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Old 05-09-2016, 05:56 PM
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Originally Posted by poorguy View Post

I am starting this thread so that everyone can share how to make e.g. $1000 more per month on top of your current job.

Hope this can provide some useful information, of course the guy who looks out the window everyday might pop by but we can just ignore him.

For me, I am selling put options on some stocks that I do not mind holding.
However, as Apple stock is expensive, I get only about 0.5% return per month on my capital $40,000.

Also, I am also invested in a fund, EXG that pays dividend monthly and the yield is ~7% per year, after US dividend tax.

I did some research on convertible bonds which seem to payout some dividend and provide some upside when stocks go up as can convert to stocks but most are priced above par so haven not shortlisted any so far.

So guys, any good opportunities to share other that COE price going up, look out window, sell HDB flat and retire overseas?

The eaton fund you are buying does not pay out dividend of 10% yield (i.e. 7% net). What it does is buy into some dividend stocks then sell call options of the underlying securities and payout the dividends + option proceeds to investors.

The drawback of this technique is that it will never get capital appreciation from the underlying securities as anytime the stocks go above strike the option holders will exercise their rights and the fund will be forced to liquidate at lower price. However when the price of the underlying stocks go down, the fund has no counter balance in hedges and will absorb the full write downs.

Long term effect is you have high dividends and deprecating unit price. The fund has dropped by close to 60% since inception due to falling NAV. Out of the 10% yield, I estimate only ~3% are real dividends, the remaining is just round about capital returns. This is not something newbies with little money should be buying.

My 2c.
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