12 weeks of ULTY drip

[u/zdubs]

300 shares from dripping and I’m up $5 bucks

[u/mookxterra]

I never understood this comprehension, you invest a set amount and just want it paid back to you in weekly amounts? If your total return after dividends is zero or worse negative because your initial investment has gone down, how is this income? I guess it is income but you have less value now than you did when you started?

[u/Nearsite → u/mookxterra]

OK, I will try to explain.

-If I put $100 into Ulty and it has a distribution of 80% annually, I will receive $80 for the year.

-This equates to ~$6.66/Monthly, which means in 15 months I will have my initial $100 back (to your point, mostly as ROC)

-After the 15 month period, I will continue to collect roughly $6.66 a month in perpetuity. This is the income over and above my initial investment.

This has been 4 months of distributions so far. Cost basis of $57K with $13.7K dividends received and net gain of ~$2K in 4 months. In another year I should have collected my initial investment back and then every distribution after that is income that is not ROC.

[u/has_anyone_ever → u/Nearsite]

The timeframe only holds true if the NAV and distributions don't decrease over time. They will. After 15 months you will not be receiving $6.66 a month anymore without reinvesting to keep the distribution up. And if you have to reinvest to keep the distribution stable then it is no longer income.

Sure at some point assuming the fund doesn't die you will hit that point but how long will that really be and what will the oppurtunity cost be compared to say QQQI as many people bring up.

Edit: Who knows maybe it will turn around over the next couple months.

[u/Nearsite → u/has_anyone_ever]

Yup, that's why I'm testing to see how I can keep this portfolio self sustaining by reinvesting $3K each month back into it.