I know that a few of you here are into equities, along with myself. But, I decided to pose a hypothetical question and see if you all might be able to help, and give me some ideas. If you had 1.5 million dollars, and wanted to generate an income of $10,000 per month after tax, what specifically would you do to create this income stream. Not wanting to be too heavily weighted in the market either. Would you choose REITs, Convertibles, CMO's, Muni's, High yields, etc. And be specific if you can, by creating a specific portfolio with rates of return. There might be a nice something in it for you if any of you ideas look good.
Investing for Income
- Thread starter Doughboy
- Start date
Doughboy will post some income trusts in a few days. Believe income trusts will grow in popularity. In Canada many companies have turned themselves into income trusts, the sector is a little overvalued as people chase yield.
thanks
selkirk
thanks
selkirk
Selkirk,
Thanks for the reply and help. Am familiar with PVX, and a few others, but not of the entire spectrum of income trusts out there. Do you know of any American income trusts, or only Canadian? Will try and put together a list also, and we can compare. Problem with them I see is taxed as income. So, if I invested 1.5 million at 10%, would give me $150,000 a year pre-tax, and approximately $97,500 after taxes or $8,125 monthly leaving me shy of my goal of $10,000 pe month in income. That is before any state tax and/if AMT tax is included. I think my taxable equivalent yield is going to be somewhere in the 11% range. I know I might be stretching it, but I think it can be done, and without too much risk also, and not dependent on the market either.
Thanks for the reply and help. Am familiar with PVX, and a few others, but not of the entire spectrum of income trusts out there. Do you know of any American income trusts, or only Canadian? Will try and put together a list also, and we can compare. Problem with them I see is taxed as income. So, if I invested 1.5 million at 10%, would give me $150,000 a year pre-tax, and approximately $97,500 after taxes or $8,125 monthly leaving me shy of my goal of $10,000 pe month in income. That is before any state tax and/if AMT tax is included. I think my taxable equivalent yield is going to be somewhere in the 11% range. I know I might be stretching it, but I think it can be done, and without too much risk also, and not dependent on the market either.
Kirk,
What do you think of the idea of doing a partial investment iin a portfolio of say 10 stocks that pay a collective dividend of about 3-4% annually, and selling 4 to 6 month calls and trying to bring in another 3-4 %. Giving myself some downside hedge, but bringing in a guaranteed income stream, and also giving myself an upside if I get called out. I also like that I can reassess every 4 to 6 months as I get called out of some or all of my positions. Problem I see is being taxed short-term on gains.
Did a lot of reearch on the Royalty Trusts, Oil Trusts, and REIT's. HAve come up with some I like, but not many because of the diminishing supply in oil trusts. Have to find ones that have a long time before they run out of oil, otr whatever they specialize in. Think I can use a good REIT portfolio, but htey are all so overpriced right now. Are there any REIT's or trusts that you like right now?
What do you think of the idea of doing a partial investment iin a portfolio of say 10 stocks that pay a collective dividend of about 3-4% annually, and selling 4 to 6 month calls and trying to bring in another 3-4 %. Giving myself some downside hedge, but bringing in a guaranteed income stream, and also giving myself an upside if I get called out. I also like that I can reassess every 4 to 6 months as I get called out of some or all of my positions. Problem I see is being taxed short-term on gains.
Did a lot of reearch on the Royalty Trusts, Oil Trusts, and REIT's. HAve come up with some I like, but not many because of the diminishing supply in oil trusts. Have to find ones that have a long time before they run out of oil, otr whatever they specialize in. Think I can use a good REIT portfolio, but htey are all so overpriced right now. Are there any REIT's or trusts that you like right now?
Doughboy most of the trusts I trade and follow are only in Canada, but one to watch is Enerplus ERF.un, (ERF) has supply of 10 years plus.
would rate it a hold, main reason it yields 10.91% when I first started buying it had a yield of 14%+. worth putting on watch as it has good managment and a good track record, just fully valued at this point.
another worry I have with the oil and gas trusts especially the smaller ones is it should be harder to buy small to med sized players at a reasonable price. since many other trusts are after the same thing.
people are chasing yield Manitoba Tel is a good example they are thinking about going into an income trust it they do people believe it will trade for $56-$60 if not then it would trade around $38.
most of the reits in Canada trade at just over 7% yield Riocan, HR, these are good trusts but hard to buy at these yields considering some good corporates bonds give me 5-5.5% with no (little risk).
like the idea of writing covered calls on stocks, I write options on stocks 1-12 months out, just depends on the price I can get for a certiain option.
also only do this with about 30 names, stocks that I follow. should note the prices I can get for calls or puts do not seem as good as 12-24 months ago.
by the way a cdn. oil company with oil reserves Suncor SU of 40 years aprox. at $24.95US $33.40 cdn. would rate it a hold target 12 months $35cdn. but a good boring oil company to watch.
thanks
selkirk
thanks
selkirk
would rate it a hold, main reason it yields 10.91% when I first started buying it had a yield of 14%+. worth putting on watch as it has good managment and a good track record, just fully valued at this point.
another worry I have with the oil and gas trusts especially the smaller ones is it should be harder to buy small to med sized players at a reasonable price. since many other trusts are after the same thing.
people are chasing yield Manitoba Tel is a good example they are thinking about going into an income trust it they do people believe it will trade for $56-$60 if not then it would trade around $38.
most of the reits in Canada trade at just over 7% yield Riocan, HR, these are good trusts but hard to buy at these yields considering some good corporates bonds give me 5-5.5% with no (little risk).
like the idea of writing covered calls on stocks, I write options on stocks 1-12 months out, just depends on the price I can get for a certiain option.
also only do this with about 30 names, stocks that I follow. should note the prices I can get for calls or puts do not seem as good as 12-24 months ago.
by the way a cdn. oil company with oil reserves Suncor SU of 40 years aprox. at $24.95US $33.40 cdn. would rate it a hold target 12 months $35cdn. but a good boring oil company to watch.
thanks
selkirk
thanks
selkirk
