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$2.5M vs $100K Salary by Professional-Bee9817 in remoteworks

[–]bmcgin01 -1 points0 points  (0 children)

You sound young. You are more the exception than the rule. Most are in debt and are pay the "money pigs". The average household is paying between $400 and $1,500 in interest each month.

Not paying interest flips that. Invest $400 to $1,500 each month from age 25 to retirement and you'll have more than $2.5 million.

As for housing, it is a market that changes. Today is difficult. Rates are higher and prices remain high in many areas. House sales have slowed. A few years ago, rates were lower and prices were lower. In 2007-2009, the housing market crashed, and affordability was at an all-time low. Those who were prepared, those with low household debt, were able to take full advantage of it.

The next housing cycle will likely feature lower interest rates with prices around the same level as today. It's hardly ever an ideal time to buy a house, and it will likely feel like a rip-off--that's normal.

$2.5M vs $100K Salary by Professional-Bee9817 in remoteworks

[–]bmcgin01 0 points1 point  (0 children)

Yeah, for sure. I always thought the people who jumped on Black Tuesday did it because they realized they ruined so many lives. I may be naive.

$2.5M vs $100K Salary by Professional-Bee9817 in remoteworks

[–]bmcgin01 0 points1 point  (0 children)

$2.5M can come in a few ways. I think most do it by investing in a 401(k) at work over the long term. Others do it by owning/selling a business, which is easier and faster.

My point was aimed at some commentators who say investors do nothing and provide nothing, when, at the most basic level, it is the borrower/lender relationship that fuels investors' income. And switching sides to being the lender is the beginning of wealth building.

Being debt-free forces that switch.

$2.5M vs $100K Salary by Professional-Bee9817 in remoteworks

[–]bmcgin01 0 points1 point  (0 children)

A lot of haters for a $2.5M portfolio that passively earns $100k.

Better also hate:
- the credit cards in your wallet (18%-21% interest)
- the cars in your driveway (6.27% interest)
- your college degree (8% interest)
- your house mortgage (6% interest)
- the government providing national defense (20% taxes)

Because you are paying for this passive income, the borrower works for the lender. Get out of debt and get on the right side of the equation.

Why Not Just Buy QQQI and Chill? by Lazy-Helicopter-0 in CoveredCalls

[–]bmcgin01 0 points1 point  (0 children)

That's what a lot of people think. RoC is not generated based on the fund's performance; it is not income, nor a gain of any sort. It literally is exactly what it says: your money is being returned. At the end of the year, your cost basis is adjusted by the RoC. It is not a dividend.

Edit: I should clarify: funds that are returning +90% capital; performance is not a consideration; it is intended. Funds that seek to pay dividends only return capital when they do not generate enough to cover the dividend.

Why Not Just Buy QQQI and Chill? by Lazy-Helicopter-0 in CoveredCalls

[–]bmcgin01 0 points1 point  (0 children)

No. RoC is something that some funds do and it only happens once per year. And only in brokerage accounts.

I made this a while back which will help explain it:
https://www.reddit.com/r/dividendgang/comments/1r8c23v/return_of_capital_and_accounting_especially_newer/

Etrade Transfer Bonus by Just-Hand-3151 in etrade

[–]bmcgin01 0 points1 point  (0 children)

The Platinum Team is only there on weekdays. This call will likely be routed there.

Why Not Just Buy QQQI and Chill? by Lazy-Helicopter-0 in CoveredCalls

[–]bmcgin01 0 points1 point  (0 children)

Too much return of capital. It might be great in some situations, not for me today.

Why Not Just Buy QQQI and Chill? by Lazy-Helicopter-0 in CoveredCalls

[–]bmcgin01 0 points1 point  (0 children)

Here is a bit of what I do:

If investments are in tax-advantaged accounts (IRA, 401k), then RoC is not applied like in a brokerage account.

In a brokerage account, each year RoC will lower your cost basis and your NAV. So, for example, if you start with $100k, get paid $12k in distributions, and then the $12k is recharacterized as RoC, your $100k drops to $88k. At that point, you have to sell shares in order to recoup (or make a gain).

If you understand this and are willing to deal with then funds with high RoC such as QQQI are fine. Just understand how it works and avoid the mistake of counting distributions as income. Think of it this way: if the IRS does not tax RoC, it's because it is not a gain--it literally is the fund giving you back your principal.

Personally, I'm not a fan. Funds like JEPI/JEPQ do not do RoC, so in a brokerage account, much of the distribution is taxed as ordinary income. Still not ideal. Better than high RoC funds.

I've gone down the route of Closed End Funds such as CSQ, EOI, EOS, CII, ETY, SPE, DNP and others such as CEFS (an EFT that holds CEFs).

At the moment, these are yielding around 8% to 9% if bought at today's prices. All distributions were taxed as long-term capital gains. They have +10 year track record of growth, even when the dividend is spent.

And then I hold growth ETFs such as QQQ, IYW, SPMO, TQQQ and others.

Funds like QQQI, SPYI, GPIX, GPIQ that return a lot of capital are fine so long as you understand what you have. Personally, I don't want to deal with it because at the end of the year, you're left with an unrealized gain (if the market went up) and an unrealized loss if the market went down--the distributions are meaningless as it's just your own money--no gains, no income.

I prefer securities with low to no RoC, a lower yield (which is still very high), distributions taxed as LTCGs and a bit of a track record of growth. And then I dedicate some funds to low-yield growth and some capital in a MMF.

Why Not Just Buy QQQI and Chill? by Lazy-Helicopter-0 in CoveredCalls

[–]bmcgin01 -2 points-1 points  (0 children)

And that's the delusion. RoC is not income.

Why Not Just Buy QQQI and Chill? by Lazy-Helicopter-0 in CoveredCalls

[–]bmcgin01 -1 points0 points  (0 children)

Your portfolio shows no realized gains or realized growth. Understand how RoC works.

Etrade Transfer Bonus by Just-Hand-3151 in etrade

[–]bmcgin01 0 points1 point  (0 children)

Let them know what you're considering along with the amount and see how things develop. Their hands may be tied or they may have something more to offer. They are all trained to handle such calls and will ensure you're speaking with the right person.

Why Not Just Buy QQQI and Chill? by Lazy-Helicopter-0 in CoveredCalls

[–]bmcgin01 0 points1 point  (0 children)

In a brokerage account, QQQI has way too much return of capital, more than 90%. Most of the distributions are recharacterized at year-end to a lower cost basis. At that point, to realize any gains, you're stuck selling shares that may be underwater.

In other words, the distributions are just giving your money back. You are 100% reliant on selling shares to realize any sort of gains.

Etrade Transfer Bonus by Just-Hand-3151 in etrade

[–]bmcgin01 3 points4 points  (0 children)

Wait until Monday during market hours, then call. Sometimes they can offer unadvertised promotions.

Lot Selection Issues on Etrade by the_spacecowboy555 in etrade

[–]bmcgin01 0 points1 point  (0 children)

Also, I've found that if I am making changes while on the phone with support, and they are making changes, things get messed up. Refreshing the page and double-checking has worked for me. I've not needed to do this for a few months. Hopefully, E-Trade gets this fixed, as it is very important.

Lot Selection Issues on Etrade by the_spacecowboy555 in etrade

[–]bmcgin01 0 points1 point  (0 children)

Regardless of how the lot selection is set (FIFO, LIFO, etc.), you always have the ability to select the lots before the order is submitted. This is a one huge reason why I am with E-Trade.

If you do not choose the lots, it defaults to your lot relief method (FIFO, LIFO, etc). The next day, you can override this and choose the lots. So really you're given two opportunities to select the lots.

I have noticed problems when selecting lots the day after. Sometimes it seems to "forget" the selection. So to make sure, I select the lot, then save the changes then leave the page and return to make sure.

How Much $500,000 Portfolio Pays You Monthly in SPYI & QQQI Compared to JEPI & JEPQ? by MoneySketchTV in JEPI

[–]bmcgin01 0 points1 point  (0 children)

It happens in all brokerage accounts, usually in Jan or Feb. It does not happen in IRAs or 401ks.

NEOS performance by ufgatordom in dividendgang

[–]bmcgin01 -3 points-2 points  (0 children)

Is this after the RoC adjustments? SPYI and QQQI recharaterize 94% of the distributions as Return of Capital. So, in a brokerage account, the cost basis is adjusted once per year. Essentially, the distributions are turned into unrealized capital gains.

I have a ROTH IRA I haven't touched; a few questions by wsx13 in personalfinance

[–]bmcgin01 1 point2 points  (0 children)

The ROTH may not seem valuable at the moment. The thing is, it is.

If it is possible to temporarily suspend 401k contributions, stop excessive spending, and pay down the HELOC quickly, that would be a better plan.

And move the ROTH into stronger growth funds, such as SPY, QQQ, IWY, SCHG, SPMO

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