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There is more than one way to achieve financial success through investing. Some prefer to take advantage of the gains of technology growth stocks to build wealth, while others enjoy collecting dividend income in addition to portfolio growth. Let’s look at an interesting success story of an investor who is crushing it with the latest strategy.
In June last year, a dividend investor shared his detailed income report with portfolio screenshots on r/Dividends, a discussion board for income investors with more than 600,000 members. The investor said he earned about $10,200 a month in dividends, or $122,930 a year. He said his total portfolio value was $977,000, excluding reinvested dividends, with a 12.5% yield.
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However, the investor seemed unhappy with the performance of his portfolio and repeatedly said his main investment was ‘in the red’.
“I’m selling everything and for a month I was working on a different approach and a completely different setup with stocks. I’ll keep you all posted. I’m not posting an actual brokerage like last time. In a time frame of the last month that I I would consider a great month for stocks, but it didn’t work out. And I developed a new strategy.
When asked how much time it took to save money for his investment, the Redditor said:
“It took thirteen years to save one million as a disposable amount that I can use to try/test strategies. The money was made outside of the stocks. So far the stocks are in the red for me.”
Later in the discussion, it was revealed exactly how much his portfolio was in the red, when someone commented:
“I bet he started with one million and is 35k in the red.”
To this the investor replied:
“Your findings are correct.”
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Nevertheless, raking in more than $100,000 in dividends annually impressed many and the investor was inundated with questions and requests for advice. Let’s dig deeper and take a look at some of the top holdings in this portfolio.
BlackRock Multisectoral income confidence
BlackRock Multi-Sector Income Trust (NYSE:BIT) yields about 10% and invests in loans and debt instruments. The objective of the fund is to generate income and capital growth. Some of the major holding companies include the FEDERAL NATIONAL MORTGAGE ASSOCIATION, UNIFORM MBS, TRANSDIGM INC., CLOUD SOFTWARE GROUP INC. and HUB INTERNATIONAL LTD.
According to the portfolio screenshots he shared publicly, the Redditor’s investment in the trust was worth approximately $46,914.
Guggenheim Strategic Opportunity Fund
The Guggenheim Strategic Opportunities Fund (NYSE:GOF) was among the Redditor’s largest holdings, earning $10,200 per month, while his investment in the fund was approximately $190,371.. GOF offers investors exposure to fixed income and other debt securities. It invests in various credit instruments, including corporate bonds, asset-backed securities, mortgage-backed securities and other high-yield debt. It is a risky investment because it invests in unrated bonds, also known as junk bonds.
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BlackRock High-yield corporate fund
BlackRock Corporate High Yield Fund Inc. (NYSE:HYT) is another junk bond fund in the portfolio of an investor earning $10,200 per month in dividend income. The fund seeks to invest the majority of its assets in domestic and foreign high yield securities, including high yield bonds, corporate loans, convertible debt securities and sub-investment grade preferred securities. The fund yields approximately 9.4%.
The Redditor’s stake in HYT had a total value of approximately $44,357.
The Redditor who earned $10,200 per month in dividends had an $84,360 stake in the JPMorgan Equity Premium Income ETF (NYSE:JEPI). JEPI, which has a monthly dividend yield of about 7%, makes money by investing in some of the most notable large-cap U.S. stocks and selling call options. JEPI is ideal for those looking for exposure to defensive stocks. JEPI usually underperforms during bull markets, but protects investors from huge losses during bear markets as most of the portfolio consists of large, defensive stocks such as Trane Technologies PLC (NYSE:TT), Southern Co. (NYSE:SO) and Progressive Corp. NYSE:PGR), among many others.
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The investor’s largest position was in the Global The total value of his position in the fund was a whopping $206,430. QYLD generates revenue by selling covered call options on the Nasdaq-100 Index. The fund started in 2013 and has been paying monthly income to investors since then. The fund yields approximately 12%. Some of the ETF’s top holdings include Apple, Nvidia, Microsoft, Amazon and Broadcom.
Brookfield Real Assets Income Fund
Brookfield Real Assets Income Fund Inc. (NYSE:RA) yields about 10% and pays a monthly dividend. The fund invests mainly in real assets, including infrastructure and real estate securities. The Redditor earned $122,939 per year or $10,200 per month in dividends and had a $195,287 position in the fund. RA has increased by 12% in the past year.
Global X Russell 2000 Covered Call ETF
Global The ETF yields approximately 12%. Being a covered call ETF, RYLD is also not risk-free and often posts losses during bear markets. The ETF is now in the spotlight as analysts believe small-cap stocks will be among the biggest beneficiaries of an easing monetary environment.
The Redditor had a $197,969 position in the ETF.
The current interest rate environment has created incredible opportunities for income-seeking investors to earn huge returns, but not through publicly traded REITs.
Arrivald Homes, the Jeff Bezos-backed investment platform, has launched its Private Credit Fund, which provides access to a pool of short-term loans backed by residential real estate with a net annual return of 7% to 9% paid out monthly to investors. In August it paid 8.1%. The best part? Due to high demand, the maximum investment amount is currently $5,000, with a minimum investment of ONLY $100.
Looking for fractional real estate investment opportunities? The Benzinga Real Estate Screener has the latest offerings.
Wondering if your investments could earn you a $5,000,000 nest egg? Talk to a financial advisor today. SmartAsset’s free tool matches you with up to three vetted financial advisors serving your region, and you can interview your advisors for free to decide which one is right for you.
This article Dividend Investor Earns $10,200 a Month with $977,000 Stocks in His Portfolio: Top 7 Stocks originally appeared on Benzinga.com
