QYLD Just Paid Out a HUGE Dividend - What Does it Mean? - YouTube

qyld we've talked a lot about this etf in the past  and today we're going to talk about this crazy 49  

cents per share dividend paid down on january 7  2022. what does this mean for you what does this  

mean for your taxes and then we're going to also  dive into what actually is qyld for those people  

that might be a little bit new to this and not too  sure of what's going on because let's face it a 12  

dividend yield can seem quite attractive but is  it worth it let's talk about first is 49 cents  

now first things first if we hop over here to the  dividend tracker website by the way this is the  

new website i'll be using to track my dividends  and you can check it out for yourself they have  

both a free as well as a premium version linked  down below in the description but look forward  

to more videos on this particular website in  the future but you can see right here payment  

date one seven of four nine nine so let's do a  quick calculation on what's going on here now  

i personally hold about 400-ish shares of qyld  that's what we want to plug in so think about if  

you if you're invested in this how many shares  do you have put that number in right now into  

your calculator so for me it's 466.1593 and then  multiply it by that .499 that is a total of 232.61  

earned on january 7th that's pretty exciting  but the big difference here is this is not your  

typical distribution let me take a step back in  time to show you what it typically is with qyld  

if we go over here to their website and i'll link  this down below if you want to check it out but  

you can see 2021 let's start off with november  this is the latest report that they offered for  

19a and i click on it and i gotta zoom in because  that's kind of small okay so here we are you can  

see this is what's going on for the average of  about a 22 per share dividend this is typically  

what we get when we get these distributions but  net investment income that's a result of what they  

do in this fund which is covered call writing  option strategies then return of capital of  

21 cents 21.71 totaling 2246. that is typical of  what we see for our monthly distributions of qyld  

if you want to learn more about return of capital  i talk about it in my tax video also linked above  

in the info card as well as down below in the  description you can check out that video after  

this one but what's most important here is this is  a difference this 49 cents is nothing to do with  

net investment income it is nothing to do with  return of capital this is all short-term capital  

gain so a short-term capital gain distribution  works just like this it's a payment made either  

by a mutual fund or an exchange traded fund in  this case qild which represents a portion of  

the proceeds from the funds sales of stocks and  other assets from its portfolio basically think  

about it as the investors share the proceeds  from the funds transaction now that's not the  

fund's overall profit this is just as a result of  them potentially selling some of the funds within  

their holdings some of that activity that happens  does get passed along to the investor but in this  

case it's called a short-term capital gain because  it was a fund or a transaction or something that  

happened that was short-term meaning less than  the last year and that's why this is called a  

short-term capital gain what this means is that it  is taxed as ordinary income so what you should do  

is check with your cpa or your accountant and talk  a little bit about short-term capital gain as well  

as ordinary income and how this could impact  you especially if you own a lot of shares and  

got a huge distribution in this past month i think  somebody got well over like five thousand dollars  

in the last month as a result of having so many  shares and this 49 cents per share distribution  

that just launched big difference and you got  to make sure you're keeping your eye on the game  

with these particular things when it comes  down to tax that does not mean that globalx  

for qyld is going to start quarterly dividends or  quarterly distributions i should say this is more  

this is the short-term capital gain that is at  the end of the year here it is great we're moving  

on and we should see what we saw earlier in the  form of either return of capital or net investment  

income for the rest of 2022 so expect that 18 to  22 cent per share distribution as we move forward  

because you got to remember the goal of qyld right  here on their website check this out high income  

potential and that's the goal of this particular  fund with monthly distributions and they've done  

that for the last eight years running so they're  going to continue that on in 2022. now obviously  

look right here and this is where a lot of people  get trapped up in qyld and i want to make this  

point in today's video a lot of people say hey i  have a lot of money and i'm going to just put it  

in the qrld because i like the idea that i could  make a lot of money every single month and you're  

thinking about it in the form of i could make  enough money just with qyld to replace my job  

income and then i could just live off of qild  it sounds sexy but it's not always what it seems  

so a couple things could happen especially if  you're younger first of all look at this little  

call it fine print at the end of this first  page covered call writing can limit the upside  

potential of the underlying security what this  means this is the nasdaq 100 this is the index  

that not only qyld is buying into but they write  covered call options writing strategies against  

the thing with that is these are the top 100  non-financial companies comprised of the nasdaq  

index what you're finding when you're doing this  activity is it's aimed at monthly distributions  

it's aimed at income now if you're in retirement  this could be a good opportunity to look into  

but if you're like 20 years old and you're putting  all your eggs into this basket i'd warn you about  

that because there are opportunities with growth  i would rather look into a growth etf or a growth  

stock or a growth mutual fund before i would dump  all my money into an income producing fund like  

this one such as qqq that is one that tracks  the nasdaq 100 index but is focused primarily  

on growth in fact if we go over to the portfolio  visualizer and we plug in a difference of a ten  

thousand dollar investment between 2019 and 2022  and that 10 000 dollar investment will be invested  

into qyld and qqq we're going to hit analyze  portfolio and as you can see here the difference  

between qqq and qyld is quite significant my ten  thousand dollar balance if i put it all into qyld  

only grows with dividends reinvested to 14  905 but look at qqq going up all the way to 26  

277 that obviously leads you to believe  that that growth is much more important than  

dividend distributions now i will tell you one  thing what i do with qyld the reason i have the  

shares that i have is because i treat this as a  short-term cash reserve so for example let's say  

a year from now or two years from now i want to  buy something or i'm i'm saving up for something  

or maybe i want to have a secondary emergency fund  to my emergency fund well i'm going to put money  

into qyld just to kind of keep it flatlined and  enjoy some extra distributions if i compare this  

to a bank account where i can store this money  instead the bank account only pays me about  

0.50 in interest i'd rather go and lean towards  something that's going to pay me distributions  

as opposed to the bank account now of course  that's my own risk in my own decision this is  

not financial advice to buy hold or sell qyld  or any investment but that's personally what  

i'm doing the majority of my income though and the  majority of my investments are going toward things  

that are growth even vti vtsax voo and things like  that those vanguard funds that are tracking either  

the entire s p 500 or the entire stock market  and are poised for growth over the long period  

that's where the bulk of my investments are going  but if i have some additional cash that i'm just  

sitting around for a little period of time and at  short term within the next two years i might use  

that money i'm gonna put it into something  like this qyld which tracks the nasdaq 100  

ryld which tracks the russell 2000 or xyld that  tracks the s p 500 and they all write covered  

call option strategies against those three indexes  so make sure you keep an eye on the qyld website  

make sure you keep an eye on your tax bill and  really start thinking about your ordinary income  

the short term capital gain of this 49 cents  and what this might mean for your tax bill  

if you want to learn more about what's going  to happen in 2022 with the return of capital  

and net investment income distributions of  qyld make sure you check out that tax video  

right after this one i'll link it down below  in the description other than that if you  

have any questions comment below check out this  video next and we'll see you on the next video