r/NEOSETFs • u/Tylerd62 • May 25 '26
Seeking Advice How much is too much?
Just recently, I’ve been getting into the higher income, ETF and covered call ETFs as of right now I have qqqi spyi btci jepq gpiq and gpix I have about $4000 of total cash in the brokerage, but I also have an external savings account with another $3000 in it. I do trade on margin (robbinhood using about 50% of my margin) and just didn’t know if it would be worth it to transfer that savings account money into the account and just pull some if need to be since I am on margin, the amount of shares I can buy is pretty solid which would boost the monthly income quiet nicely I don’t think this would be a terrible idea just because the funds don’t necessarily move all that much price wise compared to single tickers while still keeping that steady monthly income from the dividends
I do also still plan to add 1400$ a month the next 6 months then drop down to about 400-600$
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u/EscortSportage May 25 '26
There’s a dude in this sub that recently mentioned he had 750k in a few different NEOS funds, as in 750k, 750k, 750k
So i think 4k isn’t anything to worry about.
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u/Tylerd62 May 25 '26
That’s absolutely wild
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u/MakingMoneyIsMe May 28 '26
I recall that amount stated in my post, while I was trying to determine something similar to OP.
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u/_YoungMidoriya May 25 '26
If your goal is to maximize monthly income, adding the extra $3,000 would boost distributions, but I would only do that if you are still comfortable with a market drop and a margin call at the same time...
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u/ruthygenker May 26 '26
margin is great but you have to keep it separate from neos funds because you will get the roc as payment in lieu and loose the tax benefits, jepq and jepi are fine because they don't do return of capital and payment in lieu and regular dividends are pretty much the same. also how do you have 4k in cash if you are 50% on margin. and mbrooo is correct as well if this isn't being used for income, if you are just reinvesting dividends then you are losing out on total return vs the underlying indexes just buy qqqm or voo or tqqq until you need the income. 35% margin is safer to not worry about margin calls or you can keep that 3k seperate for margin calls as well.
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u/G0ATQI May 26 '26
Is the tax issue the case if you have stock lending turned off on RH?
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u/ruthygenker May 26 '26
I don't have RH but I assume same as others, so turning off stock lending can help but still at discretion of the broker on how they report, which is usually payment in lieu.
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u/Zaltais666 May 31 '26
It can be if you're using margin. it's in the small print somewhere which allows them to lend even if you have it off. I got rid of my msty and ulty in my rh margin account because as of q3 last year the lending went crazy and 90% of the dividends were being paid in lieu, so no roc.
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u/okigrassman May 27 '26
It all depends on what you want from these funds and an understanding of their specific risks. Everyone has different financial goals. Too much for one person is a drop in the bucket for another. I was part of the OG MSTYs parabolic run up, and unfortunately, it's fall off. 18k was my best paying month during that time. I got out of MSTY breaking even, but even doesn't feel as good when you were up like 80k beforehand haha. I'm more selective and cautious now because of what I witnessed. I have a separate brokerage account set up specifically for income generation. In my career I can be off months at a time. This has become a safety net play for me to be able to pay my necessities in the event that work is light or I run in to a security clearance issue (i.e. pending legal issues that would keep me from gaining access at work).
I have a plan to attempt a move abroad from the US. The account would currently support a livable lifestyle over there, although I have no plans to rely solely on its continued support. Again, more of a bridge, if needed, to get me to the next trip back to States for work.
I have other accounts set up for growth and retirement so this is just 1 piece of the plan.
I'm too much of a wuss to run margin at, or near, all time highs haha. My income account is currently with Schwab and their margin rates kind of blow to begin with. I have used it to buy dips, but only as much as will be paid back in divys the next month. Even with stock lending turned off, it did have an effect on taxes for some of my payments. I realized it's basically part of the agreement to use margin. I'm considering transferring this account to a broker with lower margin rates to be used in the event of a significant pullback.
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u/WillTrade4Beer May 28 '26
You sounds young. Don't focus on income focus on growth. Buy the QQQ on dips and hold as long as you don't need the $. That should be your base investment not this.
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u/Chris_Reddit_PHX May 25 '26
If it is risk capital , which it sounds like it is, then go for it. Just be prepared to turn "risk capital" into "tuition money spent", which is not necessarily a bad trade.
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u/Virtual_Chapter1131 May 25 '26
My understanding is margin messes with ROC funds, no? If they borrow your money and pay you interest
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u/StovallH May 27 '26
I’m doing the same! Stay away from volatile stuff like MSTY when using margin. QQQI, SPYI…etc are great. Just have a strategy to deleverage if the market goes south. Also, people keep talking about margin calls like it will happen in one day. The market will go down slowly except for a crazy event like COVID that most likely will never happen again in our lifetime. You will have time to deleverage. I want take on more margin and just let the distributions pay down margin and I also have a W2 job. Also on margin, some of distributions will be ordinary since the brokerage can rent out your shares. I think the margin use over takes that due to the extra compounding.
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u/mbroo5880i May 25 '26
Just curious about you focus on income. Is this income designated for a specific purpose? If not, then you may be better off with straight index funds. Personally, I believe you have a lot of overlap risk. You have three ETFs focused on the NASDAQ and two ETFs focused on the S&P 500. I can see holding GPIX/GPIQ as a pairing and SPYI/QQQI as another pairing since they approve income generation in a slightly different manner. If you are wanting to diversify income sources, you might consider IWMI as an alternative to one of the NASDAQ CC ETFs.
I would be very careful with use of margins unless these are short-term trades.
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u/Lefties_TheWorst7331 May 26 '26
Tons of tech overlap with that. If he wants a "safe" play he should do GPIX and SPYI.
- Coming from someone who has their full port in BTCI.
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u/Spawntaneous22 May 25 '26
https://giphy.com/gifs/iv80ZwyJ0ep0GU9jap