30-Year-Old Pours $500K Into MSTY For High-Yield Dividends – Reddit Debates His Plan To Hit $3M In 2 Years And Quit 9-To-5 Life

Many people who dream of quitting the 9-to-5 grind start to explore ways to achieve financial independence and the freedom to follow their passions.

One popular investment approach is to invest in high-yield dividend stocks, which promise long-term growth and passive income. Among these stocks, MSTY, a synthetic tracker of MSTR, has gained attention for its speculative 150% dividend yield, which is determined by the variability of Bitcoin ownership.

DRIPs or Dividend Reinvestment Plans, are a main part of this strategy. They allow investors to automatically reinvest their dividends to buy more shares, compounding their growth in the long term.

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Enter a 30-year-old investor with a daring goal of leveraging this strategy to improve his financial future. In a recent post on Reddit’s r/dividends community, he disclosed his decision to invest $500K in MSTY to accumulate 100,000 shares and end up with a portfolio worth $3.1 million in just two years.

“By the end of 2026 (24 Months) the account balance would be $3,125,000, assuming constant DRIP, the 150% yield continues and the price stays around the $30 range. That’s the equivalent of 100,000 shares total (which is my goal),” he wrote.

While he calculated a myriad of possibilities, the investor knows the move is risky and worries, in particular, about the NAV erosion. His ultimate objective is to cover his living expenses with the dividends, quit his 9-to-5 job and reinvest in a few index funds like VOO, SCHD and SCHG.

However, he is unsure if his strategy is realistic, so he’s turned to Reddit’s r/dividends community for advice.

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Reddit’s Suggestions for the 30-Year-Old Investor With $500K to Invest

MSTY – Yes or No?

Many Redditors expressed skepticism about investing all those $500K in MSTY because of its volatility and connection to Bitcoin.

“Considering MSTR’s price is nearly 4x the value of the Bitcoin they hold due to leverage, have you considered what might happen to MSTR as a whole should Bitcoin experience a bust cycle? It would be one of the quickest ways to destroy half a million dollars,” a comment reads.

One Redditor highlights the massive risk of losing an investment when the MSTR price changes radically.

“There’s always a big risk of losing money when MSTR price moves drastically,” the Reddit member says.

Another comment says that if the MSTR price stops moving up and goes down, the MSTY price will follow.

“If they stop going up, which is pretty likely on a clown stock like MSTR, your MSTY will go down just as fast,” the comment reads.

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Diversify Instead of Going All In On MSTY

A lot of comments in the thread highlighted how important diversification is to reduce risk.

“Spreading out the risk across other high-yield ETFs would lower your monthly take and your income but you'll see less erosion. I would consider AMZY, FBY and TSMY because they all stay within a ~$2.00 range MTM and pay a decent amount. Buy in for 25-37% of your purchase and use the remainder on MSTY,” a Redditor suggests.

One more comment recommended the 30-year-old an allocation strategy that diversifies his portfolio enough to avoid unnecessary risk.

“Personally, I would break it up a little. MSTY, CONY, ULTY, AIYY, YBIT, YMAX or maybe YMAG. The first five are all at or above 100% yield,” the comment reads.

Don’t Bet the Farm

A common piece of advice in the comments was to avoid putting all your eggs in the same basket, i.e., not betting all your money on the same stock.

“Never gamble 100% of what you cannot afford to lose. If you can afford to lose a half million then good for you but I wouldn't gamble everything I own,” a Reddit member commented.

One Redditor touched on the FOMO or fear of missing out, many investors feel, which can end up being a bad move.

“FOMO’ing in after an insane run-up and while it is actively free-falling from that peak in the 420s. That’s bold. It might work. Or it might not,” he said.

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