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In today's video, we're going to discuss how to live retired now, even with a smaller account, by using YieldMax ETFs with massive dividends like Tesla, which is a synthetic covered call ETF on Tesla.
Learn how to retire early with smaller accounts using YieldMax ETFs, margin loans, and dividend strategies like Tesla synthetic covered calls and Cornerstone funds.
Key Takeaways
- Using margin loans strategically can amplify returns and accelerate reaching FIRE even with smaller accounts.
- High dividend ETFs like YieldMax and Cornerstone provide both income and capital gains, but require careful management of margin maintenance and rights offerings.
- Diversification and indexing with funds like Cornerstone reduce risk compared to concentrated stock exposure such as Tesla.
- Timing around rights offerings and using dividend reinvestment plans (DRIPs) can significantly enhance returns in closed-end funds.
- Generating qualifying dividend income improves loan access and financial independence beyond just credit scores.
What the video covers
- The video explains how to achieve financial independence and retire early (FIRE) using YieldMax ETFs with high dividends, including a synthetic covered call ETF on Tesla.
- It emphasizes the importance of a sustainable system, especially for smaller accounts, involving margin loans to increase purchasing power.
- The presenter shares personal experience starting with a $2K loan and building an account to $25K to unlock 4x margin purchasing power at E*Trade.
- Tesla ETFs offer high dividends and cash flow that can pay back margin loans in about two years, but come with high margin maintenance and volatility risks.
- Diversification is crucial to avoid headline risk from single stocks like Tesla; Cornerstone closed-end funds provide a stable indexed option with a 21% dividend.
- Cornerstone funds require timing around annual rights offerings to capitalize on premiums and avoid price drops, with alerts provided via the presenter's Discord channel.
- Margin maintenance is a key factor to monitor for sustainable withdrawals and avoiding forced liquidations during market downturns.
- Additional funds like Defiance and Cornerstone help generate dividends and capital gains, qualifying as income to secure larger loans and improve financial flexibility.
- Selling options on large accounts can generate significant premium income, further lowering cost basis and increasing overall returns.
- The presenter offers eGuides and a Discord community for ongoing support and alerts to help followers implement these strategies effectively.
Chapters
- 00:00Introduction to retiring early with YieldMax ETFs and Tesla synthetic covered calls
- 00:55How to get started with loans and building your account
- 01:48Tesla ETF dividends, margin maintenance, and risks
- 03:42Market risks: stocks vs indexes and diversification importance
- 04:32Cornerstone closed-end fund overview and dividend strategy
- 05:29Managing Cornerstone rights offerings for maximum gains
- 06:21Avoiding headline risk and staying indexed with margin
- 07:05Additional funds, qualifying income, and loan advantages
- 09:51Options selling to increase income and reduce cost basis
- 14:01Portfolio follow-up, community, and closing remarks
Full Transcript — Download SRT & Markdown
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Now, you can't just drop your entire account into Tesla. There's a system required for doing this sustainably for the long term, especially with smaller accounts, and I'll share with you that system. Now, YieldMax dividends help us earn over $300,000 per year in dividends,
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as you can see below. And our performance value shows that we're beating all the indexes once again.
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We're up 19% for the year. The S&P is up 10, and the Nasdaq's up 11. So, we're beating all the indexes on a year-to-date basis with YieldMax funds. And on a daily basis, we're up $7,000 or 74% on
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Friday. And if you look above, that beat the NASDAQ. So, we're beating all the indexes on a daily basis and on a year-to-date basis using YieldMax, Defiance, and Cornerstone Funds. They help us live the FIRE lifestyle, which means financially independent, retire
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early. If you need help doing the same, email me for my eGuides at [email protected].
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It's really unusual to get outperformance like this over the indexes like we're getting. Plus, to get the day gains that we're getting with the dividends, that's also really unusual. Okay, $300,000 per year in dividends. Plus, we're outperforming, okay, on a year-to-date basis. And on a
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daily basis, we're up $7,000. So, we're getting the best of both worlds, dividends and capital gains from Cornerstone, YieldMax, and Defiance. And there's a system to doing this properly, to getting this outperformance, even with a smaller account. And the first thing you have to
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do to get started is to take out a loan. Okay? For every $1 you put in your account, you get $4 of purchasing power.
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I'm just using a modest amount of that margin purchasing power to get ahead. This $200,000 that I have in the form of a margin loan will be paid back in less than one year thanks to my dividends, which are over $300,000 per year. So, you
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can take a loan out. You can use credit cards, personal loans, whatever you want to get started. I used a loan from my parents. I got a $2K loan from my parents to start like Buffett and Dan Loe did.
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And then I sold my favorite car. I lived at home for a while. And I used a job to build up my account to over $25K. Once I got to $25K, I was in business because with every $1 you put in your account,
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you get four after you reach $25K at E*Trade. At other brokers, it's less or more. But with E*Trade, again, if you put in $25,000, you get times four to play with. So, we get a million and a half to
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play with. $25K is the magic number once again. And I never touched margin at first, thinking it was taboo. But when I learned about how the rich use debt to get ahead and how Elon Musk used margin to buy Twitter, that information
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changed my life. Margin and maintenance. Maintenance is the key to the FIRE lifestyle. Okay. Financially independent, retire early. As you can see here, Tesla is 50% maintenance. So Tesla might have a 57% dividend and it cash flows you in 2 years. So even if
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you're down on paper and you're losing in Tesla, well, you're still winning in the next two years because if you hold Tesla for 2 years, you're paid back in full. However, the margin maintenance on this is 50% and it sucks up half your
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equity. If you need help understanding maintenance, that's in my volume 3 eGuide. So again, with YMAX, you have to watch maintenance and when you're using margin, you especially have to watch maintenance because even if you don't use margin, you want to have low
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maintenance names so that you can withdraw freely out of your account. I can withdraw anytime I want out of my account. With this available withdrawal, we can withstand over 30% corrections in the market and I can still withdraw
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freely from my margin debt. So even though I have margin debt on here, I can swipe my E*Trade credit card and go wherever I want in this world even in debt and I just add to my debt. But the
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key is having low maintenance which keeps your available withdrawal high. And Tesla again is high maintenance. So you have to be aware of Tesla. And also you don't want to put all of your eggs in one basket. Okay, Tesla is a stock.
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Stocks can fall by 50% or more in a given bear market, whereas indexes usually fall 10 to 30% in a bear market.
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Yes, once again, the Tesla dividends will cash flow you over time in less than two years, but can you stand all that pain upfront, especially when you're in margin? So, you have to go for lower maintenance names or switch to a
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broker with lower maintenance. Robinhood and IBKR are great for lower maintenance, but they don't offer closed-end funds like Cornerstone who have the special DRIP. Cornerstone is a secret to my success at this channel.
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Even if you have a smaller account, you want to own some Cornerstone. Cornerstone is the index and it's a four-star fund. So four-star fund, Cornerstone is and it's the index. It tracks the S&P largely. And as you can
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see on its chart, it moves upward left to right on Morningstar's chart. But on E*Trade's chart, you see it goes sideways to down. That's because you have to factor back in dividends, DRIPs, and rights offerings. Cornerstone, like many
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other closed-end funds, has rights offerings almost every year. So you have to time this fund between its rights offerings. It's indexed, so it's tied to the S&P. It has a 21% dividend every year that it sets at its NAV. And it
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averages 20 to 30% premiums, unlike with open-ended funds. Closed-end funds have these premiums. So, you can get the 20% dividend and the special DRIP where when you buy this fund, if you own it up here, it's dripping the dividends down
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here at the bottom for free money every month. So, you're getting the 21% dividend and the special DRIP. Plus, you're getting these 20 to 30% premiums where once again, if you time them between rights offerings, you can really
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level up your account. If you need help understanding how to play Cornerstone between its rights offerings, that's in my volume 4 eGuide. When you buy my eGuide, you get free access to the Discord channel for life where we alert
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you of the Cornerstone rights offering announcement. We have almost 1,000 members here in the Discord showroom pursuing the FIRE lifestyle and we're all on top of this rights offering announcement because it's the most important thing to leveling up our
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account. It's what stands in the way of us and financial freedom is this rights offering announcement from Cornerstone because once the rights offering is announced, it's going to drop the stock precipitously. And that's why you want to sell before that and get in after
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it's done. And then you reload your gains because you pocket those 20 to 30% premiums and you pocket the 20% dividend and the special DRIP. And then you just rinse and repeat after every rights offering process. So, if you can sell
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before that rights offering and buy back after, it really levels up your account and you avoid all that pain on the downside initially when the rights offering begins. And this is pretty straightforward to do, but most people buy my eGuides just so they get the
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alert from Cornerstone on in Discord. So, if you buy my eGuides, you get this alert. And I watch the alert every day for Cornerstone when the rights offering occurs, but you never know if you might miss it or not. Maybe you're out of town
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for a day or so. So, the alert comes here in Discord in case you miss that.
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So, you can't just put all of your eggs in one basket like with Tesla because headline risk is too great with Tesla.
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Elon Musk can say the wrong thing and Tesla will tank overnight. I index my four times margin power with Cornerstone because that's the only way to invest anyway to stay indexed. Especially when you're using margin, you have to stay
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indexed with dividends so that you can pay your bills in a downturn. If the SPY goes down in a bear market, it doesn't have
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the 21% dividend. The dividends don't fluctuate and these help you pay your bills even when you're in a bare market.
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But how can you stay indexed with big enough yields to actually live retired on and to pay bills with without eating into your capital base, especially in a bare market? How can you stay indexed with things like Schwabd, SPY, again if
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they don't have big enough dividends? Well, the answer once again lies with Cornerstone. Cornerstone's dividends don't fluctuate in a bare market unlike with YieldMax and Tesla. Cornerstone sets it 21% dividend for the year and they don't fluctuate until the next
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year. This is a reason not to put all of your money into one stock like Tesla because they can drop their dividends in down markets unlike with Cornerstone.
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Tesla it goes by its volatility. So if the volatility drops in Tesla then its dividends will fall in a down market unlike with Cornerstone. It doesn't go with volatility. It goes by different metrics. So it will keep its dividend
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the same that year. The next year it will change it. Some years they raise the dividend, some years they lower the dividend. But if they do lower the dividend, the key is resetting your yield with the rights offering. And once
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again, if you need help with the cornerstone rights offering, that's in my volume 4 e guide. Then you have to diversify with other dividend funds that are indexed like defiance who also have lower maintenance. QQQY has 30% maintenance whereas yield max has 50%
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maintenance. So that's a huge deal here. Okay, QQQY once they lower the maintenance, I put a lot more money into it. QQY has 30% maintenance and it has a 70% dividend. So with this lower maintenance, we're preserving a lot of
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our equity. And again, if you need help understanding maintenance, that's in my volume 3 e guide. and it gives you a 70% dividend. So, we're getting all these dividends to help us pay down our margin much faster with QQQY. And in a down
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market, QQQY tends to outperform the NASDAQ. So, that's how we're outperforming the markets on down days, even when being in this extra 200,000 of margin debt or leverage, whichever you want to call it. With this leverage, we're still outperforming on the down
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days. You would think on down days we're getting killed, but you've seen by my past videos that we actually outperform on down days thanks to our unique combination of index dividend funds like cornerstone, defiance, and yield max.
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Yield max obviously I keep it small amounts because they're stockbased and so you have to trade around yield max to offset the erosion. Cornerstone gives you the growth upward, left or right on its chart if you time it between its
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rights offerings. And defiance gives you the extra growth that's also not only paying down your dividends, but it's qualifying for more loans to banks because the income that we receive, the 300,000 in dividends that we receive, this is qualifying as income to banks
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for more loans to level up our account faster. So, you start with a small account with the loan of some sort. Then once you get your dividends built up, you're building up your credit history in a way to the banks, your your
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qualifying income history to the banks. And this allows you to get more loans to level up your account faster once your dividends get to a good enough amount.
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And you get your dividends high up quickly by using margin. So you use a loan out of the gate to get your account going. And then you use margin to get your dividends going even further. And then that acts as more qualifying income
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to banks for loans, which then give you more loans to put in your account and level up faster with. Then all of your dividends pay back both your margin debt and your loans from the banks.
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Qualifying income is better to have than good credit in my opinion. I get way bigger loans with the higher income amounts that I have from dividends than I ever did with high credit scores. You need both though, good credit and
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qualifying income to qualify for bigger loans from the banks. Except with margin, that has no credit check or pre-approval needed. it's automatically granted to you. So margin is a much faster way to grow out of the gate in my
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opinion. The main thing for beginners to realize is that they have to sacrifice upfront and take loans to get ahead like the grades did and most real estate investors do. Loans help you level up your account so much faster and provide
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qualifying income that trading can't provide. 90% of traders lose anyway. So why go that route? Why not stay indexed and stay indexed with dividends so that you get more qualifying income? Trading gains again won't give you any qualifying income because they don't
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consider that as consistent. It's too up and down and unpredictable. Banks only accept dividends as a payto because they are more reliable than trading, even more so than your job. What's more stable, your job or the earnings from
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Fortune 500 companies? These dividends also help provide other loans to you even in a down market. I got my Lexus last year from qualifying income and nothing else. Even if the market is down, my income still shows up to the
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banks. Then I just finance my car and my dividends pay back the car loan automatically out of E Trade. All of my bills are automated out of E Trade and I just add to my margin debt that way and
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my dividends pay that back down. I don't ever have to pay back my debt if I don't want to. The interest just keeps adding on, of course, except we have low interest, so we don't mind. I've negotiated my margin rates down twice.
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Many of my clients who bought my eu did the same thing. And my interest is around 6%. And when you buy my eg guides, not only do you get free access to the Discord channel for life, where we alert you of the cornerstone rights
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offer announcement, but you also get my phone number so you can call me anytime you need help negotiating your rates down. I can also help walk you through maintenance or how I use options or whatever questions you may have about
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your brokerage account. When your account gets big enough, you can sell options against your equity to get more income. I sell these options here. We earn about 30 to 50,000 per year in premiums on a given year with these
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options that I sell. All these options here, they not only pay me thousands of dollars in premiums, but they lower my margin debt by that equivalent amount.
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So, if I make $50,000 from selling options, then my margin falls by 50,000 and I lower my interest in the process.
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Bitcoin, IEP, BTO, we sell options on these. They give us many thousands of premiums in return. Bit X, we receive $6,500 just for selling two puts on it.
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With the click of a mouse, we got $6,500 in cash to pay our margin debt down with. If Bitcoin goes down, we're getting hurt way less than other people because these are long-term puts and our cost basis is much lower than Bitcoin
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outright. Our cost basis is 50 minus 32. So, we're 50% lower than most people are just to receive a break even with our Bitcoin options. So, all the options that I sell, they lower my cost basis and add to my income significantly and
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they pay down my margin debt significantly. And again, you can do this once your account gets big enough.
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But understand when you sell options to watch maintenance as well. So, if you need help selling options, that's in my volume 6 e guide. And once again, if you need help understanding maintenance, that's in my volume 3 e guide. You can
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also look into ensuring your portfolio as it grows, like I do with buying put options, which is totally different than selling options for extra income. I always keep puts on for extra insurance just in case. So, we can withstand over
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30% corrections in the market, as I've told you, and still withdraw freely out of my account, but we also have put options on just in case the market crashes overnight, which will make us a lot more money in the event of a fall.
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if that were to occur. So, we have put options on at all times. We keep a small amount on so it barely even budges our margin debt. And again, it helps me sleep at night because it ensures my
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portfolio past the 30% correction. If you need help understanding how I use puts for insurance, that's in my volume 5 e guide. So, you have to find ways to sacrifice and save money up front. You have to do what you have to do like I
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did and get a loan of some sort to help you get out of the gate easier. Loans are everywhere. You just have to know where to look. If you need more help doing what I'm doing, email me for my eg
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guides at [email protected]. When you buy my eg guides, you get free access to the Discord char for life where we alert you of the cornerstone rights offering announcement. We also have over a thousand members here in the Discord channel and pursuing the fire
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lifestyle. So, if I can't answer whatever questions you may have on your brokerage account, they most likely can.
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You can also follow my portfolio by clicking the join button here on my wall or I'll link that in the description below. And if you like the video, click like or subscribe and I'll talk to you soon. Thanks.
Topics:FIREYieldMaxdividendsETFsTeslasynthetic covered callmargin loansCornerstone fundclosed-end fundsfinancial independence
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