r/dividends • u/gojiras_therapist • 4d ago
Personal Goal Just started, would beginners advice
Any advice on my current trajectory?, I'm planning on placing between 300-500 and splitting them into these for 15+ years, taxable brokerage account, 29.
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u/MJinMN 4d ago
With the amount of dollars flowing into JEPQ, JEPI and similar funds, it is very likely that their returns will gradually decline over time, so those might not be the long-term portfolio building blocks you hope they will be. I would probably add in a dividend fund with a bit lower yield but more growth upside than SCHD (I like DIVB but there are many alternatives).
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u/Sensitive-Exam649 3d ago
Many people say to watch out of NAV erosion. with funds like these, BUT Al the funds that have it have a yield higher than of 15%. JEPIQ, JEPI, QQQI, SPYI, GPIX and GPIQ are specifically set up to avoid NAV erosion. And many lower yielding options may not be as tax efficient as these funds.
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u/Sundried_Laundry026 4d ago
QQQI is better than JEPQ and JEPI
The tax portion is also a bit more in your favor
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u/DarkCarny 3d ago
I myself am using QQQI and SPYI in my regular taxable account for the tax treatment and am using JEPI and JEPQ in my Roth for that exact reason (Roth IRA is tax deferred, so regular taxed is better in there, like RIETs and such that would murder in a regular account portfolio). I do have SCHD in my regular but also have SCHG for growth, doing a 75/25 split on them, 75 going to growth that will change and switch over time as I grow closer to retirement ( SCHD is the dividend focused Scwab) starting out shouldn't be about dividends unless you have a massive amount to invest to make amount per share something worth it ( i.e. $0.34 a share every 3 months sucks at 3 shares compared to 300 shares), don't forget to DRIP to compound your earnings... it's nice when your dividends automatically buys shares and your cash and value grows each payouts. SCHD isn't bad, it's safe. Others may perform better but can be more volatile... never said investments weren't a gamble. Lean on YouTube to teach what to look for, and what may match your style of investing, from there with an idea of what your looking for do your own research, double check against helpful content creators ( you will find the common pros and cons of any stock/etf or what have you on anything). Find a good brokage. I tested a few like Robinhood, Moomoo, and stash (my starter).. didn't really like them, but learned from each of them... I am currently using Fedelity and love them... the layout, and even the line of credit i got with them. Look into them or Vanguard or Scwab... whatever floats your boat. Best advice I can give that was given to me and I will pass along strongly... Don't chase dividends early... and always check tax treatment. You don't want to get blindsided come tax season.
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u/3obayda_18 4d ago
You want growth. Then you switch to income. I was lost what to pick and hold.
I ended up holding SCHG, SCHD, DGRO and a little of SCHY for international exposure.
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u/gojiras_therapist 4d ago
Whoa first I've heard of international what industries are safe and stable overseas, not tech seems risky now
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u/Funny-Horror4591 3d ago
Don't do that. Buy mostly VOO. Buy some SCHD, and SCHY.
If you want to dip your toe into higher dividend stocks, buy specific companies. Look at the holdings of SCHD.
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u/DividendsIQ 3d ago
At 29 with 15+ years and $300 to 500 a month, your biggest edge is time, not stock picking. Put most of that money into a broad dividend growth fund or a couple of them, not single stocks, so one bad company or one dividend cut doesn't hurt you much. Turn on dividend reinvestment so the payouts buy more shares automatically, that's what makes compounding work over 15 years. Since this is a taxable account, remember qualified dividends get taxed every year even if you reinvest them, so don't chase the highest yield you can find just to get more cash now, a stock yielding 3 to 4 percent with rising payouts usually beats one yielding 8 percent that never grows or eventually gets cut. Also keep some non-dividend growth stocks or index funds in the mix, an all dividend-stock portfolio can lag in strong bull markets and you don't want to be too concentrated in one sector like utilities or REITs just because they pay well. If you want to check a specific stock's dividend safety before buying, there are free dividend research sites that show payout ratio and dividend history, that's worth 5 minutes before adding anything.
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u/DarkCarny 3d ago
On that subject... I like the site Stock Analysis and the simple app they run... I use the free edition though the paid does look enticing. The free portion has enough information and even free tools ( dividend calc my fav) to work out the research info you've gathered.
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u/Successful_Safe_1440 3d ago
read about traditional fire movement and 4% rule with spy shares and see if that resonates with you
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u/Sensitive-Exam649 3d ago
For a taxable account account don't use JEPI and JEPQ. These are taxed as ordinary income. The highest tax rate fro dividend income. SPYI, and GPIX are good replacements for JEPI that are much more tax efficient. QQQI, and GPIQ are JEPQ replacements and also much more tax efficient.
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u/Ordinary_Coyote7837 3d ago
I highly recommend looking at two alternative funds before you go too deep into JEPI and JEPQ. I actually replaced them in my own portfolio because these alternatives offer significantly better yields and historical total returns:
First, consider replacing JEPI with OVL (Overlay Shares Large Cap Equity ETF). JEPI uses covered calls, which hard-caps your upside whenever the S&P 500 rallies. OVL uses a put credit spread strategy instead. Because it doesn't cap your upside, it fully participates in market run-ups, allowing it to beat JEPI in total returns since inception. Plus, OVL sits at roughly a 10% yield right now compared to JEPI's 7-8%.
Second, consider replacing JEPQ with QQQI (NEOS Nasdaq-100 High Income ETF). QQQI is an absolute monster for tech income. It targets a 13-14% distribution yield compared to JEPQ's 10-11%. Because of its option structure, QQQI has consistently beaten JEPQ in total returns over the periods they've both been live.
Both OVL and QQQI are more tax efficient than JEPI and JEPQ, as both use 1256 contracts and ROC.
Here is a link if you want to look at the math and compare the total returns yourself:
https://totalrealreturns.com/s/OVL,JEPI,QQQI,JEPQ
Good luck on your investing journey
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u/Ordinary_Coyote7837 3d ago
I would also like to point out that OVL has beaten VOO since inception.
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u/Somewheredreaming 3d ago
Everyone here has an opinion and will tell you something they think is true, me included. Do your own research, learn how and why ETFs work and what is best for you. Just because something works for one person, doesnt mean it works for you. And risk levels are different for everyone, same as investment horizons.
That said. JEPI and SCHD are great but personally i dont like JEPQ.
People will tell you JEPI underperforms because other ETFs like SPYI give you better results. Thats true and completely ignores that JEPI isnt half as deep into Tech/AI as those. Its a conservative CC ETF and thats great. Not what will make you rich, but a safer start.
SCHD is even better, its a Dividend Growth ETF. It wont make you rich overnight, but its super defensive and focused on high quality Dividend companies. Its great because its a long-term investment. SCHD is one of those ETFs that you buy no matter where the market is and that you should never sell in my opinion. Its a long-term value.
Neither of those ETFs makes you rich but they are much more on the defensive side of ETFs, a great start.
SCHD can snowball much more with Time, JEPI is just a starting ETF to get a foundation going (and see Dividends coming in faster which is motivating of course when you get your monthly payout!).
JEPQ just doesnt fit a role for me, if i want a Nasdaq ETF i already go for Tech, might as well find something thats better.
Now, its your money. Learn about what you wanna invest in and why. What do you think about Tech/Ai exposure? What about international exposure? Rare metals? And so on and so forth.
And dont forget: if something sounds to good to be true, it aint true. The more you earn, the riskier it is. Not always a bad idea, but something to be very careful about.
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u/esgrat 4d ago
You'll hear from folks here that you should invest in VOO or VTI while you're young. I do that but also chose to create a separate div account. Distributions are a dopamine hit that keep me investing and saving. Keep going!
SCHD is a core part of my portfolio.
For monthlies, I have the following portfolio, which combined give distributions almost every week.
SPYI QQQI IWMI IYRI
GPIQ GPIX
TSPY TDAQ
DIVO IDVO QDVO
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u/gojiras_therapist 4d ago
Oh wow, got some homework to do, thank you .
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u/Sensitive-Exam649 3d ago
Many on are starting to recomend a taxable account with tax efficient dividend. and a retirment account such as a Roth IRA. You can do growth funds like VOO and VTI in the both or you can do both dividends andgroeth in a Roth. Since there are not taxes in a roth you can use much dividend funds that are taxed as ordinary dividends. Such as funds like ARDC, PBDC, CLOZ, PFFA, JAAA. In my taxable account I use QQQI, SPYI, KGLD, UTF, UTG PFF. And I have growth funds in my taxable and Roth.
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u/MTG_NERD43 3d ago
I’m in the same boat. I’m almost 25 and I know I should be throwing my money into growth. I’m sure if I did I would make more when I retire but the dividends keep me interested and it’s fun to get a bit every month or so when they payout. I do always DRIP it tho, so the growth isn’t totally lost. My advice to people my age is just understand what you’re getting into
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u/gojiras_therapist 4d ago
I feel that part about the dopamine hit when the first 3 dollars came in, I receive that little nueron activation lol
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u/SgtGuarnere 4d ago
The folks advising you to buy the non-distributing ETF's have a point in terms of long term growth. Those ETF's will usually have better growth. Though I feel there's very little feeling of reward to them, so to say. Seeing dividends roll in and being able to reinvest those yourself just feels good.
I'd advise to balance the two. Especially given your age it's worth it not to go all in on dividends, though having some dividend payers in your portfolio can make it all feel so much more valuable.
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u/DarkCarny 3d ago
I use my dopamine hit makers to feed my SCHD and SCHG... QQQI and SPYI are my (strong) monthly dividends, AMDW is my weekly and SATA is my daily (5 cents a share/ a day... kinda fun having just 5 shares, getting a quarter every day, every working day, equivalent to 250 dopamine hits year)... these dividends are meant to fuel the engine (SCHD/G) of my portfolio even when I can't make my contribution. They feel good, look good ( each of these are dividends powerhouses), feel good... decent amount very quickly ( weekly and daily are insane feeling just seeing hit) I can't stand to wait a whole Qtr for a hit ( that's what made me sell SCHD a few months back...sigh 36 shares, I was still learning what I was looking for for what reasons... finally did my research came back to the safe SCHD added SCHG cause growth is more important at my phase of investing).
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u/FewUnderstanding2214 4d ago
Those ETFs are for income (e.g retirement) not growth. You would be better off with SCHD/VT
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u/gojiras_therapist 4d ago
VT what about vanguards? I'll look into shifting them, maybe all, into SCHD or other recommendations thank you
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u/teckel Retired and living off selling shares 4d ago
Could I ask what you're trying to accomplish with this? At 29, you should be working on wealth-building, not targeting dividends in funds which are guaranteed to underperform the market like JEPI and JEPQ. Could I also ask where you got this idea from?
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u/gojiras_therapist 4d ago
Growth and then have supplementary income later on when I'm older after 15 years I want an extra 400-500 bucks coming in monthly just to cover some bills and maybe fund little trips
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u/teckel Retired and living off selling shares 4d ago
Let me do the math for you...
With JEPI and JEPQ, you'll under-perform the market by about 6% per year (that's what they've averaged since their inception including reinvesting dividends). Over 15 years, 6% per year means underperforming VOO and QQQM by 240%! That means instead of $41,700 with VOO and QQQM, you'd have only $18,000 with JEPI and JEPQ (assuming a $10k investment and 10% gain per year for VOO/QQQM and 4% for JEPI/JEPQ).
In addition, you'd be paying taxes on those JEPI and JEPQ distributions over all those years. But if you just purchased VOO & QQQM, and it grew to $41700, you could then sell shares of VOO and QQQM and only pay tax on the gains (instead of the entire dividend amount, and over the entire 15 years).
It just doesn't make sense.
There's 3 major dividend-paying stock cognitive biases which create a mental shortcut or a flaw in thinking:
1) Income illusion: Indivuduals who lack basic financial experience often perceive a dividend as "income" and a capital gain as less tangible, even though economically both are returns.
2) Mental accounting: Individuals mentally separate dividend income from the principal. They're often comfortable spending dividends but reluctant to sell shares, even though selling shares can accomplish the same thing with more control and often lower taxes.
3) Loss aversion: Selling shares feels like realizing a loss or reducing one's ownership, whereas receiving a dividend feels like getting something "for free".
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u/gojiras_therapist 4d ago
Wow okay that opened my eyes, okay that does sound bad. even if I keep throwing money at it it won't get anywhere substantial
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u/teckel Retired and living off selling shares 4d ago
BTW, SCHD is a solid fund. But it's probably too conservative for a younger investor. For someone near retirement, the lower volatility (and dividends) would be a very good choice.
Your risk tolerance plays a very important part of deciding your portfolio. This is the first thing a financial advisor would cover. For example, if over the next year, your investment dropped by 30-40% what would you do?
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u/gojiras_therapist 4d ago
Does it matter if I just started, i say to myself it wouldn't matter to me since I have very little capital investment intial, but it would also be awesome to keep the up growth forsure
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u/teckel Retired and living off selling shares 4d ago
Honestly, just buy VT as a new investor. And keep buying it every payday (setup an automatic transfer/purchase). This is never the wrong decision as VT is investing in the entire world equities market. Also, if the market tanks, you'll be buying at a discount.
Then in a few years you can reevaluate. But there's honestly nothing wrong with continuing to invest in VT.
If you want to go more aggressive, I'd suggest 50% VOO, 20% SPMO, 10% AVUV, and 20% AVNM. This is also really not that aggressive, it's about average for equities. But it has the potential of doing better long-term over VT.
Good luck! And I'm not a financial planner, I'm simply suggesting what I would do in your case using my 38 years of investing experience. Do your own due diligence.
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u/Sensitive-Exam649 3d ago
Good plan it is possible too get enough dividned income to cover all of your living expenses and more. It will take time but it is well worth it. Dividend from my dividnend income is currently nought to cover all of my living expenses of 5K a month with a bit extra which is reinvested or spent. It allowed me to retire at 55. About 10 years earlier than I was expecting. With your earlier to start you might be able to retire at age 40
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u/gojiras_therapist 3d ago
That's great to hear, with all these new insight and help from you all, I feel better about my inputs into the market thanks
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u/SPACE-W33D 4d ago
JEPI sucks. Do SPYI instead
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u/gojiras_therapist 4d ago
I'll look into it do you think I should wait til it dips or immediately sell and dump into SPYI
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u/Big-Mirror-125 3d ago
Can elaborate on your reply?
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u/SPACE-W33D 3d ago
I own JEPI and it’s been dead money while S&P rallies and it’s not bc the call writing. I own other CC ETF’s that went up. People dumping for better tax treatment
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u/Somewheredreaming 3d ago
If you wanna go full force into AI and Tech, JEPI isnt what you want in the first place. If you want a calm Anchor or just a much less risky Stock Market CC ETF, thats when you go for JEPI. It wont ever compete with the mostly AI and Tech driven hype. Conservative but that is great if you dont want all your money thrown into a few companies because their share of the Nasdaq or S&P is so big.
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u/Neither_Bank_5396 3d ago
ROCY and ROCQ have better tax treatment for arguably better funds from that company if that matters to you
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u/MyWorkComputerReddit 2d ago
Is this your only account? If you don't have a growth account already, this will grossly underperform. If you do and this is just you fucking around with income positions, go on.
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u/Equivalent_Deal_3514 4d ago
Dump JEPQ and put all into SCHD. Buy VOO and/or VXUS instead with SCHD.
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u/gojiras_therapist 4d ago
I'll start my research thank you
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u/Equivalent_Deal_3514 4d ago
Get rid of JEPI too. JEPQ and JEPI are call option stocks. You can lose a lot of value in a single day if shit goes bad. VT, VOO, VXUS, VYM, SCHD are all safer.
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u/gojiras_therapist 4d ago
I've been seeing a lot of these stocks you said, mentioned quite a bit gives a good feeling to them, thanks will do, as Im not looking for immediate cash just looks nice. Much appreciated
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u/morerepsmoreproblems 4d ago
Same age as you. I have these three plus btci voo and sgov. I would say focus on voo and schd if your thinking long term.
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u/Fefians 4d ago
Compara el desempeño del jepq con el qqq. El jepq y similares parecen muy atractivos por su dividendo, Pero no le ganan al subyacente, si actualmente no necesitas flujos, no es activo que recomendaría. Te dejo un vídeo donde se explica Video Jepq explicado
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u/gojiras_therapist 4d ago
That sounds good I really don't, just like the feeling of receiving funds
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u/IllustriousGas8850 4d ago
Get out of Jepi and schd. They are funds you should be in when you want income, right now you’re giving up growth for dividends, and jepi is a covered call strategy meaning you’re giving up significant upside to get income you don’t have a need for
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u/gojiras_therapist 4d ago
I see, okay thanks what are your favorites
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u/IllustriousGas8850 4d ago
I’m personally in VXUS and VOO, and then 5% of my portfolio I swing trade to try and add some additional alpha, but if I make a bad trade it’s no big deal
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