A thought provoking video... Good job! Would love to see this comparison for stocks with similar capital appreciation and beta (instead of JEPI vs SCHD). SCHD has a capital appreciation element that imo skews the comparison. Super impressed with this video👍🙂
I do the same thing bought a bunch of safe and medium 1 or 2 shares ,and every few weeks I go and split the dividends plus money invested money between a few. Call it water fall trickle 😂.Also I plan to divide my goal income b/t them .
I have been doing this for 2 years, it’s a way to diversify my account, the more new stocks/etfs I find. I used my dividends to buy them. I did this before I knew it was called this.
Excel nerds unite! I've never heard the dividend waterfall illustrated like that, makes the idea stick. Also appreciate that you talked Total Return, my guess is that there are some times when the waterfall is better and sometimes DRIP, depending on where/what each stock is
I do the reverse.. invest heavily into high dividend growth stocks, drip over time to get that yoc high and in the final 5 years before I plan to live on income I’ll purchase higher yield stocks/etfs.
For a long time what I've done is built a position until the payment I'd get is roughly 100 each payment. Then i use those to build the next position, then build on and on. Each new company making the next to reach the goal faster and faster. Few reasons i do this is 1) when i look at multiple companies generally the higher the yield the less of that company I'd want in my portfolio. Like if you compare MO to Lowe's, the amount of each it takes to receive 100 payments is a fair ratio I'd want in my portfolio. 2) getting paid 100 dollars makes me happy. 3) once i build a company to 100 dollar payments, any raise the company gives me is going to be more noticeable.
Someone else who thinks just like me.. That's exactly what I have been doing.. $3000/month that i get from from JEPI goes directly towards buying SCHD every month. Probably sacrificing some growth by buying JEPI instead of VOO but it feels a bit safer as you stated you are playing with the house money.
at 12:17 you say JEPI is the underperformer, but O has a lower return, and JEPI also has 1 month less of history, so by my math O was the underperformer! Thanks Bob! great content as always.
Sounds like a good way to increase income and help add new positions without funding from your own pocket. Just be careful with long term. Schd holds it's place for long term growth. While yes your loosing income you are possibly trading that for overall gains. Where other high monthly dividends will stay flat little growth or decrease even over time loosing overall value.. just things to consider. When and what you waterfall into and your long term end goal.
But drip usually gives you a tax break but if you’re in a tax deferred account or exempt it’s potential if you’re growing everything at the same time, taxable account you’re being taxed as gains and losing the tax option unless you’re liquidating something else
I've tried everything dividend harvesting, truthfully I've spent to much time on something that doesn't seems ro have a lope hole. I think the only thing I've ever found that makes sense is using Mark 25% trailing stop losee or as he calls it wealth preservation. As long as the stock pushes up over time your 25% line is always moving up capturing profit and giving you the ability to buy the dip
So I have a list of ETFs that I'm working on getting to 100 shares each. When it hits 100, I'll turn off drip for that particular ETF and use half to buy more of that ETF and the other half to bulk up another stock. So not a waterfall. Maybe like one of those fountains you see at fancy hotels or shopping malls since the water cycles back in
lol bond laddering applied to shares (is the method used), also requires 0 fee trades, or your increasing your fee base. this method would also increase your portolio rebalancing activities...
Cool idea. But wouldn't the returns have been better not buying the 500 shares of the REIT and just using that money to buy JEPI for the same time period?
Can I ask why you used Jepi to waterfall into SCHD when you used O to waterfall into Jepi? I just wonder if you had used O to waterfall into SCHD, if the results would be similar because the dividend yields are more comparable?
I would think that a major benefit of dividend investing is that calculating portfolio size needed is not relevant. We don't care about the value of the portfolio. We care about the sustainable income it pays. As you invest you can gradually see the income rise as you invest more and pull the retirement trigger when it's high enough regardless of the market sentiment.
I'm doing the tje other way around im starting whit high dividend low growth. To get a bust to buy lov/mid dividens whit higher Growth. Ill get a lot of money now and the Growth stocks will then supas my " starter stocks" ind the long game
This may sound bad because I never asked this question being new to investing. Am I taxed annually as I invest into dividend ETFs? Or am I taxed if I just sell the shares? I feel it would be unfair if I’m taxed as I invest.
With this strategy, we will not take advantage the compounding concept because it will not accumulate from original shares. It sounds like profit taking to me.
Great question! I'm still holding on, but it doesn't seem like much is going on right now. Would love to see some consistency (and, that means consistency & growth in the entire crypto market, which has been battered by this past year, federal funds rates, inflation, etc).
I don't think it matters how you reinvest because the total returns won't be too far apart using the same 2 investments going both ways. Could be arguements for high yield dripped to lower yield or low yield dripped to higher yield really depends on your situation and goals. Personally dripping to 100 shares to sell options is what I do then drip the premium into more of the underlying or a different holding. Now that is a waterfall method
The biggest advantage i can see doing this is like say you build for a long time into schd because it's qualified and known to grow better. Then as you get closer to fire, you use the schd dividends to buy jepi to amplify your payments as you get closer to needing them.
Wow, thank you so much Michael! Appreciate it much. As for "O", yes it can be taxed weird since it's a REIT, which is typically a "non-qualified" dividend. This means it would be taxed at your ordinary tax rate (for your income, etc). Now, this could be avoided if you shelter it in a tax-advantaged account if that is available to you (for example, a Traditional IRA or Roth IRA). An "IRA" means Individual Retirement Plan. There are certain requirements for a Roth (income limits, etc); however most people can invest in a Traditional IRA. Then, any activity that happens within the IRA (buys, sells, dividends) are tax free until you start to withdrawal the amounts during retirement.
What I do is I buy etf/stocks on margin and use dividend stocks to pay back the margin. That way I own all of the margined funds which can still pay me dividends in the meantime. This can be risky, nearly the definition of juicing your returns, so I limit my overall margin to what I estimate the dividend stocks could pay back in 3 months. This also makes rebalancing a breeze. I wanna say with tdameritrade its 13% a year on borrowed money or 1.08% a month. Done with $1000 you are only paying $10.80 a month per $1000 you borrow, nearly the same as JEPI would have paid you on that same $1000.
Heh, been doing this for months. Get dividends. Diversify by buying others dividend stocks. Edit: Ah, you're doing something a little different. Might have to try that.
Hey I'm a new sub. Glad I found your channel. I'm enjoying listing to your beginner focused videos just to hear your thoughts. Look forward to more videos. I like your style so far. As far as production etc. Good luck on your yt journey
DRIP, Waterfalls...lots of Water analogies. Stay Hydrated with your Dividends, friends!
A thought provoking video... Good job! Would love to see this comparison for stocks with similar capital appreciation and beta (instead of JEPI vs SCHD). SCHD has a capital appreciation element that imo skews the comparison. Super impressed with this video👍🙂
Each month I look at my portfolio and decide where to reinvest my dividends. Depending which one is « down » more is where I reinvest the dividends.
I do the same thing bought a bunch of safe and medium 1 or 2 shares ,and every few weeks I go and split the dividends plus money invested money between a few. Call it water fall trickle 😂.Also I plan to divide my goal income b/t them .
I have been doing this for 2 years, it’s a way to diversify my account, the more new stocks/etfs I find. I used my dividends to buy them. I did this before I knew it was called this.
Nice!!!
Excel nerds unite!
I've never heard the dividend waterfall illustrated like that, makes the idea stick. Also appreciate that you talked Total Return, my guess is that there are some times when the waterfall is better and sometimes DRIP, depending on where/what each stock is
I’m thinking about taking all of my dividends and waterfalling them into JEPI. Thoughts?
Good video. Is there much difference of using DRIP for a different stock, or just rebalancing periodically your portfolio? Thanks
I do the reverse.. invest heavily into high dividend growth stocks, drip over time to get that yoc high and in the final 5 years before I plan to live on income I’ll purchase higher yield stocks/etfs.
Have 4,500 shares of JEPI, using DRIP. Very happy with results.....so far.
For a long time what I've done is built a position until the payment I'd get is roughly 100 each payment. Then i use those to build the next position, then build on and on. Each new company making the next to reach the goal faster and faster.
Few reasons i do this is 1) when i look at multiple companies generally the higher the yield the less of that company I'd want in my portfolio. Like if you compare MO to Lowe's, the amount of each it takes to receive 100 payments is a fair ratio I'd want in my portfolio. 2) getting paid 100 dollars makes me happy. 3) once i build a company to 100 dollar payments, any raise the company gives me is going to be more noticeable.
Someone else who thinks just like me.. That's exactly what I have been doing.. $3000/month that i get from from JEPI goes directly towards buying SCHD every month.
Probably sacrificing some growth by buying JEPI instead of VOO but it feels a bit safer as you stated you are playing with the house money.
Are there any changes w.r.to taxation on dividends with drip vs waterfall?
at 12:17 you say JEPI is the underperformer, but O has a lower return, and JEPI also has 1 month less of history, so by my math O was the underperformer! Thanks Bob! great content as always.
Sounds like a good way to increase income and help add new positions without funding from your own pocket.
Just be careful with long term. Schd holds it's place for long term growth. While yes your loosing income you are possibly trading that for overall gains. Where other high monthly dividends will stay flat little growth or decrease even over time loosing overall value.. just things to consider. When and what you waterfall into and your long term end goal.
But drip usually gives you a tax break but if you’re in a tax deferred account or exempt it’s potential if you’re growing everything at the same time, taxable account you’re being taxed as gains and losing the tax option unless you’re liquidating something else
I've tried everything dividend harvesting, truthfully I've spent to much time on something that doesn't seems ro have a lope hole.
I think the only thing I've ever found that makes sense is using Mark 25% trailing stop losee or as he calls it wealth preservation. As long as the stock pushes up over time your 25% line is always moving up capturing profit and giving you the ability to buy the dip
Drip in schd ! 13 percent dividend growth
So I have a list of ETFs that I'm working on getting to 100 shares each. When it hits 100, I'll turn off drip for that particular ETF and use half to buy more of that ETF and the other half to bulk up another stock. So not a waterfall. Maybe like one of those fountains you see at fancy hotels or shopping malls since the water cycles back in
What brokerage can you reinvest your dividend of 1 security into another security?
Any of them. Just don’t automatically reinvest and take the cash to manually buy the other company.
This strategy doesn't sound bad, I own jepi, schd, and o, and using one to build up the rest is good. I might actually try it out. Thanks!
lol bond laddering applied to shares (is the method used), also requires 0 fee trades, or your increasing your fee base. this method would also increase your portolio rebalancing activities...
Cool idea. But wouldn't the returns have been better not buying the 500 shares of the REIT and just using that money to buy JEPI for the same time period?
I’m doing the drip now with REITS and ETFs. But I’m definitely up for trying new ways to snow ball my profits haha
So your idea is essentially just m1finance auto investing?
I just had a thought about starting a new portfolio where money from my pay goes into JEPI then I waterfall the divs from that into SCHD.
Can I ask why you used Jepi to waterfall into SCHD when you used O to waterfall into Jepi? I just wonder if you had used O to waterfall into SCHD, if the results would be similar because the dividend yields are more comparable?
I would think that a major benefit of dividend investing is that calculating portfolio size needed is not relevant. We don't care about the value of the portfolio. We care about the sustainable income it pays. As you invest you can gradually see the income rise as you invest more and pull the retirement trigger when it's high enough regardless of the market sentiment.
watching your videos from Brazil. Nice
Thanks for watching!
I'm doing the tje other way around im starting whit high dividend low growth. To get a bust to buy lov/mid dividens whit higher Growth. Ill get a lot of money now and the Growth stocks will then supas my " starter stocks" ind the long game
I'm happy you modeled out the JEPI dividends invested into SCHD. I've been wondering about waterfall approach myself.
Me too!!!
Love the work and thank you
I've been doing this with a diversified group of my favorite stocks and dumping dividends into whatever has the closest ex date
With this method aren’t you factoring our share price appreciation/depreciation?
That is essentially what M1 finance does!
This may sound bad because I never asked this question being new to investing. Am I taxed annually as I invest into dividend ETFs? Or am I taxed if I just sell the shares? I feel it would be unfair if I’m taxed as I invest.
Dividend is taxed annually.
@@eqqq54 what form will I need to fill out?
@@michaelgardner5843 you should get 1099-D from your brokerage, do you have Vanguard or Fidelity?
I go through Westside equities, I get my hubcaps there too.
With this strategy, we will not take advantage the compounding concept because it will not accumulate from original shares. It sounds like profit taking to me.
I had bought a good ampunt of clm and with the dividend i buy every month dividend etf's
Any Shiba updates soon? Or has that project lost its luster
Great question! I'm still holding on, but it doesn't seem like much is going on right now. Would love to see some consistency (and, that means consistency & growth in the entire crypto market, which has been battered by this past year, federal funds rates, inflation, etc).
i think it works if you already have a huge payout , if you just started and you dividends are low i wouldnt do it
That’s a fair point!
Has anyone mentioned or considered transactional costs with this strategy vs just turning on a DRIP?
Specify these transactional costs. Doesn't seem to be any different than drip.
I got about 18 shares of JEPI so far
Nice!
I don't think it matters how you reinvest because the total returns won't be too far apart using the same 2 investments going both ways. Could be arguements for high yield dripped to lower yield or low yield dripped to higher yield really depends on your situation and goals. Personally dripping to 100 shares to sell options is what I do then drip the premium into more of the underlying or a different holding. Now that is a waterfall method
The biggest advantage i can see doing this is like say you build for a long time into schd because it's qualified and known to grow better. Then as you get closer to fire, you use the schd dividends to buy jepi to amplify your payments as you get closer to needing them.
Une of the best videos 💪🍷👌
Thanks! I’ve been wanting to see a genius video like this for so long! You taught me something new! Is O taxed weird since it’s a REIT?
Wow, thank you so much Michael! Appreciate it much. As for "O", yes it can be taxed weird since it's a REIT, which is typically a "non-qualified" dividend. This means it would be taxed at your ordinary tax rate (for your income, etc). Now, this could be avoided if you shelter it in a tax-advantaged account if that is available to you (for example, a Traditional IRA or Roth IRA). An "IRA" means Individual Retirement Plan. There are certain requirements for a Roth (income limits, etc); however most people can invest in a Traditional IRA. Then, any activity that happens within the IRA (buys, sells, dividends) are tax free until you start to withdrawal the amounts during retirement.
@@BobSharpe thank you, I wonder if I can put what I have invested now into a traditional or ROTH IRA through robinhood
My goal is to get 100 shares of each etf and then build up each from the dividends so my snowball can keep growing from a diverse investing
Operation cost will take away from that
Thank you so much for this video!
I do both at the same time
Are you putting into account that SCHD is a qualified dividend vs JEPI being ordinary?
I mean...anytime you put money into a stock that yields 3x more, its going to look favorable to drip or "waterfall" into that stock.
I’ve been doing this.
In all honesty O isn't a great payer so if you flip it to Jepi that pays virable great income wsy more than o it makes sense sort of
the results aren't due to a waterfall method but rather from buying shares of higher yielding etf
Great video
What I do is I buy etf/stocks on margin and use dividend stocks to pay back the margin.
That way I own all of the margined funds which can still pay me dividends in the meantime.
This can be risky, nearly the definition of juicing your returns, so I limit my overall margin to what I estimate the dividend stocks could pay back in 3 months.
This also makes rebalancing a breeze.
I wanna say with tdameritrade its 13% a year on borrowed money or 1.08% a month. Done with $1000 you are only paying $10.80 a month per $1000 you borrow, nearly the same as JEPI would have paid you on that same $1000.
Heh, been doing this for months. Get dividends. Diversify by buying others dividend stocks.
Edit: Ah, you're doing something a little different. Might have to try that.
I’ve been trading a stock in my retired tax account , using profits
Waterfall...
DRIP...
It's all about cash FLOW
Gotta say I like waterfall a lot better than drip!
Heck yeah jepi is great
Yeah and a great yield!
SVOL, JEPI, TSLY, FOR SCHG....HMMM
I understand history matters but going back 3 years doesn't matter when everything is about what are you doing now.
jepi if you want to retire in 10 years schd if you have more than 10 years to retire. schd will outperform with drip in 10years
No, how about just put everything into JEPI? And drip
This seems like a tax nightmare
How would it be a tax nightmare.? Elaborate
Not everyone makes 6 figures 🙄
DIDN'T TLC TEACH YOU ANYTHING? STICK TO THE RIVERS AND LAKES!😂🎉
My dividend income buys me shares of sofi
Nice!!
Hey I'm a new sub. Glad I found your channel. I'm enjoying listing to your beginner focused videos just to hear your thoughts. Look forward to more videos. I like your style so far. As far as production etc. Good luck on your yt journey
I spend my dividends 😂
7:27 your “waterfall is higher blah blah” simply because JEPI has a higher (by a lot) yield 🤦🏻♂️
this is so stupid man its just overcomplicating things, if you want schd buy schd, if you want jepi buy jepi.
Correct. If you don’t like this you don’t have to do it
This makes sense for me, because I want more growth , so i waterfall into schg! I don’t have the money to put in schg
@@bossballheaddawg2588 look if you like SCHG, great. sell your stocks and buy it. There is no need for this waterfall nonsense .
You want your high income to drip into high dividend growth JEPI/JEPQ->SCHD
I did JEPI, jepq, Schd, into schg