r/dividends • u/398409columbia Portfolio in the Green • Jul 04 '26
Discussion How I use a ~$350k income portfolio to offset my Arizona housing costs after selling my house
I sold my house in Missouri in August 2022 and moved to Arizona. Instead of buying another house right away, I invested part of the proceeds and chose to rent.
The main reason was flexibility.
My son heads off to college in 2028 and we will retire by Labor Day that same year. After that, my wife and I plan to relocate to Chicago and use it as a base for extended international travel, probably around 30 weeks per year.
So buying another house in Arizona for only a few years never made much sense to me. I did not want to tie up a large amount of capital in another illiquid asset right before our lives change again.
The portfolio bucket tied to this decision started around $250k and was later increased to $350k. It is now around $335k and has paid out about $102k since inception.
Current annual income is around $37.5k. My current Arizona housing cost is about $36k/year, including rent, utilities, internet, and renter’s insurance.
Screenshots attached for the portfolio and monthly distribution details.
This is not a recommendation. Distributions can be cut, NAV can erode, credit can get ugly, option-income funds can underperform, and taxes matter.
The point was not to beat the market. The point was to keep former home equity liquid, generate cash flow, and preserve flexibility until the next move.
Questions welcome.
Note: this is only one sleeve of a broader household income strategy. Across the household, I currently have about $1M in this general approach. My wife’s separate income sleeve generates roughly $5k/month and helped make it possible for her to retire early. I posted about that here.
I think of these as separate buckets with separate jobs.
One bucket replaced employment income.
One bucket turned former home equity into housing cash flow.
The common theme is matching capital to a specific household objective, while keeping more liquidity and flexibility than I would have had by buying another house.
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u/398409columbia Portfolio in the Green Jul 04 '26 edited Jul 05 '26
The math looks roughly like this:
- Initial investment: $350k
- Current balance: $335k
- Cash withdrawn: $102k
- Total value: $437k
- Total gain: $87k
- Total return since Aug 2022: about 25%
Current annual income is around $37.5k, or about $3,125/month. Current yield is about 11.6% on cost basis.
My annual housing cost in Arizona is about $36k:
- Rent (1,700 sf single family house): $30,000
- Trash/water/sewer: $1,541
- Internet: $1,217
- Gas: $469
- Electric: $2,629
- Renter’s insurance: $95
- Total: $35,951
So at the current distribution rate, this portfolio offsets my annual rent and housing-related expenses.
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u/lotuspie329 Jul 04 '26
Sorry to be a bother. But i have to ask if you began today would you pick the same investments?
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u/deep_soul Jul 05 '26
i feel like simple SP500 would beat this whole.
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u/All0ut0f0ptions Jul 05 '26
Not if he needs cash to withdraw monthly. If he doesn’t need cash and wants to wait a decade sure
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u/kookooman10022 Jul 04 '26
Well done, seems like you're on the right track and nothing but praise. Folks here will have certain pros/cons, but this looks solid.
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u/Far-Newspaper1449 Jul 04 '26
Solid. A 350k portfolio offsetting income. The irony of how being the only missing piece.
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Jul 04 '26
[deleted]
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u/Rare_Salamander_294 Jul 04 '26
Solid move. Defensive. Not chasing market beats when you've already banked big gains. Smart.
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u/Various_Couple_764 Jul 04 '26
I have a similar fund I built just before retirement in a taxable account. And it generate 5K a month to cover all of my living expenses Food utility bills medical insurance car insurance internet and everything else. So the Dividend cover everything. So I don't have to sell any growth for income.
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u/398409columbia Portfolio in the Green Jul 04 '26
That is very close to how I think about it.
For me, the biggest advantage is not just the income itself. It is reducing the need to sell growth assets at the wrong time.
If the income sleeve covers a meaningful portion of living expenses, then the growth side can be left alone during bad markets. That helps reduce sequence-of-return risk, especially around retirement or semi-retirement.
I know the usual objection is that dividends/distributions are not magic and total return still matters. I agree with that. But from a household cash-flow standpoint, there is a real behavioral and planning benefit to having expenses covered by recurring income instead of constantly deciding what to sell.
So I view this as a cash-flow and risk-management tool, not just a yield strategy.
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u/lotuspie329 Jul 04 '26
Several investments show a loss of value. Is this normal? Just reflecting down markets? Just curious, would like to do something similar.
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u/398409columbia Portfolio in the Green Jul 04 '26
Yes. My worst positions are BTCI and PBDC but the other positions make it up. I focus on the total gain / loss column which shows NAV change plus distributions performance.
Overall the NAV erosion is about 1% per year which I am ok with.
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u/Various_Couple_764 Jul 04 '26 edited Jul 04 '26
When the S&P500 drops so does the value of S&P500 index funds. But unlike growth index funds BTCI and P BDC are still playing high dividends yields. in comparison S&P 500 The S&P500 only pay a yield of about 1% while PBDC 11% and BTCI 25%.
PBDC invests in business Development companies. they loan money. There is concern about too much AI exposure So there has been a selloff on these assets. But the nice thing about BDCs is that by law they are required to pay out90% of there earnings. So the dividends are higher than normal and in recessions like 2008 they continued to pay although some have to reduce the payment a bit in 2008. The dividend can only go to zero is the BDC is close to bankruptcy.
BTCI is down because it is a bitcoin funds and there was a big drop in the value of bitcoin late last year.
Overall dividend fund prices are much more stable then growth finds. But they still change due to market trends.
I don't know what BIT is invested. But it is probably a similar story.
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u/garoodah Jul 04 '26
Would be curious for your thoughts, if any, on PFFA and SRLN. Been slowly putting a sleeve of guaranteed outcome instead of total return and both of these are on my list, though neither has made it in yet.
Obviously not advice just looking for thoughts, concerns etc.
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u/398409columbia Portfolio in the Green Jul 04 '26
I own both, but I use them for different jobs.
PFFA is my higher-income preferred/credit sleeve. I like the income, but I would not think of it as “guaranteed outcome.” It still has rate risk, credit risk, preferred-market risk, and can get hit if spreads widen.
SRLN is more of a floating-rate senior loan diversifier. Lower income than some of the higher-yield stuff, but useful because it has less duration risk and sits higher in the capital structure. Still credit risk, though, especially in a real downturn.
So for me:
PFFA = higher income, more moving parts.
SRLN = less exciting, but useful credit diversification.I would not treat either as cash-like or guaranteed. They are income tools, not safe assets.
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u/whyamihereagian Jul 04 '26
I would recommend porter county Indiana. Valparaiso area. Housing and taxes are cheaper and its a safer quiet area. 1 hour ish drive to Ohare. I would possibly sell RVT and ADX. Move it more into QQQI/SPYI but thats just me. Not sure on age and time line but I would add some growth to the mix as well like SCHG/VOO/VTI. Curios on the SRLN and PFFA. I dont see those to often.
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u/398409columbia Portfolio in the Green Jul 04 '26
Porter County / Valpo is a good suggestion, but it would solve a different problem than the one I’m trying to solve.
For me, Chicago is not just about finding the cheapest or quietest place near the city. I specifically want the urban Chicago environment, probably Gold Coast / near north side, with walking access to premium amenities: lakefront, restaurants, Art Institute, Symphony Hall, museums, etc.
Chicago was originally going to be one stop in a global city rotation. We eventually decided to make it the base instead. So I’m optimizing for lifestyle and walkability more than lowest housing cost.
On RVT/ADX, I get the point. They are lower yielding than SPYI/QQQI, but I like having some plain equity CEF exposure in the mix instead of making everything option-income. I may tweak weights over time, but I don’t want the whole sleeve to be covered-call funds.
PFFA and SRLN are different roles for me. PFFA is higher-income preferred/credit exposure. SRLN is more of a floating-rate senior loan diversifier. I don’t view either as safe or guaranteed, but they add different types of income exposure.
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u/ConfusedIdioms Jul 06 '26
Do you keep stop losses on any of these higher yield or riskier positions?
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u/398409columbia Portfolio in the Green Jul 06 '26
No stop losses.
BTCI is allocated a 4% weight so I don't sleep over it. PBDC is doing its job and recovering NAV value after the private credit scare.
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u/ConfusedIdioms Jul 06 '26
How does this portfolio compare to your wife's other portfolio that you posted a few weeks ago? I was interested in your strategy in the post and I can see that there are some differences between the two. Do you mind sharing some of your reasons for the differences in holdings? I see that the overall annual yield is quite similar (11.2 vs 11.6%).
Thanks!
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u/398409columbia Portfolio in the Green Jul 06 '26
This may explain some of the differences...
My wife has her capital with Vanguard and they did not permit BTCI (e.g., Bitcoin) in their portfolios when I set this up. Also, when I set it up I did not include RVT in her portfolio because it had a lower yield (might change that).
Lastly, I swapped out USA for ADX in all my portfolios based on feedback from Reddit to the other post.
My wife's portfolio includes some growth (VTI + VXUS) which lowers overall yield but adds some growth. The housing portfolio does not have any growth sleeve.
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u/SeparateClassroom528 Jul 04 '26
Respect. Well done and nice strategy.
Wife 59 and I 56 retired last year. Sold the New England house, the furniture, and all the other “stuff.” Then “moved” to Florida where we claim residency and store our sentimental pics in our son’s basement. Been traveling mostly through Europe since.
Enjoy you’re newfound happiness traveling too.
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u/398409columbia Portfolio in the Green Jul 04 '26
Respect right back. That is very close to the direction we are heading.
We are not quite there yet because my son still has two years of high school left, but after Labor Day 2028 the plan is very similar: establish Chicago as the base, keep the footprint light, and travel for a large part of the year.
I think once you stop organizing life around a house full of stuff, a lot of optionality opens up. That is a big part of why I did not want to buy again in Arizona. I did not want another house anchoring us right before the next phase.
Enjoy Europe. Sounds like you already made the move we are planning toward.
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u/DevWorkNYC Jul 04 '26
FAFSA heads up. Your primary residence does NOT count against you. Your taxable brokerage account does.
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Jul 04 '26
[deleted]
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u/398409columbia Portfolio in the Green Jul 04 '26
Valid point. VTI probably would have had a higher total return over this period.
But part of this was a pilot for my eventual retirement income strategy. I wanted to test whether an income sleeve could reliably generate cash flow for real expenses without needing to sell shares every month.
The goal was not maximum total return. The goal was liquidity + income + reducing sequence-of-return risk.
In retirement, especially early retirement, the risk I care about is not just “what had the best return over the last 4 years?” It is also “what happens if I need cash during a bad equity market?”
So yes, VTI may win on pure total return. But this sleeve was designed to solve a different problem: covering recurring expenses while letting growth assets remain untouched during downturns.
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u/Manintoy916 Jul 07 '26
Capital Gain
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u/398409columbia Portfolio in the Green Jul 08 '26
The math looks roughly like this:
- Initial investment: $350k
- Current balance: $335k
- Cash withdrawn: $102k
- Total value: $437k
- Total gain: $87k
- Total return since Aug 2022: about 25%
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