The $ 48-year-old with a million dollars wants dividend revenue to be withdrawn early- “would I bet the big on Msty’s payment of $ 2/share or hold on to Schd?”
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Dividend Investing is a popular approach to investment for those who want passive income, especially when approaching retirement. However, not all shares or funds that pay dividend of the same.
Some, like Schwab US Dividend Equity Etf (Nyse:Schd), offer stability and long -term growth through a variety portfolio Financially stable companies, while others, such as the ETF of the Mrstr Mstr (NYSE:Fat), promise high yields, but they come with high risks.
For those who aim to achieve financial independence early or withdraw, it is imperative to achieve the right balance between risk and reward.
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Enter a 48-year-old investor with a clear vision of his future. He and his wife persistently contributed to their 401 (k) accounts, and raising almost $ 1 million savings. But Redditor has greater dreams: he wants to give enough dividend revenue to withdraw early and persecute his passion for video game design.
“I want to invest additional money in dividends and maybe will set my daughter for a living, or at least give her some flexibility. I have weekly investments in Schd, but not much as I finish repaying my last credit card. I know Schd is safe and good in the long run, but I also dream that they will be able to have enough a month in Dividend to give up and follow their passion.
He mentions Schd’s safety and long-term potential, but he is intrigued by the high monthly payments offered by MSTY, promising a 2 dollar dividend per share. He thinks whether he will allocate more funds for MSTY or stick to a safer SCHD, so he took in Reddit to seek advice.
Let’s dive in proposals in the comments left by members of the R/dividend.
Priority of security and diversification over high risk yield
Many Redditors have emphasized the importance of adherence to the SCHD due to the stability and diversification it offers.
“When you buy a stake at SCHD, you buy a small part of ownership in 100 US companies selected for your financial strength, past and future earnings and 10-year history of giving a portion of these earnings to their dividend owners. Soon they do not go anywhere, no matter how much everyday customers are ready to pay for these companies,” he writes in the commentary.
Reddit user shared his opinion on Msty, saying that the shares would not be able to maintain these 100% dividends for long.
“There’s no free lunch and keep an eye on anything too good to be true. MSTY is very likely to continue to offer these 100% refund of dividends for a long time,” he said.
Another Redditor advised not to buy shares of MSTY, but if the investor still wants to do so, he suggested pairing with another ETF for protection.
“Schd. Forget about msty unless you pair it [T-REX 2X Inverse MSTR Daily Target ETF (NYSE: MSTZ)] For protection, “he wrote.
“Instead of msty, better [JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ: JEPQ)]”It says another comment.
Focus on debt repayment and learning about investing before aggressive shopping
The recurring topic in the comments was how important it is to repay the debt with high interest rates before the investment increases.
“Make 100% on your credit card. You won’t beat that return with these funds. Long credit card is Savage. Once clear, Schd. Forget MSTY,” Reddist advised.
One member of the Reddit R/Dividend community suggested that the poster should not think about investing in MSTY if he is not familiar with investment in revenue.
“If you do not know how to invest income (dealing with decay, change, collar or options), I would not start offering. They can make a lot of money if you are used to investing that closed funds, high yield strategy, waterfalls. But you can quickly lose it and don’t know how you lost it,” he said.
