I did it. I’m earning $100 dollars a month in passive income from a dividend portfolio that I built with money I earned on the side. If I can do it, anyone can. I remember how I felt when I began this journey. I was excited at the prospect of earning $100 dollars a month doing nothing. I was determined. My determination has now turned into a habit. And I’ve learned a lot about value, about money, and about human psychology. But with the backdrop of the self-inflicted wound to U.S. hegemony it feels bittersweet.
This could be a great opportunity to buy, but the world order is once again shifting. Change is inevitable and no one can predict the future. You can’t time the market.
Despite all of this, I think that – on the whole – my strategy is still viable. For the first time since I began this journey I exited a position. The classic advice is to cut the losers and let the winners grow. So I sold off all of Prospect Capital (PSEC) and reinvested it into SPHD. A somewhat high expense ratio ETF that provides low volatility dividends.
My goal for the remainder of this year is to continue earning income on the side and continue investing, but my strategy will shift. I intend to build in greater risk management. As soon as I hit $105 dollars per month in dividends I will divest myself of NVDY for good (though it was a fun experiment). And then I suspect I will divest myself from GOF. This will lower my yield, but increase the portfolio’s security.
I will take a closer look at diversification and asset allocation (but I still want a monthly dividend payout for now), risk parity and portfolio rebalancing, perhaps hedging and stop-loss strategies, and maybe even volatility and tail-risk monitoring and adaptive and dynamic risk management. I will also look at tax treatment now. Though the underlying ethos will still be good companies at fair prices that have continuously increased their dividend payout over a long period of time.
After that, however, the gloves are off. I have built my current portfolio with income that anyone could have earned on the side. I may use new strategies to generate income that are not necessarily available to everyone, but which hopefully inspire creativity in seizing whatever opportunities are available.