SPYD
📊 A detailed calculation using SPYD shows a potential annual dividend yield of around 4% ($6,000 on $150,000 investment), translating to roughly $500/month before taxes.
📉 This dividend yield currently underperforms the risk-free rate offered by US Treasury bonds (around 5%).
⚠️ Investors pursuing a pure dividend income strategy must consider taxes (reducing net yield significantly) and the fact that dividend payments are not guaranteed like bond coupons.
@marcosemmimfp:
“I know people who talk about SPYD, for example. Yes, this one… I did the math the other day. See SPYD? This is the S&P 500, eh, with, let’s say, high dividends. Yes, it pays basically 0.41. Yes, 0.41. Okay. So I say, well, I have $150,000 to invest, for example. Yes, let’s put $150,000. I buy $150,000 worth today, yes, at $41.78. Yes, perfect. There it is. I have 3,590 shares. Right? 3,590. Perfect. 3,590 shares of this ETF, yes, which SPYD can be bought on Bull Market Brokers, for example… So what do I do with this? I mean, I have to multiply this by the dividend shown below, that is, by 0.411. There, okay. We multiply this. This gives me $1,500 per dividend payment. And since there are four payments, basically I have to multiply this by four. Yes, this in total would give me $6,000 in dividends. And this, meaning per year, per year it would give me $6,000. I invest $150,000, regardless of what the chart does. If it’s consistent in paying dividends… it will pay me $6,000. And if I divide this now by, eh, 12, basically it gives me about $500 approximately per month without doing absolutely anything… What’s the problem with this? And it all sounds very nice, but you won’t receive $500; you’ll receive less. Why? Because you pay taxes on this… Now, if I have $150,000, yes, at a 5% rate, yes, divided by 100, this gives me $7,500. That’s a US bond, meaning this ETF is yielding below the risk-free rate, which are the bonds. Okay… you want a dividend portfolio to earn dividends. You don’t give a damn if it goes up or down. The only thing you need is for this, in the long run, yes, to keep going up.”
Watch the exact part of the video where @marcosemmimfp talks about SPDR Portfolio S&P 500 High Dividend ETF here:
Watch the video on YouTube
Read more articles analyzing SPDR Portfolio S&P 500 High Dividend ETF (SPYD) at the provided link. SPYD stock.
