Top 5 Income Investing Questions...answered (June)

[@armchairincomechannel]

Snowball Dividend Tracker (Create a Free Account, and the 10% Discount will appear under "Subscribe"): armchairincome.link/snow

[@mikeb2777]

In my 10th year of retirement. When I retired I transitioned from my own covered calls to the new covered call ETFs that are professionally managed. This has relieved a lot of effort on my part and since they're pros they probably can do a much better job than I did. You're running a great channel. Keep up the good work

[@armchairincomechannel]

Congratulations on your continued retirement. I had a similar experience with writing my own covered calls a while back....it works, but I'd rather pay somebody else to do it for me.

[@ddelmarsmith]

Some additional thoughts on the first question. I think the main difference for income investors is "diversification of income generating strategies" vs "geo/sector diversification" that growth strategies focus on. Having 25 to 30 different income investments helps to ensure if one of them screws up and either stops paying or drastically reduces, its not a huge impact on your income, being only 1/30 of the total income.

[@armchairincomechannel]

Thanks for your feedback. You make a good point, there are several ways to define "diversification"....location, currency, asset class, etc. The key it to ensure they don't all suck at the same time!

[@Dividendflywheel]

😊😊😊 “I relieved myself of the obligation to work” I love that phrase. It’s EMPOWERING. I am counting down (47 months)

[@armchairincomechannel]

Thanks! Congrats on your looming freedom!

[@Michael-nq4ek]

Great video as usual. Is it possible to get an interview with Fepi managers? Thanks

[@armchairincomechannel]

We're exchanging emails. They've agreed in concept, just trying to nail down the details. They're a bit busy with AIPI at the moment.

[@Michael-nq4ek]

Thanks for letting me know. I look forward to all your videos

[@cartershillig1087]

You are my inspiration! I retired after 40 years in commercial real estate (office & Industrial) in Dallas, TX. Fifty years ago Red Beach was not the same place it is today. You have opened my eyes to income investing. I am in the process of following your principles by transferring income from depleting assets to income investing with diversified CEF & ETF's. I continue to look forward to your next video. "CHEERS".

[@armchairincomechannel]

That's great to know! Hi from one commercial real estate retiree to another :) I did mostly office, but also some industrial deals. If you want to chat some time, my email is [e-mail]

[@DP52001]

Thank you so much! Great insights as always - you make my Sunday great every time! YMAX is part of my holdings but I completely agree - it's early and I am also concerned as well about its performance/longevity. I think Jay is great, but when I see so many funds on their site (and growing in number), I worry about their ability to truly focus. When I look at and listen to the NEOS managers (including your interview), I see a core set of funds that I believe in more...and simply trust more....not sure why I say "trust" here, but I've watched A LOT of interviews and read many articles (I'm an obsessive researcher, so I've probably spent too much time studying); when I see/hear the NEOS team, especially Garrett, there is just something more genuine with him (as compared to Jay, or even Sylvia from Defiance). I don't think poorly of Jay/Sylvia - I just feel like their sales pitch is a little too strong, at times which always makes me a bit suspicious.

[@armchairincomechannel]

I get similar vibes, and enjoy the interviews because I get a broader sense of the fund than I can from reading numbers. I'll try to keep the videos coming on Sundays, seems to work well. Glad you enjoy them :)

[@Steverino70]

Enjoyed the interview. Really like the Q and A format.

[@armchairincomechannel]

Thanks. I'm using it to address topics that are of interest to more people than just the person who asked the question, but too short to make a full video about.

[@momdittomomditto7705]

Thank you for answering these questions. Another great video! This is my favorite YT channel!

[@armchairincomechannel]

Wow...I'm competing with Mr Beast and a lot of cool channels so that's a big compliment! Glad you are enjoying the channel :)

[@jimsteinberg9291]

Sane informed insights from the Oracle of the Armchair! Thx!

[@armchairincomechannel]

Thanks Jim! Always appreciated.

[@ddelmarsmith]

I think one of the other reasons to hold cash or money market type risk investments is if you are planning a large expense in next 1 to 3 years such as a car, home, renovations, cottage (lol), etc...

[@TonyCox1351]

No joke I’d love a nice little cottage in retirement 😂

[@armchairincomechannel]

Yes, that's a great point. You don't want those funds riding the market!

[@Krautlander]

As always a real good video. One of the best channels. And it help me stay on the income strategy.

[@armchairincomechannel]

Thanks for the supportive feedback, I appreciate it!

[@ivan11h]

Do you have an opinion on putting your own covered call trades? I know you want to sleep good at night, is your main strategy. You can use the power of this group to make a few trades this year??? We can all vote on your idea, and maybe somebody else would have a better idea in the group? Just something fun for the channel.

[@armchairincomechannel]

Funny you should say that...I'm preparing a video that addresses the question of whether its worth doing your own covered calls. Thanks for the suggestions!

[@SummitMan165]

Another good video ! Like the idea of answering a few of your subscribers questions ! Keep up the good works !

[@armchairincomechannel]

Glad you liked it!

[@mac41776]

Excellent video. I had these questions a few years ago when I was looking into income investing

[@armchairincomechannel]

Thanks! Glad you liked it.

[@BTinSF]

I recently combine the "greed" (holding cash to buy at unusually low levels) with one of the reasons you set aside: Securing options. For several years I've been selling puts at what I consider extraordinarily low levels. I believe doing that, I can add the option premium to the 5.3% or so I collect on the cash in T-bills. This can bring the yield on the cash to close to your range. But after all, I currently have only about 8% in cash. I think that's a reasonable amount for all the reasons you covered and doesn't sacrifice too much much yield.

[@armchairincomechannel]

Thanks for sharing your strategy, or part of it. If you like using options to generate income, it makes sense to do that. I'm planning an upcoming episode on this topic.

[@RobertBrown-yn9tx]

@@armchairincomechannel I'd be interested in possibly dealing in Options but really only know the basics. I recently picked up a book that deals with a modified "Wheel" strategy which looks interesting but also seems like quite a bit of work for not all that much yield (I may be wrong in my thinking) I'd love to hear your thoughts.

[@Geminous1]

Thanks again and again!!!

[@armchairincomechannel]

You're most welcome :)

[@sreekreddy73]

Thank you so much for sharing your thoughts!

[@armchairincomechannel]

You are so welcome!

[@speakerscoach]

solid and well researched info as usual. gud to see you are enjoying your retirement

[@armchairincomechannel]

Much appreciate :) Retirement is the best!

[@morrisbingman4956]

Excellent video with great content thank you Sir!!

[@armchairincomechannel]

Glad you enjoyed it! Thanks for taking the time to let me know.

[@oneeyedjack8806]

Excellent session

[@armchairincomechannel]

Glad you enjoyed it, and thanks for the feedback!

[@JG-DivMan]

I like to diversify my yield-focused funds across several market sectors and risk profiles. It might be over-diversified to some, but it's produced solid results. As for Yieldmax funds, I actually like them and hold a few. The single-stock exposure is a risk with many of their offerings, but picking a solid underlying security can lead to successful results. If it's a stock I would be interested in writing options against, I let Jay do it for me. Not only is he better at it than I am, he's able to work with scale I'll never be able to touch. I treat them a little differently, though, than my more traditional income funds (like JEPQ, PFFA, etc) using more of an ROI model than traditional metrics. Also, I watch them closely and use the generous returns to feed my "steady Eddie" income funds. I appreciate your videos very much -- thanks for making them!

[@RobertBrown-yn9tx]

I also hold some Yieldmax funds. All of them at

[@armchairincomechannel]

Thanks for sharing your strategy, and your thoughtful approach. Glad you like the videos :)

[@brucef1299]

Agree with everything here. I'll admit to being overly cash heavy at the moment, but I'm still more than a year away from losing my steady pay check. For now, it's just nibbles here and there to have some skin the game with high yield income investments as I track their performance over time and come up with a short list that will be held in retirement for that sweet sweet income. Too much income now just means acceleration up the tax rate chart. Who wants that? Thank you for your thoughts on these questions.

[@armchairincomechannel]

Makes a lot of sense. You don't want to be taxed to the max. Thanks for your feedback!

[@willydear4906]

Why Vietnam? If you don't mind me asking. Nine years ago when deciding where to live, I researched all over the world and choose the Philippines. I gave Vietnam about 2 minutes of thought and discounted it due to the Vietnam War. I'm a couple of years too young to have served in the war but remember the news reports on TV. After a few years in the Philippines I did reconsidered Vietnam namely the DaNang area but the language barrier just was too much. I'm 62 and just beginning (again) my investment journey. My investment strategy is a ever changing entity. I don't need income from investments right now so I don't do high income investing but do enjoy your channel. My goal is to have 50,000 usd per year in income in 15 years. This is for my younger wife and the children.

[@armchairincomechannel]

I spent 2 months in Vietnam and loved it. The people are incredibly friendly. Language is no problem. The food is great, transport is easy. Cost of living is low. If you're unsure then take a trip to Danang during Feb - early May (best weather) and take it for a test drive. Crime is much lower than the Philippines and no natural disasters.

[@peterjwilson]

thank you. wise words

[@armchairincomechannel]

Thanks for watching!

[@enricomonesi5856]

ARMCHAIR......you did it again.......oh, don't change the music theme YET 😊

[@armchairincomechannel]

No plans to change it....it's stuck in my head. I want to figure out a way to include more of the song but I'm not a music channel.

[@Crockerfeller]

Would love if you could do a follow up video/review on the YMAX etf. perhaps with Jay ? :)

[@armchairincomechannel]

I'm definitely open to that after YMAX has been through a correction so that we have some sense of how it reacts to various market conditions. So far its doing well but the market is abnormally bullish recently so its too early to tell much about it. Thanks for the suggestion.

[@markthompson1694]

Love your channel mate. From NZ

[@armchairincomechannel]

Much appreciated. I'll think of you next time I eat a rack of lamb :)

[@aaronrobertson5141]

Maybe you answered these before but in a future, top-questions video could you explain how you handle two common things that a job usually handles: Health Insurance and Estimated Taxes?

[@armchairincomechannel]

I live outside the US so I handle these 2 topics differently to somebody who lives inside the US (which is where most of my audience lives). Will give it some thought, thanks for the suggestion!

[@ddelmarsmith]

Great video. Keep them coming.

[@armchairincomechannel]

Thanks for the feedback and for being one of the first to watch it!

[@DanielCarpenter]

oh my goodness thanks for the info you deliver. so much to research and I love the options you present us with. Is there a program/website that announces stock splits even on stocks you dont invest in? Thanks

[@armchairincomechannel]

Thanks for your feedback, and I'm glad you find the content useful. I don't follow stock splits or alter my holdings based on them so I don't know the answer to your question. Probably something like Tipranks will do the trick: www.tipranks.com/calendars/stock-splits/upcoming

[@ddelmarsmith]

BSTZ also reduced dividends Feb and Sept in 2023. I wouldn't hold this CEF due to this unpredictability in dividend payments

[@armchairincomechannel]

I agree!

[@normansimonsen1203]

Agree 100%.

[@armchairincomechannel]

Thanks Norman :)

[@pauld9653]

New subscriber here.. not sure how I even found one of your youtube videos.. but you are preaching to the choir as I already own some of your holdings and a lot of individual preferreds. Taxes are a consideration to your audience (most of which is usa?) and there are many preferreds that pay Qualified Dividends.. so long term cap rates. Maybe a tutorial or review of Snowball and how it works.. what it all does? You seem to be a full disclosure kind of guy.. how about a 6 month review now that its end of June on your total return ? Thanks !

[@armchairincomechannel]

Thanks for the suggestions and thanks for subscribing. You're correct ,the majority of viewers are from the US. My goal isn't to maximize total return (otherwise I'd just buy QQQ), so it's not a metric I have thought about. However, you raise an important point, which is how to measure performance? My priorities are maximizing consistent income, without eroding NAV. Second to that is growing the income. Total return would be a relevant metric if I could compare my portfolio with another portfolio that produces an identical income stream, assuming both portfolios offered a similar risk profile. For example, a portfolio consisting of the Bitcoin ETF, MAXI, would show high income and total return recently, but that doesn't make it better...far too much risk. Highlighting the qualified dividends is a good idea. I haven't done a tutorial on Snowball, but I did review on it a while back, here's the link: kzbin.info/www/bejne/fmbCk6t_faegbac

[@joinjen3854]

You say you're retired, BUT (1) Managing 37 assets is a job and (2) filming, editing, interviewing is another job!!!! You ain"t retired Bro!!!!😂

[@unclelong213]

i dont think he's staring at his portfolio 40hrs a week though... lol

[@armchairincomechannel]

You have a point! If I didn't enjoy income investing it would definitely feel like a job. Although...I don't have a boss, a schedule, or an obligation to show up anywhere or do anything. So it's not exactly 9 to 5. Reading about income investing is what I liked to do before I had a channel anyway so it doesn't feel like work. The editing though...that does feel like work sometimes and at some point I might pay somebody else to do that!

[@rOHRshackartpottery]

Thank you for doing this. I wondered what your list would look like of you were concerned about taxes? In other words, which of the positions on your list have the greatest tax efficiency?

[@armchairincomechannel]

Everybody has a different tax situation so its impossible to address a portfolio that's tax efficient for everybody. My tax situation, as a non-us tax resident is vastly different from a US tax resident so my tax considerations are not useful to most people watching. I try to address the type of income when reviewing a fund, but I can't get into a lot of details when it comes to tax.

[@Level87-19]

YMAX is great 👍

[@armchairincomechannel]

It's had a nice run since it launched!

[@ivan11h]

Thank you again. Can you talk about capital appreciation or depreciation in your case? Has your capital increased in 7 years or stayed the same or came down?

[@armchairincomechannel]

I don't have an exact number but in general terms it was increasing until the pandemic (due to a combination of reinvestment of dividends and a moderate amount of appreciation). In March 2020 I sold a significant portion of my portfolio, as did many others. I waited months to buy back in...too long as it turned out, and took a loss. Post pandemic my portfolio value has grown. It took a dip in 2022 but it has recovered, similar story to most investors. So to summarize, I took a significant loss in 2020 and would have been better off if I didn't sell anything. As a result, the market recovered in a matter of months from the pandemic, but it has taken my portfolio years. Setting aside the pandemic, my portfolio grows at a slow rate, far below the S&P 500 as its optimized for income. It does, however, outpace inflation...mostly due to reinvestment of a portion of the dividends.

[@ivan11h]

@@armchairincomechannel can you talk about your dividends during the pandemic? Did they drop compared to 2019? By how much? How fast they recovered to 2019 levels? I assume the better the investment vehicle the faster the recovery.

[@markhoffman1310]

do you know an easier way to hedge against a market crash than just buying tlt? I'm slowly stacking it up to act as a counter weight to the rest of my portfolio. I am in some high risk funds.

[@armchairincomechannel]

You can buy puts to hedge a market correction. However, if the cost of the puts eats into your returns...unless the market crashes of course.

[@AdeelKhan-jo5ni]

Hey, Been following your work for sometime. Amazing info. Quick question your portfolio is not holding JAAA. Which have quite study income and safe as well is there any specific reason ?

[@armchairincomechannel]

Thanks for your feedback. JAAA produces a lower yield than I'm looking for. I held JBBB for a while.

[@AdeelKhan-jo5ni]

@@armchairincomechannel Thanks

[@FI-Beauce]

Could you explain ECAT and BCAT?

[@armchairincomechannel]

I wasn't familiar with those funds but I took a quick look...what a rabbit hole! It was recently complicated by the massive dividend increase which is presumably to resist SABA's takeover attempt by closing the price discount to NAV.

[@jonkain455]

Great stuff. Thanks for sharing your wisdom. Currently 55yo with 100K in roth (max out every year) and 100K in tax acounts. Plan to retire at 62 (hopefully). Make 100k per year, save about 35K per year in all growth stocks, MF, and ETFs. Planning on the high income stategy but how soon should I start buying into these high income ETFs and Stocks? Is 7 years before retirement too early? Thank You!

[@armchairincomechannel]

Thanks for your feedback and for sharing your situation. Of course I can't give an exact answer to your question. The optimal answer is affected by luck...meaning the growth part of your portfolio is affected by where the market happens to be when you retire. My only suggestion is to start small now, but mostly for the purpose of learning about income investing with practical experience. Generally growth will be more tax efficient than income while you're working so it doesn't make sense to go too heavily into income while you're working. If you start income investing before you retire then you are at a tax disadvantage but if the market tanks at the same time as you retire, you at least have the income set up at a reasonable cost basis. If you wait until the day you retire to switch to income investing then your fete will be determined by the market cycle at the time. That's a wishy washy way of suggesting that you gradually ease into it over the remaining years to hedge your bets....rather than picking a specific date to go heavily into income investing.

[@jonkain455]

​@@armchairincomechannel It is rare to have someone knowledgable as you who shares experiences and answers every question. Thank you for that. Regarding my ROTH , I currently hold 3 mutual funds that I dollar cost average $150 per week into. In 7 years they have a 127% gain. Since the ROTH is tax free (currently ($105,000) should I sell those and start the snowball say 10 high yield etf's 10K per etf averaging about 10% and let that roll rot the next 7-8 years? Or just keep what I have and switch closer to retirement (provided the market has not crashed, in which case I would have to continue to work)? Or keep the 3 growth funds and put the weekly $150 into new income etfs, at which point I would sell the growth stocks anyway as I get close to retirement? I started investing late and either way I feel like I won't have enough to generate a 4-5K monthly income. My gut tells me to keep the growth stocks since I am behind but please tell me if you think there is a better way. Thank YOU!

[@jonkain455]

I also invest another $500 per week into Fidelity and vanguard individual brokerage accounts which are 18 growth stocks and etfs.

[@jonkain455]

also debt free

[@strawberryw.3950]

Great content as always! Was looking for a solid bdc etf, any recommendations besides Pbdc which has that pricy 6.79% expense ratio?

[@justinblackwood4672]

That expense ratio is misleading, due to some regulations that make it include extra items, the more sincere version is

[@RobertBrown-yn9tx]

My general thinking is: If I'm getting a high/low volatility yield , that's all I'm looking for. I might cringe a bit at a high expense ratio, but the manager of the fund should be rewarded for their efforts.

[@armchairincomechannel]

PBDC's expense ratio is 0.75%. There's an illogical SEC regulation that requires the inclusion of "acquired" fees but they're irrelevant. It's explained on the PBDC website: www.putnam.com/individual/etf/846-putnam-bdc-income-etf

[@armchairincomechannel]

correctamundo!

[@armchairincomechannel]

I agree. and if you do the math...0.75% x the assets, less the dozen or so entities that take a piece...Michael isn't making much of that fund.

[@ivan11h]

would you be interested in talking about when to sell assets if somebody decided to follow 4% rule? I hold VOO and I decided to "total return" it, but I don't know when to sell each year or year quarter?

[@TonyCox1351]

Unless you can predict the future, it doesn’t matter when you sell. If the market is going to go up, best to sell monthly. If it’s going to go down, best to sell yearly. But we don’t know

[@ivan11h]

@@TonyCox1351 true

[@unclelong213]

4% rule? that means you can only sell your asset 25 years. if you retire at 67, that means u gotta die at 92...

[@armchairincomechannel]

Not quite. It assumes some growth...approx 8 to 10% per year on average.

[@armchairincomechannel]

One of the main reasons I am an income investor is because I don't follow the 4% rule (I made a video about it 6 months ago called "I retired faster with the 8% rule). The reason I don't follow it is because I don't know when to sell. Nobody does. Statistically you can sell at specific intervals regardless of market activity but psychologically its difficult to do that when the market is down. The other issue is that its effectiveness is greatly affected by when you start withdrawing. If you start during a bear market the numbers are ugly. If you start at the beginning of a bull run it works quite well.

[@thomassanfrancisco5850]

Good but I just wheel Spy and get good cash flow and growth.

[@armchairincomechannel]

If you enjoy option income strategies, that's a nice earner. Will discuss it on an upcoming episode....

[@et_phonehome_2822]

Armchair Income: do you DRIP your dividend paying stocks?

[@armchairincomechannel]

I don't DRIP. Nothing wrong with doing and if you're busy its better than just sitting on cash for a long period. However, I prefer to invest the available cash for the month into whatever opportunities I think are best at that time.

[@catfishbuster56]

Jepq

[@armchairincomechannel]

JEPQ is one of my biggest holdings, it's doing well!

[@citizenoftheyearCC]

Would you take loan against house to go all in on a high yield Income ETF that has only been out for a few months and call it "free money"?

[@armchairincomechannel]

🤔 Hmmmm Gonna need to run some calcs and get back to you on that one. What could possibly go wrong!

[@Lanark83]

In the US there are millions of mortgage holders who did refi’s during covid on

[@spooler24]

Dude, LOL, let it go. There's no one size fits all. What works for him, may not work for you and that's okay. You're a "safer" investor and the O loves risk. There's nothing wrong with either. Don't let him love rent free in your head. I was once a conservative investor... ifnit called for me to take a loan on some of them high yielders, then maybe I would if it fit my strategy. In all, we all won't to make money... some of us just want it now. Good day!

[@citizenoftheyearCC]

@@spooler24 Lol I am just trolling and you are right def no one size fits all. Though he did say he wouldnt put his portfolio into a fund thats only been out for a few months which inspired me to write this comment

[@benjaminghiglione9876]

Now that is a very bold question 🙋

[@hulkman4004]

that pic from 2017 look like your son

[@joinjen3854]

Having a YT channel ages people 😂😂😂

[@hulkman4004]

@joinjen3854 😆 🤣 that's what I was looking at 2017 not far from 2024. My man age a lot

[@unclelong213]

@@hulkman4004 must be the sun burnt from Vietnam

[@hulkman4004]

@@unclelong213 👍

[@armchairincomechannel]

The photo of me in a suit is actually older than 2017. When I was working I didn't really take photos of myself (who does!) so I don't have many to choose from.

[@unclelong213]

i dont like this... your video is too short, need 30+ mins!!!!

[@armchairincomechannel]

The best negative comment I've read in weeks! Thanks for the backhanded compliment :)

[@unclelong213]

@@armchairincomechannel hehehe, keep it coming, need more of this for sure.