@nick220 It still could with the uncertainties around the debt ceiling and the deadline only being extended until December. Only time will tell. I think putting it (all or some) into an ETF is the best option as many others have mentioned. Maybe some stocks you have high conviction in that may have higher returns.
What to do with $125K right now?
- Thread starter nick220
- Start date
johnnyvee333
New member
@nick220 My average yield for my entire portfolio is 5.62%. My highest dividend yielding stocks are:
USOI 19.51% CLM 14.56% CRF 14.43% QYLD 11.32% RYLD 11.32% SMHB 11.16% GOF 10.65%, PDI 9.95%, GNL 9.94%, PCI 9.82%, ARCC 7.82%, SSSS 7.80%, MO 7.64%, JEPI 7.52%, ABR 7.32%, CSWC 6.96%, MAIN 6.02%, BST 5.78%, XOM 5.68%, DIVO 5.10%, O 4.13%, EMB 4%, PFE 3.73%.
Most of these payouts are monthly and most of these stocks/ETFs have worked out really well for me. Our timing is different so, do your own research to see if any of these are right for you.
I will also add that I don't automatically reinvest my dividends back into the Stock/ETF that gave me the dividend. As the dividends come in every month I decide where everything should go as opposed to automatic reinvesting
USOI 19.51% CLM 14.56% CRF 14.43% QYLD 11.32% RYLD 11.32% SMHB 11.16% GOF 10.65%, PDI 9.95%, GNL 9.94%, PCI 9.82%, ARCC 7.82%, SSSS 7.80%, MO 7.64%, JEPI 7.52%, ABR 7.32%, CSWC 6.96%, MAIN 6.02%, BST 5.78%, XOM 5.68%, DIVO 5.10%, O 4.13%, EMB 4%, PFE 3.73%.
Most of these payouts are monthly and most of these stocks/ETFs have worked out really well for me. Our timing is different so, do your own research to see if any of these are right for you.
I will also add that I don't automatically reinvest my dividends back into the Stock/ETF that gave me the dividend. As the dividends come in every month I decide where everything should go as opposed to automatic reinvesting
kletoskletos
New member
@johnnyvee333 Can you explain a bit more on this? First I’ve heard of it and I’m interested.
johnnyvee333
New member
@kletoskletos I started with Real Estate during the first half of my military career. The money that I made from Real Estate I used to invest in high dividend-yielding stocks and Exchange Traded Funds (ETF) (also my Turo business but that's a different story). I posted a list of my higher-yielding Stocks and ETFs as a comment in this thread if you want to see specific things I invested in. My goal is to reach military retirement and never have to work again so I didn't invest much in a ROTH/401K because I am retiring in my early 40s (plus I had other things to help with the taxes). I choose to build passive (ish) income streams (dividends, real estate, and TURO) to supplement my future (knock on wood) military retirement income. I hope that answers your question. It's hard, to sum up, 17 years of planning in one post.
kletoskletos
New member
@johnnyvee333 Can you explain a bit more on this?
Specific companies? Stocks? How to actually set it up?
First I’ve heard of it and I’m interested.
Specific companies? Stocks? How to actually set it up?
First I’ve heard of it and I’m interested.
johnnyvee333
New member
@kletoskletos
Above are some of the specific stocks that I have and their dividend percentage. Please keep in mind that I got into these stocks at different times so how they have performed for me might not be the same as will perform for you. The dividends would be the same percentage but the capital gains could be different.
In order to set it up just open a brokerage account. I like E*TRADE (because of their line of credit loans). E*Trade also has some good research tools. There are also some good Youtubers that walk you through different high yield stocks/ETFs. The Average Joe Investor is one that I like and he shares his entire portfolio. The stock you buy will automatically DRIP unless you choose otherwise. Another word of warning, high dividend stocks do not usually have high capital gains. For example, my Amazon stock with no dividend is up 100% but my USOI stock with 19.51% dividend is only up 6% on top of the dividend.
Above are some of the specific stocks that I have and their dividend percentage. Please keep in mind that I got into these stocks at different times so how they have performed for me might not be the same as will perform for you. The dividends would be the same percentage but the capital gains could be different.
In order to set it up just open a brokerage account. I like E*TRADE (because of their line of credit loans). E*Trade also has some good research tools. There are also some good Youtubers that walk you through different high yield stocks/ETFs. The Average Joe Investor is one that I like and he shares his entire portfolio. The stock you buy will automatically DRIP unless you choose otherwise. Another word of warning, high dividend stocks do not usually have high capital gains. For example, my Amazon stock with no dividend is up 100% but my USOI stock with 19.51% dividend is only up 6% on top of the dividend.
outofegypt
New member
@nick220 Nothing new to add as you have already received quite a bit of good advice.
Just wanted to say very well done.
Your particular scenario could be an effective case study for “this is how you create wealth” for Junior service members when they initially join the force.
Curious what your investment strategy has been. Mutual funds? ETFs? Meme stocks?
Just wanted to say very well done.
Your particular scenario could be an effective case study for “this is how you create wealth” for Junior service members when they initially join the force.
Curious what your investment strategy has been. Mutual funds? ETFs? Meme stocks?
@outofegypt So, I've always been a super saver. I started investing what I made working 3rd shift while in college before deciding to join the military. I started funding my Roth IRA fully when I was 22 years old and started putting $15K/yr into my Roth TSP (401k equivalent) once the Roth option became available, I think in 2011. For the last several years, I've maxed the Roth TSP at $19,500/yr.
Initially, I would buy/sell individual equities for buy and hold but kind of ran out of time to stay up on that stuff once I started having kids. For a year and half, I decided to let someone else manage my investments but felt for the .89% AUM fee they weren't really adding value. That's when I switched strategies and switched to low cost index funds (ETFs).
Haven't hit any homeruns, just a bunch of singles. While rate of return on investments is important, I guess I've focused more on having a high savings rate in order to be able to invest and let time do the rest.
Initially, I would buy/sell individual equities for buy and hold but kind of ran out of time to stay up on that stuff once I started having kids. For a year and half, I decided to let someone else manage my investments but felt for the .89% AUM fee they weren't really adding value. That's when I switched strategies and switched to low cost index funds (ETFs).
Haven't hit any homeruns, just a bunch of singles. While rate of return on investments is important, I guess I've focused more on having a high savings rate in order to be able to invest and let time do the rest.
@kgb52 Leaning towards either the 50/50 (or 70/30) split right now or dollar cost averaging the whole thing over the next 9-12 months into low-cost index funds. The math says ROI over the next six years should be better investing vs early mortgage pay down at 3% interest. Emergency fund is good to go though.
@nick220 Yeah, virtually everyone craps on paying down a mortgage at 3% since the market “will” yield more. But that’s because it’s been a bull market for over a decade.
Paying down your mortgage is 3% guaranteed rate of return. That’s nothing to sneeze at and acts like a super bond that also gets you out of debt. I’m a fan and it’s what I do with my bonus the past few years. About 40/40 mortgage and index fund.
Paying down your mortgage is 3% guaranteed rate of return. That’s nothing to sneeze at and acts like a super bond that also gets you out of debt. I’m a fan and it’s what I do with my bonus the past few years. About 40/40 mortgage and index fund.
@nick220 I’m going to assume a few things here. You really don’t have THAT much money now, but assuming you play it right, you will in retirement. If you stay on track and avoid financial tragedies, you’ve already won and don’t need the headaches and burdens of risky investments. Crypto, options, and heavy investment into individual stocks should be out the window unless you want to sort of play around as a hobby with small sums of money. It sounds like property management should also be off your radar, and I agree. You’re still young, so some risk isn’t terrible. It’s pretty easy to find mutual funds with decent returns outside of an S&P500 index that can provide you with directed investment and managed risk.
I didn’t see you mention anywhere what you’re going to do after your retirement at age 41? If you aren’t planning to work, you really don’t have much money at all for 5 people for the rest of your lives, and your retirement accounts will take a huge hit if you need that money any time soon (I’ll assume you understand that). Stocks that produce high dividends could be a good option for you earlier in life than many others - someone already mentioned that with a pretty good reinvestment plan. Relatively low, but constant income to supplement your relatively low pension income could be necessary if you aren’t working.
Where are your IRAs? Go to that institution now, and start talking to an advisor and get a plan together to reduce your tax burden in retirement.
You said mostly Roth accounts which will benefit you greatly. Anything IRA-related not in Roth accounts can be converted to Roth, and doing so when your tax burden is low is best. Do this before your retirement accounts have millions in taxable money. Let’s say you want to buy a house in cash in retirement - if you want to withdraw $500k for a house from a traditional account, that’s a huge tax burden (just an example - maybe it’s a car for the kids or summer property). If all of your retirement accounts are Roth, this doesn’t really apply. Outside of the military, your taxable income may become too high for you to even contribute to Roth accounts, so keep this in mind.
I want to stress that with less than $200k/$1MM in taxable/retirement accounts, you really don’t need to pay someone to manage your money if your risk is relatively low. By retirement age, this may turn the other way. With 10 figures, it may be worth it to you to relieve yourself of the stress of money management and pay someone to do it. Very rich people do this all the time with advisors from major financial institutions. If you do this, shop around for a fiduciary who you trust and shares your values. The fees on managed accounts aren’t always too bad, and may be worth it to you.
The last morbid point I’ll make is that you need to plan on your death. You will have enough money that it will become pretty complex if you don’t have a plan. Make sure you have beneficiaries on your accounts and look into a will. $500 to a lawyer now could save your family a huge headache. If both you and your wife die tomorrow, have a plan ready to take care of financial issues until your children are old enough. Look into whether or not you need term life insurance - you and your wife may not deem it necessary, but it is pretty cheap while you’re young, and remember that your wife does not have a job and your children are not independent yet. Also remember that outsiders do very weird things when rich people die. If you don’t plan for your assets appropriately, estranged relatives and friends could show up in probate court with stories about how you promised them money or property. Even a simple will can put a quick stop to that sort of thing.
The biggest point I want to make is to stay away from stupid and/or high risk plays. You don’t need a get-rich-quick scheme to build generational wealth. Stay the course and protect what you have. Talk to a professional.
I didn’t see you mention anywhere what you’re going to do after your retirement at age 41? If you aren’t planning to work, you really don’t have much money at all for 5 people for the rest of your lives, and your retirement accounts will take a huge hit if you need that money any time soon (I’ll assume you understand that). Stocks that produce high dividends could be a good option for you earlier in life than many others - someone already mentioned that with a pretty good reinvestment plan. Relatively low, but constant income to supplement your relatively low pension income could be necessary if you aren’t working.
Where are your IRAs? Go to that institution now, and start talking to an advisor and get a plan together to reduce your tax burden in retirement.
You said mostly Roth accounts which will benefit you greatly. Anything IRA-related not in Roth accounts can be converted to Roth, and doing so when your tax burden is low is best. Do this before your retirement accounts have millions in taxable money. Let’s say you want to buy a house in cash in retirement - if you want to withdraw $500k for a house from a traditional account, that’s a huge tax burden (just an example - maybe it’s a car for the kids or summer property). If all of your retirement accounts are Roth, this doesn’t really apply. Outside of the military, your taxable income may become too high for you to even contribute to Roth accounts, so keep this in mind.
I want to stress that with less than $200k/$1MM in taxable/retirement accounts, you really don’t need to pay someone to manage your money if your risk is relatively low. By retirement age, this may turn the other way. With 10 figures, it may be worth it to you to relieve yourself of the stress of money management and pay someone to do it. Very rich people do this all the time with advisors from major financial institutions. If you do this, shop around for a fiduciary who you trust and shares your values. The fees on managed accounts aren’t always too bad, and may be worth it to you.
The last morbid point I’ll make is that you need to plan on your death. You will have enough money that it will become pretty complex if you don’t have a plan. Make sure you have beneficiaries on your accounts and look into a will. $500 to a lawyer now could save your family a huge headache. If both you and your wife die tomorrow, have a plan ready to take care of financial issues until your children are old enough. Look into whether or not you need term life insurance - you and your wife may not deem it necessary, but it is pretty cheap while you’re young, and remember that your wife does not have a job and your children are not independent yet. Also remember that outsiders do very weird things when rich people die. If you don’t plan for your assets appropriately, estranged relatives and friends could show up in probate court with stories about how you promised them money or property. Even a simple will can put a quick stop to that sort of thing.
The biggest point I want to make is to stay away from stupid and/or high risk plays. You don’t need a get-rich-quick scheme to build generational wealth. Stay the course and protect what you have. Talk to a professional.
hailsatan666
New member
@hailsatan666 Those C8 mid engine corvettes sure do look fun, but probably not the right time, haha.
