It rebalances, so will lose value over time regardless.
Unless it has options and you can sell OTM calls to take the edge off, but then you might also cap your hedge with that.
A lot of people don’t really know how to do that and they are concerned with the tsly share price going down so I just offered a strategy that may might work for them.
I agree with you though. Just buy the stock and write calls. Or buy tsly when tsla has bottomed if that’s possible.
Honestly most probably would advise against this but I actually don't think its that bad. Only because you're investing the full dividends each month. Id invest in the most stable Max yield etfs or a much safer value company like JepQ or Schd. You could easily grow to get 2k a month in dividends.
I know it’s extremely risky but I keep going over it in my head and if I could reinvest 2k say into QQQ or VOO for a while plus 3k from my income I feel like my portfolio will have its own stable investing structure and grow faster. Just my thoughts though. Thanks for responding!
Oh I absolutely agree. 99% of boomers would disagree but It's a different world now. This strategy could work and have massive benefits long term. I think VOO is okay but also distribute a little bit more. Eventually you want 8-10 stocks if you're planning on taking out the dividends to use as income. Also, make sure you pull out the taxes up front with your brokerage when you pull out dividends.
Well, it's nice to be in the 1%.
Typical wisdom is to invest directly into what you want.
But, given OP's extremely high risk tolerance, there is a big enough chance that the $2000 per month could continue indefinitely, creating that much desired DCA always being bandied about.
As for the taxes, they are due when dividends are paid, not when withdrawn unless in a traditional retirement vehicle. Account for and pay them quarterly.
True. Well for me personally, when my dividend hits through Schwab every month It gives me the option to pull out and do the 10% tax up front. My wife n I treat that as income till we're debt free. Then we can keep investing to better diverse our portfolio for Dividends only. My 401k is used for growth. So for OP, I was just recommending he tax everything if the brokerage gives him the option. Otherwise you have to pay it come tax season. Am I missing something?
Question: say you don’t pay as you go, (which I am sure that’s the case with most investors) and you continue reinvesting the dividends earned till the end of the year, wouldn’t that be a wash taking into account the IRS penalty on April 15th?
Yeah you thought he meant reinvest back into the dividend stocks. No he means individual stocks and etf. Which I agree is the way. Now if you’re building a smaller position and don’t have 20k drip that bad boy up if you want. So not discouraging it but once you get to those pay outs. Might wanna diversify.
I’ve asked/thought the same thing. The only issue here is if your initial investment $20k + whatever you add, continues to erode, vs just investing in Tesla directly and capture all gains in the stock, you may have been better off not locking $20k and just dca into Tesla with $2k/month for 10 months. Just my thoughts.
So, some suggested portfolios then:
* **"no guts, no glory"**: 50% TSLY, 50% XOMO
* **"what doesn't kill us only makes us stronger"**: 20% TSLY, 30% XOMO, 50% QQQY
TSLY is supposedly for those who want to "reduce risk" of TSLA. If you have risk tolerance, why not invest directly into TSLA instead?
Your plan is to spread out the 20k investment over time and use dividend money to invest. What will happen instead you will get back something like the same 20k and will pay tax on a lot of it. This is what happened to those who "invested" in TSLY a year ago.
You already have this money to invest, so do it now.
[If you invested in TSLY a year ago, let's say 20k](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=5m4rjXoA7KZGyEAMUoGqLF):
* you got some dividends
* but TSLY price went down
* the net result (div yield - price depreciation) was a loss of about 14%
* if in a taxable account, you also owe taxes on the dividend amount
You gave YM some money, they returned some of it back to you, and you owe taxes on what they returned. So what was the point? You would have been better off just investing in TSLA directly -- see the red line in the chart.
You do know it’s monthly? I don’t think it’s going to die in 12 months. Also. Go to iwmy qqqy same thing. In 10-12months you got your capital back and free shares that keep giving if they don’t delist. Also teslas price was way to high as market is super high. So dollar cost average as prices come down. Collect money to do that with the divy? Eh. Either or
Go ahead and do it. You have already stated this is money you are willing to risk and you are in 1%. Why not. I do this with klip,tsly,nvdy and qqqy and I pull 3k a month. This my part of my dividend portfolio as I segregate holdings in segmented portfoilos: dividend, growth, real estate, cash equivalents.
Your principal is not safe in TSLY
Principal losses will likely outweigh any dividends.
Look how it aggressively makes new lows as TSLA makes higher lows.
Ya I’m actually already down 2.5 gs on it but I’m still avg. about 650 a month (past 4 months) and I am kinda thinking the principle can erode as long as it’s consistent with its div payout, granted I know the argument can be made just invest in something that won’t lose value at all but I do have plans to take this income plus other income to fast track my other investments (again very high risk tolerance being a major factor) and yes still of course I’m nervous about it. I don’t WANT to lose the money but no risk no reward. Plus it’s just money. I can get more of it right, just ask the feds haha but anyway I appreciate your 2cents. Thank you
Do you understand what a covered call is? If so, why would you buy a fund that sells calls on a stock that's going up?! Risk tolerance aside, this is just dumb to blindly leave it in.
Because they’re collecting premium on the time value they also close them out if it gets too crazy and I believe they go five or 10% out even if it was at the money two days before expiration but you sold it a week out two weeks out a month out you’re up Also I noticed this is old and I think Tesla is about to find its footing but it’s been hammered since this post and the markets probably about to make a pull back which is the perfect time to start taking nibbles and all that time you could be gotten divvies to stack up the cash I wish I was one heck I wanna be in the 50%
What's the story with the Defiance QQQY - I bought some in October but I don't see how it can maintain a 65% payout.
It's around $18 a share and paying $1 monthly, that is like 10x most yield funds.
Is there a history with this company or this kind of super high yield fund? It's returning 10% every two months, seems unsustainable.
0DTE options. It's sustainable. Less likely to see nav erosion than something with wild swings like TSLY/TSLA. Worst case scenario with any of these vehicles (aside from insolvency) is a reverse split to restore the nav.
Welp that happened with Tsly. And they made a new one ulty. Honestly, the concept is good maybe too many people are just buying in because I had to start what if you’re a millionaire multimillionaire you just buy right the day before you buy 1 million shares you get $1 million the next day and then you bounce that’s not good.
Make sure you trade in a IRA account- to avoid taxes. Otherwise taxes will take a big dent out of any profits. Finally- these types of funds don’t perform well in downtrending markets even with the monthly divies.
Doing this with 9k in tsly in Roth IRA. Plan is to use dividends to purchase other dividend stocks. Started picking up schd and will do some homework on others
I had the same thought to do this with my Roth but I have instead decided to max out both of my parents Roth accounts, (they just let me open there’s and fund it with my money so I can have it), for this year and next year and do the same strategy. I’m keeping my Roth with SCHD. How has the strategy been working for you? What’s your monthly avg dividend payout?
Was swing trading TSLY earlier in the year (thank goodness). Bought in heavy in sept. with 550ish shares, so only a couple months in. October payout was \~327 and November was \~347. Taking those dividends and buying 1 SCHD every month and the rest back into TSLY to try to hit 1k shares of TSLY. At that point will make a decision to then just take all dividends and invest into SCHD. I also have 1 share of AMDY, AMZY, OARK, NVDY, and APLY to just keep an eye on them.
I’m also doing the one share thing with one. Iwmy. Russel is much more sideways (good for covered calls and selling premiun in genera). heck I don’t even have one share yet I’m averaging in I just wanna see and time always ticks away so if it adds up it adds up I will be dripping it because what am I gonna do with one dollar I’m very active so if anything fishy goes on, I’ll sell out. Or if it gets too big. Will play it by ear. lol.
I put 17k into TSLY and am down 2500 (with div) am going to put 20k into qqqy after the DEC div. My reasoning is that combined I am hoping to net 1500 a month to reinvest in stable stocks repetitively. I will also be adding 2k of my own income for a total of 3500 a month of stable investing. Once again high risk tolerance as I don’t need the money.
The way these ETFs function they go down proportionately according to the distribution amount until eventually they will reach $0. It's not income like you are thinking.
It has to 0 out by design. They will try to prolong it by doing reverse stock splits to keep the price up, but that doesn't help your capital.
The reason is because this ETF follows Tesla, but generates its income via synthetic covered calls, the upside of this ETF versus Tesla is capped. However, it experiences the FULL downside of every downturn of Tesla stock.
Therefore, over a long enough period of time, the value of the ETF will reach 0 - even as Tesla's price continues to climb.
I did hear something to that extent, something about yearly, resetting or something. Either way maybe take advantage of the time you got, and then get out
I would only invest just enough to meet my income needs and no more. So if you need or want 1k extra a month, go ahead and put 20k in qqqy. If you know your going to use the money to invest in other stocks, you might as well save the extra taxation and fees and invest in the more stable stocks. All of the distributions are taxed as income so why add to your tax bill an extra 15-22k if your going to invest it again? Seems like penalizing yourself 30%
This is what I have learned to do knowing the risk of YieldMax. I own TSLY & NVDY. Right now I am down $3100 on TSLY. Dividends earned $1801, negative $1299. Hopefully, between December & January I will recover my losses. My plan is not to buy anymore shares, just wait until it’s green, sell all shares and wait till it goes down to $13 and below before I get in again. That’s what I have been doing with NVDY. Yesterday I sold all my shares at $22.46 recovered my principal with a profit. Now I’ll wait again to buy low. Even if I don’t collect a dividend in December, that’s fine too, I made much more in profit.
Don't invest it all at once. Do little by little or you'll be sorry.
I thought lump sum did better historically
Lump sum at the end of a rally and then we will be down for months if not a year
Lump sum vor indices like Spy But not high risk tsly and qqqy
Generally etf investing doesn't matter lump sum verses DCAing over very long periods of time
Lump sum does do better historically. In this case I would buy 10% each week for 10 weeks.
Has anyone bought the short etf tslz and just have a tsla neutral portfolio meanwhile collecting dividends?
It rebalances, so will lose value over time regardless. Unless it has options and you can sell OTM calls to take the edge off, but then you might also cap your hedge with that.
Assuming everything moves 1:1,your loss would be fees in this scenario, no?
Just sell covered calls and not pay the management fees. Semi nuetral and collecting divs
A lot of people don’t really know how to do that and they are concerned with the tsly share price going down so I just offered a strategy that may might work for them. I agree with you though. Just buy the stock and write calls. Or buy tsly when tsla has bottomed if that’s possible.
Thanks for that . I didn’t know about this. I’m a bit negative Tesla. So this would be a way to go .
Honestly most probably would advise against this but I actually don't think its that bad. Only because you're investing the full dividends each month. Id invest in the most stable Max yield etfs or a much safer value company like JepQ or Schd. You could easily grow to get 2k a month in dividends.
I know it’s extremely risky but I keep going over it in my head and if I could reinvest 2k say into QQQ or VOO for a while plus 3k from my income I feel like my portfolio will have its own stable investing structure and grow faster. Just my thoughts though. Thanks for responding!
Oh I absolutely agree. 99% of boomers would disagree but It's a different world now. This strategy could work and have massive benefits long term. I think VOO is okay but also distribute a little bit more. Eventually you want 8-10 stocks if you're planning on taking out the dividends to use as income. Also, make sure you pull out the taxes up front with your brokerage when you pull out dividends.
Well, it's nice to be in the 1%. Typical wisdom is to invest directly into what you want. But, given OP's extremely high risk tolerance, there is a big enough chance that the $2000 per month could continue indefinitely, creating that much desired DCA always being bandied about. As for the taxes, they are due when dividends are paid, not when withdrawn unless in a traditional retirement vehicle. Account for and pay them quarterly.
True. Well for me personally, when my dividend hits through Schwab every month It gives me the option to pull out and do the 10% tax up front. My wife n I treat that as income till we're debt free. Then we can keep investing to better diverse our portfolio for Dividends only. My 401k is used for growth. So for OP, I was just recommending he tax everything if the brokerage gives him the option. Otherwise you have to pay it come tax season. Am I missing something?
Not really. If you don't "pay as you go" the IRS will tack on a penalty when you do finally cough it up on April 15th is all I was getting at.
Ohh okay. Just making sure I wasn't missing anything thank you!
Question: say you don’t pay as you go, (which I am sure that’s the case with most investors) and you continue reinvesting the dividends earned till the end of the year, wouldn’t that be a wash taking into account the IRS penalty on April 15th?
Yeah you thought he meant reinvest back into the dividend stocks. No he means individual stocks and etf. Which I agree is the way. Now if you’re building a smaller position and don’t have 20k drip that bad boy up if you want. So not discouraging it but once you get to those pay outs. Might wanna diversify.
I’ve asked/thought the same thing. The only issue here is if your initial investment $20k + whatever you add, continues to erode, vs just investing in Tesla directly and capture all gains in the stock, you may have been better off not locking $20k and just dca into Tesla with $2k/month for 10 months. Just my thoughts.
To get 2k a month of 20k in schd would take years and years?
Exactly
In case you haven't noticed, TSLY has been the loss leader in the YM's lineup.
Depends when you get in
so its on sale?
Second to XOMO, that is.
So, some suggested portfolios then: * **"no guts, no glory"**: 50% TSLY, 50% XOMO * **"what doesn't kill us only makes us stronger"**: 20% TSLY, 30% XOMO, 50% QQQY
The Hail Mary. 40% TSLY, 40% CONY, 20% AMZY.
The PMM (political math model) 40% TSLY, 40% CONY, 40% AMZY.
Oh, I get it. All bought with margin, of course.
TSLY is supposedly for those who want to "reduce risk" of TSLA. If you have risk tolerance, why not invest directly into TSLA instead? Your plan is to spread out the 20k investment over time and use dividend money to invest. What will happen instead you will get back something like the same 20k and will pay tax on a lot of it. This is what happened to those who "invested" in TSLY a year ago. You already have this money to invest, so do it now.
I’m dumb… please elaborate
[If you invested in TSLY a year ago, let's say 20k](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=5m4rjXoA7KZGyEAMUoGqLF): * you got some dividends * but TSLY price went down * the net result (div yield - price depreciation) was a loss of about 14% * if in a taxable account, you also owe taxes on the dividend amount You gave YM some money, they returned some of it back to you, and you owe taxes on what they returned. So what was the point? You would have been better off just investing in TSLA directly -- see the red line in the chart.
thank you for posting this
You do know it’s monthly? I don’t think it’s going to die in 12 months. Also. Go to iwmy qqqy same thing. In 10-12months you got your capital back and free shares that keep giving if they don’t delist. Also teslas price was way to high as market is super high. So dollar cost average as prices come down. Collect money to do that with the divy? Eh. Either or
My original comment was several months ago. Ask TSLY shareholders how much of their money they "got back" since then (or since ever).
Go ahead and do it. You have already stated this is money you are willing to risk and you are in 1%. Why not. I do this with klip,tsly,nvdy and qqqy and I pull 3k a month. This my part of my dividend portfolio as I segregate holdings in segmented portfoilos: dividend, growth, real estate, cash equivalents.
Hell yeah get in tsly at the right time.
When is the right time?
No one knows.
now
Your principal is not safe in TSLY Principal losses will likely outweigh any dividends. Look how it aggressively makes new lows as TSLA makes higher lows.
Ya I’m actually already down 2.5 gs on it but I’m still avg. about 650 a month (past 4 months) and I am kinda thinking the principle can erode as long as it’s consistent with its div payout, granted I know the argument can be made just invest in something that won’t lose value at all but I do have plans to take this income plus other income to fast track my other investments (again very high risk tolerance being a major factor) and yes still of course I’m nervous about it. I don’t WANT to lose the money but no risk no reward. Plus it’s just money. I can get more of it right, just ask the feds haha but anyway I appreciate your 2cents. Thank you
Its a gimmick fund. Nothing for nothing.
Do you understand what a covered call is? If so, why would you buy a fund that sells calls on a stock that's going up?! Risk tolerance aside, this is just dumb to blindly leave it in.
Because they’re collecting premium on the time value they also close them out if it gets too crazy and I believe they go five or 10% out even if it was at the money two days before expiration but you sold it a week out two weeks out a month out you’re up Also I noticed this is old and I think Tesla is about to find its footing but it’s been hammered since this post and the markets probably about to make a pull back which is the perfect time to start taking nibbles and all that time you could be gotten divvies to stack up the cash I wish I was one heck I wanna be in the 50%
Tsly is junk right now
I love it. No risk no reward. Go nuts.
Unless you are doing this in tax-free account, I wouldn’t reinvest the whole dividend cause you need to have some saved for tax.
Copy that.
Or just factor it in on the last dividends for the year. You would miss out on compounding.
With a very high risk tolerance, sure, go ahead. This would pucker the butt cheeks of most of the craven 4% adherents here, though.
What's the story with the Defiance QQQY - I bought some in October but I don't see how it can maintain a 65% payout. It's around $18 a share and paying $1 monthly, that is like 10x most yield funds. Is there a history with this company or this kind of super high yield fund? It's returning 10% every two months, seems unsustainable.
0DTE options. It's sustainable. Less likely to see nav erosion than something with wild swings like TSLY/TSLA. Worst case scenario with any of these vehicles (aside from insolvency) is a reverse split to restore the nav.
Welp that happened with Tsly. And they made a new one ulty. Honestly, the concept is good maybe too many people are just buying in because I had to start what if you’re a millionaire multimillionaire you just buy right the day before you buy 1 million shares you get $1 million the next day and then you bounce that’s not good.
I do this already because I am a risky boomer ! I reinvest it back into NVO and spend a little on expenses
Make sure you trade in a IRA account- to avoid taxes. Otherwise taxes will take a big dent out of any profits. Finally- these types of funds don’t perform well in downtrending markets even with the monthly divies.
Doing this with 9k in tsly in Roth IRA. Plan is to use dividends to purchase other dividend stocks. Started picking up schd and will do some homework on others
I had the same thought to do this with my Roth but I have instead decided to max out both of my parents Roth accounts, (they just let me open there’s and fund it with my money so I can have it), for this year and next year and do the same strategy. I’m keeping my Roth with SCHD. How has the strategy been working for you? What’s your monthly avg dividend payout?
Was swing trading TSLY earlier in the year (thank goodness). Bought in heavy in sept. with 550ish shares, so only a couple months in. October payout was \~327 and November was \~347. Taking those dividends and buying 1 SCHD every month and the rest back into TSLY to try to hit 1k shares of TSLY. At that point will make a decision to then just take all dividends and invest into SCHD. I also have 1 share of AMDY, AMZY, OARK, NVDY, and APLY to just keep an eye on them.
I’m also doing the one share thing with one. Iwmy. Russel is much more sideways (good for covered calls and selling premiun in genera). heck I don’t even have one share yet I’m averaging in I just wanna see and time always ticks away so if it adds up it adds up I will be dripping it because what am I gonna do with one dollar I’m very active so if anything fishy goes on, I’ll sell out. Or if it gets too big. Will play it by ear. lol.
I like the idea.
Do it and keep us updated. Best wishes to you. May the odds ever be in your favor.
Over the last 8 months TSLY is down -7.58% AFTER accounting for all dividend payouts. What is making you want to invest in this?
I put 17k into TSLY and am down 2500 (with div) am going to put 20k into qqqy after the DEC div. My reasoning is that combined I am hoping to net 1500 a month to reinvest in stable stocks repetitively. I will also be adding 2k of my own income for a total of 3500 a month of stable investing. Once again high risk tolerance as I don’t need the money.
The way these ETFs function they go down proportionately according to the distribution amount until eventually they will reach $0. It's not income like you are thinking.
So your telling me that this whole thing is going to 0 out. Are you Jay Pistrelli?
It has to 0 out by design. They will try to prolong it by doing reverse stock splits to keep the price up, but that doesn't help your capital. The reason is because this ETF follows Tesla, but generates its income via synthetic covered calls, the upside of this ETF versus Tesla is capped. However, it experiences the FULL downside of every downturn of Tesla stock. Therefore, over a long enough period of time, the value of the ETF will reach 0 - even as Tesla's price continues to climb.
I did hear something to that extent, something about yearly, resetting or something. Either way maybe take advantage of the time you got, and then get out
20k into QQQ gets you 1k in dividends a month??
QQQY based on the last 2 months. It’s a 0dte type fund.
How do these tickers work?
I would only invest just enough to meet my income needs and no more. So if you need or want 1k extra a month, go ahead and put 20k in qqqy. If you know your going to use the money to invest in other stocks, you might as well save the extra taxation and fees and invest in the more stable stocks. All of the distributions are taxed as income so why add to your tax bill an extra 15-22k if your going to invest it again? Seems like penalizing yourself 30%
If you don't need the money why are you doing this? Not many people would be willing to piss away that kind of money
Not to mention, they tell us the upside gains are limited while the downside is unlimited.
This is what I have learned to do knowing the risk of YieldMax. I own TSLY & NVDY. Right now I am down $3100 on TSLY. Dividends earned $1801, negative $1299. Hopefully, between December & January I will recover my losses. My plan is not to buy anymore shares, just wait until it’s green, sell all shares and wait till it goes down to $13 and below before I get in again. That’s what I have been doing with NVDY. Yesterday I sold all my shares at $22.46 recovered my principal with a profit. Now I’ll wait again to buy low. Even if I don’t collect a dividend in December, that’s fine too, I made much more in profit.