Dividend Investor Who Earns $4000 Per Month Shares His Top 7 Portfolio Holdings

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Living off dividends sounds fantastic, but it isn't easy. To earn significant dividends, you must put a hefty amount into stocks/ETFs with high yields and constantly watch out for risks and losses. The last thing you'd want in your dividend investing journey is losing money.

Thousands of successful investors share their experiences and advice on Reddit's daily dividend investing discussion boards. We came across an interesting discussion in which a Redditor shared that he makes about $4,000 a month in dividends. He provided a complete breakdown of his portfolio, historical returns, and principal investment.

Dividend Investor Who Earns $4000 Per Month Shares His Top 7 Portfolio Holdings
Dividend Investor Who Earns $4000 Per Month Shares His Top 7 Portfolio Holdings

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The Redditor claims to make $4,000 monthly with an initial investment of $150,000. Most portfolios comprise risky covered call ETFs with extremely high yields and income funds. We picked some of the most important funds from the portfolio and explained their income generation strategy.

YieldMax AI Option Income Strategy ETF

YieldMax AI Option Income Strategy ETF (NYSE:AIYY) is a covered call ETF that provides investors with indirect exposure to C3.ai, Inc. How do such ETFs generate income? The ETF sells call options on the shares it owns (in this case, C3.ai) and generates premiums, which are distributed to investors.

The YieldMax AMD Option Income Strategy ETF

The YieldMax™ AMD Option Income Strategy ETF (AMDY) is another covered call ETF that generates monthly income at a distribution rate of about 38%. The last payment was about $0.4306 per share. The ETF provides indirect exposure to AMD shares.

StockStory aims to help individual investors beat the market.
StockStory aims to help individual investors beat the market.

The S&P 500 Enhanced Options Income ETF (JEPY) is one of the reliable high-yield income ETFs that generate a healthy distribution per month. It's another covered call ETF, but instead of focusing on a single company, JEPY provides exposure to the broader S&P 500 index. JEPY is suitable for investors looking for stable income with low volatility.

The Nasdaq 100 Enhanced Options Income ETF

The Nasdaq 100 Enhanced Options Income ETF (QQQY) generates a sizable distribution, albeit with risks. The ETF sells in-the-money put options on the Nasdaq 100 daily, meaning the options' strike price is above the index’s current market price. This strategy sacrifices capital gains from the share price appreciation of the Nasdaq in return for a high options premium.

QQQY is suitable for investors looking for higher income and willing to accept a cap on potential market gains. The ETF has a distribution rate of about 71%.

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YieldMax NVDA Option Income Strategy ETF

YieldMax NVDA Option Income Strategy ETF (NYSE:NVDY) makes money by selling call options on Nvidia. The ETF has seen a lot of popularity lately amid all the buzz around Nvidia. The ETF has a distribution rate of about 63%. Analysts believe NVDY is suitable for those who believe in the long-term potential of Nvidia but want to hedge against potential declines in the chipmaker's shares.

The Defiance S&P 500 Income Target ETF

The Defiance S&P 500 Income Target ETF (SPYT) invests in ETFs that track the S&P 500's performance and sells daily credit call spreads on the Index. This means the ETF sells a call option and buys another one at a higher price, earning income from the premium received. The ETF has a distribution rate of about 20% and pays monthly.

Rex Fang & Innovation Equity Premium Income ETF

Rex Fang & Innovation Equity Premium Income ETF (NASDAQ:FEPI) generates monthly income by writing call options on top Big Tech companies. The fund aims to use Big Tech "volatility" to generate income. The ETF owns 15 stocks, including Salesforce, Tesla, Adobe, Amazon and Nvidia. The ETF's distribution rate is about 25%.

Looking For Higher-Yield Opportunities?

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Don't miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga's favorite high-yield offerings.

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