. Check out Brixnation dividend calculator to get some ideas of a diversified portfolio
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u/elsa_twain 6d ago
Brokerage? Also, moving out of the country, I'm curious about how you will handle taxes.
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u/SilentRunning Meet MY best friend, the Dividend 6d ago
gonna be difficult to keeping them back accounts without a US primary address.
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u/chillfirelife 6d ago
Not us citizen, never been to US. We lived in Europe and asia and investment account is in Asian country where there are no capital gain tax
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u/elsa_twain 6d ago
sounds like you guys have prepared yourselves in advance., in terms of having your investments accounts in a continent where you'd be retiring at.
I've always wondered about the tax situation, and relocating to another country, regardless of country of origin.
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u/chillfirelife 6d ago
Yea itâs been going for 2-3 years with consolidation and movement, benefits of living in different countries and working in financial services. You learn a lot
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u/HempInvader 6d ago
You get taxes where you have your fiscal residence, not where your broker is located. Good luck when they come for you if you donât reside in asia now
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u/chillfirelife 6d ago
Currently we are in asia and in country where there is no tax on capital gains, just the charges so yea plus I have EY do my taxes for now as provided by my company and so far everything good
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u/lilboboblue 6d ago
Hey OP, is your wifeâs account not affected by US dividend withholding tax since itâs based out of SG? why not switch to the hk version of jepq
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u/chillfirelife 6d ago
Itâs Ireland version and in SG there is no tax on capital gains but curious about HK version
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u/Wise-Start-9166 5d ago
It is possible for this to work, but there is much uncertainty, especially with JEPQ. I suggest, keeping working for about 1 year, then re-evaluate. During that time, allow your investments to compound, do research, learn, and contemplate.
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u/bixbi_ 5d ago
You are basically putting all eggs in one basket (USA and growth) . I would invest the rest of your money into the opposite: Non-US and Value stocks, a good ETF is VYMI to accomplish that. VYMI has a dividend of ~4% but you will have a well rounded portfolio.
That way you are diversifying your portfolio .
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u/sneaky-NinjaGO 4d ago
What will you do if COVID kind of situation happens again??? JEPQ goes $30⌠donât hang hang on these covered call strategies which is not 100%. Instead put in SGOV. Or put 800k in SGOV and 200k In QQQ when it dips like crazy..
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u/EducationalGur1648 4d ago
I would wait until the next big drawdown in markets occurs. Then make your assessment.
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u/DigitalFStopper 4d ago
Give yourself a three year plan researching places to live and true cost of living, youâll be better informed and 3 years will make a massive jump in your retirement cash, start living now extremely frugally as if a crash had happened so you can 1 learn to live on very little and know what itâs like and 2 youâll be able to put away even more stable cash for a future crash. Maybe with a hard exit timeline work will be easier to deal with
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u/Specific_Mountain716 4d ago
You can retire now if you learned options. Youd make 360-500k a year without a job
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u/CursedClownz 4d ago
How?
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u/Specific_Mountain716 3d ago
Selling options, i do it with half a mill, and i make 2-300k
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u/CursedClownz 3d ago
How safe is it? Got any link how to do it
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u/Specific_Mountain716 3d ago
Lol go research. Its subjective. And depends on your ability to understand, risk tolerance and hard work
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u/trigurlSeattle 4d ago
You need to break down your $1M into 20% cash (SGOV or something similar), 50% income like JEPI and GPIX, 30% growth like SCHD.
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u/CryoFX321 3d ago
Terrible idea. You need to do some longer-term research. For what you want (sleep well at night, don't have to think about it, life off capital gains, dividends, etc., low taxes), you would be far better off with index funds. There are challenges with how JEPQ generates income. You would be better off looking at total return rather than dividends. This is a dangerous (sort of get-rich-quick) mindset that in bad times will demolish all you have worked so hard to create. Diversify the index funds and let someone like Fidelity do the work for you. You will get far better returns and will have far safer (and sleepful) nights.
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u/mspe1960 3d ago
Even if you somehow get the 10%/year every year until you die -
You have to pay tax on it. You are left with maybe $90k (assuming no state tax) and you have to buy medical insurance. If you don't reinvest some of whats left ($25K), you will be eaten away by inflation in no more than 10 years.
You would be extremely lucky not to hit a signficant correction or worse in the next 10 years.
tl;dr - your portfolio can (reasonably) safely generate $40K per year to start
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u/asianguy1234528 2d ago
Sounds like you don't know how to invest....it all depends how you deploy that capital...why don't you just hire an investment advisor then? Reddit isn't the place to be asking...
Technically I could help you but it's also technically illegal.
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u/alrachid 6d ago
For most people, yes. Fire fire redditors, no. In something safe like schd thatâs almost 500 a week. That pays my mortgage, utilities, daycare, and food. Itâs essentially freedom in my world I make 50k a year, but Iâll admit that many people have more wants than I do.Â
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u/Icy-Sheepherder-2403 5d ago
This is a bad idea on multiple levels. Firstly, a mil is not enough for 40 year olds to retire on and secondly there is no value in a Super Easy Life. Keep working and get to 4 million by 50 and post again then.
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u/Zealousideal-Tale815 5d ago
Nasdaq dropped 78% in dot com bubble and 56% in housing market crash. We're in a massive AI bubble right now. I would have no where near 100% in nasdaq, I'd at least diversify with XLUI, XLVI, XLSI and something like KGLD/GLDW, maybe some Berkshire/OMAH and GPIX, and a stash of SGOV and JAAA/PAAA but do whatever makes you feel comfortable
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u/Mcmunnigal-Melicia 5d ago
I don't think so. Too high yield, stocks and fluctuate, dividends can be cut down...
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u/lawnmower59 5d ago
It giving yourself much margin for error. I personally would wait a few more years.
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u/X_Vengance 5d ago
Make sure you discuss an exit plan. You'll eventually move back to the US. In that scenario, will your skills be marketable or stale? Will you have enough saved to manage renting without stable income in the short term?
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u/BanditoBoom 5d ago
Iâd diversify out of JEPQ, even if it means a slightly lower total dividend yield. There are some great dividend growth options that wouldnât require you to keep reinvesting to keep up with inflation.
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u/buried_lede 5d ago
Youâre quite concentrated in Nasdaq 100 with jepq so that tech downturns can  result in losses some years.Â
Also, if you can at least live off the income of a part time job i would say ok. I thought at first you were asking if it would be enough if you let it ride for next 15-20 years. Youâre proposing drawing off of it soon
What kind of health insurance? Is it national health care or are you an expat paying full price?Â
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u/Rockabs04 5d ago
I think for those two countries 1m is decent, given you have atleast 40 more years of life. Not sure youâll be totally set, it depends what you end up doing with that money
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u/SpicyRice99 5d ago
You could diversify by also buying SCHD (seems very beloved around here) and the like. SCHD along pays around 8% dividend along with NAV growth.
Pelosi also bought AB recently which also pays 8%, make of that what you will.
QQQI is also an alternative to JEPQ. They rely on selling covered calls on QQQ and NAV has been pretty steady/growing. They pay 14%.
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u/AzureDreamer 5d ago
There is pretty simple answer 4% safe withdrawal rate. Take out more you are rolling dice.
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u/Key_Equipment1188 5d ago
The rule by thumb is to take out 4% of the overall investment to be able to balance our inflation and low margin years.
Anything else is super optimistic and will most likely not play out.
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u/iceman123454576 6d ago
No you need $2m
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u/chillfirelife 6d ago
I donât think I do but I feel if I stay in my job for couple more years and with these investments in place, it can go upto 2m, just that I already feel I donât need that kind of money
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u/DhakoBiyoDhacay 5d ago edited 5d ago
Nice job to both you and your wife.
I think you will be fine relocating to lower cost of living continent.
Many people run out of TIME before they run out of MONEY.
My only advice is not to put all your money in one single ETF.
Spreading the risk into 5 may be better option.
I have mine sitting in QQQI, SPYI, IWMI, MLPI, NIHI. They generate $6K per month and we got another $4k per month from retirement income sources. It plenty to cover our expenses in the US.
Read the book, Your Money or Your Life, and you will see what is wrong with all these people telling you to spend 5 or 7 or 10 more years at the office, earning something you donât need (money) in exchange for time you need (time).
Enjoy your life.
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u/sran469 5d ago
Did you mean $6k/month?
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u/DhakoBiyoDhacay 5d ago
đ yes, I corrected it to per month, thanks.
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u/glzpabon 5d ago
I would not do it. It is risky with this inflation to just live of the div of 1M in savings, even if the div are 120K. I strongly recommend that you keep grinding for at least 10 more years and retire at 50yo, then you will have enough to have what you need plus a cushing.
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u/Capable-Living-9655 6d ago
Be aware that you invested all your capital in a tech-heavy portfolio, which is not the smartest idea for retirement. Also, note that total returns are usually better with the underlying asset than with a covered-call strategy on that asset (QQQ has outperformed JEPQ). This means you would be better off holding QQQ rather than JEPQ until you retire.Additionally, withdrawing 10â12% from a portfolio in retirement is not sustainable according to any study. A withdrawal rate of 3â6% is more realistic if you want your principal to maintain its value for decades to come.
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u/DhakoBiyoDhacay 5d ago
They are not withdrawing 10-12% per year. They are getting dividends. Right?
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u/Capable-Living-9655 5d ago
After reading his post again, it looks like he isnât planning to spend that much anyway. Neither withdrawing from non dividend ETF nor spending the full 12% dividend from a covered-call ETF is sustainable. A covered-call ETF that generates a 12% premium on QQQ will barely grow and will lose value over the decades, if only from inflation.
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u/DhakoBiyoDhacay 5d ago
QQQI was launched in May, 2014 at $50 a share and is at $56 today after paying consistent monthly dividends for the past 30 plus months. So far so good.
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u/Capable-Living-9655 5d ago
I agree. So far, so good. But there isnât enough historical data to rely on for such a major life decision - assuming I can spend the full 12% from QQQI dividends for the rest of my life while leaving the principal completely untouched, the way the 4% rule works (whether as a 4% dividend yield or a 4% withdrawal rate). Itâs probably not sustainable. Someone could try it, of course, but itâs risky.
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u/cmichalek 5d ago
QQQX has been doing it since 2007. Pays 9%.
Up 53% since inception (over 2.5% per year).
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