let's just say you saved up four hundred thousand dollars and you stopped investing and instead
what you're gonna do is you're gonna withdraw two thousand dollars from that balance every
single month well in 10 years your 400 000 balance will be worth 1.2 million what yeah this video is
gonna be wild and i got a great question from a subscriber on a recent qyld video here's what
they asked i would like to see one additional comparison which would be comparing qyld and
qqq if both were used in retirement for income meaning that one person would be selling shares
of qq to pay for their expenses and the other would be collecting the dividends from qyld to
pay for their expenses so i took the painstakingly long painful process to put this all together in
an excel document about which strategy could potentially be exciting depending on what your
goals are so if you find value in today's content please take the hopefully not painstaking way
of tapping the like button down below let's get right to it now there's a couple things that we
need to start off with now qyld and qqq are kind of the same fund as far as tracking is concerned
they both track the nasdaq 100 top 100 companies in america but there's a difference qyld is
focused on options writing strategies that provide income monthly distributions to the people that
invest in their particular fund qq is not trying to aim for income for their investors instead
they're focused on the growth of the nasdaq 100 index another very important thing to keep in mind
is that past performance which we're going to look at a lot today in this video does not indicate
future performance in fact it could go completely upside down or get even better we don't know we
can't predict the future now i'm going to talk about how we got to 1.2 million by investing 400
000 because technically that makes no sense oh but it's about to but let's start with the question
and that question would be okay you got to a point where you're in retirement and you want
to live and that doesn't mean that you're old i mean if you do this the right way and you start
early if you're young and watching this video if you start the right way you could actually retire
early and a lot of people do in their 30s and their 40s and their 50s and that retirement allows
them more freedom to do other things that they're passionate about so if we look at this what we're
going to do is look at portfolio visualizer now this is going to be an extreme example and i know
it's a very extreme example but just bear with me let's say the year is 2014 and you're like oh crap
i need to retire soon or i want to retire soon and it's 2014 and i want to retire by august of 2022.
i better get my act together because i have zero dollars invested for retirement i have nothing
nothing to my name at all so i'm going to side hustle and find different ways to make money
or try to save as much money as possible so that i can invest get ready for it two thousand dollars
a month now i know that sounds like a lot of money but if you put your mind to it you never know what
you can find let's just say it's 2 000 a month so from 2014 to 2022 right over here on portfolio
visualizer we are gonna put in a total of two thousand dollars contributed every single month
and what we're gonna do is we're gonna compare two different people person one is going to invest in
qq and person two is going to invest in qyld now at the end of the difference between 2014 and
2022 here's what we got your balance in qqq would have grown to 472 758 by putting in two thousand
dollars that is a look at that that's amazing 89 growth over that period of time with dividends we
invested and adjusted for inflation qyld your two thousand dollars put in every single month grew to
only 292 795 but that is a growth of 78 and of course with dividends we invested adjusted for
inflation but this is where point number one comes in now let's say we're going to retire off of qyld
and that is it this is where my painstaking work came in because i didn't want to just
assume i had to go through and look at a couple metrics the very first thing i needed to look at
is what was the exact price of qyld based on the month that you put your two thousand dollars in
and how much money were they paying in the form of the dividend every month that was then reinvested
back into your account and i took this month by bloody mind to put this together so here's the
excel spreadsheet i was talking about i'm going to zoom in so we can take a look at it so here
we get the month here's we got the investment and here we got the cost per share shares bought total
shares dividend dividend paid reinvested shares and total trailing shares this is how many shares
you're building up to based on the dividends that you're reinvesting so what this all means
is that from january 2014 when you get the light bulb to say i want to retire by august 2022 here's
what that would have looked at if we scroll all the way down here to 2022. here we are you now
have a total of 14 571 shares of qyld and because of that you're going to stop reinvesting the
dividends and you're only going to live off of the dividends at qyld this is how much money you're
going to be making every single month roughly if they continue and again past performance this is
just kind of looking at the past it doesn't mean that the future is going to look like this this
whole video could go to hell in a hand basket but if we look at what they've done in the past let's
say they're painted 18 cents dividend as they did here in july 2022 you're going to get a total of 2
556 dollars in dividends that you can cash out and use for your everyday expenses so living off of 2
500 a month is that possible is that something you could look forward to in your retirement now of
course when you're definitely at retirement age like you know 60 65 that could be potentially a
good solid income on top of some other investments but let's see what happens here if this goes up so
let's go to like 20 cents see that 28.92 and your balance let's look at your balance so if you have
i'm gonna do i'm gonna do equals this amount of shares times we're going to use this price that
it's currently going for which is 1842 a share that means you have a total of 268 000. of course
that lines up slightly with our 292 000 over here but in any case this is what we have 268 000
and we're not going to touch that money at all we're only going to live off of the dividends and
distributions that qyld pays every single month to the tune of about 25 to 2800 and the beautiful
thing about it if you really think about this right here it's right around here in july of 2020
where you cross over this point of just kind of excitement from your two thousand dollars that
you put in every month you're now getting the same amount back in dividends every single month from
august 2020 to august 2022. look at that threshold because now you continue to put in your 2 000 but
you're also getting 2 000 in dividends every month that's kind of cool isn't it and and just to think
this was 2014 not really that long ago dang it i wish i would have started that but wait but
wait it gets more exciting because you know qyld okay fine twenty eight hundred dollars a month but
let's look at qqq because we saw back here right we have qqq sitting at 472 758 now even though
they do pay some dividends we're going to pretend they do not pay any dividends and we're going to
live off of the balance only only the balance so here's where things get super interesting
we're going to start right here with our balance of 472 758 we are only going to withdraw 2 000
a month now we could do 2500 if we want but we're going to do 2000 for now because we feel that
we're going to take in and maximize our expenses to the fact that we only need two thousand dollars
to be withdrawn from our qq balance that we've built up from january 2014 until now
every single month that's it just two thousand dollars but remember there's also something called
growth the fund is going to still grow and if we look at an annual growth percentage of 10 percent
on average that is what we can look forward to so you might be already seeing where this is going
if i have my balance in august 2022 i stopped contributing and now i'm gonna start withdrawing
i'm gonna take out two thousand dollars but i'm gonna continue to grow at an average
growth rate of 10 on an annual which means every month it's going to grow by about 3 900
which means my remaining total is actually higher than my total balance even though i'm taking out
two thousand dollars because i'm going by 3 900 a month and i'm only taking out 2 000 a month
that's pretty cool isn't it so guess what happens after 10 years we scroll down here
and in 2032 10 years from now you're left with an 870 000 balance despite the fact that you're
you're taking out two thousand dollars every single month and not contributing anything
you're literally taking money out taking money out every month and it continues to grow that's the
power of investing and compound interest my friend that's why so many invested people get so like
excited about this stuff and you're like kind of like what kind of finance nerd are you that's why
that is why and that's kind of exciting but we got to put a little bit of disclaimer here first
disclaimer is the fact that you know obviously this assumes an average growth rate of 10
right here at the top right but there are going to be bad years and good years that's why it averages
out to 10 there are going to be potentially some years where you grow at a rate of like 20 30 40 50
but then there's some years that you're going to lose money on your portfolio
let's say it's negative 5 10 15 20. in fact right now in 2022 we're down about 20 overall so you're
actually negative but over the long period of time we're assuming an average growth of only
10 percent we're not shooting for the moon and saying it's like 30 40 50 and we're not saying
it's doom and gloom and then the negatives now you might be saying well bob i can't live up for two
thousand dollars a month i need more than that if you think about everything i do i need let's say
five thousand dollars a month well okay fine i'll put in five thousand dollars it'll trickle all the
way down here now let's see what happens we come down here and we end the next 10 years at 255
000 balance which means you can take out 5 000 once you've spent your time between 2014 and 2022
building up your balance to enjoy a 5 000 monthly withdrawal with qyld if you're only going to focus
on the dividends you're only getting what you're getting otherwise you're going to have to withdraw
on this balance and the problem with qyld is if you're withdrawing on the balance you're reducing
the amount of shares and the amount of shares reduced means your dividend per share goes down
so you're actually it's like a double whammy with qyld whereas with qqq because of the growth and
because of the aggressive growth in this fund it's pretty exciting just know high volatile things
can go up and it can go down pretty severely and this is not financial advice to change your things
from qild to qq or anything like that all we're doing is we're looking at the past and predicting
the future it doesn't always go this way so let me make sure my calculations are correct if this is
our total balance when we retire at 472 758 based on that 2 000 monthly like aggressive game plan
that you put in over the last couple years let's go back in here and say okay there's my balance
472 but i'm gonna be withdrawing two thousand dollars every month so come down here into qq
hit analyze and look at that your initial balance with withdrawing two thousand dollars every single
month ends up at 1.3 million dollars check this out if you look at their overall return of 13
in this case if i plug in that same number over here if i only withdraw i'm going to go back here
and say i'm only withdrawing 2 000 every month it continues to grow at a faster rate my growth is
growing at a faster rate than my withdrawal and then by the time i get to 10 years from now
i'm at 1.2 million now the difference here between 1.2 million and the 1.3 million
is remember i am not assuming any dividends paid qq does pay dividends just not as much as qyld so
that's the difference between 1.2 million and 1.3 million in the case of the portfolio visualizer
because they are actually reinvesting the dividends based on their calculations so let me
get this straight i take out two thousand dollars a month after i've grinded and grinded away and
lived so freaking poorly to putting all my money into the stock market and now i can just coast
yes that's what they call financial independence retire early but remember that takes a lot of
sacrifice in the beginning where were we from 2014 to 2022 what were we doing
i wasn't doing this i kind of damn wish i did because right now i'd be looking pretty good
but for the skeptics out there it doesn't always go this way as i've mentioned a couple times in
the video let's look at the same trajectory if you went from 2000 to 2014 and kind of flipped that
upside down on its head and let's say you started with 472 and you withdrew that fixed amount
from that period of time things aren't looking as sexy look what happens you actually lose all
your money why is that because of the dot-com bust and because of the recession that happened
in 2007-2008 you end up losing your money right around the end here in june of 2007 you actually
run out of money before the great recession hits and that's why i got to warn you even though we
looked at all these exciting numbers and it looks like if the past little snapshot of 2014 to 2022
repeats itself you're going to be looking freaking awesome you're going to retire in 472 and 10 years
later you're going to still be retired and yet be a millionaire that's exciting but if it goes
the other way and we have this terrible decade as we did from 2000 to 2009 well if qqq has a strong
decade or a strong year you're going to be looking great but consistency with income of that 2500
distribution and a qyld could be a safer bet what do you guys think comment down
below let me know check out this video next and we'll see you on the next video