Dividend Investor Making $1,000 Per Month With Just $40,000 Invested Shares His ‘Hyper Dividend’ Portfolio: Top 9 Stocks and ETFs
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Giving yields too much importance in dividend investing comes with risks and caveats. However, high-yield dividend stocks have always been attractive over the past several decades. For beginner investors with a limited budget and high-risk appetite, focusing on stocks with high yields is the only way to achieve significant dividend income.
While dividend growth stocks with strong fundamentals and growth history provide better long-term opportunities for investors, many are finding success by investing in high-yield stocks.
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Approximately two months ago, a dividend investor shared his portfolio and income report on r/Dividends, a discussion board for dividend investors on Reddit. The investor mentioned that he earned about $1,000 monthly with a $40,000 investment, giving the portfolio an impressive yield of around 34%.
“I created a hyper dividend portfolio last month and collected 1k last month. Goal is to reach 2.5k /month by next August,” the investor stated.
As expected, most of the holdings in the portfolio are risky high-yield options ETFs. When asked about the risks of potential losses in principal associated with investing in such ETFs, the investor responded:
“Yes, I know. These are called synthetic ETFs. Don’t care how they pay it as long as principal + interest < final value."
Let’s take a look at some of the major holdings in this extremely high-yield dividend portfolio.
Please note that many of these holdings are risky ETFs. This article is based on an income report shared publicly by an investor and does not constitute investment advice.
The YieldMax MSTR Option Income Strategy ETF
The YieldMax MSTR Option Income Strategy ETF (NYSE:MSTY) generates income by selling call options on MicroStrategy (MSTR) stock. It has a distribution rate of about 75%.
The Simplify Volatility Premium ETF
The Simplify Volatility Premium ETF (NYSE:SVOL) is a high-yield (16%) dividend ETF that is gaining popularity on Reddit. The ETF generates income by shorting the CBOE Volatility Index (VIX) and betting that volatility will remain stable or decrease. Since the broader market tends to trend higher in the long term, investing in this ETF is suitable for those seeking stable income. The Redditor, earning $1,000 monthly with a $40,000 investment, mentioned that he owned 200 SVOL shares.
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The Pacer Pacific Asset Floating Rate High Income ETF
The Redditor earned $1,000 monthly and mentioned that he owned about 100 shares of The Pacer Pacific Asset Floating Rate High Income ETF (NYSE:FLRT). FLRT generates income by primarily investing in floating-rate loans of non-investment-grade companies. These ETFs tend to perform well when interest rates are rising, and the fund yields approximately 8%.
JPMorgan Equity Premium Income ETF
JPMorgan Equity Premium Income ETF (NYSE:JEPI) was among the notable dividend ETFs in the portfolio of the Redditor earning $1,000 a week with $40,000. His hyper-dividend portfolio included 100 JEPI shares. JEPI makes money by investing in large-cap U.S. stocks and selling call options. It is suitable for those looking for exposure to defensive stocks. While it may underperform during bull markets, it can protect investors against significant losses during bear markets, as its portfolio consists of defensive equities like Trane Technologies PLC (NYSE:TT), Southern Co (NYSE:SO), Progressive Corp (NYSE:PGR), among others.
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YieldMax AMZN Option Income Strategy ETF
The YieldMax AMZN Option Income Strategy ETF (NYSE:AMZY) generates income by selling call options on Amazon. The Redditor with the hyper-dividend portfolio mentioned that he owned 100 AMZY shares. The fund has a distribution rate of about 41%. AMZY is down 9% so far this year.
YieldMax TSLA Option Income Strategy ETF
YieldMax TSLA Option Income Strategy ETF (NYSE:TSLY) is a popular YieldMax dividend ETF for high-yield seekers. With a distribution rate of over 120%, TSLY generates income by selling call options on Tesla shares. Over the past year, TSLY has been down about 55%, while Tesla stock has declined by 7%.
Realty Income
Realty Income Corp (NYSE:O) is a staple in Reddit dividend portfolio success stories. The REIT has a dividend yield of over 5% and has increased its payouts for 30 years. The Redditor making $1,000 a month with $40,000 mentioned that he owned 100 shares of Realty Income.
JPMorgan Nasdaq Equity Premium Income ETF
The Redditor earning $1,000 a month had approximately 100 shares of JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ) in his portfolio. JEPQ invests in Nasdaq companies and generates additional income by selling call options. As of October 14, the ETF yields around 9.4%.
YieldMax NVDA Option Income Strategy ETF
YieldMax NVDA Option Income Strategy ETF (NYSE:NVDY) generates income by selling call options on Nvidia. Recently, the ETF has gained popularity due to the buzz surrounding Nvidia. The fund has a distribution rate of about 57%. NVDY is suitable for investors who believe in Nvidia’s long-term potential but want to hedge against potential declines in the chipmaker’s shares.
Wondering if your investments can lead you to a $5,000,000 nest egg? Speak to a financial advisor today. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to determine which one is right for you.
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