Income Investing Results - November

[COcheesehead]

November has been a transition month for me.

First my personal definitions of income. What I report on my taxes is different than what I track as income. I do not consider capital gains as income. I do not consider equity fund distributions as income either. Those are either more one time events or are just taxation events and not additive to income.

So the transition….
I topped out at about $430,000 in annual run rate income. I decided that was overkill especially in light of falling rates and was likely unsustainable going forward. I turned my goals more to capital preservation, downside protection with an eye still on potential growth from uncorrelated assets.

I have my run rate down to about $382,000 and that will likely drop even more either organically from lower interest or from moving positions. I moved funds into QMNNX (up 23% YTD) and EGRAX (up 16% YTD) which pair well with my big position in QLENX (up 27%YTD). These may or may not be longer term positions, but they are working so well right now. My total return will likely increase as my income drops. At least there is an opportunity for that.

We’ll see where this goes.

Two of my biggest income producers PDI and GOF took big market hits in the last 30 days, but those were balanced off by increases in individual muni bonds, muni CEFs, global equity and the previously mentioned alternative funds.

I am .023% below my all time high.

 

[Waynew]

That's an awesome income Wayne. I just a not sophisticated enough for the Options stuff, and I don't think I have the same capital to work with. Great job!

Flieger

Trading options is not hard. I have trained a dozen friends, including people who are not accountants or financial wizards. I have trained a home remodeler, our lead pastor, a project manager, a camp director, our son (who is also a pastor), a nurse, and others. Each of them is giving me updates about their income from options. Our lead pastor's account balance is relatively small, but he already cleared $2K in options trading in about five months. Once you learn the basics you can put the options income to work earning more options income.

 

[Spock]

/...
Two of my biggest income producers PDI and GOF took big market hits in the last 30 days, but those were balanced off by increases in individual muni bonds, muni CEFs, global equity and the previously mentioned alternative funds.
....

If you don't mind my asking, which muni CEFs are you currently in?
I recently bought NEA as it is only 12% and NAD at 19% junk.
With no math to back it up, I'm equating the risks of "lower junk, high leverage (40%)" with "all junk, no leverage" VWAHX. While VWAHX has a lower distribution rate, it's price is doing a lot better than the CEFs.

 

[Waynew]

November has been a transition month for me.

First my personal definitions of income. What I report on my taxes is different than what I track as income. I do not consider capital gains as income. I do not consider equity fund distributions as income either. Those are either more one time events or are just taxation events and not additive to income.

So the transition….
I topped out at about $430,000 in annual run rate income. I decided that was overkill especially in light of falling rates and was likely unsustainable going forward. I turned my goals more to capital preservation, downside protection with an eye still on potential growth from uncorrelated assets.

I have my run rate down to about $382,000 and that will likely drop even more either organically from lower interest or from moving positions. I moved funds into QMNNX (up 23% YTD) and EGRAX (up 16% YTD) which pair well with my big position in QLENX (up 27%YTD). These may or may not be longer term positions, but they are working so well right now. My total return will likely increase as my income drops. At least there is an opportunity for that.

We’ll see where this goes.

Two of my biggest income producers PDI and GOF took big market hits in the last 30 days, but those were balanced off by increases in individual muni bonds, muni CEFs, global equity and the previously mentioned alternative funds.

I am .023% below my all time high.

I consider capital gains as income because the IRS seems to want to know what income (or loss) I received from my taxable accounts. However, even though they don't treat capital gains as income in the ROTH or the TIRA, they are income. Someday I might have to pay income taxes on the TIRA income unless I can avoid it using QCDs or other charitable maneuvers.

 

[COcheesehead]

If you don't mind my asking, which muni CEFs are you currently in?
I recently bought NEA as it is only 12% and NAD at 19% junk.
With no math to back it up, I'm equating the risks of "lower junk, high leverage (40%)" with "all junk, no leverage" VWAHX. While VWAHX has a lower distribution rate, it's price is doing a lot better than the CEFs.

NMCO and NZF
My muni bond ladder has a much higher distribution rate than VWAHX with also a par value to back it up. So I have the safe returns from that and the 7%+ tax free distributions from the funds.

 

[COcheesehead]

I consider capital gains as income because the IRS seems to want to know what income (or loss) I received from my taxable accounts. However, even though they don't treat capital gains as income in the ROTH or the TIRA, they are income. Someday I might have to pay income taxes on the TIRA income unless I can avoid it using QCDs or other charitable maneuvers.

I view them as income for taxes, but not my personal income tracking because they are likely not regular, repeatable events and then you get into what do you do with tax loss harvests and carry overs which are more tax related than income related so I just eliminate cap gains as my definition of income.

 

[Rhythm Method]

November has been a transition month for me.

First my personal definitions of income. What I report on my taxes is different than what I track as income. I do not consider capital gains as income. I do not consider equity fund distributions as income either. Those are either more one time events or are just taxation events and not additive to income.

So the transition….
I topped out at about $430,000 in annual run rate income. I decided that was overkill especially in light of falling rates and was likely unsustainable going forward. I turned my goals more to capital preservation, downside protection with an eye still on potential growth from uncorrelated assets.

I have my run rate down to about $382,000 and that will likely drop even more either organically from lower interest or from moving positions. I moved funds into QMNNX (up 23% YTD) and EGRAX (up 16% YTD) which pair well with my big position in QLENX (up 27%YTD). These may or may not be longer term positions, but they are working so well right now. My total return will likely increase as my income drops. At least there is an opportunity for that.

We’ll see where this goes.

Two of my biggest income producers PDI and GOF took big market hits in the last 30 days, but those were balanced off by increases in individual muni bonds, muni CEFs, global equity and the previously mentioned alternative funds.

I am .023% below my all time high.

Good stuff, as usual. My income is well below yours, but still comfortably into six figures—more than enough for my needs. Not bad for a guy who started playing in strip clubs at sixteen and is now exploring the avant-garde side of his craft.

I digress.

I recently opened a position in QLENX and have been adding to it. I don’t own the other alt funds you mentioned, but I’ve been taking some equity gains and rolling those into QLENX, which now makes up well over 3% of my total portfolio.

I’m considering backing off the CEFs unless a really juicy opportunity appears, and instead adding more to QLENX and PYLD, which I already hold. I am considering adding QMMNX or EGRAX as well

In your opinion, is that a reasonable alternative to adding the other funds? I’m trying to simplify things a bit and limit the number of positions I need to track.

 

[COcheesehead]

Good stuff, as usual. My income is well below yours, but still comfortably into six figures—more than enough for my needs. Not bad for a guy who started playing in strip clubs at sixteen and is now exploring the avant-garde side of his craft.

I digress.

I recently opened a position in QLENX and have been adding to it. I don’t own the other alt funds you mentioned, but I’ve been taking some equity gains and rolling those into QLENX, which now makes up well over 3% of my total portfolio.

I’m considering backing off the CEFs unless a really juicy opportunity appears, and instead adding more to QLENX and PYLD, which I already hold. I am considering adding QMMNX or EGRAX as well

In your opinion, is that a reasonable alternative to adding the other funds? I’m trying to simplify things a bit and limit the number of positions I need to track.

I have four groups. Pure equity, alternative, CEFs and individual bonds. They all act differently and I like that.
I am just trying to maintain more balance in the four. I got out a little over my ski tips just concentrating on income when it really wasn’t needed.

 

[Flieger]

Trading options is not hard. I have trained a dozen friends, including people who are not accountants or financial wizards. I have trained a home remodeler, our lead pastor, a project manager, a camp director, our son (who is also a pastor), a nurse, and others. Each of them is giving me updates about their income from options. Our lead pastor's account balance is relatively small, but he already cleared $2K in options trading in about five months. Once you learn the basics you can put the options income to work earning more options income.

Thanks Wayne. I have opened the Options section on Fidelity and looked and for my holdings (almost no individual equity) there is just not much to be "earned". Outside of Income funds, my Growth is held almost entirely in Funds.

Flieger

 

[schrodingerscat]

Just getting things started for November! Summary of thread purpose below as stated in initial thread.

I thought it might be interesting to have a thread that those folks that have chosen Income Investing to fund retirement might share experiences, plans, investment decisions, and results so far if you so choose to divulge. This isn't intended to debate the investment choice/style as that has been done in other threads. This is for people that, at least for the time being, have made this strategy as their primary choice of income. I, for example, have a portion of total portfolio invested this way, while also continuing to have a smaller portion in Growth as "more" hedge to inflation.

Current Total Portfolio Allocation: Income 66%/Growth 24%/Short Term 10%. Income Holdings below.

View attachment 59546

Flieger

With respect, YOC is more of a feel good metric; specifically, it's already reflected in the price. Current yield shows you several things, including where to put new money. Multiply current yield by allocation and you get a weighted yield. The total of those yields gives you an average weighted yield. This is one of the most important numbers on my spreadsheet.

 

[Flieger]

With respect, YOC is more of a feel good metric; specifically, it's already reflected in the price. Current yield shows you several things, including where to put new money. Multiply current yield by allocation and you get a weighted yield. The total of those yields gives you an average weighted yield. This is one of the most important numbers on my spreadsheet.

Yes, this has been discussed in other thread at length.

FWIW, this is current yield, I forgot to change the title. Also, difference is almost negligible (for these) either way.

Flieger

 

[schrodingerscat]

Thanks for clarifying and good job. I really like the portfolio you shared; you own several best-of-breed CEFs/ETFs and I know you did proper research/DD on those tickers. I own a few of them. I'll try to find the other thread you referenced. If you change the cell to read "current yield," it will save math nerds like me from being confused.

 

[Flieger]

Thanks for clarifying and good job. I really like the portfolio you shared; you own several best-of-breed CEFs/ETFs and I know you did proper research/DD on those tickers. I own a few of them. I'll try to find the other thread you referenced. If you change the cell to read "current yield," it will save math nerds like me from being confused.

Thanks! Will do!

Flieger

 

[COcheesehead]

With some moves in the last few days I have my income run rate for 2025 down to about $352,000 having moved funds into assets that provide other value and not just income.

2026 will be even lower. I have the income dropping to about $322,000. We’re paying cash for the new house and that will remove some income generating assets even if they are just funds sitting in a prime money market now.

With the move and selling another piece of land we own, I also jettison some expenses: a mortgage, two property taxes, two HOA payments, which saves us about $30,000 a year.

I think the 2026 portfolio mix will be more balanced still providing about 3.5X our expense needs, but also providing some more longer term benefits outside of just current cash generation.

 

[sengsational]

Trading options is not hard. I have trained a dozen friends, including people who are not accountants or financial wizards. I have trained a home remodeler, our lead pastor, a project manager, a camp director, our son (who is also a pastor), a nurse, and others. Each of them is giving me updates about their income from options. Our lead pastor's account balance is relatively small, but he already cleared $2K in options trading in about five months. Once you learn the basics you can put the options income to work earning more options income.

Well, at least you didn't train-up the shoe shine boy Otherwise, we'd all have to run for the hills!

 

[Flieger]

I avoided posting last Saturday after the "massacre"

2H25 (and YTD) Cost basis still taking a hit. Again, after WD (Nov WD hit Thursday). Income dropped a little after exiting some Yieldmax, but still on par for a good yearly income. Results for Div's below are complete for the month. Cost basis has another (short) day Friday to be done for November. Again, Cost basis is after all WD's. Will repost Saturday.

Flieger

 

[dickoncapecod]

I avoided posting last Saturday after the "massacre"

2H25 (and YTD) Cost basis still taking a hit. Again, after WD (Nov WD hit Thursday). Income dropped a little after exiting some Yieldmax, but still on par for a good yearly income. Results for Div's below are complete for the month. Cost basis has another (short) day Friday to be done for November. Again, Cost basis is after all WD's. Will repost Saturday.

View attachment 60162


Flieger

Hi. I don't understand the purpose of attention to cost basis or the retroactive adjustments to it. Is it useful in a running estimation of taxation upon sale? Also, cost basis is established upon purchase of an asset --- so its unclear how "cost basis [can] take a hit." The value of your portfolio is based on last night's mark to market..right?
Regards, Dick

 

[Flieger]

Hi. I don't understand the purpose of attention to cost basis or the retroactive adjustments to it. Is it useful in a running estimation of taxation upon sale? Also, cost basis is established upon purchase of an asset --- so its unclear how "cost basis [can] take a hit." The value of your portfolio is based on last night's mark to market..right?
Regards, Dick

Yes, Cost basis is subject to the last market prices of all investments. 90%+ is in non taxable. I just track this to see where I am CURRENTLY with respect to my initial investment, so it doesn't really "take a hit" unless I sell.

I'm not sure I fully understand your question though? Should I not care at all, at any time, what my portfolio value is? My stated goal is to have income from my Portfolio at this time while not losing my starting investment. Meaning making up now for what I will have once I finally start SS. After SS start I will likely go more conservative and growth oriented. Otherwise I would just be mimicking an annuity, correct?

I guess I could just take a look at the Portfolio value on a less frequent basis, but I like seeing this to help in decisions on modifying my investments.

Not trying to be sensitive, just trying to understand the question. Thanks Dick.

Flieger

 

[aja8888]

Yes, Cost basis is subject to the last market prices of all investments. 90%+ is in non taxable. I just track this to see where I am CURRENTLY with respect to my initial investment, so it doesn't really "take a hit" unless I sell.

I'm not sure I fully understand your question though? Should I not care at all, at any time, what my portfolio value is? My stated goal is to have income from my Portfolio at this time while not losing my starting investment. Meaning making up now for what I will have once I finally start SS. After SS start I will likely go more conservative and growth oriented. Otherwise I would just be mimicking an annuity, correct?

I guess I could just take a look at the Portfolio value on a less frequent basis, but I like seeing this to help in decisions on modifying my investments.

Not trying to be sensitive, just trying to understand the question. Thanks Dick.

Flieger

Maybe your "cost" hit is really the "current value" hit?

 

[Flieger]

Maybe your "cost" hit is really the "current value" hit?

Yes. My terminology is probably off!

Flieger

 

[Flieger]

Updated for month end. Cost basis is currently -0.4% for the 2H25, and -2.1% for YTD. Removing WD's I would be up 4.8% YTD.

Flieger

 

[Spock]

Updated for month end. Cost basis is currently -0.4% for the 2H25, and -2.1% for YTD. Removing WD's I would be up 4.8% YTD.

Cost basis dropped because of dividends with return of capital?

 

[COcheesehead]

Just got all my Dec 1 bond interest credited this morning. Still have $7719 in CEF income pending reinvestment and more tax free interest due on Dec 15th, but 1 year running total is $401,604. No capital gains included. That may be the high water mark for a long time since I am moving some income producing assets to other things based on where we are in the markets. I am at an all time high by $5772.

 

[Flieger]

Cost basis dropped because of dividends with return of capital?

Mostly dropped because of Price change. As Dick has pointed out, NAV's have performed admirably (which is indicative of the ROC's).

My goal right or wrong, and the reason I look at my cost basis, is to take my higher than normal WD's for the next years until SS and hopefully maintain my overall Portfolio value. IOW, avoid drawdown.

Flieger

 

[Flieger]

Just got all my Dec 1 bond interest credited this morning. Still have $7719 in CEF income pending reinvestment and more tax free interest due on Dec 15th, but 1 year running total is $401,604. No capital gains included. That may be the high water mark for a long time since I am moving some income producing assets to other things based on where we are in the markets. I am at an all time high by $5772.

Very nice COcheese!

Flieger