If you auto drip your dividends you are missing out on massive upside.
Being more hands on will lead to much higher gains. Here’s why. 🧵👇
High yield funds that yield 50-100% are all going to decay over time.
While total returns will still be great you’re missing out on a ton of upside.
The cheat code is moving half of your dividends to growth & lower yield funds.
When you do this you…
✅ Create more upside & gains
✅ Offset NAV erosion
✅ Create sustainability
✅ Further diversify yourself
Building out a free growth portfolio is the key to making these work long term.
My favorites for this are $IBIT $SPMO for growth & $BTCI $TDVI for lower yield sustainability.
Instead of drip extract yield. Look too..
• Hold Value
• Get upside appreciation
• Multiply your compounding
High Yield Math:
$50K in a 60% yield ETF = $30K/year.
If you drip you’re missing out on huge upside long term.
If you divert half of that $30K into BTC annually, over a halving cycle, that’s potentially life-changing compounding.
In my experience this how you offset the cons & no longer break a sweat over them.
Once you make that investment view that money as gone and use it as a compounding machine.
Don’t let a bad stretch shake you. You’re going to achieve house money and be further green with each payout.
When you buy some growth with these payouts your dividends create their own gains.
Mindset Shift:
Think of high-yield ETFs as a money printer, not a savings account.
• Use them to generate cash.
• Deploy that cash where it grows.
Now you’re creating asymmetric upside alongside an income stream for freedom.
Buy yourself a salary & do both things.
If you want to scale a high yield portfolio join the world’s best discord. 🅾️🅱️
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How to build a sustainable high yield portfolio. 🧵👇
1. Single stock funds
These will typically be your highest yield.
1️⃣ Underlying is crucial. Worry about the best companies not the highest yield.
2️⃣ Entry is everything especially on single stock tickers
3️⃣ Never have one single stock ticker heavily above 10% of your portfolio
2. Indexed income funds.
Hold funds spread across a basket of stocks. Why?
1️⃣ Reduces single stock risk
2️⃣ Higher Nav stability
3️⃣ Ability to zone in on a sector
Always the critics first complaint but rarely truly understood. As you’ve probably noticed not all high yield funds but many have a down trending chart. The income is generated through capping the upside while you still have full downside. This creates the downtrend. But what isn’t understood is that true NAV Erosion is when total return is negative.
Here’s an example of two funds with what is claimed to be “NAV Erosion”. This is why I say you need to view these through a total return chart.
ROC: “But your just getting returned your own capital”
ROC is traditionally seen as a red flag because it means a companies dividend is your own money being returned to you. With high yield funds that is not the case. This ROC is actually structural not destructive.
Yield Max does what they can to avoid conditions that cause options premiums to be considered income and taxed. This makes ROC a huge advantage. 100% ROC? Guess what you’re most likely not paying any taxes until your initial investment is house money.
“Not sustainable”
The classic argument made by people who have never sold an options contract in their life let alone run a synthetic covered call Strat. Options trading has been around since the 70’s this isn’t some SEC sanctioned Ponzi Scheme. If the underlying company is there and has vol you’ll have your dividend. Don’t want to sweat that? You can stay indexed or grab $BTCI which have all been extremely consistent. If you’re worried about capital decline reinvest some of the dividend. No one expects to pull out all of a 90% yield.