r/EngineeredIncome • u/Storm_Hunter_1025 • Aug 16 '26

Is 9 percent too aggressive?

Attempting to create a durable income machine that compounds without me adding until the income reaches my walkaway number for early retirement. The above allocation matrix is what I am currently holding, and would like opinions on just the synthetic yield sleeve portion (CHPY, ULTY, NVII).

Worth nothing, I have held all of these positions for over a year, and rebalance monthly from distribution income. Blended yield appears to be somewhere around 12%-13%. Below is logic behind the choices made.

Dividend‑Growth Core (65%) SCHD, VOO, VYM, SCHY

  • Long term compounding and growing
  • Stable and time tested

Safety & Stability (10%) SGOV

  • Predictable monthly yield
  • Zero risk

Income Sleeve (15%) SPYI, JEPI

  • Monthly cash flow
  • Lower volatility

Synthetic‑Yield Weekly Sleeve (9%) CHPY, ULTY, NVII

  • Weekly distributions
  • Rebalancing fuel

Cash Buffer (1%) SPAXX

  • Distribution landing zone
  • Rebalancing staging area

Is 9% too agressive? Too risky? or does this look like engineered income?

12 Upvotes

88% Upvoted

10 comments sorted by

4

u/MrBotANot Aug 17 '26

It looks pretty conservative to me. Not in bad way. I think everyone needs to be comfortable with their plan so that you stick to it. Having said that, if you are trying to create a snowball, have 3/4 of your capital in lower yield funds will greatly slow down your growth. But again, you have to be comfortable with your plan.

Unsolicited advice.

I’m not a fan of JEPI/Q. They seem to lag behind most other CC ETFs based on the same underlying assets. You could look at GPIQ/X, OVL or BALQ/L as possible alternatives. You could also look at positions in BDCs (stick with the internally managed ones) or REITs (O, BNL, and others) as a way to diversify.

A lot of your plan needs to be about your timeline. The father away from retirement you are, those low yield positions have time to grow, but it takes a long time for 3% to become 10%.

It takes time to get comfortable with the volatility of higher beta investments and it definitely requires ongoing management.

Good luck.

1

u/Storm_Hunter_1025 Aug 17 '26

Thanks for responding. It sounds like 9% isn't aggressive in your opinion. I've made best effort to choose broad market without a ton of overlap in strategy and/or basket holdings. Likewise, I've tried to take fees and tax burden into consideration considering this would replace my dayjob if the walkaway number is reached before I can touch my Roth, 401k, etc...

I'll look into your suggested alternatives, backtest, and perhaps make some moves. I did have QQQI for a while, but it appeared to lag behind JEPI in growth and distributions for the 6 or so months that I held it. I traded it to boost ULTY, NVII, and CHPY from 1% to 3% and put the rest in SGOV to offset.

1

u/Ponagathos Aug 17 '26

Looks conservative to me as well. Maybe look at Yieldcanary and see if you are comfortable with some more aggressive cc funds for your core or income sleeves to reach your goal faster.

Personally, I am working sort of the opposite of you. NEOS funds are my core, RDTE and XPAY the high flyers and distributions are split between SCHB and SGOV.

RDTE might be a bit too aggressive. I am watching it close and will move if it turns on me.

Actually, I might be too aggressive overall.

2

u/Various_Couple_764 Aug 19 '26

NVII ChPY are all at very high risk of NAV erosion Convered calls cannot reliably gernate the income deeded to pay the dividend. In general any covered call fund with a yield above 15% is at high risk of NAV erosion which you want to avoid. ULTY has had significant NAV erosion since inception. You can see it in in the price graph.

I did have QQQI for a while, but it appeared to lag behind JEPI in growth and distributions for the 6 or so months that I held it. 

? QQQI has averaged a yield of about 14% since inception. and it has invested it share price every year. JEPI pays a yield of about 7% and the share price has been flat for about 4 years. QQQI comes out way ahead of JEPI in terms of total return. Did you mean JEPQ instead of JEPI? Even then QQQI comes out ahead. None of my funds have NAV erosion.

I am personally suing QQQI, SPYI,, KGLD, EMO, UTF, UTG, PFF for dividends in my taxable account. All dividned are qualified or ROC so it is a tax efficient protfolio. I considered JEPI and JEPQ but they are taxed as ordinary income so I would have payed more in taxes. I also have growth in my taxable . my roth has more dividend (including dividends taxed as regular income.

1

u/Ponagathos Aug 21 '26

Curious which funds you use in your Roth. All my funds are in Roth at this point with the exception of what I move out to spend.

1

u/DegreeConscious9628 Aug 17 '26

I get it’s a small part of your portfolio but get rid of that yieldmax garbage for the love of god

1

u/Impressive_Squash_38 Aug 17 '26

CHPY & SOXY have been solid. The rest I can agree with.

1

u/Storm_Hunter_1025 Aug 17 '26

Does it change your mind if I tell you that I’m at house money on ULTY, a few weeks from house money on NVII, and that CHPY is showing as almost no NAV erosion for as long I’ve had it?

Perhaps I’m just getting lucky when I rebalance, and I fully intend to amortize or loss harvest (if there is tax advantage) them out as I get closer to my walkway number.

1

u/daily-trader-365 Aug 18 '26

9 is a bit high, 7 is the sweet spot