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TALKING ABOUT INCOME ETFs | WEEKLY WOLF INCOME SHOW
Recorded: April 9, 2026 Duration: 1:01:31Space Recording
Full Transcription
Yo, yo. Oh, what is up mr crypto fit
yeah you were here twitter let us up right too it was it was a nice start
just want to do a quick calm check um i want to make sure the noise is not
i'm driving right now so i'm not sure that my noise is.
Can you hear the background noise?
No, it's not bad.
No, you're good.
Oh, that's awesome.
Perfect.
I thought I had to pull over to a Tesla charger and just hang out there for a few minutes.
Every day I wake up telling myself I don't need a Cybertruck.
telling myself I don't need a Cybertruck and it's starting to bother me.
And it's starting to bother me.
I'm telling you, it's the, well, maybe not Cybertruck, but the EV,
especially Tesla EV is probably the best invention in human history. I,
I will never go back to any other car. This is my second Tesla car.
So I got the model three and the Cybertrucks. It's truly, truly the best thing ever invented.
Yeah, that's definitely why I'm super interested in TSII. I truly believe that with Tesla,
I mean, they are robots, right? Like the first robots are cars and people keep thinking, you
know, first robots are going to people keep thinking, you know,
first robots are going to be whatever.
So it's going to be huge.
Yeah, the technology is unbelievable because literally I'm on self-driving right now.
I don't have to put my hand on the steering wheel as long as I look at the road.
It literally just drives me from point A to point B.
And it's just unbelievable.
It will pass.
It will go around the car will
slow down for detours it will it does everything that's great so it's easy
you know i'm gonna get i essentially pay this oh i'm sorry i didn't know we started already
i essentially paid this with uh my tesli money tsl y no i mean we didn't
officially start i got i got a couple wait a minute for a bunch of people to get up i'm seeing
some people in the panel i want to get up uh sullen if you're interested in talking to i was
chatting with you earlier on next please hop on stage but yeah i mean so it's kind of going to be
the first topic so honestly that, that's actually great.
And, you know, what I really wanted to go through this week,
this is our third week of doing this call.
First week we had Marcos on,
so it was kind of more like me and him talking the entire time.
You guys thought it was very valuable.
But the second week we got more of the community on.
So I'm hopeful that we keep having this community conversation
and people coming through talking about, you know, the certain things.
You did a great job, Coach K.
I call you Coach K, but and glad to have you back today.
The first topic I really wanted to throw out was I was I'm very interested in the everyone is interested in the fire movement, probably who gets into
these income.
And we had a good conversation going last week.
And then so I did some more deep dives.
And obviously, if you're in the fire community, it's 25 times your expenses.
You have a, you know, 4% safe withdrawal rate.
There's all these simple math equations that they are using.
And I wanted to just continue that
conversation to start because we got into it, then we kind of got cut on time. And we don't
really have one for the high yield community. We're all trying to figure this out together.
We're trying to figure out the safe yield where we can actually withdraw it. And we're trying to
figure out what's a good reinvestment strategy. what's a good reinvestment cycle. Are you always reinvesting in the same fund?
Are you taking some of your higher yield and investing into lower yield?
And even the definition of what is high yield, what is low yield?
So that's where I want to start today.
So Coach K, do you got anything to add on that real quick while you're driving?
Yeah, I appreciate it.
Thank you for inviting me to come on again. So I'm going to maximize the time. First of all, I'm not a coach. I just missed the K and I'll call you Mr.
Yeah, I appreciate it. I think the key that the most difficult thing you brought up about the fire movements
So a lot of time the fire movements bleed into our community
And our community bleed into the fire movements community, but we're not the same people
It can be the same, but I
We're still trying to figure that out
So I think if we figure it out
We'll definitely share that with the fire movements because at the end of the day is we're trying to find a retirement plan that we can live off the income. And one thing I don't want to do is eat a couple noodles and live in a trailer park somewhere. I want to still enjoy life. And so I think where we separate from the fire movement is the high yield dividends, we are trying to supplement our current income.
So that's the big difference is supplement the current income that we have.
So I'll leave it there for now.
No, I want to stay on that because there are some things that we can take from that.
So I love how you said, I don't want to eat noodles.
Because if you are in the FIRE community community Which full disclosure? I was as well when I exited on some big positions in bit and uh
Crypto I don't want to call just bitcoin, but you know a few others
I was like, okay
I'm gonna minimize my expenses as much as I humanly possibly can and the fire community has the best information on that
Hey, here's you know, here's how you cut this expense cut your own hair xyz and I agree with that's not who we are
But we can at least take some of the understanding of how to reduce expenses.
So my first thought is what I wanted to go into was if you are aware of what your expenses are at a minimum, let's just say you have, you know, $15,000 that you need a month to run your life.
you need a month to run your life, right? And you're producing $15,000 in income. Well,
that's a different conversation already, because how is that being produced? What funds are these
going to be funds that are, you know, eroding over time that need a reinvestment schedule? Or
are you 15,000 a month and something that follows the S&P and kind of appreciates,
you know, with inflation and you can withdraw it.
So I think that's step number one is like break that down into percentages.
And you got anything to say on that, Ms. Roundhill?
Mr. K?
Yeah, I'll give Ms. Roundhill a chance.
Oh, yeah, I agree that the fire movement is not necessarily the same as the high-income crowd.
There is honestly a lot of feed overlap, but yeah, it's a little bit more involved than just the traditional fire movement.
Also, I'm retired and eating noodles, basically.
Can you explain to us what you think is the difference?
What's your opinion of differences?
Because I may feel that we all may not share the same.
Yeah, I feel like the core fire movement,
they're really looking at that 4% rule that they really want to use,
you know, like they want to accumulate so much before they spend anything and i'm more like you
where it's like well actually i want to have a balanced approach to my spending as i get to my
retire early goal that way i don't have like a bad relationship with my money as i go into
retirement like i want to have a lifestyle yeah and. And I think the first step, all of us got into this saying, I have an annoying bill
at $400 a month and I hate it. I hate that I have to pay it and I want to continue to invest my
money. What's a way I could get there? Oh, I found this fund that does covered calls on Robinhood.
Well, I believe in Robinhood, right? So I want to invest in Robin
Hood and then take income from it, hopefully tax efficiently or even tax deferred. That's what we're
going to get into next. But is that kind of the way either of you guys or Kidd, go ahead and you
can speak on that too. Is that the way that you found these funds or am I just weird and that's
the way I found them? Yeah, go ahead and Kidd. Oh, I'm not sure who you call just open to the panel we got uh
three speakers up here so okay take it over so where where where the similar the similarity is
this you're using robin hood as an example they would buy robin hood and they would own millions
of dollars worth of robin hoods and we're not saying that's wrong either. We said yeah let's own that.
Own that so now we can do number one. We can do cover call on that. We do option trading on it. So that's not much.
That's another thing. And also we invest in in ETF providers that will give us a passive income stream.
And so one of the key part is. Figured out what your expenses.
And and then after that go find
your income from that.
To the passive income stream
from these ETF providers.
Or you can do your own option
trading a lot of us can do
option trading a lot of us
will do that but but but you
don't have to you can just if
you don't you you're.
Dinner you just find an ETF provider that trade on your favorite stock that you like that you will own a lot anyway part of the five movements then and and that that's how I think that's where the two bleed over but the difference within us is that we have a passive income stream that that essentially going to generate for a long, long time.
I just want to, can you guys hear me okay?
Yeah, you're a little soft, but try to speak up. I think we got you.
Great. Yeah, I just want to echo what Kamir is saying there. I think a lot of us understand that these funds, what we're doing with these, we're trading the upside.
We're capping our upside for a little bit of security and for some income.
And that's where we fundamentally differ from the FIRE movement is what they believe in compounding as the eighth wonder of the
world, the thing that has brought so much prosperity to the markets.
We're eschewing all of that because we want income.
I think that is the basis of what we want.
We know what to do with those funds.
We're reinvesting them.
We're paying bills.
This is what this community is all about. And a lot of us have really unlocked something special here.
Yeah, and definitely thanks for sharing that. Before we go forward, obviously none of this is financial advice. So feel free to share your own experiences just for education and entertainment, really.
you know, education and entertainment really. So when I think about it, this is like a healthy
debate because I agree with you guys. And then I'm in, I'm in a little bit of a disagreeance on,
I actually, I think that this is a smarter way to fire if I'm just being honest. So maybe you guys
will debate me on this, agree you're back, you know, maybe some good back and forth, but
I see it as a way that if you are, if you have the ability to invest and let's just say $100 to make
it easy, right?
How much of that $100 do I want to go to growth?
How much of that do I want to go to income?
Well, everybody's situation is different.
But if you're younger and you want to supplement your current lifestyle, most investors will
tell you that's a terrible idea. You're just being
impatient. I'm in Bitcoin rooms and they say, go get an effing job. It kind of pisses me off
because I'm like, look, I have enough Bitcoin for growth that if Bitcoin works, it's just talking
about me personally, I'm good. I don't need any other additional growth asset. So right now,
I'm trying to supplement and buy back my time.
Well, how can I do that? Well, take for example, buying something like a, you know, I, I'm really enjoyed FEPI. I've had FEPI the position. I'm not, you know, trying to just shill any funds here,
but I bought FEPI when it came out. My cost basis is now lowered, I think just under $39. That means it hasn't even
hit $39 yet. So it's, it's working. I haven't had to touch that capital and it's paid me $1,500 a
month. I have never, not one time reinvested it. I have over, you know, 20 months, I think of
a $1,500.
Sometimes it was a little more, sometimes a little less investment.
And that can be just pushed away to pay bills.
And so I don't know.
I think that that's a way better way for a lot of people to get there quicker.
What do you guys think on that?
See, you're able to say that because you came from the FIRE movements or at least you dab into it I have never dap into the fire movement
So I just understand it because I'm in a space that's sharing a similar space
So so I have to read up and watch a lot of their YouTube video and follow up on them trying to find out what's going on
But I I would not I wouldn't I would disagree with saying that that our method is far superior I
would never say that to any any
investment method if you have
been in the investment method
work for you it may not work
for me and I may not be in
interest for me but it doesn't
mean it's wrong it's you you
have to figure out what works
for you and I think that's
where you and I will disagree
in that little bit but you're coming from a better position because you at And I think that's where you and I will disagree in that little bit.
But you're coming from a better position because at least you dab into it.
I haven't dabbed at all.
Ms. Roundhill, you want to go on that one?
Yeah, it's kind of like a checking account versus a savings account.
The savings account is supposed to be for things.
You're not doing a lot of transactions on it. It's growing for the future. Your checking account
is for your everyday expenses right now. I feel like my income portion is for me for right now,
immediately in the future. But I'm not saying the fire movement is wrong. It's just
I have bills right now. So like I'm keeping an eye towards the 20 to 30 years from
now, me that would have appreciated all the compounding, but you know, there's, there's a,
now with these cover call ETFs, there's an option to have basically a checking account
in your income, in your investing portfolio. Yeah. And so I love that we've challenged
yield max with that. I know you're on that call all the time on Wolf on Wednesdays and so around here.
I've even heard Jay, I think at some point, I'm not putting words in his mouth, but I
remember one week he even said, you know, if you don't need income, buy the underline,
right?
If that's what you're after, these are income products that you should be utilizing your
capital today.
So I think where people are getting trouble right now is they're thinking that it's solely, you know, if I completely reinvest 100% of my distributions, that it's a growth.
And then you have the people posting like it can be.
So that's the challenging piece.
I think maybe it's a misuse, like usage of it.
That's kind of what you're saying.
Yeah.
So like, if you don't need the income,
be in the underlying,
but personally I like having as much, you know,
of the distributions as possible.
That way I can choose what to invest in,
what to reinvest in,
but that's just like my own psychology, you know?
Yeah, go ahead, kid.
If I could. Yeah. This is a very interesting topic. And I think that this brings up something that I asked.
I don't know if you caught Michael Coe the other day.
I asked him this question about, are these funds marketed correctly?
Or is the average high yield investor,
someone who's getting the product for exactly what it's built for,
harnessing the implied volatility,
capping a little bit of the upside, getting the income.
But I see a lot of people are leveraging these funds.
They are going into margin debt
just to bump up that number that they get weekly so they can say, yeah, I'm making what?
$20,000 a month, for instance.
Maybe that's not what these are designed for.
Do we think, and this is the question to anybody, that these are marketed correctly for what they offer?
No, well said, kid.
I couldn't agree with you more. And I've, I've brought that up to them
several times, uh, but not in a, I would say like confrontational way. I don't think the education
is there. And that's honestly why I reached out to Wolf and like, Hey, I really want to
have more of an educational series on these because we, yes, we can talk about the strikes
and the iron condors or whatever all
the advanced options talk is. And I think that if you invest in these funds, you should have a very
basic knowledge and options. I now have a very basic knowledge and options. I've learned,
and let me tell you something, I suck at it. I mean, I don't suck at it, but I have paid some
expensive lessons that now I have to sit and hold, you know, the 2x
leverage of Robinhood. I'm holding Webull. I'm holding Circle. I have to hold all that. I can't
even write covered calls on them, right? Because I don't want to be an options trader. I want to
simply do what Ms. Roundhill kind of talked about and buy funds, utilize the income now. And I don't
think that they're marketed accurately in that way. But I think with
us and, you know, with spaces and with more content on our own, I think we can kind of
change the narrative on it. Yeah, I totally agree. I think the more we talk about it,
we drive our own narrative. When I first came to this space, YieldMax drove the narrative.
We are the news now, you know like what elon always said you you guys
are the news now and when we first came in we don't nobody it's not like there's a resource
plethora of information you can go out there and find out what is tesli with this people don't
even know what cover call is so but it took us a while to get there but now we're there i think for the next generation the next group of people coming in to investing in our space and our
high yield different space we owe to them to give them the as much information as possible and i
truly believe that when they came in the geomax etf was not for me i know that for sure now it was not it was not designed for me
because but i got into it and i'm glad i'm into it now i learned a lot but it's definitely not for
this essentially i break it down to three groups and uh there's the beginner groups there's the
people who who's i have a small portfolio and these people have a large portfolio. If you have a large portfolio. The
high yield dividends have very
little impact on your portfolio.
So if you take my numbers for
example. You know I have a
hundred thousand dollars of
something. And if you put that
against a million dollar of
something. We're talking about
at least 10% it's a it won't
affect it so when it won't affect it so
when it go down or it when nav road and all that stuff it has very little effect on their overall
portfolio but uh but when you start off when you're brand brand new uh there is a way to play it and
that's one of the things we can talk about how do we play these things uh there's a way to play for
beginners like okay i want to
make some income and i don't want to eat a couple noodles so and i want to make some income to
supplement my income when i no longer work how do i do that how do i grow my portfolio through
income i think there's a lot of discussion to be made on that can i can i just sorry go ahead kid
i i just think that um nobody knows this better than you, Kamara.
You've done it every which way.
Could you maybe give us just like your top three rules for making these things work?
What sizing?
What type of fund?
What leverage?
What drip rate what like what are the three kind of main
things that you've learned from playing these oh this is fun yeah come uh mr k go ahead and then
miss brownhill i i see you right there yeah um unfortunately i'm driving that's a very good
question where i would actually take notes and then come back because now I'm just gonna do it brainstorm from from scratch and so essentially what what I
What works for me was when when I came in I bought
Very small amount of TSL Y and I only invest in TSL Y during the time
But it was a very small amount overall my bigger portfolio
And it was fine because I knew it coming down but i was getting more share and i got more share i got
more income and i used the income to buy other things so it was fine so my first mistake was
i got into margin so if you don't know anything about margin forget about high yield dividend
just the the concept of margin i didn't know i didn't understand how margin work forget about high yield dividend just the the concept of margin i didn't know i
didn't understand how margin work forget about high yield dividends and then use that so because
the map makes sense yes can i ask what brought you into that level of margin was it just seeing
that number every week or the income like what was the draw for the margin no it was just it was just
simple math it was simple math and nothing to do with anybody.
It nothing to do with anybody.
When I started off, there's not many people doing it.
And there's literally no other contents to talk about.
So, but the math works.
So, for example, if you take a personal loan, that's 10% yield.
So you can pay it back.
And let's say, you know, you take $100,000 and you get- I'm just
using an example on a personal loan. I've got what my margin rate was but if you take
the margins. And you pay back at 10% but these things paying no almost 80% yield you actually
have enough money to pay the loans and then pay and then collect the differences.
So to me, it makes logical sense. So like, oh, I'm going to do that. But I don't want to do the
HELOC loan. And I don't want to do a personal loan, even though I was very capable to get that.
I used the margin because I thought the margin was within the brokerage house that I can control.
So and and so it's easy. You know, take personal loan you have to apply for it affects your credit score
You take HELOC loan you use it against your house
So that's how very high risk but margin is very easy
It's really to do with child swap during the time I have all you do is just click a mouse you get a margin
It's really that easy and because I had a lot of money in there
So they gave me a lot of margin so
and that's where my first mistake was i the mat makes sense during the time but what what i did
not consider it was that tesli is coming down faster than the actual rate that the margin i
hold does that make sense yeah miss roundhill. Roundhill, go ahead, because I got
three big rules, too.
You've had your hand up for a while.
Yeah, so it was only
relatively recently that
YieldMax
even had things that
we could say, oh, you could be in this for
the long term,
specifically like Big E and
quadruple D. Everything else, it's like, it comes with caveats. Like, are you super bullish on it?
I think the single stocks were meant for people that like, they own, you know, 10,000 shares of
Apple, but Apple's not giving them an income. So they sell a little bit of their Apple,
giving them an income. So they sell a little bit of their Apple and they get income from Apple.
And, you know, I think the way that these funds were used were different from the way that they
were actually used. But I do agree with Mr. K because I have a personal loan. I have 401k loans i have zero percent credit card apr i'm leveraged to the
hilt with my margin so yeah all of the margin risks and you have to do the math and you have
to do the math not like if we continue in this bull run everything goes absolutely good you have
to go okay what if my entire portfolio goes down 50%. So yeah, leveraging yourself into these things is very dangerous.
So basically, when this first started, the 100% ones were very, very tempting.
But now I get excited about the 8% to 10% ones because I know better.
So I think it's really good that the space has evolved over time.
Yeah. Well, I think too, when it comes to the rules,
we all got tempted into the margin,
into the loans because you saw the arbitrage, right?
I think that's what everybody's saying. Like, Oh, there's an arbitrage there.
My loan rate's 5%. This pays X,
but you don't think about when you take the loan out when you're at the market.
And that's the dangerous piece is someone can take, I always, I keep joking about the Misty Heloc because we all
know every, you know, we have the Misty Heloc culture where they were going nuts for a while
when strategy is just going crazy. And yeah, things were good for a while. In reality, when is the best
time to take a Heloc out and go into Misty? Well, you've got to do your own research when it comes to that,
but it's much more when everyone thinks strategy is about to go under.
You know, that would be the actual time,
but it's just too risky to consider to do that.
I know one rule that I've made, I took my yield down from,
I think it was like 55 to 60% average.
And my goal is to get it on a, on a, you know, $300,000 portfolio,
closer to a 25 to no higher than 30%. Now that doesn't mean that I am not including funds that
yield much higher than that, but the whole average, I obviously use div tracker to look
at all this stuff. I've found in my experience that a comfortable average for me is like 25
to 30% yield and yield on costs. You can't let that number get too far out of whack. And I felt like that was kind of a comfortable space. So I know one rule for me, because kid, you were asking about rules is I try not to go over 30% too much on an overall portfolio.
overall portfolio.
I don't know if anybody wants to toss back on that one.
One thing I will add, one thing that I've noticed,
it's a trap to try to go for house money.
I think you see this claim a lot
on a lot of these discords and community boards,
where some guy with a spreadsheet,
and that's about it, says that he's got,
he's on house money now.
He's made a hundred percent back and it's all gravy.
I think that's a trap.
I think there's a very small percentage of people who have actually achieved
house money,
but the best yield,
the best thing to do is get in,
get in that first few weeks of the offering where they're still paying the dividend they're claiming they're going to pay and then get out.
Because as the nav erodes, you're going to just you're never going to you're never going to reach that that that holy grail of house money.
I just think that's a myth that a lot of people are trying to chase.
That would be my rule.
You know, so I just share you what it didn't work for me was the margin, but let me share
you like why it's working for me in another aspect. So, and I had to test this out. So I
created a Robinhood account just to test it out. And I, back in June of 2025, I bought TSYY and COYY, and those two were the highest yield payment during the time when I bought it.
Now, when I bought it, if you're a beginner,
that's not a conversation I'm talking about. So it, these are ultra high. And so I buy into it.
I still have them and then generate income. Yeah. They went down from $10 to $3 now,
but I still have incomes. What I do now is I take the income of that and I buy lower yield.
I do now is I take the income of that and I buy lower yield.
So I have a money flowing in to an 8%, 10% like QQI, SPI and stuff like that.
So I think the way to play them, like I said, there's literally a million way to play.
One of the way to play them is take, you start off at the ultra high and then you work your
way down. At some point you got to transition.
One of my mistakes was I didn't transition. So I never transition. If you don't transition,
then you're going to suffer on the other end. But get to a number you're comfortable with. And
the question is, what number you're comfortable with? Well, if you put $500 a month out of your
paycheck into these investments, that should be a goal $500 you got the dividends from the ultra high $500 you can turn that off your contribution and you take that ultra high money and now you buy in lower yield and generate income that's the but the lower yield is what you're retiring from you're not retiring from the ultra ultra high. You're retiring from the lower yield one, which is essentially SEHD, SPI-I, QQI, all the things at 8%, 9%, 10%.
Can I just ask, does anybody here look at the underlying?
I know we're talking a lot about yield and some metrics that, you know, how much we're getting per week. Do you think this community at large thinks about what the
underlying stock is doing? Kamara, you mentioned SPY. I think that's a case where you don't really
have to think about what's going to happen. It's not going to move much. But in terms of like a
Tesla or an Ulte or something, do we see in this community anybody really paying attention, having a thesis about what the underlying is going to do?
Or do we just trust the fund managers to capture that volatility and give us give us those cover call returns and then we don't have to think about what the stock is actually doing?
You pay an expense ratio for that.
So you should be able to just trust the fund managers, right?
Like I don't want to have to go through all the ulti trades.
I know there's people out there who do.
And that just sounds brutal to me, right?
I bought a fund because I want to collect the income and I don't want to have to do that.
And I'm paying the expense ratio for that.
I do know that the only work I really do is use
totalreturns.com and that doesn't lie right I mean you use totalreturns.com and I think Sullen
pointed out to me earlier for this you know even looking at something like ULTI versus ULTY I mean
ULTI is crushing ULTY for the last, I mean, six months.
And I think year to date, I think in total return, they're up 14% or something.
It's just kind of like these things happen all the time, but that's not just a yield
max problem, right?
Like what's the best fund that we've seen return?
Well, it's going to be, is it chippy?
I believe it's chippy, right?
Like it's not even a
comparison but that is because the underlying is doing so well that basket of is that a semiconductor
one i believe i don't know off the top of my head i think it's semiconductors and i mean that's
what's hot okay so we do have to at least know like and understand what the basket is and or
what we're investing in the other line.
Go ahead, Ms. Roundhill. I saw you coming off mute a couple of times.
Oh, I was just going to say that these single stock ones, you have to invest like it's a
single stock. So if your conviction investor where you're saying, even if it goes low,
I'm still going to invest, then it's fine to continue to DCA into it. But if you're someone that wants to always ride, what's the next hot thing?
You better have your trailing stop losses in and pick your indicators and invest in it like it's single stock.
Could you make a case for why you would not just invest in the underlying if you have conviction and knowledge in that?
Why go for one of these that caps the upside?
Oh, yeah, sure.
Because I don't have millions of dollars in my portfolio.
And so if I wanted to get income from it and get those 100 shares,
that would be a very disproportionate amount of my portfolio.
So these cover call ETFs really helped me get it to be like, you know, the 0.25% of my
portfolio that is actually not going to thank my entire portfolio when, you know, Misty decides to
do what's doing. They have mechanisms for compounding your investment though, right? Like,
so I, in a way, if you're extracting money that you've invested in the company, what you are essentially saying is, I know how to make more money than this company that I trust does.
So I think that's something that I struggle with is when do I trust myself with the money?
I mean, I know bills aren't going to pay themselves.
No, you should go into practice of not trusting anything.
You should never trust anyone on anything.
Because any day it's your money.
Why would you want to trust your money on somebody else?
So you should do the research on what you believe in.
If you go on a single stock ETF, the number one thing is you have to believe in the single
stock ETF.
If you don't believe in it, and the first question I would ask somebody is, why would you buy into it forget about high yield or low yield or whatever yield why would you
buy into something you don't believe in if you believe in it the next question they ask is why
don't you own the underlining stocks uh so and a lot of time is people in our space say well because
we don't have that kind of capital fair that's but at least one of the things to consider you should try
to own it so like for example I believe in the hood and I can't afford Tesla even if
I want to I could afford it when it was 130 but that's not the case but I can own hood
so I'm trying to own a lot of hoods so because I believe in hood but also I do cover call
on it and also I own H O Y Y and H O Y R and you know all these other
single stock ETF to supplement the total package of hood. So I think you have to look at as a
package. If you if you want to maximize the single stock that you like. But if you don't know anything
about single stocks and you don't want to do the
research on the single stocks, then I would say just stay away from that and then invest in
something that you know or go into more index or basket funds. Is that fair? Is that just my opinion?
I think that makes sense. What I heard you say, though, was that sometimes you don't have the money, but I think you said $170. Well, surely, if the stock is going to return 10%, 20%, 30%, the price doesn't matter, right?
It's down a lot.
It's like, you know, $60, $70.
So at $60, we bought a lot.
But we know that we're potentially going to go back up to $80, $90, $100.
So you have to do a single stock research if you're going to buy.
So I'm not a stock.
I don't know how to pick stocks.
Stocks, I will fail.
And so, go ahead.
And so, Kid, to answer your question too there, I think a lot
of people will go into this. This will be the next thing we'll do is tax efficiency, right? Like,
I want to be exposed and utilize. I don't want to have to sell if I just bought the underline. I
don't want to have to sell and have a taxable event. I want it, you know, tax deferred return
of capital or at least parts of it.
And that's kind of the next thing.
I don't know if you guys caught Fong Lee, you know, strategy CEO.
Yep, we did.
All over the news right now, explaining to the general public about return of capital and about stretch.
And I mean, they went from zero to 5 billion assets under management faster than the iPhone.
And the only thing to beat them is has been Ibit to get there that fast.
So I found that very interesting because we're in this game, right?
We've been in it for a while.
We're all asking all these questions.
We understand the pros, the cons, which there are pros and cons and sacrifices you make. So I'm wondering if Stretch explaining to people about
return of capital, explaining to people the difference between, you know, something pegged
to $100, the differences between that and just, you know, the bond market and preferreds and all
of these things. I'm wondering if people are going to actually start to flood our industry a little
bit more because of stretch.
But when we talk about return of capital, I think that's something super important.
Because how do you guys evaluate whether a fund's return of capital is healthy or destructive?
Anyone have anything on that?
That is so difficult because like for example since october of this year
everything's down because the market's down you can't really tell if it's destructive if the
entire market is down but like ulti even during the big bull run it had so much premium that the price was only steady and that was a bad sign.
So it's just very situational dependent. This is why I'm basically like in the NASDAQ 100
and the S&P 500 at this point, except for our strategy. And also, I don't manually drip my dividends back, but when I get my Misti dividend, I put a few dollars through to Mr. and the underlying because I think that will compound faster.
So when I say I don't have enough money, I mean, I don't have enough money for 100 shares so I can do my options on it.
Yeah, totally get that.
And that's the thing.
Michael Coe says that, you know, beautifully.
He's like, hey, what were these funds created for?
Well, it's for people to get options exposure who can't afford to buy the fund, right?
Like Circle is a great example.
You know, I got smoked.
My cost average is $129, but don't get it twisted.
I was, my cost average was $129 when Circle was $57 still. Right now, I believe in it, but I did not think that,
you know, I didn't do my research to know that, I don't know, they basically allowed 60% of the
company to sell all their shares at a certain point, which is like right when I got in. So
then that happened. But, you know, I believe in the underlying, so I'll hold it long-term. But in terms of destruction, return of capital, I also, this is my only, you know,
annoyance with it is I think they give us a false sense of security with
return of capital.
I don't know if you guys have seen that because my, you know,
when I get my 1099 at the end of the year, I'm like, wait, I feel like more of this should have been return of capital.
Have you guys noticed that at all?
Or is it pretty accurate?
Yeah, I mean, this is my first year of doing that and being partially employed or whatever.
So it wound up for me being like 60% of it was return of
capital. And I was like, I really thought it would be more, but it is what it is at this point.
Do we want high return of capital just to limit the taxable event? Or do we want to see
that return of capital go down so we know that maybe some of our gains are more taxable and
therefore we're increasing our income? What do we feel? Do we want high return of capital or no?
I mean, it depends on how they do it. If they do the heartbeat trade, then sure,
they can do that where they sell something that they've lost money on and then they put into something they have gains in and then they exchange out that in kind for shares so that you don't actually realize the gains on the thing that you're winning on.
That's a good type of return on capital.
They're just not that transparent about it.
So I think, yeah, it's like
XPAY is 100% return of capital
and I just didn't agree with
how that was structured so I guess
it's just like a bonus
that I don't think about too much
there's a huge debate on this too kid
there's like some people saying that you know return of capital
is a fraud
they're handing you back their money
it's a Ponzi scheme and I like understand where they're handing you back their money. It's a Ponzi scheme.
And I like understand where they're coming from on that too.
But ultimately it's for them.
Mike Coe explains it well.
So I definitely check in on Wednesday and bring that up again,
where they kind of have to essentially
give you back your money in a way
to make sure that the taxes are good on their side too.
And so that's where the return of capital is coming.
It's not necessarily them handing you back your own money in a Ponzi scheme,
which is kind of how the funds work.
Let's talk about, can we talk about Michael Cole for a second?
And not just him, but Jay and just everybody that's managing these funds.
they don't invest in their own products, do they? Can we talk about why we think that might be if
They don't invest in their own products, do they?
it's too much exposure and they're just trying to diversify or do they not believe in these funds?
Well, I think there's... Actually, if you check the documents on their web pages, on the actual
funds web pages, you can actually see how much the fund managers do have in their own funds.
So that's been debunked.
I think it was like 1.2% the last time I checked.
Yeah, I saw, so I've definitely talked to fund managers
who there's rules around buying their own funds,
but they also have bought their own funds too.
I know I've talked with David of,
I mean, I'm going to not get all the I know I've talked with David of, uh, I'm going to
not get all the people right, but I know David of he's got the one that's Bitcoin and gold
talk to, um, obviously Scott from Rex shares, quantify funds, ISBG on a five funds. Yes.
So I want to get the word. Is it the working investor? You just hopped on stage, man. Welcome
to the stage. You got anything to add real quick? Bring up a topic. Tell us we're crazy.
Oh, hey, guys.
How are you?
Thanks for having me on.
Yeah, we're going to talk about the,
you guys were talking about return of capital
and distributions and tax implications.
So you got me.
I'm very focused on that kind of stuff.
So, you know, one thing that some of us don't think about,
at least I didn't think about it, was, you know, for example,
you know, capital loss versus capital gains.
You know, in my mind, I did a lot of rebalancing,
and I had, like, a lot of write-off from capital losses that I can offset.
But unfortunately, dividends is considered distributions.
It's considered like income, basically.
And there's no, you can't really write off.
I mean, I'm not a tax guy.
Again, you gotta speak to your tax person,
but what I've gathered from my research was,
and I filed my taxes and I watched it,
you know, that you can't really write that off.
You know what I mean? That's income.
So everybody's different in their own situation.
But, you know, let's say somebody got 100K of dividends in a year.
That's a substantial amount of dividends.
You know, dividend distributions is, let's say, not considered return of capital.
But then they have, let's say, 100 grand of capital losses that they thought, you know, you can only write off like three grand if you do, you know, mirror files,
you're only your 1,500 or single, but that changes a lot of tax implications as well. So
everybody has to think about if they want to be high in the high yield dividend space,
does that income, how does that, you know know what kind of implications would that have
and then also with return of capital and this last one return of capital is if you have return
of capital rock you know obviously that's tax preferred until you get your return of capital
back but then if you have in your setting in in your brokerage, like lending, then they give you manufactured dividends.
They give you so it's not, you know, quote unquote return.
I was very surprised because on Robinhood, I had like, you know, stock lending on.
I thought it's like another source of income.
And then I'm like, hey, why don't I see the return of capital, you know, from rec shares, for example, that, you know, based
on their breakdown and that they see like, when I'm looking at my 1089 and then Robin
is like, Hey, you did, you know, lending.
So it's manufactured distributions, which takes away the whole status.
So those are just a couple of nuggets to think about.
Um, cause we have to think about the big picture, you know,
totally turn after taxes too. Yeah, great point. I mean, so I know I file, I've been, I've done
two years of taxes with these high yield funds. And last year was definitely my, none of this tax
advice. I've seen, I'm just talking about personal experience. I think I had 120, maybe 130,000 in distributions.
And so I believe like close to 50 of it was considered,
you know, ordinary income.
And then the rest was return of capital.
So how do I see that?
It just lowers my cost spaces.
And that will happen on Robinhood pretty much in the month,
at least Robinhood on exchange.
That will happen following
there. So I get a lot of people hating on my WiMAX and Alti. I don't care, like fight me for it. I'm
not scared whatsoever. So, but my cost basis has been lowered for almost two years now. So that's
what people are forgetting, right? Like if I go to sell, so there is a tax advantage too. I knew
personally that I wanted to get out of a ulti position before the year's end.
So I actually sold and I got to essentially that went against my gains that year.
Right.
So kind of that tax thing evens out.
It's so freaking confusing, man.
Like I definitely think in our space, there's going to be elite tax professionals that start a YouTube channel that come on X that we're all kind of hiring or asking, hey, how do I do this?
Like, can you help me out?
And I just I think more and more of that is definitely coming for sure.
Go ahead, Miss Rona.
I think you want to add something.
Oh, maybe not. She's like, i hate taxes yeah that's something no i was gonna say i just i need the
amount of income i need like i i have six thousand dollars a month of income from these funds and my
expenses are usually around five thousand five thousand five, you know, just have the amount.
And if it gets taxed, it gets taxed.
I just need that amount of income in order to live.
Also, sorry, I'm doing yard work, so I don't know if that breaks my hand or something.
A couple of things.
One to answer Kit Prushe on fund manager owning the stocks.
Me, personally, I don't really care about that i mean that's individual them do whatever they do uh it's like it's like you know the buttweiser
you know beer company the guy doesn't drink his own beer uh to me it's just
I think we might have lost him.
Jay and, you know, Jay may start out the products, but there's so many products out there.
So there's so many good fund managers out there.
They're all good.
So to me, we appreciate Jay and appreciate jay that he started off these things
but there's so many out there now that i think it's not fair uh you know that we are just focused
hyper focus on yield max and and jay so but there's so many out there that that we could just focus
on that um that's the first portion the second on the return on capital i'll tell you my opinion
is this i did not know
anything about if somebody asked me what return capital was back in 2023 I have no idea. 2024
I have no idea. But once I figured out what return on capital is. If I knew then what I
knew now I would have sell out a lot of the yield max fund and just sell it out and get
them just thought. But I didn't understand how how these things work so one of
one of the you know one of the things that going into these spaces education here here's an
opportunity to talk to people like miss round hill you know watch her youtube channels and i
you have a youtube channel um you know so all these people that they talk about these things
and go into you know talk to crypto fits about all
these things. Um, because, because you would probably play it differently once you understand
how it works. Uh, I didn't understand how it works. So I just play it the way I think it was.
And then once I realized what it was by that time, it was kind of too late, you know, for me. So
that's just my take on that. Mr. K, I think you had a disadvantage because you were one of the first movers in this space.
So there wasn't a lot of information going around at that time that there is now.
Mr. K, do you think that there were any voices in the space at that time?
You say 2023.
Can you think of anybody that was maybe urging you to play it differently?
Any advice you wish you had taken, or do you think you played it well?
No, there's no voiceover. I did everything all myself. So because if that's just me,
I just, I want to learn. I came into a space. I want to learn. I'm willing to risk my money.
Alone I came into a space I want to learn I'm willing to risk my money and so I'm willing to experiment with different strategy
And so there was no there was no boys
I hear all kind of talking point, but you know
But I listen to I take notes and the best I can and but that's the dog contribute to my learning process
So no, I did not I mean thanks. Thanks thanks for the question but there's not a single person
out there influence at the end of the day nobody should be influenced your ability to put to invest
at the end of the day uh it's only it's only me pushing the buttons and so yeah i always say that
there's unless you're god unless you're my mother unless you're my wife i don't know how you're
going to influence me uh denver welcome to the. I want to get you on before we hit that hour mark.
Hi. I had YieldMax ETFs in my retirement accounts from probably the summer to fall,
and I ended up dumping them because I was basically loosing the nav, and I wasn't making
that much money on them. So I'm at a point right now where I need to start over.
I want to learn what I can about these funds so I can figure out which ones to buy so that I can, you know,
I'm getting close to retirement.
I know a lot of you are younger, but, you know, at some point I'd like to have, you know,
$50,000 in income coming off of this and growing just, you know, at some point I'd like to have, you know, $50,000 in income coming off of this and growing.
Just, you know, in addition to whatever I have for my 401k, Social Security and things like that.
I think a lot of people are doing that.
They don't want to.
I'm in the insurance business and a lot of folks, you start looking at, okay, if you put money in annuity, it's a depreciating asset.
if you put money in annuity, it's a depreciating asset. You're just taking money out of that.
You're just taking money out of that.
And the insurance company is hoping that they're not going to have to pay more than what you put
in. In this case, you want to keep the NAV and keep making income. And it seems like a win-win
if you can find the right ETF. So I guess what I want to know is what every what is everybody doing to be able to pick
the right income producing ETFs? I mean I think SPYI and QQQI are are no-brainers right? But if
you're going to you know diversify and have you know 10 or 15 different ETFs that are income
producing, how is everybody determining which ones are not going to rip you off? Because I feel like Yieldbacks was the biggest ripoff, and I don't want anything to do with
it again.
Yeah, go ahead, Ms. Runger.
So, hey, nice to meet you.
I have a website called Yieldmight.com.
It's Yield, M-I-G-H-T.
Yield, M-I-G-H-T. And I have like 300, almost 300 high income ETFs that I keep track of with
the distribution. So it's a good discovery tool and I have different modes. So you can actually
build your own portfolio and experiment. And I have comparison tools where it can tell you what
the nav has been like for the last, know three six nine months so um i don't
know what everybody else uses for discovery but um i do have a tool that could help you with if
you're looking for s p 500 etfs or the nasdaq and you just need a list of these and a way to compare
them easily then that's a thing i would just want to add to Denver that
obviously you want these in a tax advantage. You want to make sure that you're using your
tax advantaged accounts as you're getting closer to retirement. But also don't listen to us. Listen
to Mike Coe himself, who just a couple of days ago said, these are not the vehicle for that sort of thing.
This is something that is high volatility, something that is not supposed to be
the main source of your income, the main source of your investments. This is so just go to the horse's mouth and what they say about it.
And they warn about this kind of strategy, especially this close to retirement.
Sorry, the working investor.
Working investor, you had your hand up, wanted to say something.
Oh, he dropped.
Okay.
Real quick. So Denverver yes i don't come
off mute yet just because i think i'm in your like back speaker but i would totally take miss
roundhill up on that and just a couple things i wanted to add uh it's not all it's not always
about like you know it's the old max's fault or there's so many fund managers it's about
do your goals line up with your actions i always tell i, I was, uh, I've been in fitness for
the longest time. And that's like one of the things I tell people the most, like,
are, do your goals line up with your actions? And if you're closer to retirement, yeah, I actually
agree with kid a little bit on that where it comes to these are high. Some of these products
are high volatility plays, but some of these products are built completely different, different
funds, just following the S and P. Uh, there's There's targets. I know with, I don't mean to bring yield max back into it,
but like a target 12 for them, they're doing calls way further out of the money. And that is
something a little bit safer. I want to get income architect on here because he talks a lot about the,
you know, 15% range that he tries to average his portfolio out. And then he takes eight of it
immediately and reinvest seven. And that's how he's retired. So it's just something to consider
going forward. Or I'm a huge Bitcoin guy myself. I've been in it since 2016. I have Bitcoin I bought
in 2016 that I've never sold. So I know Bitcoin very well. I wake up in the morning and I kind of
know what it's going to do. I say that jokingly, like I don't actually know. But like, so for me personally, instead of buying another Bitcoin this cycle,
I wanted to buy another Bitcoin's money's worth in BTCI, the income fund that kind of uses iBet
and they write options on it. And they've proved very effective with their strategy. So it's just
something that I'm considering. I'm going to hold that long term. Ms. Roundhill, go ahead,
probably end this out.
Ms. Roundhill, you had your hand up.
Sorry. No, I didn't.
Oh, you're fine.
I'm sorry that that's showing.
But I thought you said the income architect was here, right, Brad?
No, I'm trying to get Brad next time. So I'm going to try to utilize i don't know different chats maybe a couple times to get him
in here okay yeah i mean i'm in a discord chat with him i can ask if he's available at 2 p.m
i'm not going to be here next week i'm going to be recovering from surgery so i'm just not going
to be on anything while i'm doing that well hopefully that goes well hopefully it's not
super major and if you feel like it
and you're on some pain medication
and you just feel like hopping on,
that might be the best time to have you, you know?
Yeah, I'm using eye surgery,
so I'm just not going to be on my phone.
Stretch my eye out.
Yeah.
The working investor,
do you want to add real quick?
I know you hopped on and off
and you had your hand up
before we kind of end this.
Oh, yeah. I don't want to stretch it out because this is a big topic,
but something just to put a nugget out there.
This is especially what Ms. Denver said.
A lot of people mistaken the distribution yield as a safety withdrawal rate.
They confuse the two.
So I know a lot of us here come from the fire movement.
I heard people talking about that.
We know about the 4% rule.
We don't have to go into that again.
So the point is to take distributions in perpetuity that's safe,
that will not catabolize the portfolio.
And you were talking about income architects eight percent rule you know tries to take you know live off eight percent
so he has his type of safety withdrawal rate so that's just something people shouldn't get mixed
up and i find it's a fallacy this is my opinion a big fallacy where people get in trouble
thinking that
if the dividend yields 100%, you could take the full amount and your portfolio is sustainable.
I think it all goes down to you have to figure out what is the safe withdrawal rate. But
we can go into that at a different time. I know you got to respond to it. Thanks for
having me on. No, appreciate it. And make sure you take care of those kids. I've got
three of my own.
Can I ask real quick, are you going to do another income ETF show next week?
Yes, we are.
Yes.
I'm sorry.
Denver, I think you got an echo.
No, I just muted it.
But yeah, same time, same place.
And honestly, we can listen back to the recording.
Andrew, I think we should start kind of digging into that topic a little bit more as well i personally listen i'm
not super crazy deep into the income world i have talked with a lot of these different fund managers
and i've seen different stuff here and i'm 27 i'm interested more in growth i have put some cash in
the side i've had moments where I'm like, I don't know
if this is the best time to invest. I don't want to just have cash. So I want to have stuff getting
me income. And I've had one or two things I bought. I've also heard one or two interesting
ones. I personally, I don't know, maybe I just like Adam Patti, but I find the VistaShares ones,
the concept interesting. They kind of go around trying to target like 15% on
Warren Buffett's largest holdings, Pepper's largest holdings. I work with them. I work with
a lot of people. I don't know. There could have been a lot of options I gave you, but that was
one that I found interesting. And I honestly think Neos, I don't even know if the answer needs to be much passed to that sometimes. Safe and safer-ish on the indexes.
Well, without a doubt.
Without a doubt, yeah.
And I'd love to get Adam on here.
I know Mike's in our community and he works with them now.
So maybe we'll kind of – I'll try to get Adam to –
or sorry, I'll try to get Mike to get Adam on here maybe next time.
No, we can get him on at any point.
We just got to make sure that time works.
Denver, to answer your question,
we're doing this every Thursday at 2 p.m.
going forward, and hopefully we'll get more
and more people on.
I appreciate all you guys for coming.
Make sure to share.
Thanks.
I appreciate you guys. Have a great one.
