Do you own any NUSI or plan on adding it to your portfolio? M1 Finance Referral. Get $30 Free for Signing Up ➡️ bit.ly/3shmxtb Please support my 2nd Channel Hidden Off-Grid ➡️ bit.ly/3f4xnQA All My Spreadsheets Used To Help Me Reach FIRE. Get the spreadsheets here ➡️ bit.ly/35aaQw2
I started to view $NUSI as an alternative to low interest rate environment bonds right when it came out. But global X has these new funds with tail end risk and as you said, collars strategies which makes more sense for my situation. Would love to see you and Jerry review how a global x products could be better or worst than NUSI. Thanks for this video ✌🏻
Gerry did a video on them already. They suck compared to NUSI. They are not managed funds, so that makes NUSI better straight off. They do cost a little less in terms of expense ratio, but it's not a huge difference. You're better off with NUSI by far. Given the Global X funds are strictly rules based it's very simple to do what they are doing with very low expenses on your own.
Great overview. I really appreciate your comments around having to re-deploy capital depending on market conditions. So important particularly when you are retired. Prior to September I took A large portion of my gains from a fund this year and put it in my options account. If the market continues up for the rest the year so be it but for the most part I locked in gains for the year.
I like having flexibility in all market conditions to make money. Having an options account on the side is very helpful. You can do options in all market conditions, you can also decide to deploy some of that cash in a market crash too.
Thanks for the great content. I bought my first 135 shares of NUSI recently. Will slowly build up a position. Also in RYLD, QYLD and probably also JEPI and DIVO. Learned a lot from you and the others from the retire with options community. My retirement income will be partially from dividend and options trading. Looking forward to follow you on your retirement journey.
Sounds like a winning combination. I like the use of options on your own too. The options trading/income is optional. You're in control of how much you make and when you make it.
The distributions are ROC according to their supplemental tax information on their site. September for example is 100% ROC. Here's a quote from it ... "In connection with the monthly dividend payment of $0.1824 per share payable on September 24, 2021 to shareholders of record on September 23, 2021, it is anticipated that 100% of such dividend will be a return of capital. "
I'll take a look. So 100% is ROC. Man, they need to get their sh*t together and update the prospectus. Thanks for the information. This isn't bad for me considering it's all in a taxable account anyway.
I think a lot of investors think there is a realistic chance that all the holdings can one day go to zero with options strategy but as you explained that is not possible.
I think so too. I'm really trying to slowly show them the light. Not saying these are for everyone, but I don't want them to think they are dangerous either.
Great explanation of how Nusi works and produces consistent monthly dividend income. I am living off current dividends and capital gains. I used to own some bond funds for income and risk protection of a stock market fall. But yields on bond funds are so low and with fed raising rates and scaling back on purchases of bonds. I have bought NUSI as a replacement for bond income along with a small emergency cash portfolio. Thanks Dave!
I think NUSI isn't a bad choice for that. I've heard of others doing the same thing for bonds as well. Is bond income ordinary income too? I assume as long as they aren't municipal bonds they are ordinary income.
@@HiddenFreedom yes Dave the bond interest is taxed as ordinary income. A lot of financial advisors recommend bond mutual funds for my situation. They would always say could I afford a loss from stock market and to a degree I agree because if your entering a decade like the one from 2000 to 2010 and spending down a retirement account it would not be good
Yeah, I've never really agreed with having a bond allocation for myself.. even after retirement. If yields come back up to 3-5% for bonds, then I would have 1-2 years in bonds perhaps. I guess that's why you're using NUSI. Spending down my accounts is going to take some work.. short of buying some expensive acreage to live on. Not too worried about a lost decade for myself, at least with my investing plan. But, maybe I'll get punched in the face too. I think cutting expenses or being flexible during those times is a bigger factor than having bonds. Maybe I'm naive James. lol.
@@HiddenFreedom Dave from what I see from your portfolio you will be fine. You have a great strategy and also key to retiring is expenses and number one is health and time. Health and time you can not buy. Thank you for sharing your portfolio, and your retirement set up and journey to it. Keep up the great work on your RUclips Channels. Thanks Dave for all you do for the fire community!
NUSI is like … all the insurance out there. It is not sexy but when SHTF, you will be glad to have it. That is why I still have it in my portfolio. In the future I will probably build up DIVO more exclusively. It has everything I need at the moments: dividend growth, active management & selling covered calls.
I think they all compliment each-other in different ways. I don't think DIVO is immune from income drops or dividend cuts either. But, I think we all know how it will act in general if we came from individual dividend investing. NUSI should be pretty stable, but I think people think it's suppose to never go down on a market sell off.. Trying to clear the air a bit.
@@HiddenFreedom Yes, $10K per social security number, per year. My wife and I loaded up for $20K last year, and another $20K this year. We feel inflation will remain high, which is good for iBonds.
Ya, 10k/year is too small for a single person, would take years to get anything substantial in there. RE is another good option to make 7-8% per year with no cap. I'll keep iBonds in the tool shed.
Great video. I am always keenly interested in your thoughtful process of structuring your portfolio to provide you with the most tax efficient, time efficient return for your risk tolerance. Perhaps in each update, provide your risk tolerance ( ie delta or OTM%) based on the current VIX for the often mentioned SPY / QQQ option portion of your future retirement portfolio. Would love to even see you paper trade that position on video so that we could get some perspective on how, where and why you would place your strikes,DTE and amount risked. Kind of like what Gerry is doing with QQQ/RYLD, but from your perspective as if you were now retired and how you would act/react based on current conditions.
I'm a ways a away yet from total execution. The good thing about SPY/QQQ options that I will be doing is they are both tax deferred accounts. So I can be aggressive as I want. The only real risk is missing out on some up side. As with everything I've done, until I actually do it, I only know how it will work in theory. I've already done many things over the last two years that didn't work out like I thought. But, it took me doing it to figure out that it doesn't work like I thought. I think next weeks video will be slightly updated strategy from the last update. It's not a huge change from my original plan, but I think it's a good one.
Best ROI isn't always the best option. For example you can use an income ETF to better your debt to income ratio. Let's you finance more. Harder to do that with strick index funds
I think people just need to see what they need. It makes sense to probably not go all in on income funds but rather put enough in to get the income they need. Put the rest in traditional investments like VTI/VOO. Perhaps SCHD and/or DIVO. But, hopefully when they are older and getting ready to retire. No need to do it early on IMO.
Curious why you don't like ROC? I suppose if you were investing in a tax sheltered account, ROC doesn't help you at all. Should be good for taxable accounts though.
I'm have the same thinking as you as well. Pay as you go instead of a dreaded big bill. The larger the tax consequences for selling something, the less likely you will want to do it. So it sort of dictates making moves in your portfolio in some cases.
How does dividend reinvesting affect you when you file your taxes ? I wanted to pick some of these ETFS on my robinhood account but I’m unsure how the taxes work when tax season comes around.
Reinvesting doesn't have any effect either way. It's paid and then reinvested. So, it's still a taxable event regardless. Income ETF's could be return on capital, qualified dividends, NII (essentially ordinary income). Some might be all return on capital. Many are a combination of RoC and NII. ETFs like SCHD, VYM, DGRO for example would be qualified dividends, but the income ETFs like NUSI, JEPI, DIVO, QYLD are a mix of RoC and NII or straight RoC.
I know Nationwide's main business - insurance. I stay as far away from insurance companies as I can. Show me a comparable ETF from JP Morgan, Vanguard, etc., please.
This is an interesting opinion. Haven't heard this one before. Unfortunately, you're left with either Global X or Nationwide. The Global X funds for the collar suck IMO compared to NUSI. The other option is you do the collar strategy on your own. It's not going to be as easy to duplicate though given they own all the Nasdaq 100 stocks and run the collar on NDX. So, you could own QQQ and collar that I suppose for cheaper. But it's not passive either considering you would have to do the management. Something like this doesn't exist from Vanguard... JEPI is what you get from JP Morgan.
@@HiddenFreedom Wow! Thank you so much for the thoughtful response. I had looked into JEPI a few months back, but felt I didn't know enough about these types of ETF's. I'll admit I don't know a lot about them, but I really appreciate the alternative pathway you provided. Yes, I agree - anything like this should be actively managed by pros vs. an under-educated persons such as myself attempting to mimic such a fund or outcome.
More videos to come ... my hope is to try to de-mystify them... just a little. People hear options when I talk about these income ETF's and they immediately think they are risky, leveraged, or too good to be true. Options are by far a wealth hack. Selling premium can provide easy income with little to no risk. This is why I like income ETF's because they all use some sort of options strategy..
They do, even if I'm doing 1% a month which I've done, I feel like I do it with less risk. I like having options in all market conditions. Coma money is just that though. I've debated taking a portion of the options account and just putting into JEPI/DIVO/NUSI, but doesn't make sense right now. I'd rather keep it in the option account to give me more flexibility. I'd have to actually see what the costs are for one of these income funds compared to my options trading. YTD I'm at $1900 in commissions in my IB account but that is a little misleading considering I had traded some Bitcoin funds which were expensive.
I can't remember are you going to transition to mostly all income type ETFs in your dividend portfolio? Getting $42K from $686K is pretty sweet. INTC reporting earnings Thurs. They seem to always sell off after earnings so I staggered CCs from 56-60 strikes. Watch this be the one time the stock pops after earnings, but I need to unload shares so wouldn't be the worst thing.
Maybe I should sell some puts so you can get out. lol. If it tanks, I'm selling some puts. I think Pat is raising the Titanic over the next 10 years. I think people will have their minds blown. I'm in mostly income ETF's on the taxable side. I will do an updated strategy video soon to go over some reason changes I've made to it, but still same basic strategy.
I WAS disappointed in this video. BY your title I thought you were going to compare NUSI TO DIVO, JEPI, AND QYLD. THIS IS THE COMPARISION I am most interested in.
There were minor comparisons in this video. I've done videos on all of them, many times. They are all so different, so a comparison is complicated. Although I recommend people watch each video to understand the differences. I'm sorry it wasn't quite what you were looking for.
@Hidden Freedom Investing Just finished watching the video. Your majorly screw up more than makes up for the detailed info. on Nusi. Thank you for such a rich content. Totally appreciate your hard work.🙏
Shouldn't be too bad. Some are RoC, some are qualified, some are ordinary income from the various income ETF's. Still going to be a bunch less taxes than I've ever paid in recent years. I don't mind being the FIRE guinea pig.
Do you own any NUSI or plan on adding it to your portfolio?
M1 Finance Referral. Get $30 Free for Signing Up ➡️ bit.ly/3shmxtb
Please support my 2nd Channel Hidden Off-Grid ➡️ bit.ly/3f4xnQA
All My Spreadsheets Used To Help Me Reach FIRE. Get the spreadsheets here ➡️ bit.ly/35aaQw2
Black Swan Protection.
You went back to my old comment to let me know about a NUSI video coming out. Much respect!
Yes sir, I try. Thank you for the support.
Hidden ETF Channel...Great review Dave!
Naw. I leave that to my Gerry.
Thank you for this video. I have NUSI in my Roth IRA as a replacement for my bond holdings
More and more people reported they are using NUSI for bond replacement. That's cool. Nice job.
I started to view $NUSI as an alternative to low interest rate environment bonds right when it came out. But global X has these new funds with tail end risk and as you said, collars strategies which makes more sense for my situation. Would love to see you and Jerry review how a global x products could be better or worst than NUSI. Thanks for this video ✌🏻
Gerry did a video on them already. They suck compared to NUSI. They are not managed funds, so that makes NUSI better straight off. They do cost a little less in terms of expense ratio, but it's not a huge difference. You're better off with NUSI by far. Given the Global X funds are strictly rules based it's very simple to do what they are doing with very low expenses on your own.
Great vid I have NUSI in my Quad Fecta portfolio along with DIVO QYLD JEPI
Quad Fecta. What's a 5 fecta? Polyfecta? lol. Good choices.
I just started a position recently, I plan to build it up to 100 shares.
Should be a nice monthly income for you. Then drip it!
Great overview. I really appreciate your comments around having to re-deploy capital depending on market conditions. So important particularly when you are retired. Prior to September I took A large portion of my gains from a fund this year and put it in my options account. If the market continues up for the rest the year so be it but for the most part I locked in gains for the year.
I like having flexibility in all market conditions to make money. Having an options account on the side is very helpful. You can do options in all market conditions, you can also decide to deploy some of that cash in a market crash too.
Thanks for the great content. I bought my first 135 shares of NUSI recently. Will slowly build up a position. Also in RYLD, QYLD and probably also JEPI and DIVO. Learned a lot from you and the others from the retire with options community. My retirement income will be partially from dividend and options trading. Looking forward to follow you on your retirement journey.
Sounds like a winning combination. I like the use of options on your own too. The options trading/income is optional. You're in control of how much you make and when you make it.
Thanks for your video on Nusi!
Watched and liked.
Big thanks Gary.
You seem to have a rock solid plan Dave... I just bought my first 175 shares of NUSI last week.
Nice! Congrats on your first NUSI shares. Should be a nice monthly income boost for you.
The distributions are ROC according to their supplemental tax information on their site. September for example is 100% ROC. Here's a quote from it ...
"In connection with the monthly dividend payment of $0.1824 per share payable on September 24, 2021
to shareholders of record on September 23, 2021, it is anticipated that 100% of such dividend will be a
return of capital. "
I'll take a look. So 100% is ROC. Man, they need to get their sh*t together and update the prospectus. Thanks for the information. This isn't bad for me considering it's all in a taxable account anyway.
I’m looking forward to watching this after my shift 💪
Thanks DD!
I think a lot of investors think there is a realistic chance that all the holdings can one day go to zero with options strategy but as you explained that is not possible.
I think so too. I'm really trying to slowly show them the light. Not saying these are for everyone, but I don't want them to think they are dangerous either.
Great explanation of how Nusi works and produces consistent monthly dividend income. I am living off current dividends and capital gains. I used to own some bond funds for income and risk protection of a stock market fall. But yields on bond funds are so low and with fed raising rates and scaling back on purchases of bonds. I have bought NUSI as a replacement for bond income along with a small emergency cash portfolio. Thanks Dave!
I think NUSI isn't a bad choice for that. I've heard of others doing the same thing for bonds as well. Is bond income ordinary income too? I assume as long as they aren't municipal bonds they are ordinary income.
@@HiddenFreedom yes Dave the bond interest is taxed as ordinary income. A lot of financial advisors recommend bond mutual funds for my situation. They would always say could I afford a loss from stock market and to a degree I agree because if your entering a decade like the one from 2000 to 2010 and spending down a retirement account it would not be good
Yeah, I've never really agreed with having a bond allocation for myself.. even after retirement. If yields come back up to 3-5% for bonds, then I would have 1-2 years in bonds perhaps. I guess that's why you're using NUSI. Spending down my accounts is going to take some work.. short of buying some expensive acreage to live on. Not too worried about a lost decade for myself, at least with my investing plan. But, maybe I'll get punched in the face too. I think cutting expenses or being flexible during those times is a bigger factor than having bonds. Maybe I'm naive James. lol.
@@HiddenFreedom Dave from what I see from your portfolio you will be fine. You have a great strategy and also key to retiring is expenses and number one is health and time. Health and time you can not buy. Thank you for sharing your portfolio, and your retirement set up and journey to it. Keep up the great work on your RUclips Channels. Thanks Dave for all you do for the fire community!
NUSI is like … all the insurance out there. It is not sexy but when SHTF, you will be glad to have it. That is why I still have it in my portfolio. In the future I will probably build up DIVO more exclusively. It has everything I need at the moments: dividend growth, active management & selling covered calls.
I think they all compliment each-other in different ways. I don't think DIVO is immune from income drops or dividend cuts either. But, I think we all know how it will act in general if we came from individual dividend investing. NUSI should be pretty stable, but I think people think it's suppose to never go down on a market sell off.. Trying to clear the air a bit.
Thanks, great explanation.
You're welcome Joseph.
Right now, it’s iBonds for us. 7.2% return, with no downside risk.
Isn't there a limit on how much you can get per year or at once?
@@HiddenFreedom Yes, $10K per social security number, per year. My wife and I loaded up for $20K last year, and another $20K this year. We feel inflation will remain high, which is good for iBonds.
Ya, 10k/year is too small for a single person, would take years to get anything substantial in there. RE is another good option to make 7-8% per year with no cap. I'll keep iBonds in the tool shed.
Great video. I am always keenly interested in your thoughtful process of structuring your portfolio to provide you with the most tax efficient, time efficient return for your risk tolerance. Perhaps in each update, provide your risk tolerance ( ie delta or OTM%) based on the current VIX for the often mentioned SPY / QQQ option portion of your future retirement portfolio. Would love to even see you paper trade that position on video so that we could get some perspective on how, where and why you would place your strikes,DTE and amount risked. Kind of like what Gerry is doing with QQQ/RYLD, but from your perspective as if you were now retired and how you would act/react based on current conditions.
I'm a ways a away yet from total execution. The good thing about SPY/QQQ options that I will be doing is they are both tax deferred accounts. So I can be aggressive as I want. The only real risk is missing out on some up side. As with everything I've done, until I actually do it, I only know how it will work in theory. I've already done many things over the last two years that didn't work out like I thought. But, it took me doing it to figure out that it doesn't work like I thought. I think next weeks video will be slightly updated strategy from the last update. It's not a huge change from my original plan, but I think it's a good one.
Best ROI isn't always the best option. For example you can use an income ETF to better your debt to income ratio. Let's you finance more. Harder to do that with strick index funds
I think people just need to see what they need. It makes sense to probably not go all in on income funds but rather put enough in to get the income they need. Put the rest in traditional investments like VTI/VOO. Perhaps SCHD and/or DIVO. But, hopefully when they are older and getting ready to retire. No need to do it early on IMO.
Thanks for the video and covering the tax treatment! I actually thought the distributions were ROC (which I'm not a huge fan of).
Curious why you don't like ROC? I suppose if you were investing in a tax sheltered account, ROC doesn't help you at all. Should be good for taxable accounts though.
@@HiddenFreedom I don't like the idea of a giant tax bill if I decide to sell years later. I'd rather pay it off in baby chunks each year.
I'm have the same thinking as you as well. Pay as you go instead of a dreaded big bill. The larger the tax consequences for selling something, the less likely you will want to do it. So it sort of dictates making moves in your portfolio in some cases.
How does dividend reinvesting affect you when you file your taxes ? I wanted to pick some of these ETFS on my robinhood account but I’m unsure how the taxes work when tax season comes around.
Reinvesting doesn't have any effect either way. It's paid and then reinvested. So, it's still a taxable event regardless. Income ETF's could be return on capital, qualified dividends, NII (essentially ordinary income). Some might be all return on capital. Many are a combination of RoC and NII. ETFs like SCHD, VYM, DGRO for example would be qualified dividends, but the income ETFs like NUSI, JEPI, DIVO, QYLD are a mix of RoC and NII or straight RoC.
I know Nationwide's main business - insurance. I stay as far away from insurance companies as I can. Show me a comparable ETF from JP Morgan, Vanguard, etc., please.
This is an interesting opinion. Haven't heard this one before. Unfortunately, you're left with either Global X or Nationwide. The Global X funds for the collar suck IMO compared to NUSI. The other option is you do the collar strategy on your own. It's not going to be as easy to duplicate though given they own all the Nasdaq 100 stocks and run the collar on NDX. So, you could own QQQ and collar that I suppose for cheaper. But it's not passive either considering you would have to do the management. Something like this doesn't exist from Vanguard... JEPI is what you get from JP Morgan.
@@HiddenFreedom Wow! Thank you so much for the thoughtful response. I had looked into JEPI a few months back, but felt I didn't know enough about these types of ETF's. I'll admit I don't know a lot about them, but I really appreciate the alternative pathway you provided. Yes, I agree - anything like this should be actively managed by pros vs. an under-educated persons such as myself attempting to mimic such a fund or outcome.
More videos to come ... my hope is to try to de-mystify them... just a little. People hear options when I talk about these income ETF's and they immediately think they are risky, leveraged, or too good to be true. Options are by far a wealth hack. Selling premium can provide easy income with little to no risk. This is why I like income ETF's because they all use some sort of options strategy..
@@HiddenFreedom Looking forward to them! Thank you so much for the work you do.
Your income fund is you running options. These income funds underperform you and at a higher cost.
They do, even if I'm doing 1% a month which I've done, I feel like I do it with less risk. I like having options in all market conditions. Coma money is just that though. I've debated taking a portion of the options account and just putting into JEPI/DIVO/NUSI, but doesn't make sense right now. I'd rather keep it in the option account to give me more flexibility. I'd have to actually see what the costs are for one of these income funds compared to my options trading. YTD I'm at $1900 in commissions in my IB account but that is a little misleading considering I had traded some Bitcoin funds which were expensive.
I can't remember are you going to transition to mostly all income type ETFs in your dividend portfolio? Getting $42K from $686K is pretty sweet. INTC reporting earnings Thurs. They seem to always sell off after earnings so I staggered CCs from 56-60 strikes. Watch this be the one time the stock pops after earnings, but I need to unload shares so wouldn't be the worst thing.
Maybe I should sell some puts so you can get out. lol. If it tanks, I'm selling some puts. I think Pat is raising the Titanic over the next 10 years. I think people will have their minds blown. I'm in mostly income ETF's on the taxable side. I will do an updated strategy video soon to go over some reason changes I've made to it, but still same basic strategy.
@@HiddenFreedom Gelsinger is definitely not going down without a fight.
It will be fun to watch for sure.
Thx for the vid. Is the UZI distribution any better than the NUSI?
Which ETF? I can't find UZI. Is that an Ultra shares ETF?
@@HiddenFreedom it’s part of the Rapid Fire series of ETFs, lol
The 9mm series.
@@HiddenFreedom sadly u need a license and background check for that ETF 😟
lol.
I WAS disappointed in this video. BY your title I thought you were going to compare NUSI TO DIVO, JEPI, AND QYLD. THIS IS THE COMPARISION I am most interested in.
There were minor comparisons in this video. I've done videos on all of them, many times. They are all so different, so a comparison is complicated. Although I recommend people watch each video to understand the differences. I'm sorry it wasn't quite what you were looking for.
First. LOL
Always. I majorly screwed up this morning with this one. 4am half asleep issues.
@Hidden Freedom Investing Just finished watching the video. Your majorly screw up more than makes up for the detailed info. on Nusi. Thank you for such a rich content. Totally appreciate your hard work.🙏
Thank you All Good. :)
I’ll be interested to see all the tax impact from these I come etfs for you. You’re everyone’s “FIREing soon” guinea pig. 😅😁
Shouldn't be too bad. Some are RoC, some are qualified, some are ordinary income from the various income ETF's. Still going to be a bunch less taxes than I've ever paid in recent years. I don't mind being the FIRE guinea pig.
Late release. UNSUB!
You're sleeping at 6AM anyway.
And you probably just went to bed.
@@jetstang6185 Long story. I went back to bed at 11AM.