# $75K per Year



## tygrus (Mar 13, 2012)

I am looking for ideas to generate $75k per yr off $1MM. Not going to invest for 3% yield, need more than that.

What funds would you suggest to give such a return. And since a portion of the yield is going to my mortgage, ROC is fine.


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## CalgaryPotato (Mar 7, 2015)

A safe, consistent 7.5% per year?

Yeah, I'll take that too, please and thank you.


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## gardner (Feb 13, 2014)

Some Couch-Potato portfolios yielded in the 6.5% range last year.
http://canadiancouchpotato.com/2017/01/06/couch-potato-portfolio-returns-for-2016/

To get in the 7% to 8% range you're going to have to rely heavily on equities, and that will not be safe or consistent.


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## zylon (Oct 27, 2010)

http://www.centurion.ca/

I've owned the _*Apartment REIT*_ since 2010.


monthly payments like clockwork into my account
8% per annum
mostly ROC
plus about 20% growth since 2010

Sometimes they close the _*Apt REIT*_ to new investors - I think it's open now.

Other options are the two _*Trusts*_, which I'm not familiar with.


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## tygrus (Mar 13, 2012)

gardner said:


> To get in the 7% to 8% range you're going to have to rely heavily on equities, and that will not be safe or consistent.


Returns are not the same as yield in my view. Pure yeild is what I want.


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## Nerd Investor (Nov 3, 2015)

This isn't something you want to jump into, but if it were me I would look at adding some low-moderate risk options strategies. You can write some pretty high probably covered calls or puts to squeeze out 5%-6% annually which should help get you to your goal assuming your portfolio holdings are yielding 2.5%-3%. 

Some REITs and Pref shares as _part _of the mix will help push up your average yield but it wouldn't be prudent to chase those yields and make that the majority of your portfolio.


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## redsgomarching (Mar 6, 2016)

7.5% good luck lol. I would aim for 4-5% and then take the remaining 2% through ROC or depletion. 

http://www.gordonstirrett.com/calculators/investment-withdrawal-calculator

using this calculator and 5% return compound your 1 mill would last you 22 years.


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## agent99 (Sep 11, 2013)

tygrus said:


> Returns are not the same as yield in my view. Pure yeild is what I want.


Some things to look at:
- Closed end split preferreds
- Preferreds
- Convertible debentures
- Funds like say SIN.UN that contain a basket of high dividend payers plus REITs. (currently 7.33% yield of which about 25% will likely be ROC)

You won't likely get 7.5%, but maybe 5.5%?

If you want to pay off mortgage, presumably this will be in a taxable account. No immediate tax on ROC, but your acb will go down and if you sell sometime down the road, you may owe significant CG taxes.


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## lagagnon (Apr 13, 2017)

You don't say outright but I am assuming you are now retired? If that is the case then I suspect almost any financial advisor would tell you to pay off the mortgage first. You also don't state approx how long you suspect your lifetime will be but you need to factor that in as well. And as the others state here I think you're pushing it to expect more than 5% in the long run.


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## tygrus (Mar 13, 2012)

Well I got close to the $75k but not quite. Had to rely on covered calls to boost the yeilds. 

Comments?

Canoe EIT Income Fund
iShares S&P/TSX Capped REIT Index ETF
iShares S&P/TSX Canadian Preferred Share Index ETF
BMO Laddered Preferred Share Index ETF
iShares Canadian Financial Monthly Income ETF
BMO Covered Call Canadian Banks ETF
BMO Covered Call Utilities ETF
iShares Diversified Monthly Income ETF
BMO US High Dividend Covered Call ETF
BMO CA High Dividend Covered Call ETF


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## AltaRed (Jun 8, 2009)

Nothing will get you 7.5% consistently year after year with any kind of diversification.


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## tygrus (Mar 13, 2012)

AltaRed said:


> Nothing will get you 7.5% consistently year after year with any kind of diversification.


Well $58k isnt bad. And there is plenty of diversification there. US-Canada different industries. Bonds dont interest me.


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## AltaRed (Jun 8, 2009)

$58k still seems high on an ongoing basis. Based on what time period? 5 years? 10 years? Since the bull market began in Mar 2009?


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## Eder (Feb 16, 2011)

If you want 7.5% (9.5% before inflation) there needs to be stock picking & capital gains.


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## james4beach (Nov 15, 2012)

tygrus said:


> Well I got close to the $75k but not quite. Had to rely on covered calls to boost the yeilds.
> 
> Comments?
> 
> ...


Many of these funds are designed to make investors _feel_ like they're getting a sustainable yield. Really, the yields are not sustainable. XTR (iShares Monthly Income) is a fund that already went through this, and several years ago they cut the distribution. Over time, they will have to keep cutting the distribution because the payout yield of 5.3% isn't sustainable.

The junk bonds and dividend stocks that XTR holds can't generate 5.3% in distributions. Part of what you're getting paid out is the _capital appreciation_. You don't want to hear that, and iShares knows that, so they're doing it under the hood and hiding you from the process. But trust me, you're being paid with capital appreciation.

The covered call ETFs are another kind of sleight of hand. This is yet another way to convert a total return to something that looks like a steady monthly payout. All of these products have been designed to fill the void left by ultra low interest rates. Retirees *crave* fixed income, so they're giving you something that looks like fixed income.

You will probably be best off if you just use a standard diversified stock/bond portfolio, and withdraw your desired amount of $ out of the portfolio every year. Then at least it will be transparent what's going on, because either way, you will be depleting your capital.

Look at the average MER of the funds you listed, something like 0.60%. This is how they exploit your desperation for yield. FIE has 0.94% MER !!

You could hold a simple couch potato portfolio like XIU / XAW / VAB and end up in more or less the same place, with an MER well under 0.20%


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## tygrus (Mar 13, 2012)

Eder said:


> If you want 7.5% (9.5% before inflation) there needs to be stock picking & capital gains.


Then I should probably just buy the S&P 500 and sell some every year for income. Was really trying to use ETFs to reduce volatility.

I agree XTR has some junk in it, but the others dont and are just covered calls. I have owned some covered call stocks for many years and they haven't crashed yet or cut distributions.


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## Saniokca (Sep 5, 2009)

lol srv.un


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## james4beach (Nov 15, 2012)

tygrus said:


> I agree XTR has some junk in it, but the others dont and are just covered calls. I have owned some covered call stocks for many years and they haven't crashed yet or cut distributions.


The BMO covered call ETFs have lower total returns than the non-covered-call versions. This illustrates that they are converting total returns to yield payout, but end up with something less efficient than if you just sold the shares yourself.


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## dubmac (Jan 9, 2011)

http://www.mawer.com/our-funds/performance/
MAW104 produced 8.6% from inception. 7.8% over last one year, and 4.9% over past 2. well diversified. low mer.


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## dubmac (Jan 9, 2011)

dubmac said:


> http://www.mawer.com/our-funds/performance/
> MAW104 produced 8.6% from inception. 7.8% over last one year, and 4.9% over past 2. well diversified. low mer.


...oops that is return, not yield. 
I can't suggest anything other than DFN for a yield around 7.5%. And DFN is NOT a good choice!


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## tygrus (Mar 13, 2012)

Ok you guys guilted me. Reworked it to come up with this;

iShares S&P/TSX Capped REIT Index ETF	XRE
iShares S&P/TSX Canadian Preferred Share Index ETF	CPD
BMO Laddered Preferred Share Index ETF	ZPR
iShares Core Canadian Universe Bond Index ETF	XBB
iShares S&P/TSX Composite High Dividend Index ETF	XEI
iShares Core S&P 500 Index ETF	XSP

3.7% yeild. Lower than I would like but I want to sleep at night I guess.


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## canew90 (Jul 13, 2016)

tygrus said:


> Ok you guys guilted me. Reworked it to come up with this;
> 
> iShares S&P/TSX Capped REIT Index ETF	XRE
> iShares S&P/TSX Canadian Preferred Share Index ETF	CPD
> ...


It won't be pure yield. There will be ROC, probably some CG and some interest.


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## lonewolf :) (Sep 13, 2016)

Maybe rent out house buy used mobile trailer to live in a trailer park to help bring income up to 75,000. Was listening to guy on internet that owns trailer parks going rate he charges is 300 a month. A trend a lot of the middle class are doing to bring down costs


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## milhouse (Nov 16, 2016)

Just for discussion purposes as I wouldn't recommend completely putting your eggs in one basket to achieve a 7.5% yield but a couple of interesting, though unrealistic scenarios...
Boston Pizza Royalties Income Fund's share price took a hit in late 2015/early 2016 along with the rest of the TSX when the market was feeling the impact of the oil shock and ended up yielding over 8%. There didn't seem anything fundamentally wrong with their business though I suppose they could have felt impact from customers in AB reducing spend. 
Aimia was yielding about 8.5% before it's share price fell off a cliff when AC announced it was going to set up its own loyalty program. Its shares took another hit when they suspended their dividend though the company said it wasn't a liquidity problem but rather a rules based requirement in the Canada Business Corp Act. To state the obvious, with their share price under $2, it's seemingly a very speculative investment at this time. However, if they can turn confidence around by securing and announcing a new airline partner with good conditions, I can see it yielding dividends at a nice clip again.


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## gibor365 (Apr 1, 2011)

> Boston Pizza Royalties Income Fund's share price took a hit in late 2015/early 2016 along with the rest of the TSX when the market was feeling the impact of the oil shock and ended up yielding over 8%


I hold SRV.UN for about 5 years, it's yielding more than 7.5%. One of the dividend champions AT&T yields 5.3% now and was increasing dividends for 30+ years, CHE.UN yielding now almost 7%, many of the Canadian REITs have 7%+ yield, BCE 4.8%... thus if you buy on some dip you may have rather diversified ,low beta portfolio, may be not with 7.5%, but in 5-6% range


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## tygrus (Mar 13, 2012)

Looking for other select high div yeilders to bring this up a bit. Suggestions?


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## postflop (Aug 19, 2017)

tygrus said:


> Looking for other select high div yeilders to bring this up a bit. Suggestions?


If you still looking, maybe i've got something of your interest.


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## james4beach (Nov 15, 2012)

tygrus said:


> Looking for other select high div yeilders to bring this up a bit. Suggestions?


You could use CDZ, one of the best dividend ETFs we have in Canada... I actually like it because it's well diversified across sectors and its total return is about as good as XIU. Dividend yield for CDZ is around 3.5% to 4.0%

Or you could look at its portfolio and replicate it yourself, if you prefer the individual stock route.


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## fxx (Aug 22, 2017)

tygrus said:


> I am looking for ideas to generate $75k per yr off $1MM. Not going to invest for 3% yield, need more than that.
> 
> What funds would you suggest to give such a return. And since a portion of the yield is going to my mortgage, ROC is fine.


You can get this profit with Forex. Of course the risk is higher than anything on the market so I wouldn't advise you to put all your money in just Forex. 

I started a Forex managed account program a few months ago and I only allocated 10% of my total money in it. The result so far is higher than my expectation was.

But you have to be careful. I always take the profit month by month and only risk what I can accept to loose. So far, in return I get 5-15% monthly profit.

PM me if you are interested.


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## james4beach (Nov 15, 2012)

fxx said:


> PM me if you are interested.


fxx, I see you are new to the forum. I'm one of the moderators here. I can see that you are posting from an IP address located in Hungary.

Are you a Canadian investor? Do you have experience investing in Canada?


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## fxx (Aug 22, 2017)

james4beach said:


> fxx, I see you are new to the forum. I'm one of the moderators here. I can see that you are posting from an IP address located in Hungary.
> 
> Are you a Canadian investor? Do you have experience investing in Canada?


Hello james4beach,

I am sorry if I interfered with the rules I had no intention to do that.
I am in Budapest, Hungary now, my hometown. I moved to Canada last December for work.
I have a few investments. Forex and stocks this is why I registered here.
My investments are not specifically Canadians rather worldwide.
If my post was against the rules I am sorry.

fxx


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## james4beach (Nov 15, 2012)

I was first checking to see if you were a real person. We get lots of spam posted from distant countries, but I can see that you're real and actually have a connection to Canada - great!

Please take a look at the forum rules in any case:
http://canadianmoneyforum.com/announcement.php?f=2


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## Eder (Feb 16, 2011)

And let us know if that 15% monthly profit has been sustainable ...if so you must be a trillionaire and own the internet I would imagine.


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