Is anyone here into Closed End Mutual funds? I'm thinking about investing because it seems like an attractive option for passive income. I have to do more research obviously, but I can afford to play around with them a bit. As long as the stock market keeps on it's current trajectory (if shit goes south it's all fucked anyway), I'd be looking at average yields somewhere around 7%. I'm not into meme coins or particularly concerned about future financial planning, but having a bit of extra income a month I can keep putting money into will make wagecucking at a factory more tolerable since the college meme isn't worth it at this point.
Is anyone here into Closed End Mutual funds...
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>Closed End Mutual funds
just buy into a total market ETF. you'll get about the same returns, if not better. But you'll actually keep more of your money since mutual funds have much higher fees (typically)
you shouldn't definitely be investing. how exactly depends on how much work you want to put into it and your financial situation.
Do you personally invest in any total market ETFs? Like let's say I invest $2000 ,after doing a healthy amount of research, into a fund with a conservative quarterly yield of 8%. Each quarter, I continue to invest the yield into ETFs. Within about 2-3 years, would I start to see appreciable yields? My current thinking of how it would grow is along the lines of pic related.
I would like to keep a close eye on it, but I'm not looking for crazy yields. I want it to be more of a supplemental income that allows me to make the best of the situation I'm in (low income factory jobs for the foreseeable future) and never falling into any sort of debt slavery unless absolutely necessary.
yes, I've got about 14% returns with a total market fund.
I'm getting 32% returns with WiseBanyan, but they decide how funds are invested
Most total market etfs are pretty safe, just look at the fees.
Thank you for the guidance. What I'm thinking of right now, is every dividend payout I reinvest the same amount I initially invested (1st quarter-$1000, 2nd quarter-$2000, 3rd-$3000, etc.). Is this type of thinking completely off base from the reality of ETFs?
>Do you personally invest in any total market ETFs?
I use a version of this guide. there are some tax issues you can use to optimize the best implementation, but when you're still in the thousands it amounts to pennies over decades, so don't worry about it.
target date funds and robo advisors do the same thing with less work.
>Within about 2-3 years, would I start to see appreciable yields?
unless there's something specific you want to buy with the money than this is your retirement fund. you can look up online retirement calculators to see how the money grows
>I want it to be more of a supplemental income
as long you're still working I wouldn't take money out of the account, especially if it's a tax free one
>yes, I've got about 14% returns with a total market fund.
that seems high. I wouldn't bet on anything more than 9% a year on average. smoothed out with something less volatile if you dependent on the money
Thank you for sharing that link. I'm not interested in investing for retirement however. It sounds awful and I know I'm going to regret it down the line, but at the moment I'm looking to aggressively invest in something with conservative but consistent and quarterly yields (is this even a thing?) with a windfall. The situation on my end is pretty crap financially, so I'm looking at making the best out of a shit situation and being able to grow a consistent, but not high, form of passive income to supplement an unskilled labor job that pays 30k a year. Im a frugal bastard and won't have any significant living expenses for the next year. I'm thinking more 5 years down the line than anything else.
>is every dividend payout I reinvest the same amount I initially invested (1st quarter-$1000, 2nd quarter-$2000, 3rd-$3000, etc.).
contributing $4,000 a year; after 10 years it will be growing $4,000 a year on it's own, and $30,000 in 30 years (>$400,000 in the account).
but that's the average outcome and deceptively optimistic. it's a crap shoot whether you end up on the good side of the financial cycle when you need the money.
5 years isn't really long enough to ride out a bad market, you could be fine but you're taking a risk.
you said you weren't interested in college but have you looked into trade school? skilled labor doesn't necessarily mean a diploma. it's cheaper and in some cases pays more than what a 4 year degree can get you.
So ETFs are more of a retirement thing? My line of thinking is that would generate consistent yields relatively quickly, and coupled with aggressive investment into those conservative options I could increase yields fast, in a way that would allow me a steady, supplemental income in 2-3 years that I could continue to invest into while working to cover most expenses. Are you aware of any other options that would be more suited to my needs?
As for college, I've attended on my own dime but job propsects in the area arent great and schooling isn't an option at this point. I'm also a mediocre student and my heart really isn't in it. I'm going to be homeless in about 2 years time (parents moving) and I refuse to take out loans for college. The math just doesn't add up for me.
>So ETFs are more of a retirement thing?
no, ETFs are the "dumb" version of mutual funds. the strategy being to just buy everything in proportion and don't worry about trying to find the winners, let market forces sort that out. by definition this gives you average results but then managers can turn their attention to reducing fees.
>supplemental income in 2-3 years
the two ways you can increase investment returns is to either take greater risk or lock you're money away for a longer period of time. with just 3 years you're looking at gambling if you want returns more than 5%, which I don't suggest.
but two years without rent is a decent head start. you have a lot more options if you're willing to save the money and move yourself.
actually I should say the strategy you're thinking of depends on the specific numbers and not percentages.
investing your money is almost definitely better than leaving it in a checking account, but it takes a while to start paying off when you're starting from scratch.
I get the feeling you're tempted to take a gamble at riches like everybody else on this board, but I don't think anybody in good conscience could tell you it's a good idea.
yeah, kind of a bummer if you were expecting a neat trick that bankers hate, getting into the habit of saving is how wealth is made.
Thanks for clearing that up. This is going to sound absolutely batshit insane, but my absolute limit for investing right now is $3500, since I'm working and keeping living expenses low, so I can recoup the losses quick (I'm basically a monk). Even a 5% return would work since I can count on absolute security for the next two years, at the very least. My line of thinking goes something like this
>Invest heavily and aggressively into an ETF/CEF for two years to let it "mature", even if yields are low
>No capital gains taxes (am I correct?), only fees
>Continue working at my job, save
>Come time to move I can start seeing appreciable supplemental income to put me somewhere in the ballpark of $20/hr in a low COL area
Does this make any sense at all, or am I getting way ahead of myself?
It's not like that at all, at least the way I see it. I see it as more of going the "easy" route the smartest way possible while avoiding siginficant debt. I'm only 21, so the prospect of living a frugal life doesn't scare me for the next few years. Basically leveraging my money now in a way that puts me on par earnings wise with a college graduate with none of the debt.
>Invest heavily and aggressively into an ETF/CEF for two years to let it "mature", even if yields are low
your use of investing vocabulary has me a bit confused here. but investing
cefl is a 2x leveraged etf of closed end funds. basicly very high monthly income and you end up owning every income producing investment in the investable world. ubs weeds out the nasty closed end funds so that reduces the risk. its got bonds stocks em convertibles covered call funds EVERYTHING. prolly about 15% divy but you gotta check. reinvest divies and you own the world at compounding rates with 2x volatility over the broad market, but because it pays a very high divy and is diversified as fuck big downs are autoreinvested at a higher income. its the king of compounding passive income. open a margin acct but dont buy on margin just use the margin acct to borrow from the etf and you dont pay tax on your drawdown cuz technicly you withdraws are a loan. please tip me for this advice. this is the ONLY way to invest in closed end funds that amkes your income grow FAST and its all real income to boot
When I say "mature" I mean letting it sit for years, never selling. Basically HODL, but in a more conservative way of investing. I'll take a look at other options, but I also feel that just keeping the money I have now and keeping the course with a good savings plan is also not a bad option. At the core of I'm just looking to leverage the money I can spend now in a way that benefits me in the not too far off future.
cefl is the best diversified way to invest in wall street. wait for a crash day when closed end funds are at a discount to nav and cefl will be at 2x discount to nav. buy put acct on drip and watch your income go up every month like a clock
you can do a tax free closed end fund of funds buy buying munibond cefs and covered call cefs. bond rates going up will ding the capital but your income will keep climbing
Capped for future reference. Thanks for sharing mate. From the sounds of it this sounds like a very successful strategy for you. It's out of my realm of competency at the moment, but I will look into it. It seems to align with the general idea of what I'm playing with. New to Veeky Forums, but what is tipping?
Thanks again! Seems like there's a lot of volatility in the market anymore despite being in a good state regardless, thanks to (((the news))).
maturity implies there's a designated time to collect the investment. but you never really know when high or low, it just averages out over decades.
most of this stuff is at least ball park predictable, you should at least crunch the numbers and see if the math works out for your plan.
At the risk of dangerously oversimplifying it, I did the numbers like this, being conservative and assuming quarterly dividends.
$2000 x .05 = $100 for a total of $2100. Don't touch, HODL/reinvest dividends, and watch it compound over a few years period. Save aggressively on my end, like I've been for years, while paying fees and the like with my own income, supplementing losses. This does sound really reckless, and I'm not going to even attempt doing this without dozens of hours of research on my end. But does the basic math at least seem "realistic"?
I got the impression you plan to start taking money out after a few years. which leaves future you with little or nothing when your no longer in a position to work.
how exactly you save doesn't matter in comparison to just saving in the first place, which apparently 50% of Americans haven't been.
I'm hopeful about future prospects for the country overall, hence why I'm trending towards short term gains to secure a position of comfortable mediocrity without an education with no debt within the next decade.
I am too, but there's a saying that the stock market isn't the economy. the two are linked, but they don't always reflect each other in the short term. so good luck.
I'm going to bed in like 10 minutes, if you have any other questions make it quick
That's why I'm leaning back towards CFEs since they don't seem to be affected nearly as much by market volatility. Like I said though, I'm going to look a much deeper look into it over the coming weeks. The political/economic situation is pretty dire for the average person (i.e. someone in debt) I'll admit, but the upper echelons of society are doing better than ever, as fucked up as it sounds. Thank again for giving advice.
If you do want some exposure to cryptocurrencies I'd recommend C20, its a rebalanced and decently weighted fund of the top 20 cryptos, even just allocating 5% of what you are looking to invest will be enough to really aid in the growth of your capital and you won't have to worry about all the missed out gains from crypto.
Do you have any? I avoid crypto as a rule. I don't want to get into buying the dip and mooning and all that. I do like the HODL philosophy though.
>those ID colors