in overall market returns in the past. Data shows that from March 1994 through March 2024, dividends and dividend reinvestment accounted for about 47% of the total return of the S&P 500.
Last May, someone asked dividend investors on Reddit to share their monthly dividend income goals. The question drew strong engagement and many investors shared their detailed income reports, but one comment stood out.
An investor said he collected about $20,000 a month in dividend income and aimed to take this to $30,000 a month.
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“Goal is $30k/mo min, since that’s going to be roughly $20k/mo after taxes. $22k last month, $20k this month. Portfolio is just shy of $600k and has a total gain over the last year of about $25k,” he said.
However, the investor’s portfolio had several risky covered call dividend ETFs. He said in a comment that he was aware of the risks involved. He also mentioned that he had no Roth or tax-deferred accounts and had retired early.
“I think of this a different way. If it all goes to zero, I’ll still be OK. I’m simply taking a chance on leveling up my life. Most folks don’t have that kind of money. That doesn’t mean that I’m right or wrong, or that the more mainstream folks are right or wrong. I simply believe the reward is worth the risk.”
Let’s take a look at some of the key holdings in his portfolio.
YieldMax COIN Option Income Strategy ETF
YieldMax COIN Option Income Strategy ETF (NYSE:CONY) was in the portfolio of the investor who collected about $20,000 a month in dividends. The fund makes money by selling call options on Coinbase Global (NASDAQ:COIN). CONY is a risky investment since its upside potential is capped due to the covered call strategy, and its performance is linked to a single company operating in the volatile crypto industry. The fund has a distribution rate of 105% and pays monthly. CONY is down 42% over the past 12 months.
YieldMax Ultra Income ETF
With a distribution rate of 84%, the YieldMax Ultra Option Income Strategy ETF (NYSE:ULTY) generates income from a portfolio of covered call strategies. It’s down 57% over the past year.
YieldMax MSTR Option Income Strategy ETF
The YieldMax MSTR Option Income Strategy ETF (NYSE:MSTY) generates income by selling call options on MicroStrategy (NASDAQ:MSTR) stock. Its distribution rate is about 106%.
Colombian petroleum company Ecopetrol (NYSE:EC) has a dividend yield of 33%. The stock is down 17% over the past 12 months. Earlier this month, Colombia’s President Petro reportedly called on the company to sell its fracking operations in the US.
YieldMax NFLX Option Income Strategy ETF
The yieldMax NFLX Option Income Strategy ETF (NYSE:NFLY) generates income by selling call options on Netflix (NASDAQ:NFLX). It has a distribution rate of 76%. Over the past one year, the fund is up 3%, while Netflix shares have gained over 80% in the same period.
YieldMax MRNA Option Income Strategy ETF
The YieldMax MRNA Option Income Strategy ETF (NYSE:MRNY) generates monthly income by selling call options on Moderna (NYSE:MRNA). The fund has a distribution rate of 101%.
Brazilian petroleum company Petroleo Brasileiro ADR (NYSE:PBR) was also a part of the portfolio. The stock yields about 20%. Earlier this month, data from the company showed its production fell 10.5% in the fourth quarter year over year.
Altria
Altria (NYSE:MO) was another high-yield dividend stock in the portfolio. Last month, the tobacco products company reported Q4 results that came in ahead of Wall Street estimates. In 2025, the company expects annual earnings growth of 2% to 5%.
Alliance Resource Partners
Oklahoma-based Alliance Resource Partners (NASDAQ:ARLP) has a dividend yield of over 9%. The stock is up 31% over the past year. The company’s revenue in the fourth quarter fell 5.6% year over year.
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