How To Live off

$500,000 Forever

In this income investing report, you’ll discover…

  • How to bank $40,000 annually for every $500,000 you invest,
  • 3 safe funds with dividends up to 9.1% and 10% gains ahead,
  • A “preferred” stock play for 6.5% dividends, and
  • 2 recession-proof REITs paying 8%.

Fellow Income Investor,

A half-million dollars is a lot of money. Unfortunately, it won’t generate much income today if you limit yourself to popular investments.

The 10-year Treasury is stuck below 2%. Put your $500K in them and you’re not even over the single-person poverty level with $10,000 annually. Yikes.

Dividend paying stocks are masquerading around as bond proxies for this reason. But they still don’t yield enough. Vanguard’s popular Dividend Appreciation ETF (VIG) pays 1.7%. The iShares Select Dividend ETF (DVY) pays 4.2% – better, but that still only gets you $21,000 per year, which is only a little over poverty level for a two-person household.

When investment income falls short, retirees sell their investments to supplement the income. Of course the problem here is that when capital is sold, the payout stream takes an immediate hit – so that more capital must be sold next time, and so on.

Avoid the Share Selling “Death Spiral”

Some financial advisors (who are not retired themselves, by the way) say that you can safely withdraw and spend, say, 4% of your retirement portfolio every year. Or whatever percentage they manipulate their spreadsheet to say.

Problem is, in reality, every few years you’re faced with a chart that looks like this. Your dividends are fine, but your stock price tanks big!

Chevron’s Dividend Was Fine – Its Stock Wasn’t

When dividends aren’t enough, you need to sell shares for money to live on. Not good – it means you sell more shares of stock when prices are low, and less when prices are high.

Remember the benefits of dollar cost averaging that built your portfolio? You bought regularly, and bought even more when prices were low? In this case, you’re forced to sell low.

The Reliable Retirement Solution:

Dividends Only

Instead of ever selling your stocks, you should instead make sure you live on dividends alone so that you never have to touch your capital.

This is easier said than done, and obviously the more money you have the better off you are. But with rates and yields so low, even rich guys have a tough time living off of interest today.

You can actually live better than they can off of a (much) more modest nest egg if you know where to look for lesser-known, meaningful and secure yield. I’m talking about annual income of 6%, 7% or even 8% – so that you’re banking up to $40,000 each year for every $500,000 you invest.

And you’ll never have to touch your nest egg capital – which means you’ll never have to worry about stock prices.

The only thing you need to concern yourself with is the security of your dividends. As long as your payouts are safe, who cares if your stock prices swing up or down on a given day?

Most investors know this is the right approach to retirement. Problem is, they don’t know how to find 7% and 8% yields to fund their lives.

And when they do find high yields, they’re not sure if these payouts are safe. Will the company or fund have enough cash flow to pay the dividends into the future? And how sensitive are these payouts to interest rate increases?

Let’s walk through my three favorite vehicles in the investment universe for income today. Regular stocks won’t let you live on dividends alone – but these secure, underappreciated payout strategies will.

And we’ll put a special focus on the interest rate question, which is mistakenly believed to be a threat by headline-focused investors.

“Dividends Only” Vehicle #1:

Closed-End Funds

Some closed-end funds (CEFs) paying up 7%, 8% or even 9% can be good income candidates – if you choose wisely.

You’re probably familiar with their mutual “cousins”. Closed-ends are a bit different. While mutual funds tend to buy individual stocks and mirror the market, CEF managers tend to have wider mandates and longer leashes. A top CEF manager takes advantage of this flexibility to generate alpha.

He might buy safe sovereign debt in Australia when investors are scared of Asia altogether, and lock in secure 6% yields. Or he might buy preferred shares issued by JPMorgan paying 6.1% annually – a deal not available to an individual investor like you or me (more on this in a minute).

A savvy closed-end manager can even borrow cheaply and juice returns. CEFs borrow at rates tied to Libor (the London interbank offered rate) – good living today with the international benchmark at just 2.5%. The “spread” turns already good yields into great ones.

If you feel trapped “grinding out” dividend income with classic 3% or 4% payers, you can double your payouts (or better) immediately by moving to CEFs. And you can often make the switch without actually switching investments.

For example, JPMorgan Chase (JPM) investors can potentially trade in their 2.6% dividend yields for the Gabelli Dividend & Income Trust Fund’s (GDV) 6.2% payout. JPM is GDV’s largest holding amongst a list of blue chip payers plus dividend growers like Wells Fargo (WFC) and Verizon (VZ).

Superstar money manager Mario Gabelli runs his namesake GDV. He combines his yields with growth and leverage to create his outsized yield – which he delivers investors every month, to boot.

Sounds like a sweet deal, right? His investors get the benefit of a legendary money mind along with his access to ideas and cheap money.

And there are funds that deliver even more “alpha” than GDV – which means they pay more, and offer more potential upside. I’ll highlight three of my favorite plays in this space in a moment.

It is bizarre that many first-level investors spent much of the last few years running away from closed-end funds, claiming that their “free leverage lunch” was nearing an end when higher rates were on the horizon.

Plus, they said these funds are going to see more competition from other fixed income assets looking increasingly attractive, making them less so.

The result? Many funds are still selling at bargain prices today thanks to the headline worry that the Fed holding rates at current levels — or even raising them again — could hurt CEFs. But that’s just not true.

Libor — the rate CEFs borrow money at — is tied closely to the Fed funds rate. And the last time the Fed hiked its significantly, CEFs did just fine.

In June 2004, Fed chair Alan Greenspan began boosting rates from then-historic lows. Over a two-year period, he increased the federal funds rate from 1% to 5.25%. An earthquake.

How’d CEFs perform? Three prominent funds – Gabelli’s along with the Calamos Strategic Total Return (CSQ) and the Eaton Vance Limited Duration Income Fund (EVV) – all outperformed the market during this 2-year span!

Higher Rates No Problem for Top Closed-Ends 2004-06

And wait ‘til you see the three closed-end picks I have for you. These “slam dunk” income plays pay up to 9.1% dividends.

Plus, thanks to these unfounded interest rate fears, they trade at steep discounts to their net asset value (NAV) today. This means these funds are perfect for your retirement portfolio because your downside risk is minimal. Even if the market takes a tumble, these top-notch funds will simply trade flat … and we’ll still enjoy those 9.1% yields!

I’ll share the details on my three favorite CEFs in a minute – but let’s get into our next strategy.

“Dividends Only” Vehicle #2:

Preferred Shares

You can double your yields, and actually reduce your risk, by trading in your common shares for preferreds. Most investors only consider “common” shares of stock when they look for income. These are the shares in a company you receive when you place an order with your broker.

Problem is, most dividend darlings don’t pay much on their common shares today. You’ll be hard pressed to find a dividend aristocrat with a yield above 3% or a P/E ratio below 20 – evaporating business models or not!

A Bear Market in Common Yields

MSFT_chart (4).png

A company will issue preferred shares to raise capital. In return it will pay regular dividends on these shares – and as their name suggests, preferreds do receive their payouts before common shares. They typically get paid more, and even have a priority claim on the company’s earnings and assets in case something bad happens, like bankruptcy.

So far so good. The tradeoff? Less upside. But in today’s expensive stock market, it may not be a bad trade to make. Here’s an example that would roughly double your current dividends.

Common shares of JPMorgan (JPM) – which I like and own warrants on – pay 2.9%. Not bad, but you could more than double your yield by buying JPM’s “Series Y” preferred stock offering for 6% annually.

Series what? That’s a big problem with preferred shares – they are often complicated to purchase without the help of a human broker.

The best management teams buy mostly floating rate bonds – which will buffer their portfolios as interest rates rise. It’s important to stick with the experts and avoid convenient ETFs, which aren’t “smart” enough to do this.

I’ll show you how to purchase my favorite preferred fund paying a 6.5% yield in a minute but, before I do, let’s talk about our third high-yield issue.

“Dividends Only” Vehicle #3:

Recession-Proof REITs

How about two REITs paying up to 8.2% that are set to rise in the months and years ahead?

The IRS lets real estate investment trusts, or REITs, avoid paying income taxes if they pay out most of their earnings to shareholders. As a result these firms tend to collect rent checks, pay their bills and send most of the rest to us as a dividend.

REIT investors also benefit from the tax breaks that “pass through” businesses received in the 2017 tax code changes. Investors are now able to deduct 20% of their REIT dividend income.

Interestingly, REIT income would be taxed at a lower rate than regular rental income (which would not receive the deduction). Which means if you don’t have a burning desire to change light bulbs and play landlord yourself, it will be cost-effective to simply sit back, make a few clicks and buy real estate stocks instead of physical properties!

The result is higher payouts than the broader market. The Vanguard Real Estate ETF (VNQ) pays 3.9% today, more than double the S&P 500.

REITs are finally starting to get the respect they deserve – Standard & Poor’s recently gave REITs their own sector for the first time.

Which means there’s a lot of money chasing REITs now, but the first wave of capital is blindly piling into the lone ETF in the space according to Barron’s. Reason being, most of these “first-level” investors and money managers don’t know the individual names that well.

As a result, they’re piling into the blue chips owned by this ETF and missing the true hidden dividend gems in the space. Soon enough they’ll smarten up and start throwing their billions into the real values – like my favorite commercial landlord which yields 7.9%.

This well-connected commercial real estate lender lets us play Monopoly from the convenience of our brokerage accounts. They do all the legwork, building a secure, diversified loan portfolio featuring offices, retail space, hotels and multifamily units.

Management then collects the monthly payments, deposits the checks – and then it sends most of the profits our way as dividends (a requirement of its REIT status).

This is one of those “unicorns” you may hear people talk about but rarely see yourself: a 7.9% payer with a dividend that’s growing like a weed! The regular payout has jumped 36% since it started up in early 2015, with three special dividends thrown in for good measure.

Same for another REIT favorite of mine that pays an astounding 8.2%.

But this mortgage REIT (mREIT) doesn’t own buildings, it owns paper. Specifically, they buy loans and collect the interest – and they make money by borrowing short and lending long.

This business model prints money when long-term rates are steady or, better yet, declining. When long-term rates drop, these existing mortgages become more valuable (because new loans pay less).

Of course, the traditional mREIT’s gravy train derails when rates rise and these mortgage portfolios decline in value. Historically, rising rate environments are challenging for mREITs, but this one is primed for any moves in rates from here–higher, lower or steady.

The firm’s overall mortgage assets are a well-diversified portfolio that includes loans, MSRs (mortgage service rights) MBS (mortgage-backed security) holdings and credit risk transfer (CRT) securities.

Some of these buckets benefit from falling rates, while others run higher when rates rise. It’s a well-hedged asset portfolio that makes money no matter what the Fed does next:

To show you what I mean, the chart below shows the recent mortgage rate rollercoaster (which is the difficult-to-predict orange line) laid alongside this firm’s profits-per-share (the steadily climbing easy-to-predict blue line):

Heads or Tails We Profit

Profits have more than doubled in just two-and-a-half years and the company is now likely to raise its dividend in the near future!

Fortunately, most investors and money managers haven’t taken the time to understand how this REIT generates its profits today. They put it in the “too hard” pile because they’re lazy.

This mREIT should be owned by any serious dividend investor for three simple reasons:

  1. Its diversified portfolio is set to profit no matter what the Fed does next,
  2. It pays a rock-steady 8.2%, and
  3. Has the potential to grow its dividend over time.

Now let’s discuss how you can get a hold of my complete No Withdrawal Portfolio research today, along with stock names, tickers and buy prices.

An Average 8% Yield, With Upside

It’s only a matter of time before other investors ditch their paltry 3% and 4% payers and find their way over to these “slam dunk” income plays, so the time to buy is now, while they still trade at deep discounts to NAV and FFO.

That’s why I’ve prepared three in-depth guides, outlining each of the strategies I mentioned above…

Special Report #1

The first is called the Monthly Dividend Superstars: 8% Yields With 10% Upside.”

Inside you’ll find the ticker symbol, my buy-up-to price and in-depth backstory on each of my three favorite CEFs, including:

  • An 8.1% payer that’s set to rake in huge profits from an artificially depressed sector,
  • The brainchild of one of the top fund managers on the planet that pays 9.1%,
  • And a rock-steady 6.5% dividend trading at a massive discount to NAV.

Special Report #2

The second guide is called Preferred Shares: Looking Past Common Dividends for 6.5% Income.

Inside you’ll find my favorite fund for investing in preferred shares, along with its management profile and investing strategy.

The fund pays a solid 6.5% today. High yield is great, but its best quality may be its lack of correlation with the broader stock market. The shares this fund owns are preferred in every sense of the word – meaning it gets paid its fat dividends no matter what the broader market does.

Special Report #3

Finally your third guide, Recession Proof REITs: 2 Plays With 8% Yields and 25% Upside, will discuss my two favorite REITs. They include:

  • The 8.2% payer uniquely positioned to thrive in the current interest rate environment, and
  • A 7.9% “unicorn” that’s increased its payout by 36% since 2015!

In each report you’ll get the rationale behind where, why and how to profit. In short, everything you need to know about these stocks before you invest a single penny.

How to Get All 3 Reports Absolutely Free

To access all three reports, Monthly Dividend Superstars, Preferred Shares and Recession Proof REITs at no cost whatsoever, I simply ask that you take a risk-free trial of my research service, Contrarian Income Report.

I created Contrarian Income Report to help self-directed investors uncover overlooked and under-appreciated income plays before Wall Street and the mainstream herd bid them up.

Right now, there are 20 high-yield stocks and funds in our CIR portfolio, and you get instant access to each one the moment your no-risk trial starts.

PLUS you’ll get my next 2 NEW monthly issues.

Every new investment you get in Contrarian Income Report comes with a simple guarantee: it will pay SAFE 6% dividends—or better.

And some holdings in our portfolio go way further than that, delivering 9%+ income right now.

So just by “swapping out” your blue chips for these high-powered dividend stars, you could double, triple—or even quadruple—your income. And you could do it TODAY!

But don’t take my word for it. Here’s what some of my subscribers have to say about these recommendations:

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But that’s not all, because…

Safe Yields Are Only the Beginning

In addition to my favorite REITs with 8%+ yields, the closed-end funds paying up to 9.1%, and the 6.5% Preferreds, your risk-free trial includes a whole lot more…

  • You’ll have immediate access to all of the picks in the members-only portfolio, including my exact buy & sell recommendations and buy-under prices.
  • Get new income investing ideas on stocks I’ve been watching and analysis of major market events delivered straight to your inbox every single week.
  • Never worry about missing out on breaking news on our portfolio stocks. I’ll have an eye on all of them 24/7 and will send a flash alert right away if there’s ever any change in our position.
  • On the first Friday of each month, you’ll receive my monthly research bulletin, including new portfolio additions, updates on existing positions and an overview of trends and events that may affect our holdings.
  • Day or night, you can always log into our password protected members-only website to access all of our resources, archives, special reports and the full portfolio.
  • If you ever have questions about your subscription, you can email our customer service team anytime, or call our New York office during regular business hours without waiting on hold or navigating those annoying phone menus.
  • You won’t need to spend hours in front of a computer screen researching stocks. I’ll take care of all the work and send out new recommendations as they become worthy of your investment dollars, as well as keep you up to date on our existing holdings.

Now, the regular member price to join Contrarian Income Report is $99 per year.

With everything that’s included I’m sure you’ll agree it’s well worth the cost. Heck, the three reports you’ll get absolutely free are worth three times that much.

And even a small position in any one of the picks mentioned above will easily cover that in just the first few months.

Imagine 7%, 8%, even 9% dividends rolling in from these picks, and then watching them appreciate as mainstream investors realize what they’ve been missing and inevitably pile back in.

But it’s important that I earn your trust and you have the chance to see exactly how profitable this service can be.

So I’ve arranged for a small number of investors to take 60% off the regular price and try out Contrarian Income Report for just $39.

And to ensure you have no reason not to try this service out, I’m going to include two more bonus reports just for giving it a shot…

Bonus #1: The Dirty Dozen: 12 Dividend Stocks to Sell Now

High yields can be a warning sign of a stock in trouble.

Just ask the investors who chased the high yields of RadioShack.

The company started to hike their dividends to 6%…8%…and even double digits and investors piled in, tempted by the mouth-watering payout promise.

Then July 2012 rolled around and the company stopped their payments. And their stock got caught in a death spiral before they finally declared bankruptcy.

Let me tell you … it wasn’t pretty for anyone who stuck with them.

It’s easy to spot this tragedy in hindsight, but when it’s unfolding, people have their blinders on and they’re sticking with their stocks because of the dividend.

Big mistake.

And in this report, I’ll reveal 12 popular income stocks you should dump right now.

Next, you’ll get your very own copy of my personal playbook…

Bonus #2: Second-Level Investing: Your Guide to the Contrarian Money Machine

Many super-investors agree that you’ll never beat the market by following the herd. They tout the virtues of contrary thinking, but I’ve yet to hear any one of them specifically outline how they go about finding under-appreciated stocks with low valuations.

And that’s exactly what you’ll get with this step-by-step contrarian guide.

For the past decade I’ve been refining a system that identifies and selects the top contrarian candidates for investment. By following these steps, you’ll be able to find the types of stocks that Warren Buffett, George Soros, Howard Marks and many other greats only wish they could invest in.

Now, there’s just one more thing I’d like to include…

Our Ironclad 100% Money-Back Guarantee

I’m so confident you’ll enjoy (and profit from) this service that I’m going to give you 60 days to try Contrarian Income Report absolutely risk-free.

Here’s how it works…

Start your membership today. Download your special reports, read the latest issue and start tracking a few winners in the portfolio that catch your interest.

Then, sit back and enjoy the next couple of issues of Contrarian Income Report, check out my weekly column and all of the other member benefits.

If, after nearly 2 months, you don’t feel the advice has more than covered your cost, or if it’s just not right for you, simply let me know and I’ll issue a full refund.

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Plus you’re welcome to keep all five special reports with my thanks for trying it out.

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I don’t see how you can lose here, so click the button below to get started right now.

In the coming months, many investors will struggle to get by on their paltry 2% and 3% payers, holding their breath for the next signal from Washington on the state of the economy, fearful of what might happen in China & Europe.

But Contrarian Income Report readers and I will rest easy thanks to our super-safe “Dividends Only” portfolio and enjoy 8% dividends with 10-20% gains (or more!) over the next 12 months.

Are you going to join us?

Yours in profits,

Brett Owens

Chief Investment Strategist

Contrarian Income Report

P.S. Since my recommendations are contrary to prevailing popular beliefs, they have a habit of rallying quickly as soon as the mainstream herd catches on to what they’ve been missing. I encourage you to get started right now so that you can get in at a good price!

P.P.S. Remember, your risk-free membership comes with the names and full details on my top 3 closed-end funds paying up to 9.1%, dividends up to 8.2% from my top REIT plays, and the Preferred fund that will hand you 6.5%. Even a small position in any one of these picks will easily cover a full year’s membership… most likely before your 60 day trial even ends!


 

 

 

 

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