About once a decade I channel or stumble upon a financial idea that seems too good but turns out to be legit. About 7 years ago, I saw that with a remaining mortgage at $120,000, and a second mortgage for $50,000, if we paid down the Main to $50k, and paid off rest of the Main with the 2nd, we could then pay down the remaining $50K very fast using the monthly payment amount we were used to. The remaining time dropped from 22 years to 5, and the minimum payment dropped from $800 for principal and interest on the main, to $160 (interest only) on the 2nd.
The risk was we might need the $70,000 of our retirement savings before we had rebuilt them post payoff. We took the risk, it worked, and now we're building our reserves back.
Here comes a current one. I research and think. I'm not a licensed or otherwise 3rd-party certified financial anything. Read this with that in mind and perform you own due diligence.
When scanning for companies that paid high dividends I found this—an ETF (Exchange Traded Funds) company called YieldMax has launched the first 3 of 15 new ETFs that pay between 50 to 70% per year in dividends, paid monthly. That's not a misprint.
The tickers are OARK (keyed to Kathy Wood's ARKK Innovation ETF), TSLY (keyed to Tesla), and APLY (keyed to Apple and just launched a couple of days ago). More to come. They use Treasury Bonds as collateral for selling call options for income which they then distribute to shareholders.
I've put a little money in and await my first dividend payments to reinvest.
Many of the higher-yield ETFs pay about 12%. Right now, YieldMax share prices are in the mid-teens to $20, they should be closer to $83 to give a 12% dividend. The potential for price appreciate alone is between 4 to 6 times.
Thought I'd share it before the market figured out what they really do and are worth.
Revu2