Want $10,000 a Month in Dividends? These 4 Monthly ETFs Could Get You There

Do you have to be fabulously wealthy to achieve $10,000 a month in cash dividends/distributions? Not at all! It’s entirely possible if you know which exchange traded funds (ETFs) offer high yields based on well-known stocks.

Many stocks and ETFs only provide cash distributions once every three months. However, YieldMax is changing the game with a suite of ETFs that feature eye-catching yields and monthly payouts. As long as you’re careful, you could potentially generate $10,000 per month even if you’re not a millionaire.

Indirect Income From Famous Tech Names

If you directly invested in shares of technology giants like Apple (NASDAQ:AAPL), Google parent company Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), and NVIDIA (NASDAQ:NVDA), you would collect some dividend payments. However, they would be small dividends and you’d have to wait three months to receive each company’s distribution.

So, you’d need a whole lot of money and patience to squeeze $10,000 worth of dividends every month out of those stocks. Yet, if you’re prepared to accept certain risks, there’s a way to indirectly invest in those tech stocks and get much bigger payments every month.

The secret strategy is to own certain ETFs from YieldMax. All four of these funds use synthetic covered call option strategies (along with Treasury bonds) to indirectly derive substantial monthly income from famous tech-sector stocks.

The first fund to consider is the YieldMax AAPL Option Income Strategy ETF (NYSEARCA:APLY). With indirect exposure to Apple stock and sophisticated options-trading strategies, the APLY ETF offers an impressive distribution rate (which is similar to a forward annual dividend yield) of 26.97%.

The YieldMax AAPL Option Income Strategy ETF automatically deducts annualized operating expenses of 1.06% from the share price. Thus, the expected net yield that you’d receive might be 26.97% – 1.06%, or 25.91%. You must admit, that’s still a pretty hefty annual yield.

Higher and Higher Yields

The other three YieldMax funds on today’s list use similar options-trading strategies to the APLY ETF, but apply them to different technology stocks. For example, there’s the YieldMax GOOGL Option Income Strategy ETF (NYSEARCA:GOOY), which indirectly invests in Alphabet stock.

The GOOY ETF advertises a 33.14% distribution rate but deducts 1.2% worth of annual operating expenses. Consequently, you might anticipate a net take-home yearly distribution rate of 33.14% – 1.2%, or 31.94%.

Next up is the YieldMax AMZN Option Income Strategy ETF (NYSEARCA:AMZY). As you might have guessed, this fund is indirectly based on Amazon stock.

Currently, YieldMax advertises a whopping 47.52% distribution rate for the AMZY ETF. Be aware, though, that this fund deducts 1.17% worth of annualized operating expenses. In consideration of that, you might expect to achieve a yearly net distribution rate of 47.52% – 1.17%, or 46.35%.

Finally, there’s the YieldMax NVDA Option Income Strategy ETF (NYSEARCA:NVDY), a fund that provides indirect exposure to NVIDIA stock.

With a jaw-dropping 50.19% distribution rate, the NVDY ETF is the highest-yielding fund on this list. The YieldMax NVDA Option Income Strategy ETF deducts 1.27% worth of operating expenses per year, but this could still leave investors with a net distribution rate of 50.19% – 1.27%, or 48.92%.

Achieving $10,000 per Month

Now, let’s do some math to determine how you could potentially achieve net dividends/distributions totaling $10,000 per month. You’ll need a decent-sized investment account, but you won’t need to be ultra-wealthy.

Between the four ETFs mentioned today, the average expected annualized net distribution rate would be (25.91% + 31.94% + 46.35% + 48.92%) / 4, or 38.28%. If you invest $320,000 in equal dollar amounts of APLY, GOOY, AMZY, and NVDY, then you might anticipate net distributions totaling $320,000 x 38.28%, or $122,496.

That equates to $10,208 per month, which would put you above the $10,000 threshold. And, since these four ETFs don’t make you wait three months to see the cash in your account, you’d actually pocket $10,000 or more each and every month.

Big Rewards Come With Big Risks

Bear in mind, however, that these ambitious potential results come with major risks. For one thing, the share prices of APLY, GOOY, AMZY, and NVDY could decline. If that happens, you might end up losing money overall even though the monthly paychecks would keep coming in.

Also, there’s no assurance that the aforementioned yearly distribution rates will remain the same. The yields you see advertised today are susceptible to change at any given moment.

Besides, these funds use covered call option strategies which produce significant income but also tend to limit the upside potential of the share prices. As a result, the underlying technology stocks may go up sharply while the corresponding YieldMax ETFs don’t rise as much.

Frankly, it’s not a very prudent plan to put a full $320,000 into APLY, GOOY, AMZY, and NVDY in a quest to achieve $10,000 in monthly payouts. That said, you could purchase much smaller stakes in these YieldMax funds for indirect, high-yielding exposure to four fantastic technology stocks.