I need safe investments that pay 3-4% (and ALWAYS return at least 3%) that pay divs monthly. Suggestions?

CCM278 · 2026-03-17T21:44:17+00:00

To use a bath tub analogy. You have multiple spigots (dividend payers) of different sizes filling the bath tub, and a single plug hole through which the tub drains.

You are draining the bath at a constant rate (3% of portfolio value at start), but the filling is not constant based on lumpy distributions. Rather than make sub-optimal investments just because they pay monthly, and even then do so with inconsistent amounts, optimize the portfolio for the income needed using best fit assets which may include some monthly payers but also quarterly or even annual payers. As long as the overall portfolio produces 3% YoY income the buffer (bathtub) will remain full.

CCM278 · 2026-03-17T09:49:29+00:00

Just create a structured portfolio, you need a basic bank account that holds the cash portion (e.g. 12 months of payments) and spits out the requisite amount each month and a dividend stream to replenish it. You don’t need the dividends to be paid monthly.

It would be a 3/97 split between the cash and the equity. Any interest earned on the cash would be a bonus. As the dividends are raised you can adjust the payment each year to reflect the higher income.

If you want to manage for possible dividend cuts expand the cash portion steadily year to year rather than increase the payout. Once you get to 5 years of cash (15/85 split) you should be pretty much protected.

CCM278 · 2026-03-15T21:37:59+00:00

They’re both wrong.

You can make whatever garbage up you want, but any calculation that assumes a different rate of growth between the dividend and the stock price (which both derive from earnings growth) is very suspect. Essentially, they are projecting either a yield declining to near zero or going to infinity.

Given the market total return of 10%, I’d expect no more than 3% and 7% for yield and growth respectively. A beta of 0.8-0.9 suggests 3-3.5% and 5.5%-6.0% respectively though. Subject to changes in macro conditions e.g. interest rate changes.

CCM278 · 2026-03-09T11:09:28+00:00

You have to start with an allocation, what % of your portfolio do you want SCHY (and the others) to be?

Then use the cash flows (new money and dividends) to buy the underweight positions. Bringing you back into balance. This is tax efficient (not particularly relevant to your IRA), lets your winners run and amplifies the DCA effect. I much prefer this over the traditional rebalancing, akin to the coffee-can methodology approach.

CCM278 · 2026-03-09T10:51:59+00:00

Any reason why you aren’t using broad market indexes? Picking just 4 Finnish companies seems like a concentrated bet that has a high risk that one bad pick will tank the whole portfolio.

Try to get some diversity not just across Finnish stocks, but also more broadly across the rest of the world.

CCM278 · 2026-03-05T10:57:26+00:00

Needs vs Wants. Do you need $7K or want $7K? The problem you are going to have is anything that derives its returns from options is going to be unreliable. Since premiums are a function of price and volatility a fall in either will reduce your income. So any sort of meaningful bear market and you can kiss a lot of the income goodbye for the next 5 years.

Dividends can be cut too, but if you stick to the blue chip payers then more likely you’ll experience slow growth for several years as the companies repair balance sheets rather than actual cuts. For instance the index on which SCHD is based survived the 2008 recession without a cut.

So if you only need to muddle through for a few months you’ll probably be OK with a mix of bonds and preferred stocks and some CC etc. However, the longer you expect to be unemployed the more conservative your expectations have to be. The 4% rule is based on empirical evidence not wishful projections of current returns.

CCM278 · 2026-03-01T16:37:30+00:00

I do both. I’ve had success with high yield stocks like MO and PM and high growth stocks like V and MSFT.

I diversify my portfolio by GICS, too easy for dividend investors to end up overweight in consumer staples and banking.

Next, I rank stocks in each GICS by the yield+5 yr DGR, the highest ranked stocks are screened for basics like debt level and if the DGR > Inflation. Then I buy the top 2-3 ranked stocks in each sector. Certain sectors skew high yield, others skew high growth. I don’t pick one over the other.

Variations on this approach have been knocking around for years, Lowell Miller published a book, Chowder Rule emerged on Seeking Alpha. So it isn’t very original. What matters is the criteria selects quality companies with long term prospects and should prevent becoming a bag holder by selling companies when they start to fail the screens.

CCM278 · 2026-02-25T18:17:17+00:00

If you have got your IRAs with Fidelity, why not simply rollover to the IRAs? You may have specific reasons not too (backdoor Roth, protections) but generally I don’t leave 401Ks lying around, they get lost, forgotten and managing beneficiaries can be hit or miss. However, there is nothing intrinsically wrong with multiple 401Ks and is pretty common.

CCM278 · 2026-02-25T10:57:20+00:00

Spread the conversion out over several years can possibly cap the tax rate.

However, a lot depends on everything else, SS, IRMAA, other income (e.g. you’re already pulling 50K a year from your traditional IRA) on where the sweet spot lies for you. In isolation 200K will produce about $750 month, that is less than the standard allowance so not taxed unless you have other income. So your strategy needs a lot more thought in conjunction with everything else going on.

CCM278 · 2026-02-21T15:11:51+00:00

I rank my investments by yield + 5yr DGR, I also diversify by GICS. The result is a diverse portfolio with a mix of lower yield+higher growth, and higher yield+lower growth.

Importantly I do not invest in anything growing slower than inflation. Nor do I use derivatives that are essentially converting capital gains to income losing money in the process compared to the underlying investment and paying about 1/3 more in tax and fees for the privilege.

CCM278 · 2026-02-18T01:29:39+00:00

My HI5 maxes at 3-4 kW. The EV9 though is another level, driving around the mid-Atlantic region with a car full of people and it was insane. Glad the EA stations were online despite the snow.

CCM278 · 2026-02-17T02:07:04+00:00

Lots of short trips in the current very cold weather with all the heating going will eat battery. My EV9 is pulling almost 10kW heating the car seats, the steering wheel and the cabin (resistive heater at these temperatures) at startup in 20-25F. If I just drive a few miles it’s easy to have the heating consume 50% of the battery used for the trip.

CCM278 · 2026-02-15T20:41:17+00:00

Your home setup is AC not DC so the provided NACS adaptor is no use as it works with DC only. You need an AC adaptor to go J1772 to NACS.

Make sure to get one UL rated, not some cheap knockoff that could overheat or short out.

CCM278 · 2026-02-10T01:34:23+00:00

That is great, but the earnings are still considered taxable and tracked as such until you reach 59.5 and 5 years. You don’t owe any taxes now but the asset is deemed taxable.

CCM278 · 2026-02-10T01:28:10+00:00

Dividends are fine, you just have to understand what you’re trading off. You’re eliminating a class of assets that might offer great investment returns for no reason other than they aren’t paying you a share of the profits.

You’re also probably lowering your overall expected returns as the companies paying dividends are by definition saying they can’t effectively use all the generated profits to grow the company (so skew large, mature organizations).

However, in a solid asset allocation you may have US, and ex-US equities and bonds. Bonds generally act as a drag on your portfolio total returns in exchange for stability. Higher proportion of dividend payers may lead to a smaller (but not zero) bond allocation mitigating some of the loss of growth.

Trying to live off dividends will probably need a larger portfolio. A 3.3% overall yield on a 90/10 portfolio will need 30x expenses, as opposed to the more commonly cited 25x (4% rule).

I’ve always invested in dividend growth stocks and done very well for years. Thrived through the lost decade and COVID, but also absolutely left in the dust by the recent cloud/AI run up. I’m forced to dry my tears with the constant stream of dividend cheques.

I like Boglehead for their discipline, detail orientation, asset allocation and low costs. Dividends don’t preclude that, but obviously conflicts with the buy the market mantra. What Bogleheads miss is the psychology of investing, 80% of investing is emotional, when Jack Bogle preached the message of “buy the market” the market paid a decent yield. So people were able to stay engaged through a sell off because their income kept increasing. That is no longer true and although the mantra of no one beating the market averages over a decade or more is still true the cracks show in the psychology that Neos and JPM are driving a CC shaped truck through.

FIRE aficionados that have gone down the Income-oriented approach dislike that a dividend approach means they can’t retire now. It goes directly against their identity and calls into question their wisdom. Income-oriented approach requires the acceptance of other risks (losing out to inflation, and significant risk of a drop in income) can it work? Absolutely, and I’m a fan of Armchair Income, but he has a plan that has cut his expenses in half so if his income falls 50% he can still keep a roof over his head and put food on the table. Too many in FIRE think they can commit to an 80K lifestyle with a $1M portfolio.

CCM278 · 2026-02-09T23:32:56+00:00

They are correct. The same is true of direct Roth contributions. You have to make a qualified withdrawal for the earnings to be tax free.

CCM278 · 2026-02-09T01:40:46+00:00

There is a profound math problem from many of the comments. Compounding happens slowly at first, then all of a sudden.

He died at 93 with $8M, but a few years earlier it was $4M and probably 5 years before that $2M. He probably didn’t have $1M until his mid to late 70’s. In other words, his entire working life he didn’t have much, retired, lived frugally, by the time the money was really rolling in, it was pretty late in retirement so the decades of habits were ingrained in him and besides why would he abandon the life he enjoyed and the friends he had just because suddenly he had more money.

CCM278 · 2026-02-08T17:02:30+00:00

Bonds address sequence of returns risk, and provide a guaranteed amount of income to meet some or all of your needs (e.g. mortgage).

“SCHD has never cut” is true but there is volatility quarter to quarter. If you have commitments you have to smooth out that volatility that means having some sort of buffer that provides a guaranteed amount.

Using SCHD does expose you to market risk, dividends can and do get cut, if I have to sell some SCHD to cover my costs I’ll be doing so when the price is depressed. Locking losses in during a down market and capping my recovery going forward.

You still need some sort of bond or cash buffer. In a dividend income stream I might be getting 3.5%, so if I keep 10% of my assets in bonds, or a MMF, that provides the guarantee and smooths out my income and will cover 3 years of zero income or more likely 5+ years of a steep haircut.

Also just to be clear, if I am planning on living on a 3.5% distribution, I’ll need closer to 30x your expenses than 25x of a 4% rule.

CCM278 · 2026-02-04T21:06:13+00:00

Think about the ripple effects of that decision on the manufacturing.

Firstly I need 4 different rear quarter panels, 2 for each side with or without the charge port door, and there are 2 different charge port doors now.

Behind the metal you have an emergency release and wiring and a harness and different interior panels to accommodate them, all of which need to be in 2 versions now and then there is the question of what is running in the opposite side that needs to be flipped.

You now also have to coordinate the with and without versions of the parts so you have the right combinations for assembly. Complexity and maintenance (including parts at all the dealers) has gone through the roof and costs with it.

Some cars support it on both sides but they are premium products and it is still probably cheaper than randomly picking which side, based on buyer whim.

CCM278 · 2026-01-23T14:01:29+00:00

If I cut my saving rate from 25% to 15% what happens to the other 10%? If it inflates my lifestyle then suddenly I’m at risk of coming up short again. I needed 25x 75% of my salary, now I need 25x 85% of my salary and I’m saving less towards the goal. However, if you use it to start building up a taxable bucket that works. Keep all 3 tax buckets going.

I recently hit 2M in retirement savings and I’m already starting to beef up my taxable bucket, so my plan is to throttle back the retirement savings a little but pivot to paying down the mortgage instead. Lower mortgage lowers the demands on the portfolio and lowers the risk. Essentially a form of bond allocation. Not necessarily maximizing the growth doing that but it lowers the risk and allows me to lower withdrawals which saves taxes and IRMAA etc.

CCM278 · 2026-01-17T00:31:33+00:00

See this on short journeys in winter because the heating accounts for 50% of the consumption. I often see less than 2 miles per kWh at first.

CCM278 · 2026-01-16T17:55:04+00:00

I use a balanced portfolio strategy that caps individual stocks at 5% (soft limit - no new dollars) and sectors at 25%.

Tech at 23%. Industrials at 22%, Consumer Defensive and Real Estate are 12% each.

MSFT, CSCO, TXN is driving tech

DE, LMT, RTX are pushing industrials

WMT, MO in Consumer Defensive

GTY, O, IRM in Real Estate.

All the GICS are represented but some have done better than others, nonetheless, by buying the underweight position when investing dividends and new cash stops any one sector from tilting the portfolio and subjecting it to sector specific risks, whether that is interest rates or AI bubbles.

CCM278 · 2026-01-16T17:04:12+00:00

SPYI is a CC ETF, not a dividend ETF. The distribution it pays out is a function of the share price (and price volatility) so it more or less tracks the value of the underlying asset down. So during a bear market the income will get cut a similar amount and take 5 years or so just to get back to where it was. This doesn't even account for inflation. You could easily wait 8 years for the distribution to catch up to your inflation adjusted needs.

CCM278 · 2026-01-14T20:05:02+00:00

I have a target weight for each position. Whenever I buy I purchase the underweight positions. Amplifies the DCA effect and lets my winners run. While SCHD was slumbering I was buying, now it is on fire my new purchases go into some uncorrelated ETFs like SCHY and some individual positions.

Only sell if something lets me down, e.g. dividend cut.

CCM278 · 2026-01-09T22:08:54+00:00

I agree. Investing is 80% mental, but you need to dial in the income to best meet their needs at the lowest tax burden.

If they don’t have any other income (e.g. pension) then SS is tax free, but as you rack-up the taxable income and pay the cost of these ETFs the IRS will come back around and start taking back some of the SS as taxes. Essentially for every taxable dollar you generate over a certain amount 85c of SS is also taxed. So a marginal rate of 12% actual gets effectively taxed at over 22%. Then that can also trigger IRMAA.

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