Dividend Investor Earning $20,000 a Month Shares His 7 High-Yield Stock Picks – 'You Just Need to Start'

Dividend investing has long rewarded patient investors. Data shows that from 1998 to 2018, high-yield dividend stocks posted a compound annual return of 8.8%, compared with 6.6% for non-dividend companies. 

In May last year, someone asked income investors on Reddit to share their monthly dividend income goals. Many investors shared their current income and long-term goals, but one comment caught attention.

An investor said he made about $20,000 a month in dividends and aimed to take this income to $30,000. In several comments on different posts on the social media platform, the investor advised others to start investing as soon as possible.

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"You just need to start, add where you can, re-invest divs and give it time. Consistency & patience is the key," he said.

However, most of the investor's portfolio consisted of high-yield and risky covered call ETFs. Based on the information he shared publicly on Reddit, let’s examine his portfolio holdings.

YieldMax COIN Option Income Strategy ETF

YieldMax COIN Option Income Strategy ETF CONY was among the investor’s largest holdings. The fund makes money by selling call options on Coinbase Global COIN. CONY is a risky investment since its upside potential is capped due to the covered call strategy, and its performance is linked to a single company operating in the volatile crypto industry. The fund has a distribution rate of 110% and pays monthly. CONY is down 42% over the past 12 months.

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YieldMax MSTR Option Income Strategy ETF 

The YieldMax MSTR Option Income Strategy ETF MSTY generates income by selling call options on MicroStrategy MSTR stock. Its distribution rate is about 108%.

The investor seemed highly bullish on the fund and said in various social media posts that he had fully recouped his investment in MSTY.

"I bought MSTY at inception and it paid off in 10 months. I use my divs to accumulate more shares and generate higher divs. If you need to create income, then join the party and disregard all the naysayers who can’t wrap their little heads around new investment vehicles," he said in a comment.

YieldMax NVDA Option Income Strategy ETF

YieldMax NVDA Option Income Strategy ETF NVDY makes money by selling call options on Nvidia NVDA. Recently, the ETF has gained popularity amid the buzz around Nvidia. The fund has a distribution rate of about 52%. NVDY suits investors who believe in Nvidia's long-term potential but want to hedge against possible declines in the chipmaker's shares. 

The Redditor said his investment in the fund has already paid for itself.

"NVDY has turned into a nice steady payer. When I first entered it paid $2+ multiple times," he said a few days ago.

The YieldMax SMCI Option Income Strategy ETF

The YieldMax SMCI Option Income Strategy ETF SMCY generates income by selling call options on Super Micro Computer Inc SMCI. The fund has a distribution rate of about 86%.

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Roundhill Small Cap 0DTE Covered Call Strategy ETF 

The Roundhill Small Cap 0DTE Covered Call Strategy ETF RDTE generates income by holding small-cap stocks and selling call options with zero expiration days. Its distribution rate is 27%. 

YieldMax MARA Option Income Strategy ETF 

The YieldMax MARA Option Income Strategy ETF MARO generates monthly income by selling call options on crypto mining company MARA Holdings Inc MARA. The fund has a distribution rate of about 82%. Its value has been down 29% over the past 12 months.

REX AI Equity Premium Income ETF 

The REX AI Equity Premium Income ETF AIPI invests in top AI companies and generates income by selling call options on stocks. Some of the fund’s top holdings include Palantir PLTR, CrowdStrike CRWD, ARM ARM, Nvidia NVDA, Meta Platforms META, Qualcomm QCOM and Alphabet GOOG.

Wondering if your investments can get you to a $5,000,000 nest egg? Speak to a financial advisor today. SmartAsset’s free tool matches you up with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.

Interest Rates Are Falling, But These Yields Aren't Going Anywhere

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Arrived Home's Private Credit Fund’s has historically paid an annualized dividend yield of 8.1%*, which provides access to a pool of short-term loans backed by residential real estate. The best part? Unlike other private credit funds, this one has a minimum investment of only $100. 

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