097 - Is Reinvesting YieldMax Dividends A Mistake? The Data Points To Yes!

Does Investing in YieldMax ETFs Actually Work? The Data Says… 

So many people say you can’t make money with YieldMax ETFs—but is that true? We pulled the data on TSLY, CRSH, NVDY, DIPS, CONY, and FIAT to put this claim to the test.

🔹 The Experiment: We analyzed six months of dividends, share prices, and reinvestment strategies for both the long and short YieldMax pairs.
 🔹 The Findings: Simply holding both long & short positions together wasn’t a losing strategy—in fact, each combination outperformed reinvesting the dividends.
 🔹 The Best Approach? If you’re using YieldMax for income, taking dividends in cash works better than reinvesting due to NAV decline over time.

Want to minimize the risk of YieldMax? Know when to reinvest and when to cash take dividends in cash. We break it all down in today’s episode!

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**DISCLAIMER**
Ticker metrics change as markets and companies change, so always do your own research. The content in this podcast is based on personal experience and is for educational purposes, not financial advice. See full disclaimer here.

Episode music was created using Loudly.

Chapters

• 0:00 Should You DRIP and/or Buy Long & Short Pairs
• 3:58 NVDY & DIPS 6 Month Dividend & Price Data
• 6:02 NVDY & DIPS Shares or Dividends Collected
• 10:21 NVDY & DIPS Combo Total Returns DRIP vs Not
• 12:48 CONY & FIAT 6 Month Dividend & Price Data
• 14:58 CONY & FIAT Shares or Dividends Collected
• 18:58 CONY & FIAT Combo Total Returns DRIP vs Not
• 19:47 TSLY & CRSH 6 Month Dividend & Price Data
• 21:58 TSLY & CRSH Shares or Dividends Collected
• 25:35 TSLY & CRSH Combo Total Returns DRIP vs Not
• 26:12 Verdict On Reinvesting Dividends & NAV Decline
• 30:11 When To Reinvest
• 34:26 YieldMax Risk & Strategy
• 37:49 YieldMax On Margin vs Our Loan Experiment
• 41:10 Questions & Other Stocks: O, PTMN

Transcript

Welcome to roaming returns a podcast about generating a passive income with dividend stocks so you can secure your finances and liberate your life. 

Today, we’re tackling a big debate in the investing world: Can you actually make money with YieldMax ETFs? So many people think the answer is no, but the data says… well, you’ll have to stick around to find out! We’re diving deep into six YieldMax funds that have long and short pairs. People say they’re a “trap.” 
We ran the numbers, tested the strategies, and we’ve got hard evidence that might just change your mind. Does holding both long & short positions protect you? Is reinvesting dividends a mistake? What’s the best way to actually profit from YieldMax?
If you’re serious about using high-yield ETFs to generate cash flow without getting wrecked, this episode is for you. Let’s dig into it!"

So as we promised this week, what's up, y'all? We are back with some awesome more YieldMax. It's going to be YieldMax thing that I was on Reddit. I visit Reddit not to participate in conversations because, you know, he doesn't do that.
People are whatever they are. But I read the conversations and it's one of the interesting, not a consensus, but a majority of people think that you can't actually make money in YieldMax. So anytime people bring up a thread about YieldMax, they're like, oh, you're stupid.
Why are you investing in something where you just lose money? You're stupid. You're stupid. You're stupid.
So one of the ones that caught my eyes though was like, they were talking about doing like the, remember I had said that we were doing the Tesla long and the Tesla short, the TSLY and the CRSH. Someone brought that up and said, it doesn't matter. And I said, oh, I know that's not true.
And so like, once I got in my head that I was right, I went. Wait, what did they say didn't matter? If you did the long side and the short side? If you held both, it didn't matter. You still lost money.
And that's not true. So that's what this is all going to be is how, if you buy both the long and the short and the three different things that, and there might be four now, but the three main ones are, NVDY and DIPS. NVDY is NVIDIA long.
Yeah. DPS is your short on the video. The second one is CONY and FAIT.
CONY long. FIAT is the short account of the CONY FIAT. And then the third one is the TSLY and the CRSH that we have mentioned time and time before. So I just did some back data on these just to prove my point, because why not? Because Tim likes data.
The discussion that I was looking at was about buying both to mitigate loss. The people said, you can't make money. And I said, though, I know that's not true.
And I actually have the data to prove to you that it's not true. You can make money. Even you have to remember, like we had a serious downturn since January.
So you're going to be down and you're going to be down pretty much in everything. So like the data is kind of skewed in that regard. So I probably should revisit this in a sideways market or a slight bull market just to prove my point again.
So even in the down market. But if you buy YieldMax, any of them, and you turn the drip on, probability is you're going to lose money. We've discussed that time and time and time again.
But now I actually have data that shows you this. And so we're going to go through here and look at basically what I did is I looked the last six month dividends up for all six of them, NVDY dips, and then I have a CONY, FIAT and TSLY CRSH. And then I looked at the share price the day after the dividend.
So like if you get your dividend and you reinvest it, they have the share price will be the day after the dividends paid out. So then you'd be buying back at that price. And then I just went through and I calculated everything to come up with data for you guys.
This is actually interesting. I think it's interesting, but I'm a nerd, so I don't know. I'm eating the spaceship
The cockpit. Yes. Okay.
So the last six dividends for NVDY were on 10.10. It was $1.10. We're going to pull it up so you guys can read it. So I'm not like... So we all can see it together. 10.10, it was $1.10, 11.7, 1.02, 12.5, 1.19, 1.3, 90, 1.30, 83 and 2.27 was $1.61. You go to the next column over there, you'll see that the last six dividends of dips, which again is the short of the video was 10.10, 69, 11.7 was 61, 12.5, 64, 1.3 was 51 and 1.30 was 50 and 2.27 was 58.
So then you look at the share price. So those were the months and that was the dividend. Yeah.
So that was the dividend. So here is the share price the day the dividend was paid. 10.11 was $24.70, 11.8, $25.98. Wait, what is this based on? Like how many shares? Did I miss that whole part? No, we'll get to that.
This is just the upfront data. 11.8 was $225.98, 12.6 was $24.76. I'm sorry, you guys. 1.6 was $2402, 1.31 was $19.31 and 2.28 was $17.21. So big drop.
Huge drop. Dip's price was $15.32 on 10.11. 11.8 was $13.15, 12.6 was $12.70, 1.6, 11.82, 1.31, 12.62 and 2.28, 12.26. Now what I can see from that right now, just looking at it is the share price from NVIDIA went down a shit ton and the share price from Dip didn't. And when NVIDIA really started to decline here on 1.31, there should have been a bigger jump from 11.82 to 12.26. So that's crazy right there.
That is a big jump. 24 to 19 versus 11 to 12. Actually went up.
Yeah. So like for this last six months, you would have collected $6.65 in NVDY dividends and you would have collected $3.53 in DIPS divvies collected. Per share.
The price from NVIDIA declined from 10.11 through 12.28, 7.49 and the dip's price declined 3.06. So if you invested $1,000 in NVDY in October, you would have got 40 shares. It was $25 a share on 10.7. DIPS would have got you 59 shares, $17 a share on 10.7. So using the math, here we go. So you're investing $1,000 and $1,000 equally on both sides, right? That's what I'm interpreting.
Yes. All right. So we're doing equal money.
So here's what the math's pushed out. Here's the math. 10.10, you would have collected 44 and you would have actually dripped back in $1.78 shares.
11.7, you would have collected 42.62 and you would have dripped back in 1.64 shares. This is in NVDY. 12.5, you would have collected 51.67 and you would have dripped back 2.09. 1.3, you would have collected 40.96 and you would have dripped back 1.71. 1.30, you would have collected $39.19 and you would have reinvested 2.03 shares.
On 2-27, you would have collected 79.29 and you would have reinvested 4.61 shares. So as of 3-11, when I did the data for all this, which was not too long ago, your total NVDY shares would have been worth 15.82 at the time when I looked it up and all your shares combined would be at 53.86. You would have collected 13.86 shares, would have given you 8.5207. Now, if you had just collected NVDY in cash, your 40 shares, remember this is going to be 40 for all six now, you're not going to be reinvesting. So you would have had 40 shares, you would have got 44 on 10.10. Those are the dividend payouts, $44.
$40.80 on 11.7, $47.60 on 12.5, $36 on 1.3, $33.20 on 1.30 and $64.40 on 2.27, which would have given you $266 in cash. Your 40 shares would have been worth $632.80. So you add the 266 plus the 632, you get a total of 898.80. So you actually would have made, what is that? $36 more had you just collected cash with your 40 shares as opposed to selling your 53.86 shares. So you're up, which proved my theory for one.
In a really, really big decline. Check that out. I mean, you're still down.
If you look at it, you're either down like 8.52, you would have been down $148 total with the dividend reinvestment and you would have been down $101 had you just collected cash. But you're still up more. Remember, that's $1,000 starting price, but you're up more by collecting cash.
So if we do the same math for DIPS, 10.10, you would have collected $40.71 and you would have reinvested 2.66 shares. 11.7, you would have collected 42.53 and you would have reinvested 3.24 shares. 12.5, you would have collected $41.54 and you would have reinvested 3.27 shares.
1.3 would have been $34.77 and you would have reinvested 2.94. You're getting a lot more shares. 2.94. 1.30, you would have collected 35.56 and you would have reinvested 2.82 shares. And on 2.27, you would have collected $42.88 and you would have reinvested 3.50 shares.
So if you went and you sold this on 3.11 when I did the prices, same date as NVDY, you would have had your total DIPS shares would have been worth, at the time it was $13.29 and you would have had 77.43 shares. So you got a shit ton more shares. Yeah.
Would have given you $1,029.04. However, if you collected cash only on your DIPS, your 59 shares would have got you $40.71 on 10.10, $35.99 on 11.7, $37.76 on 12.05, $30.09 on 1.03, $29.50 on 1.30, and $34.22 on 2.27, which is giving you a total amount of cash collected of 2.08.27. Your 59 shares would have been worth 7.84.11. So if you add the 2.08.27 plus the 7.84, it would have given you a total of 9.92.38. So here you would have lost $30. From your baseline? Or no, from the difference. So you would have made $30 had you reinvested your DIPS, but you would have lost $8 had you just collected cash.
So if you do your NVDY with the DRIP reinvestment plus your DIPS with the DRIP reinvestment, you would have actually had $1,881.11. So you lost $119 plus on that. Yeah. If you would have done it without the DRIPS for the NVDY and DIPS, you would have $1,891.18. So you would have lost $109.
And that's the $2,000 starting price. So that's not too bad at all compared to what we lost in CONY by itself. So just for comparison, I just took the NVDY stock from 10.11 through 3.11. You mean NVDA? NVDA.
It was up 1.13, so you actually would have had $1,000 and you would have had 1,001. So you actually would have... Bade better in NVIDIA. If you'd just invested in NVIDIA, yeah.
For the snapshot timeframe. But again, this is six months, and I'll probably at some point, I'll probably revisit this and do like a full 12-month thing just to see if it holds up. But so far for the pair, remember if you do the pair, the whole idea behind the theory is if you hold the long and the short that you're going to lose less capital appreciation, which you did on both instances.
So yeah, so it would have been 1,881 as opposed to 1,891. So you still would have lost a little bit of money, but you wouldn't have lost as... If you just did it, if you held NVDY by itself, you would have lost more. If you held DIPS by itself, you would have gained a little bit more.
So this one here, it actually benefits you more to hold the short side because NVIDIA did have an awful six weeks. But still, I like the fact you're only losing $108 if you just... Yeah, because what you would do is you'd just double those shares, right? And you'd put them back in here. So doubling the loss.
So if you just sunk it all into one, you would have lost... If you'd sunk it all into NVDY, you would have lost $203. If you sunk it all into just DIPS, you would have lost more than that. So you would have lost... You would have lost less with DIPS by itself.
Yeah, DIPS by itself, you would have lost less. I was going to say that price drop that we saw before was in whatever. So yeah, totally a thing.
So again, but a way to not lose money. You have to remember... I know... I feel like this isn't going to be the drastic one compared to the next one. I know you're losing money, but at the same time, the markets were down.
They've been down 10% to 12%. So losing $108 is all right. No big deal.
Okay, so that's that one. Now we're going to do the CONY one. Yeah, and if you have been paying attention to our CONY experiment... A disaster.
Disaster. It has literally been nothing but gone straight down. And if you haven't, $17.12 is what we bought in at, $15,000 worth.
And yeah. So the last six dividends for CONY were on $10.17, $1.11. $11.14 was $2.02. $12.12 was $1.34. $1.08 was $0.83. $2.06 was $1.05. And $3.06 was $0.60. Pitiful $0.60. And on the other side of that, the Fiat one on $10.17 was $1.45. On $11.14, it was $0.73. On $12.12, it was $0.68. On $1.08, it was $0.65. On $2.06, it was $0.55. And on $3.06, it was $0.68. So again, that one is better, I think, a better... Oh, so these numbers aren't going to be as bad as our numbers. And I'll explain here why.
So the CONY price on $10.18 was $13.81. On $11.15, it was $18.39. Remember, right after the election, everything went up. On $12.13, it was $15.86. On $1.19, it was at $12.44. On $2.07, it was at $12.04. And on $3.07, it was at $9.39. So it went down a lot. It went down $4.42. Remember, I said we bought at $17.12. So we bought beginning of December, I believe.
Right about December. Yeah, beginning of December. And it was a lot.
And then the Fiat price went from $15.50 on $10.18 to $9.17 on $11.15. $7.77 on $12.13. $8.46 on $1.19. $7.41 on $2.07. And $8.01 on $3.07. So Fiat- So this one went down a lot too. So FIAT declined a lot. It went down $7.49. Whereas the last one, it actually went up, didn't it? The short side went up in the last one? The short side wasn't as down as much as like this one.
The short's up way, way, way more than the long. You mean down more? Yeah, it's down. Like that's a huge like- Yeah, disparity.
Remember, NVDY was at like $7. And TIPS was at like $4 something. Okay, so this is the reverse of that.
So CONY, you would have collected $6.95 in dividends the last six months. And you would have collected $4.74 in dividends in Fiat the last six months. So if you invested $1,000 in CONY in October, you would have got 76 shares at $13 a share.
And if you invested $1,000 in Fiat in October, you would have got 49 shares at $20.50. So CONY, you would have collected $84.36 on 10-18, and you would have reinvested 6.11 shares. On 11-15, you would have collected $165.86 with 9.02 shares reinvested. 12-13, you would have collected 122.11 with 7.7 shares reinvested.
1-9, you would have collected $82.03 with 6.59 shares reinvested. At 2-7, you would have collected $110.69 with 9.19 shares reinvested. And on 3-7, you would have collected 68.77 with 7.32 shares reinvested.
So on 3-11 again, you would have had 121.93 shares. So you got a lot of shares. You went from 76 up to 122 shares about there.
But your value would have been worth $8.24 at the time. Your shares would have been worth $1,004.70. If you collected cash though, you would have received $87.69 in October, $153.52 in November, $101.84 in December, $6308 the 1st of January. I think it was the 3rd of January, something like that.
$79.80 at the end of January, and $45.60 at the end of February, which would have gave you a total amount of cash of $531.53. Your 76 shares would have been worth $626.24. Remember, you're taking 76 times 8.24. And then you add the $626.24 plus the $531.53, you get $1,157.77. So you would have made $153 more just collecting cash and not reinvesting on CONY. Man, I wish that would have happened for us. That's a huge difference.
I wish that would have happened for us. We started way too late. Yeah.
And so if we do the numbers for Fiat, here we go. On 10/18, you would have collected $71.05, and you would have reinvested 4.58 shares. 11/15, you would have collected $39.11, you would have reinvested 4.27 shares.
On 12/13, you would have collected $39.34 with 5.06 shares reinvested. On 1/19, you would have collected $40.89 with 4.83 shares reinvested. On 2/7, you would have collected $37.26, and you would have reinvested 5.03 shares.
And on 3/7, you would have collected $49.48 with 6.18 shares reinvested. So as a 311, your total number of shares in your Fiat would have been 78.95, so not near as many accumulated shares with the drip. And the price was $8.59 on 311, so you would have had $678.18 only.
With your drip on, that's what you would have collected. Ooh, that's low. So had you taken cash, you would have received $71.05 in October, $35.77 in November, $33.32 in October, or December, I can think.
You went backwards. $31.85 in January, $26.95 in February, and $33.32 in March, which would have given you a total of $232.26. Your 49 shares would have been worth $420.91, making your total $653.17. So you would have lost a little bit in Fiat just collecting cash, but it's only like 20 bucks. But if you did these together, which is the whole premise of my theory, CONY with the drip plus Fiat with the drips reinvested, you would have had $1,682.88 total with $1,000 in each.
And if you did it without the drip and just collected cash, you would have $1,810.94. So you'd only be $200 down. You would have made a lot more without reinvesting as opposed to reinvesting. Now Coinbase, the last six months, the price when I looked this up was up around 12%, it's not accurate anymore.
Really? 12%? How is that possible with that decline? That's crazy. So you made $128. You just say, I don't know.
I don't know. You made $128.06 by taking cash. So you made quite a bit more in this scenario.
In this scenario, yes. And the last two are the ones that we actually hold. So we have TSLY and CRSH.
TSLY was that one that Crash Burn did a reverse stock split. So these should be... These, I don't know. This is going to be interesting.
I don't like these two, actually. I don't know why. I just took them because they were both really kind of cheap.
So I could just get $500. I was going to ask you why you actually picked these two as the two to get in for this experiment. So it's just because they were on the cheap side? Yeah.
TSLY's last six dividends were 10.3, it was $1.09. 10.31, it was 60 cents. 11.29, it was $1.22. 12.27, it was $1.27. 1.23, it was 72 cents. And 2.20, it was 58 cents.
And CRSH had, on 10.3, it had 98-cent dividend. 10.31, it had a 45-cent dividend. 11.29, it had a 38-cent dividend.
12.27, it had a 37-cent dividend. 1.23, it had a 29-cent dividend. And on 2.20, it had a 38-cent dividend.
So just looking at the number, I actually like how the numbers in CRSH look. But that's... Neither here nor there. Yeah.
So the TSLY price on 10.4 was 12.72. On 11.1, it was 12.01. On 12.1, it was 14.66. On 12.28, it was 14.73. On 1.24, it was 13.55. And on 2.21, it was 11.03. And I can tell you it's... Damn, that held up pretty hard. It's lower than that now, but... And then the CRSH price on 10.4 was 12.16. 11.1, it was $11.11. 12.1, it was 7.64. You see that's a massive drop there. That went down to like $3.50. Wow.
12.28, it was at 5.90. 1.24, it was at 5.78. And 2.21, it was at $6.12. So the total price decline in Tesla during the last six months was one... TSLY, I'm sorry, was $1.69 decline. And the total decline in crash in the last six months was $6.38. So that's... That's a big difference. It's a huge difference here compared to the other two.
Total TSLY dividends you collected was 5.48. And the total CRSH dividends you collected was 2.85. So if you do the same math, $1,000 invested in TSLY in October, it got you 74 shares at $13.50 a share. And 1,000 invested in CRSH would have got you 77 shares at $13 a share. So using the data, we have TSLY, you would have actually collected $80.66 on 10.3, which would have got you 6.34 shares reinvested.
On 10.31, you would have had $48.20 collected in dividends, and that would have reinvested 4.01 shares. On 11.29, you would have collected $102.91 with 7.02 shares reinvested. On 12.27, you would have collected 116.04 with 7.88 shares reinvested.
On 1.23, you would have got $71.46 with 4.85 shares reinvested. And on 2.20, you would have got 60.38 collected with 4.46 shares reinvested. So if you sold all of your shares on 3.11, you would have 108.53 shares, which would be worth $855.22 on 3.11. The price of TSLY was 7.88 a share.
If you collected cash on your 74 shares, you would have got $80.66 in 10.3. You would have got $44.40 on 10.31, $90.28 on 11.29, $93.98 on 12.27, $53.28 on 1.23, and $42.92 on 2.20, which would have given you a total of $405.52 in cash that you would have collected. Your 74 shares, again, remember, 74 is what you started with, would have been worth 583.12. So combined, your cash plus your share value would have been worth $988.64. So you only lost $11. Not bad for that one.
Yeah, not really. Considering it's worth a lot less than that now. But CRSH, you would have collected $75.64 on 10.3, which would have reinvested 6.21 shares.
On 10.31, you would have collected $37.44 with 3.37 shares reinvested. On 11.29, you would have collected $32.90 with 4.31 shares reinvested. On 12.27, it would have been $33.63 with 5.7 shares reinvested.
On 1.23, it would have been $28.01 with 4.85 shares reinvested. And on 2.20, you would have collected $38.55 with 6.3 shares reinvested. Sorry, it's a lot of data up front before we get to the actual point.
It's worth it. So on 3.11, you would have had 107.74 shares total with your reinvestment. And they would have been worth $886.70. And on 3.11, the share price of CRSH was $8.23 a share.
If you collect the cash, your 77 shares would have got you $75.64 on 10.3. On 10.31, you would have got $34.65. On 29.26, on 11.29, $28.49 on 12.27, $22.33 on 1.23, and $29.26 on 2.20, which would have given you a total of $219.63 in cash you would have collected. Your 77 shares of CRSH would have been worth $633.71. If you combined your 633 plus your 219 in cash, you would have had 853.34. So Tesla with reinvestment plus CRSH with reinvestment would have given you $1,741.92. Tesla without the DRIP, just collecting cash plus crash, collecting cash without the DRIP would have given you $1,841.98. Tesla was down about 5% the last six months. Again, you have over $100 in difference just collecting the cash.
So again, here it's one we're not reinvesting. If you do the pair, now obviously if you don't do the pair, the numbers are going to be different had you just went with say TSLY versus CRSH. But the point of the Reddit thread was they were trying to do the long and the short, because I'm apparently not the only one that has that theory where if you hold both, you're going to mitigate your price, your NAV decline.
So the whole point of all this was to see what the difference is holding the pairs of those words. And it looks like in all three cases, if you held the pair of them, NVDY and DIPS, CONY and FIAT, and TSLY and CRSH, you would have actually made more just reinvesting, just with getting cash instead of reinvesting, all three of them. So again, obviously holding the underlying stock is probably a better strategy in all three of these cases, except for I don't want to hold the underlying stock.
We're more interested in income and the people on Reddit, the reason that they're in YieldMax is because it generates a lot of income. So if you're one of those people that's on the fence about the YieldMax, you can mitigate the risk of holding them and the NAV decline by actually just taking your dividends and cash. I did this with these six.
I'm probably going to do it with a few more down the road whenever I have nothing better to talk about, or we're in the middle of a recession and no one cares, and I'll just be running some numbers. But I'm fairly confident that actually just getting your dividend payment in cash is going to be at least 90% more effective over all the YieldMaxs in reinvesting. What reinvesting does is because the NAV decline or the NAV price of all the YieldMaxs is so volatile, and it's generally volatile in a downward trajectory, when you reinvest, I'm sure you're getting more shares.
But your price is declining as you go down. But your price is declining every month. And then if you go to sell the shares to generate cash because you're not taking it in cash, you're selling your shares at a lower price.
You have more shares, but you're selling them at a lower price. And that's not the way that you want to do it. You'd actually have to hold the shares until it went back up to around where you bought it, if that was what you were doing.
If it's even going to go back up. Now, some of them are ran better. Like I've mentioned AMZY and MSFO, but those ones you're not getting the 60, 70, 80, 90% dividend.
You're only getting a 20 to 30% dividend. I mean, only. And they don't have a short side, do they? Not yet, but I'm sure they will at some point.
So within the YieldMax sphere, there are ones that are ran better where you're not losing as much in NAV decline. NVDY is one of them. Up until the last seven weeks when it went down a lot.
AMZY is another good one. And MSFO is a really good one. Now, there's newer ones that come out that have came out recently that don't have as much data, but they have like a less NAV decline.
But if you look back at all the YieldMaxs when they first came out, the NAV decline was negligible. That's just like the nature of the beast. Like when it first comes out, people are excited, they pour into it, and it keeps the total amount under investment, the price up, and they don't have as much NAV decline.
But if you give it some time, like PLTY is like a super popular one on Reddit and Facebook where people are like, I'd say give that one six months because all the ones that we went over, TSLY has been around for like 18 or 19 months. NVDY has been around for like two years. CONY has been around for I think two years as well.
The short ones are newer, but they've still been around like 9, 10, 11, 12 months. The newer ones when they come out, if you go through, look through all the charts of every YieldMax, when they first come out, they start at 20. And then they generally will go up but they won't kind of deviate from the $20 range for a few months.
And then they just like whatever happens once they break to the $20 floor, they go down and they go down pretty hard. But to generate income, you want to generate income. You don't want to reinvest.
And I've been saying that for a while now and people didn't know about it. So we went and discussed it with them. They send us questions on YouTube or they send us questions on Facebook or wherever they send us questions.
Dude, if you pull the data and you look at it, you make more money not reinvesting. The only time that I recommend reinvesting the shares is when you've pulled your initial investment out and you don't have a need for the money that you have in YieldMax. So say the reason you're using YieldMax is for buying a car, buying a house or like in our case where we're going to go on the road, once you pull the initial investment out, you can let it accumulate until you actually need the cash. And then you can then turn the drip off and you'll actually have all those shares at the higher, um, you'll have a lot more shares. So you'll be getting a higher income per month.
But in the beginning, the first thing that you should do with the YieldMax is literally get your money out. But if you let it compound when the price is really, really high and advanced strategy for this is what Tim always talks about. Like he keeps an eye on like, Amazon's a really good one.
He knows the price band that that thing hangs out in and he'll turn it on when it's down. And then he'll turn the drip off once it goes up. So you're accumulating at the lower price and you're not accumulating at the other one.
You implement that strategy. There are some things you're like, you, you know, $20 is the, the, the initial payment price, but you have to monitor it. Like, cause like at some point that $20, the $20 floor is going to become $19 floor.
It just is the nature of the nature of these beats. Yeah. So then you have to adjust your price.
Like, so if it falls below 19, you obviously will collect the drip and then you'll look, you'll turn the drip on. And then if it shoots up above 19, you'll turn the drip off. And then you have to adjust that as it, as it steps down.
Now, how did you adjust that? Every quarter, every probably every three months. What I'm noticing though with a lot of these is once they drop too far, they'll actually do a, like Carm said earlier, they'll do a reverse stock split where they're like, if you have a hundred shares, they'll give you 10 shares. So they're pulling 90, like 90, like whatever.
That was a two for one. I might be wrong. Whenever they pull off the market that way, when they like, if you remember, we went through this before, when they do a reverse stock split, what they're doing is they're taking shares off the market.
So there's less shares that then naturally shoot the price back up to the $20 range. TSLY has done that already. I do believe ULTY will probably do that at some point.
That's one that we ran until recently. And we aren't sure if CONY's going to do that or not. It really depends if CONY turns around and that thing falls.
CONY could do that soon. Which would be interesting considering how much money we have in that. Or they may not because crypto is starting to turn around.
Like fingers crossed, baby, fingers crossed. I mean, even if not, it is what it is. And I do believe like when I'm, I haven't done the data yet, but I'm assuming that the yield max strategy can be applied to the weekly dividends, like the XDTE, the QDTE, the LFGY, all those ones that there's like 11 or 12 that pay weekly.
I assume that you could do the same strategy with those weekly dividend payers where you just say you put $1,000 and you wait until you pull your $1,000 out in cash before you turn the drip on. We're currently doing that. Pretty much anything that has the cover call or the synthetic call is something you want to.
It's more the synthetic call than the cover call. Well, it's more of that, but it depends. But again, if you get your initial investment out first, they're more secure.
They actually have the shares of the stock, whereas the synthetic calls, they don't hold anything. But some of them just still do have a little bit of NAV decline, don't they? They do a little bit, but like, so like FEPI is one that has cover calls and that's been pretty, pretty solid. AIPI has had all the REC shares.
They have the cover call and they've held up pretty well. But I'm finding the synthetic calls or yield max is because they don't hold anything, they're very volatile, super volatile. And because they don't hold anything, there's nothing really there to stop the decline.
Like so I really have a hard time understanding that considering they have so much money in treasuries that they're holding. They use the treasuries as collateral. I still don't understand how that's not, so that doesn't actually have value.
So they have $5 million in treasuries. They can write $5 million in options. And if the options go to shit, they have money to put that as collateral to pay for that.
It's like if you have a margin account, say you have $10,000 in margin from your portfolio, you should have $10,000 in something else that you can liquidate real quick to pay off the margin call. And that's kind of what they're doing with the treasuries. And I imagine if it hits that, that means it's kaput kaput.
So they just do the reverse stock splits. They will do at that point. Until they can't.
Until they can't do reverse stock splits anymore. To me, because we've, we identified pretty quickly how to not lose money in YieldMax. They're pretty reliable payers and they're no more risky than say the ETNs that we've brought up or the other high dividend stocks.
If you listen to last week's episode, the ETN, USOI, Y, I? USOI. That thing, that's actually our highest payer for our dividends each month. They have USOIs, the ETN.
They have SLVOs, the ETN. And they have GLTIs, another ETN. But we got out of the other two.
What the ETN is, if you don't know, is that's an exchange traded note. So they just have a note that they have X amount of a free USOI. They have X amount of USO shares.
Because USOI is based on the USO. So they write options on the USO stock. So they have an exchange traded note.
Means they actually don't hold anything. So it's like YieldMax. It's just paper.
Yeah, it's just paper. So any of those things that hold nothing, like synthetic calls to me, I might be wrong. If you guys want to yell at me, like people have been doing recently.
We keep getting so much heat. It's so funny. To me, synthetic holding is you don't have anything.
You're just holding options on the long. You're holding options on the short. I think they're worse than crypto, actually.
Like they're really nothing compared to crypto. Crypto actually has like tech. And ETNs, to me, like USOI, SLVO, GLTI again.
To me, they don't hold anything other than paper saying that they have options on these underlying stocks. Stocks. So those, to me, are more risky than like a 14% BDC.
But if you implement the right strategy where like your whole objective is to get your money out as soon as possible, that way it doesn't harm you. Like if they go to zero or they call everything back, it doesn't matter because you already got your $1,000 or you already got your $2,000 out of it. Yeah, so the strategy for YieldMax is essentially if you are brand new to investing, the best way to keep momentum in the beginning is to have results.
And so if you take like $500, you put it in, you get results. You can then funnel that money into better stocks to then start building your good portfolio out. So these can work as something like that.
Or if you get that initial cash back out, then you kind of just let the shares just pay and pay and pay and pay and pay. And it just kind of becomes a paycheck while you're growing the rest of your other stuff or letting that compound. That's what we're planning to do when we actually like get the money from the condo proceeds.
We're going to dump a good chunk into the YieldMax. We're going to use that as our cash fund so that our actual portfolio can continue to compound and grow. So that whenever YieldMax goes, like shits the bed, completely disappears, if they do, then we have all that time of compounding to then have that nest egg growing or that dividend growing.
Well, we did. I ran the numbers and I know I brought this up in a previous podcast. But with like $40,000 in these things that are riskier, we can actually generate like $3,000 a month in cash.
If you extrapolate that out, that's like 15 months of cash payments to get your initial investment out. And then you have $40,000 in payments coming in for as long as they come in that you don't have any like skin in the game really. How much money did you say? $40,000? $40,000.
So if you took that $40,000 and you divided it by that $3,000 a month, say you're spending that, you'd be living for 13 months. So if the YieldMax is pay out that $3,000 for more than 13 months, as opposed to you spending it on your normal expenditures, you're actually like ahead. And that's how we're looking at it.
When I'm seeing what a lot of people do that I don't agree with, even if they employ the same strategy that I use, is they are actually using their brokerage and they're doing these on margin. They're already kind of like a margin. If you're not familiar with margin, what margin is like if you have a say $100,000 in your brokerage account, you can borrow up to like, I don't know what it is, $80,000 on margin.
And since Robinhood allows you to do that like collateral exchange. What margin is, it's like a second mortgage basically in my view. I think you'd be better off with an actual second mortgage than doing the margin call.
Because margin is if they call, like say you have less, like they do a margin call, which means that your shit went down a lot. Yeah. So if your value of your stocks go down below that margin, they force you to liquidate other aspects of your portfolio to cover that.
Or depending on the way you have your brokerage set up, they might actually completely liquidate your position to make up that difference because they will not let you go below that threshold because it puts the brokerage at too much risk. I've lost like $40,000 doing that. So I don't agree.
I do not agree with that strategy putting these yield max on a margin. Yeah. Now, if you're going to do a margin, I would say, okay, I want to put $40,000 in the yield max.
I would do, if I was going to do margin, I would do something way more reliable like MO or IIPR or something like that, where you're getting seven, eight, nine, 10%. But you're not at risk for a serious, serious principle. But at the same time, if we right now are on the cusp of a recession, if not potentially a bigger recession, I don't think this is a good time to get in a margin period.
Because you don't know- Personally, I don't do anything on margin. Yeah. Like that is very risky.
Because I don't want to actually be forced to liquidate my positions. And my positions are generating cash. You saw we did with the last two podcasts where how much we're making off the positions.
I like what we're making. I don't want to have to liquidate. I don't want to be forced to liquidate anything that'll lower my monthly income.
And I don't know if margins work the same way in brokerages as they do in crypto, because that's what happened to me. But it was like a daily charge that you got for the margin that you had out while the stock was in play or the money was invested. I think it's monthly.
Like we do a monthly loan. It was daily when I did the crypto thing. But so here's the deal.
When we did this CONY experiment with the yield max, I took a loan out to take that 15 grand to put it in. So it's like a 70% yield. I don't know what the actual cost of margin is.
But I actually think that's more secure from a cost perspective. Plus, you don't have to force the liquidate jack squat. And as of right now, the CONY payouts are actually making whatever the payout would be on the loan to begin with for minimum payment.
So- No, we did go over that. I think that's less risky. As long as the CONY dividend stays above 29 cents, we'll be able to make our minimum payment.
It was 26. Oh, 26 cents. 26.
And that's not with the reverse split. That's just the bare minimum payment. That's the minimum payment.
But as of right now, we've been paying back the whatever the heck we get extra on top of that. So we have, I think, like 18% of the loan paid back already in the first three or four months. Four months, I think we're at.
We're due for another disappointment here in a week. Oh my God. Has it gone up at all? Has CONY gone up? It's at like eight something.
Well, it was at like seven, seven something. Yeah, it's at eight something now. I think it was 794.
I don't know what the next dividend is going to be. I do kind of hope crypto like pivots because Coinbase is based on like Bitcoin and Bitcoin, like whatever that does is what effects can. But like for what I'm saying is like, so if you guys watch this, you have any questions, just leave a question in the comments.
We go through the comments pretty regularly, daily, if not hourly. She's crazy about that. I will gladly walk you through anything.
Well, actually, there's been a couple of videos that we've actually recorded because we didn't feel like typing that we've posted. Where we post those? TikTok. TikTok.
A couple of TikTok and YouTube videos where it's like, this is too long to type out. So I'm just going to talk to you. But like if you have any questions about anything, like anything that we hold or anything that you think we're missing.
Yeah, like we just did literally a stock that we don't even do. We just did a review or what Tim thinks about XDTE. QDTE, which is the round hill.
They're the zero day options. They literally will write an option at night and then they'll let it go to the following day and then the options over at the end of that day. Then they just collect the premiums from that and they just accumulate that and they put that into treasury.
Then they give you a payment at the end of the month. Yeah, they're pretty similar. They're nice.
Like they're good. They're good cash generators. Like it's 30%, but it's a lot like FEPI and AIPI.
You're getting 30 or 40%. But the point was just that like if you have a question on something we haven't even talked about, like Tim will totally evaluate it and let you know what he thinks. So I mean, any question, whatever.
Except for O. I'm not talking about O anymore. Oh man, we got some heat on O. Because apparently people are really, really, really touchy about O. Really got hard-ons for that one, Tim. We said that we thought it was going to... The next podcast is going to be like how I evaluate REITs because there's like some... Apparently people who are crazy pants is about how that's evaluated.
Some problems with how I'm evaluating REITs. So I'm going to go through exactly how I evaluate them. It's like they think I just literally look at the profit margin, which is not the case.
Oh man, we got some heat on that. That was fun. There's some people that are really pissed off about that.
Don't stop making videos because you don't know what the hell you're talking about. Like then stop watching the videos. It was really negative emails or comments and it's like whatever.
But like now I'm going to make a podcast and an email about how I evaluate REITs. And there's like eight or nine factors, not profit. The profit margin is like one of the eight.
And now I'm actually really curious to see what actually happens with O because they don't think that it's gone anywhere. And Tim's like spidey sense over here. I hate to say it, but like the experience I've had with him for the last three years, usually when he has a spidey hunch, things happen.
And that's, I don't know if we talked about PTMN on here. I think that was also another reel. But PTMN, it's a BDC, right? So Tim's looking at it.
The BDCs kind of tend to move in a pack. And Tim basically was like, what the hell is going on with PTMN? We were only in it for like, what'd you say? A couple of weeks, two months, two months at that. And he's just like, something's wrong with this.
He's like, something's just wrong. He's like, I can't see it in the financials. I can't see it in this, can't see it in that.
So he sells it. And then the earnings report comes out. And they cut their dividend by like 30 some cents.
And it had a like, how much was that cut? It was like a 50% cut or something. Like 50%, yeah. And then it had a 24% like actual price drop.
So we like completely avoided another icon, MPW in like camping world. So like, dude, high five. That's like all I gotta say.
But what I've said about O is I don't think they can sustain the dividend. Yeah, even if you're not supposed to be using the- They're like, well, you have to look at the AFFO, which is the adjusted something- Financial. Free cash or whatever from operations.
Yeah. Which is fine and dandy. But if you look at all the other metrics, their debt's gone up.
Their revenue's gone down. They've actually taken on more of- They used to be like a pretty specific REIT. And now they're kind of branching out into different components of real estate.
And like, I don't like all their- Like it's very difficult to maintain revenue and costs whenever you have your hands in 16 different things, like 16 different components of REITs. Their debt's gone up. Their payout ratio is like 300 some percent.
I think it's 311 percent. And then there's like a whole assortment of other factors. Tim said that some of the- I get that they've raised a dividend like 30 some years in a row.
I'm not disputing that. Like- But that's pressure to keep that raised, right? Keep borrowing. You see their debt going up.
They're borrowing more money to pay on their dividend while they're investing in other stuff. So like something's going to have to give there at some point. Yeah, something's got to give somewhere.
And- They're going to have to refinance that debt because they've taken on debt the last like four years. Since COVID, they've taken on a lot more debt. So they're going to have to refinance that debt at some point.
Unless they drop the interest rates and it actually makes sense to do that. If the interest rates go down, they might be lucky. But if the interest rates don't go down, which I don't think they're going down very much, they're going to have to refinance the debt at a higher interest rate with all the debt they already possess with less revenue.
They have like a lower EPS. I don't know. There's just something about it that I don't like.
For me, REITs are a risk reward. So what am I willing to risk to get a yield? In O's case, the yield is like five and a half percent. So what am I willing to risk for five and a half percent yield? It's not what they have going on.
I would rather invest in ABR, which has way shittier metrics in some areas in O, but you're getting a 14% reward for that risk. But that's my opinion. Yeah.
And again, we didn't say you didn't have to invest in it or you had to get out of it. And these people were just like chomping. It was really funny.
It was really funny. Sorry for the tangent. Next week's email is going to be how I evaluate REITs.
This is a segue into it. I'm actually really curious. So that'll be fun.
Because we've done, I think, stocks in general and we've done closing of funds? Yeah, closing of funds. Is it closing of funds? Yeah, I guess it was closing of funds. With the NAV and everything.
I'd rather actually hold a closing of fund that deals with REITs that has O in it. But that's me. Facts.
So we'll see you next week. Have a good one. Next week's REITs.