Now that we’re seeing the market drop by double-digits, this is the opportunity we’ve been waiting for. The markets have fallen back down to a reasonable valuable, based on forward looking earnings and fundamentals. Now, I’m not going to pretend that I know where the bottom is, but I do know that the outlook is incredibly attractive. If you follow me, you know that I’ve been pretty consistently accumulating ETFs like and every week.

Similarly, you also know that I hold a mix of high yield ETFs and classic dividend ETFs to create a growing income stream. This way, I collect income no matter what direction the market is moving. For instance, I recently shared a comparison piece on and . I think these funds will outperform the S&P 500 through the remainder of the year just because they hold more boring blue-chip consumer companies, which aren’t related to the AI trade.

With that said, the market is seeking stability right now. So in the short term, defensive funds will probably do better than the technology sector. However, I think the indsutry forecast for 2027 still shows us that technology has lots of growth left. A Democratic Congress took over, interest rates are trending higher, inflation is rising, and hyperscalers are burning through free cash flows. Despite all of this, AI is here to stay and I think there’s lots of proof that companies we hold ( , , ) are all heading higher through 2027.

Demand Didn’t Move

But first, let’s talk about what just happened. Semiconductors declined hard. Capex spending was the issue a few weeks ago during the last earnings season, which I already covered. It’s the reason why the Mag 7 sold off. Now, the market is selling off AI and semiconductors because a Democratic Congress is assumed to push back on data center construction. If regulatory changes push back the infrastructure to support AI, this can eventually translate to slower earnings growth. However, I don’t think you should stress any of this shit.

Republicans, Democrats, Trump… none of it matters. Historically, the market has always gone higher after midterm elections. In fact, the current setup is perfect. A President that opposes a Democratic Congress means nothing gets done. On average, the market has traded higher by 14% over the twelve months following midterms, since 1950.

Do you really think this time is any different?

Nothing getting done means that the market gets a sense of stability and predictability. Pushing past this noise, I think there’s plenty of data to confirm the fundamentals are still strong.

For instance, the latest forecasts estimate that chip sales will roughly double this year, while growing another 29% in 2027. Then, the latest earnings season consisted of management teams confirming the outlook is attractive and guiding revenue and earnings growth higher. The buyers of those chips are the same companies the market is worried about. Their spending budgets are trending higher because the reality is that you need to make money to earn money.

However, the pullback is clearly an opportunity when looking at the valuation across the hyperscalers. As you probably know, one of my larger positions has been CGDV (Capital Group Dividend Value ETF) because of its high quality holdings and outperformance against the S&P 500. We can see the companies across CGDV and here are some of the valuations of its largest positions:

• MSFT: forward P/E of 26.62x.

• Nvidia : forward P/E of 18.67x.

• META: forward P/E of 20.95x.

• AMZN: forward P/E of 20.24x.

Therefore, I will continue to accumulate CGDV and all of the hyperscalers through this weakness. That’s it. Nothing special here to report and I’ve struggled with this. I can easily sell you some nonsense about why Democrats are going to crash the market, or why data centers are bad, or why interest rates will cause an influx of mortgage defaults.

All of that is just noise. Let’s focus on the future and how we’re growing our wealth through consistent actions over time.

The Chip Companies That Pay You To Wait

You know that I love income from my portfolio. Therefore, I wanted to share a few different positions that are aligned to pay growing dividends through the chip frenzy, that will likely continue to pay higher dividends over the next decade.

I still earn roughly $43k a year from my portfolio through weekly paying ETFs. However, I will highlight four positions that provide growth and a small dividend, with the potential to pay fat raises.

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I don’t say that to scare anyone out of growth stocks. I own all four of those companies and I’ve been adding. I say it because a year like that is exactly when you want part of your portfolio in funds that pay you to sit through it, and SCHD and DIVO are the two that come up in my inbox more than any other. People treat them as interchangeable. They’re not. One is built to grow your income over a decade and one is built to pay you more of it right now, and in a choppy year the difference between them matters more than it does in a bull market.

Below is why 2027 looks uncertain, what each fund owns and how it makes money, what $100,000 pays today and in ten years, who should own which, and the risks in both.

Why 2027 Could Be The Year Of Uncertainty

Amazon, Alphabet, Microsoft and Meta are spending close to $740 billion this year on data centers, chips and power, per their own guidance, and the message on every call was that 2027 goes higher. Amazon’s CEO used the words “meaningfully more.” That spending is why three of the four posted negative free cash flow this quarter, and negative free cash flow is why Meta and Alphabet each dropped double digits in October while Microsoft, the one that stayed positive, went up.

We’ve seen a smaller version of this. Between November 2025 and March 2026 the indices went sideways for about four months as money rotated out of technology on the first round of capex fear, and dividend funds outperformed the whole way through. This time the numbers are bigger, the spending is already committed, and the companies are funding part of it with debt, which Alphabet and Amazon both did this quarter. I don’t think it ends the bull market, because the growth underneath is real. I do think it keeps the indices choppy well into 2027, and in a choppy market the funds that pay you while you wait are the ones that win.

and both own businesses that generate cash instead of spending it, which is why they held up while tech fell, and why SCHD is up 38.5% over the past year. But they handle a choppy market in different ways, and the rest of this article is about picking the right one for your situation.

Two Different Engines

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When I started this newsletter, I always wanted to provide value that went beyond articles. I think ETF Portfolio Mechanics will be a natural extension of this by giving you guys the ultimate ETF toolbox.

Most of us own several ETFs that look nicely spread out on a brokerage screen, but underneath they often lean on the same handful of companies. The tools we built let you enter ANY combination of funds you own and see every stock underneath, how much of your total portfolio each one makes up, and what your projected dividend income is, so you know where your money actually sits before you buy more.

ETF Portfolio Mechanics allows you to be the mechanic of your own portfolio. The basket of tools will allow you to dig deeper into each fund and construct your portfolio will precision.

Learn More About ETF Portfolio Mechanics

It will launch as a Seeking Alpha investing group for do-it-yourself ETF investors, and it opens to members in early November. Jack runs the macro and growth side, I run the income side, and together we take the most widely held U.S. funds apart holding by holding every week, with real-money portfolios built on what that work finds.

If you’ve been reading Dividendomics for the income funds, this is where I’m putting the deepest version of that work. Here’s what you’ll get:

1. Three crafted income portfolios - Choose by which yield profile you want.

2. Jack’s Growth Portfolio

3. A weekly Dividend Monitor

4. A weekly Macro Monitor

5. Expansive Toolkit - covered below.

It is an ETF-only service, though, so it doesn’t cover individual stocks, CEFs, BDCs or REITs directly, and if those are the core of your portfolio you should know that going in. Something that I learned is that all income investors don’t want the same thing; some want to maximize the income received, while some want capital appreciation as well.

So instead of one portfolio there are three, ranked by yield, and you pick the one that matches your goal when you open the page. I own stakes in ALL OF THESE PORTFOLIOS, so I am incentivized for these setups to do well going forward. Each portfolio will be actively managed, so expect tweaks over time as market conditions shift.

The Tools Inside The Member Site

I never wanted this member to just be about articles. There are tons of services that only offer information, which you can get for free nowadays. The idea here is that you have a toolkit that you can depend on for everyday research. YOU can become the own mechanic of your portfolio and the clear visuals makes it easy to understand the flow of money within your portfolio.

Membership comes with a password to the member research site, and these tools answer the two questions I care about most as an income investor: how much of my money is sitting in the same few companies, and what each month is going to pay.

So let’s take a quick preview of the features available.

Portfolio X-Ray works with any mix of funds. You import or paste up to 20 ETFs, and it shows every position underneath, sized by its share of your whole portfolio and colored by the fund that contributes the most. You can also enter a proposed allocation and compare it against what you own before you make a change.

Income Hub ranks dividend, option-income, and alternative-income funds by distribution rate, repriced daily, with the trailing twelve months shown beside each one.

Income Planner turns your income funds into a twelve-month payment calendar with planning ranges, so you can see which months run heavy and which run light before they arrive. Import your positions and get an accurate output of what your monthly dividend income will look like.

Then there's ETF Research for opening up one fund, ETF Compare for putting two side by side with their overlap and fees, and ETFs by Holding, where you pick a stock and see every ETF that holds it and at what weight.

For instance, maybe you want to see how and compare to one another? You can get a direct breakdown of any combination of ETFs like this. You can see how the holdings compare, the dividend growth, and even the internal health of the companies they hold.

What Lands In Your Inbox Every Week

The thing I wanted most from this was a schedule you can plan around, so we locked one in before launch. Every piece has an owner and a day, and you’ll know what’s coming before you open the email. The best part is that users can specifically suggest funds that they want coverage on. Have an ETF you want to know more about? Submit to us and we’ll publish coverage on Tuesdays and Thursdays.

How To Join

Membership runs through Seeking Alpha’s Investing Groups with one checkout, and you do not need a Seeking Alpha Premium subscription to join. Once you’re in, you get a welcome email with the member-site password and your first piece on the next publishing day.

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In my opinion, all of this is being overblown but that is why it is an opportunity for us.

Two things you’ll walk away with:

• Here’s why tech is selling off. The one number all four reports share, why three companies tripped it and one didn’t, and whether the fear is justified.

• Here’s how to structure your dividends as the defense. The exact way I pair these growth stocks with income funds that get PAID when they swing, so a month like this one costs me nothing in cash flow.

#1: The Businesses Are Growing

Start with the part the headlines skip, because it’s the part that matters most. A “hyperscaler” is a company that owns giant data centers and rents the computing power inside them to everyone else, and four of them, Meta, Microsoft , Alphabet , and Amazon , just reported.

Every single one grew revenue by double digits, per their earnings releases.

• Meta grew 26%.

• Alphabet grew almost 25%.

• Microsoft grew 19%.

• Amazon, the biggest of the four by sales, grew 12%.

The cloud divisions, which is where the AI money actually shows up, grew far faster than the companies as a whole. Azure grew 48%, AWS grew 39%, its fastest pace in nearly five years, and Google Cloud more than doubled because Alphabet started selling entire TPU chip systems to customers. If you only looked at the growth, you'd assume all four stocks went up. Three of them went down, and to understand why you need one more concept.

#2: What Free Cash Flow Is, And Why It Went Negative

Free cash flow is the cash a business makes minus the cash it spends on buildings and equipment. Wall Street calls that spending capex. If a company makes $100 and spends $110 on data centers, free cash flow is negative $10.

The business didn't lose money.

It spent more than it made on assets that are supposed to produce more revenue later. That's it. That's the number everyone is panicking about.

Meta produced $32.7 billion of operating cash this quarter, more than it ever has, and spent $34.9 billion on data centers and chips, so free cash flow came in at negative $2.1 billion, per its Q3 presentation. Alphabet did the same thing at a bigger scale, negative $9.1 billion. Amazon spent $77.3 billion in the quarter alone, more than double a year ago, and its twelve-month free cash flow is negative $42.4 billion. Microsoft spent heavily too, and still came out $18.6 billion positive.

For fifteen years these companies printed cash every quarter, and now three of them just printed a negative number in the same month. Nobody thinks Instagram stopped making money. The worry is that the AI buildout costs more than management says, takes longer to pay off, and gets funded with debt in the meantime. I understand the concern. I just think it’s being overdone, and the next three steps are why.

#3: How Much They’re Spending, And Why It Won’t Stop

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I remember experiencing layoffs at my first job and seeing grown adults walk around miserable. I never wanted to be that vulnerable; the idea of a company having so much control over your wellbeing is insane!

From that day forward, I prioritized building a second income stream with dividends.

👉 Fast forward nearly a decade and I’ve been able to build that income stream up to $43,250 annually. I share a monthly dividend income report for subs.

The Fed’s own survey says only 63% of adults could cover a $400 surprise with cash, and that number hasn’t moved in three years, per the 2025 well-being report. Meanwhile companies have announced 573,195 job cuts this year through September, and for the first time ever the number one reason given is AI, per Challenger, Gray & Christmas. Tech alone is 29% of those cuts.

If you work at a desk, that’s your industry.

I spent years as a senior analyst at large companies, and the thing nobody tells you about a good salary is that it’s ONE income source controlled by ONE person who isn’t you. You can be great at your job and still get an email on a Tuesday. The only thing that ever made me feel safe at work was a second income that showed up whether I was employed or not, and by the time my portfolio was covering the bills, I didn’t need the job anymore. Last month it paid me $3,220 and I didn’t sell a share to get it.

That’s what this article is about. Not getting rich, I covered that on Tuesday. This is about building a second income stream with two dividend ETFs, one that pays monthly and grows, and one that pays every single week, so the next layoff headline is something you read about instead of something that happens to you. Everything below is free. What they pay, how I’d pair them, what a month looks like, and the risks nobody puts in the fund’s marketing.

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A Second Income Stream Changes How You Work

A second income doesn’t have to replace your salary to change your life. It has to be big enough that losing the salary is a setback instead of an emergency, and that threshold is lower than people think.

$500 a month covers a car payment and the phone bill.

$1,500 a month covers rent in a lot of the country.

Once a few bills are paid by something that isn’t your employer, you negotiate differently, you say no to things, and you stop reading every reorg announcement like it’s about you.

The way I build that income is in layers, which I laid out in The Dividend Stack Strategy. One layer is a check that grows every year, so the income keeps up with your bills. One layer is a bigger check that shows up constantly, so the account never goes quiet. The two funds below are one of each, and I picked them because they fail in different ways, which matters more than people think when the market has a week like last week.

DIVO: The Monthly Dividend ETF That Grows

I personally hold this fund and reinvest all dividends so that my income can snowball larger over time. In fact, I just added to DIVO and shared it in the subscriber chat. I try to stay consistent adding to existing positions each week.

holds about 35 large U.S. companies with a record of growing their dividends and earnings, names like Microsoft, Visa, JPMorgan and Caterpillar, and then writes covered calls on individual stocks only when the manager thinks the premium is worth it, per Amplify. That “only when it’s worth it” part is the whole difference between this fund and most covered call ETFs. It isn’t selling away all its upside every month to hit a yield target, which is why it has returned 16.38% a year over the past three years at NAV and 12.40% a year since 2016.

and I built a tool within the ETF Portfolio Mechanics toolkit that allows us to actually see what options are being written within an ETF. I will release more updates here next week. For now, you can sign up for access here. I will be giving access to some Founding Members.

Learn More About ETF Portfolio Mechanics

The payout is the boring part, and boring is the point. Nine monthly distributions so far in 2026, every one of them within two cents of each other, and the trend inside that range is up, per StockAnalysis.

The normalized distribution rate is 4.88%, which won’t impress anyone scanning a yield screen, and that’s exactly why it works as the growth layer: it pays you from dividends that companies raise every year and from premium on top, without eating the share price to do it. With $8 billion in assets and a 0.56% fee, it’s the cheapest and most established fund in this article by a mile.

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There’s always some sort of negative commentary tied to …

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I’m not going to pretend that doesn’t sting, but I bought this fund for exactly this kind of market, because the thing that knocked the share price down is the same thing the fund sells to make the weekly check, and it paid me $194 in September doing it. I suspect that the income over the next 30 days will rise.

👉 I will also share what I plan to do to increase my annual dividend income through the uncertainty.

Below is what happened to the fund since my October 9 article, the mechanism that connects a volatile earnings season to a bigger option check, and the scoreboard the headlines skipped. Paid subscribers get the capex argument in full, why I think the market is being dramatic about it, what I’m doing with my GPTY and Meta shares, and the three things that would change my mind.

👉 Upgrade Your Subscription for $0.82 a day and get every buy alert first, plus the Yieldly Dashboard and the High Yield ETF Database on day one.

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What Happened Since My Last Call

GPTY closed at $38.25 on October 22, down about 11% from the day my article went out, per StockAnalysis. Three sessions in that stretch each took more than 3.5% off the fund. The first was the CPI day I covered in Why The Market Is Dipping, and the last was the Meta reaction. Add back the two weekly distributions and the total return is about minus 9%, my own calculation.

That’s a bad two weeks and I’m not dressing it up, but it’s a bad two weeks for a fund that owns Nvidia, Alphabet, Microsoft and Meta, and those names fell with it. The question for an income fund isn’t whether it dropped with its holdings, because it always will. The question is what the drop does to the check, and that’s where this fund works differently from a regular stock.

Volatility Is What GPTY Sells

GPTY earns its payout by selling call spreads on the stocks it owns, every week, per the YieldMax fund page. The price of any option rises with expected volatility, because the buyer is paying for the chance of a big move and big moves have gotten more likely. So when the Cboe VIX climbs from 16.82 to 19.78 in eight sessions, which it did between the CPI selloff and the Meta reaction, the same spread the fund sold in September fetches more premium in October.

That premium is the weekly check. It’s the reason an earnings season full of 7% single-day moves is a better environment for this fund than the calm one before it, and it’s the trade-off I accepted when I bought it, the same one I scored across the field in I Analyzed 10 Option Income ETFs. In a quiet, grinding bull market the fund gives up upside for a thinner premium. In a jumpy one the premium fattens while the shares take the hit.

A falling share price pulls the dollar amount down even as the premium per spread goes up. The rate itself held at 35.66% as of October 20, per YieldMax, against 35.64% when I wrote the first piece. If volatility stays elevated through next week's reports, I'd expect the premium side of that equation to do more of the work, but that's an expectation and I'll report what the fund actually pays.

The Scoreboard The Headlines Skipped

Here’s what the companies are doing while the market argues about them.

So far 84% of S&P 500 companies have beaten earnings estimates against a five-year average of 78%, per FactSet. Blended earnings growth for the quarter sits at 29%, and FactSet credits positive surprises from information technology, the sector GPTY is built on, as a major reason the index’s revenue growth rate rose.

The index trades at 19 times forward earnings, below its five-year average, and that was before this week’s drop made it cheaper. A market with 29% earnings growth and a below-average multiple isn’t a market pricing in a bust. It’s a market that got spooked by one line item, and that line item is the paid half of this article.

The Capex.. “Problem”

The worry is real, so let me give it its due. Meta spent $34.9 billion on capital expenditures in a single quarter and guided the full year to $135 to $145 billion, per its Q3 presentation. That spending pushed free cash flow negative for the quarter, at minus $2.1 billion, for a company that was printing cash a year ago.

Meta is one of four. Across Amazon, Microsoft, Alphabet and Meta, Forbes put 2026 spending at roughly $700 to $725 billion, and Goldman Sachs has 2027 at $905 billion. That’s a pool of money bigger than most countries’ economies pointed at one idea, and it’s fair to ask what it earns.

The fear has a name now. IBM’s CEO told investors this week that large enterprises are “getting worried if some of the AI spending is completely out of control with no real return,” per Yahoo Finance. When the company selling the AI tools says its customers are asking about returns, the market listens, and it listened by selling the companies writing the checks and the companies cashing them.

Meta is my largest position, per my September report, so I’ll be direct: revenue grew 26% to $64.6 billion and the stock fell 7%. That’s a market punishing a company for what it might waste rather than for anything it has failed to earn, and that distinction is the whole argument for the next section.

Why The Market Is Being Dramatic

On October 22 the Nasdaq dropped 2.6% and the Dow finished flat, per Yahoo Finance. Two-thirds of the stocks in the S&P 500 went up that day, and the equal-weight index beat the cap-weighted one by the widest margin since July 2024, per CNT Trading’s daily note. That’s not money leaving the market. That’s money leaving twenty stocks for the other four hundred and eighty.

The bond market said the same thing louder. The 10-year Treasury yield fell 17 basis points to 4.96%, its biggest one-day drop in more than two years, which is the opposite of what happens when investors fear a bust. Staples, homebuilders and software companies all rallied. The capex names got sold because they went up the most, and a 6.7% drop in the chip index after the run those stocks have had is a correction inside a bull market, not the end of one.

I wrote in Stocks Are Cheaper Even Though The Market Is Up that earnings had been outrunning prices all year, and this week made that gap wider. The capex is a real risk to the spenders’ free cash flow in 2027. It isn’t a risk to the 29% earnings growth they’re reporting right now, and a market that sells the second to worry about the first is being dramatic.

So here’s what I’m doing next…

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I originally started by accumulating over 50 dividend-paying positions. However, through experience I’ve learned that a simple 3-fund portfolio is enough to generate thousands of dollars every month and cover your bases.

👉 I want to share that portfolio with you here today.

I currently hold ALL three of these positions within my portfolio so full transparency, I am incentivized for these ETFs to do well. Even better, this 3-fund portfolio has outperformed the S&P 500 over the last two years.

👉 Paid subscribers instantly get access to the Yieldly Dashboard. Plan out your monthly income!

What $1,000 A Month Actually Takes

$1,000 a month is $12,000 a year, and the only question is what yield you trust. The panel runs the math at every yield, and the top rows are where most people get hurt, because a fund paying 12% has to work very hard to do it without handing you your own capital back. That’s how I ended up selling two funds in The Yield Trap.

The build below lands at a blended yield just under 9%, which puts $1,000 a month at about $137,000. That’s more capital than the high-yield route needs and a lot less than the dividend-growth route, and the difference is that this version held its value over the past year while it paid. Start with less and the structure doesn’t change, it just pays proportionally less, and the figures by portfolio size are in the paid section.

3-Fund Portfolio

I don't use one fund for income anymore, because any single fund that pays enough to matter is making a trade-off somewhere. The growth engine owns businesses by how much cash they throw off and barely pays a dividend, so its job is to make the portfolio worth more next year.

The raise layer owns dividend growers with calls written on top, so its job is a monthly check that grows. The paycheck layer sells calls on the Nasdaq-100 every single day and sends the biggest check of the three.

Here’s the portfolio:

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👉 On a YTD basis, my portfolio has nearly doubled the return of the S&P500.

Three changes to how I run the money did, and the dividend income I built in those slow early years is what funds all three. I’ll share the adjustments I’ve made and why it has worked out.

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Neither one changes what I own or what I’m buying, and I’ll explain why. The short version is that higher rates punish companies that borrow to build, and the biggest AI spenders in my portfolio are building out of cash flow. That’s the whole difference between a dip you buy and a dip you run from, and it’s the reason my weekly Amazon buys kept going on Wednesday.

👉 Upgrade Your Subscription for $0.82 a day and get every buy alert first, plus the funds paying my bills.

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The Inflation Report Changed The Fed’s Excuse

Through the summer the Fed had a clean story: inflation was a gas-price problem, and raising rates doesn’t pump oil. September’s report took that story away. Gasoline still accounted for most of the monthly jump, with prices up over a third from a year ago, and this time rent, plane tickets, used vehicles and healthcare moved up as well, according to the BLS data via Trading Economics. Core inflation, which strips out food and energy, beat expectations again after doing the same in August.

Rent is the part that worries the market more than gas, even though gas is the bigger number. Oil can fall as fast as it rose, and rent only moves one direction over any stretch that matters. Once inflation shows up in housing and services, the Fed loses its reason to wait, which is why the odds of a hike at the October 28 meeting jumped to about 41% on the CME FedWatch tool after sitting near zero. Pulling the hike forward from December to October is what sent the 10-year Treasury yield above 5.25% and dragged stocks down with it.

Why AI Stocks Took The Hit

The tech sector fell three times as much as the index on Wednesday, and the trigger was a Barclays downgrade of Dell, HPE and NetApp that said out loud what a lot of people have been thinking: valuations are stretched and enterprise AI spending hasn't shown up in their numbers yet. Dell dropped over 8% and the data center names fell with it. Add a rate hike to that and you get a crowd heading for the exit at the same time, because every AI build that runs on borrowed money just got more expensive to finance.

The four biggest AI spenders will lay out somewhere around $700 billion this year, up roughly 75% from last year, and several firms expect the total to pass $1 TRILLION in 2027, per Forbes. The number that matters on a day like Wednesday is how that gets paid for. Amazon , Microsoft , Alphabet , and Meta fund most of it from operating cash flow generated by businesses that have nothing to do with AI, so a quarter-point hike changes their math by rounding error. The server resellers, the neocloud operators leasing GPUs on debt, and anyone else building on credit don’t have that luxury, and those are the names that led the selling.

That’s also why I don’t read Wednesday as the AI trade breaking. Microsoft’s AI business is already running above $37 billion a year and Google Cloud’s backlog sits above $460 billion, per the same Forbes piece, which is revenue that’s contracted whether the Fed hikes or not. The hyperscalers report in the last week of October, and their 2027 spending guides will tell you more about this trade than any CPI print, which is the case I made in Buy Alert: I’m Adding Another $15,000 To Amazon.

What I’m Doing With It

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Waiting for a market crash can feel like discipline. You keep the cash, watch prices climb, and tell yourself you’ll get interested when everything goes on sale.

But what if the businesses improve faster than their stocks rise?

A company can cost more than it did three months ago and still offer more earnings for every dollar you invest. Meanwhile, the stock that dropped 20% might be the worse deal if its profits are disappearing even faster.

Just look at how Nike has performed over the last few years. Nike currently trades at a forward price to earnings of 27.4x.

Meanwhile, Meta trades at a forward P/E of just 24x. So yes, META’s stock is technically cheaper than Nike. Crazy right?

Meta Platforms jumped up over the last few weeks but I still think it is incredibly undervalued.

For me, this eventually comes back to income. I want a portfolio that can pay me more over time, and that requires paying attention to what the businesses earn before deciding how much cash I can take out.

Sometimes that cash arrives as a dividend increase. Sometimes growth builds a larger amount of capital that can support income later. And sometimes reaching for a bigger payment today means giving up more future upside than I intended.

That last tradeoff matters a lot in a market where earnings are still expanding.

👉 Subscribe to Dividendomics for my portfolio updates, income reports, and the reasoning behind the changes I make.

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The Sale Doesn’t Always Show Up In Red

Imagine a business trading at $100 per share with expected annual earnings of $5. You’re paying 20 times those earnings.

Now the stock rises to $110, while its expected earnings increase to $6. You missed a 10% rally, but the valuation has actually fallen to about 18.3 times earnings. The price went up less than the business’s expected earning power.

That’s hypothetical math, but the same distinction is relevant to the broader market.

In its October 2 earnings preview, FactSet put the S&P 500’s forward earnings multiple at 19.0, down from 20.4 at the end of June. That early-October reading was also below its five-year average of 19.8 and slightly below its ten-year average of 19.1.

FactSet’s October 9 update showed a 29.6% third-quarter earnings growth rate, combining reported results with estimates for companies still to report. Only 19 index members had released results at that point, so most of the number was still an expectation.

I’m encouraged by that growth.

The AI Trade Has To Pass A Cash Test

The next stage of the AI story interests me because the spending needs to produce something shareholders can eventually benefit from.

Buying more servers proves that a company is investing. It doesn’t tell me what return those servers will earn, how quickly they become outdated, or how much additional spending will be necessary just to stay competitive.

This is where I think the large cloud and advertising businesses deserve a closer look. They have existing customers and established ways to monetize demand. If AI improves those businesses, shareholders may benefit through higher revenue, better margins, or both.

Take Amazon’s second-quarter results. Its operating income rose 43% to $27.5 billion, and AWS revenue grew 37%. Over the trailing twelve months, operating cash flow reached $161.4 billion, up 33%.

At the same time, Amazon reported a $7.6 billion free cash flow outflow over that trailing period. Its investment spending, primarily related to AI, absorbed more than the cash left under that measure. Reported quarterly net income also included $53.4 billion of non-operating pretax other income, primarily tied to its Anthropic investments.

My reading is that the operating business is growing strongly, while the cash payoff from this investment cycle remains something to prove. Headline net income alone would give an incomplete picture.

That changes what I’m watching across the group.

1. Can revenue from the new capacity keep growing?

2. Do operating margins hold up as depreciation builds?

3. Does cash generation eventually grow faster than the spending needed to support it?

If the answers improve, I can see a case for more attention shifting toward the businesses using the infrastructure. That’s a possibility, not an inevitable rotation away from chipmakers.

I also wouldn’t assume the cheapest-looking earnings multiple identifies the best opportunity. Temporary investment gains or unusually strong cyclical profits can make a stock look inexpensive at exactly the wrong time.

How This Becomes A Bigger Paycheck

There are two ways I connect business growth to future portfolio income.

The first is direct: a company earns more, generates enough cash after reinvestment, and decides to increase its dividend.

Microsoft provides a recent example of an actual payout decision. On September 15, the company raised its quarterly dividend to $0.98 per share, up from $0.91.

I explored this more in 4 Stocks That Give Bigger Raises Than Your Job. The starting yield tells you what a position pays now. The cash supporting the dividend helps you judge whether that payment has room to grow.

The second route is through the size of the portfolio itself.

Here’s a simple illustration:

At an assumed 4% annual cash yield, $100,000 produces $4,000 a year. If the capital available eventually reaches $150,000, that same assumed yield produces $6,000. The additional $2,000 comes from having more capital working, without needing a higher yield.

Growing the capital involves risk, realizing gains can create taxes, and the investments available later may offer different payouts. It shows why portfolio growth belongs in an income discussion.

This is a tradeoff I’ve already made in my own account. In my August dividend report, I explained why I accepted a lower projected dividend total while reallocating capital toward growth. The immediate reduction in income was real. The larger future payoff was still a thesis.

That distinction matters. I can measure the income I give up today. I have to earn the future result.

Someone relying on every distribution for living expenses faces a different decision from someone reinvesting those payments for another decade. The time available changes how much uncertainty the plan can tolerate.

Getting Paid Now Has A Price

Covered calls add another wrinkle to this setup, especially for income investors who also expect strong earnings growth.

The premium is visible immediately. The upside you surrender is much easier to ignore until a stock jumps past your strike price.

The Options Industry Council’s explanation lays out that exchange: selling a covered call brings in premium while limiting potential gains during the contract. Assignment can require selling the shares, and substantial downside exposure remains.

Here’s a hypothetical example, ignoring dividends, fees, and taxes. You own 100 shares at $100 and sell a $110 call for $2 per share. If the stock finishes at $130 at expiration and you’re assigned, the combined gain is $1,200: $1,000 on the shares plus $200 in premium. Simply holding would have produced a $3,000 unrealized gain at that price.

You made money. You also gave up $1,800 of additional upside.

That can be an acceptable outcome if $110 was a price you were happy to sell at. It becomes a problem when the income target overrides the reason you owned the business.

I use covered calls, and my beginner’s guide explains the mechanics. But an expectation of strong growth makes the strike price and willingness to sell especially important. The largest available premium doesn’t answer either question.

What I’m Checking Before The Next Decision

The practical work here is something readers can do without predicting next week’s market direction.

For any holding or watchlist company, I’d write down these five questions before its earnings release:

For ordinary operating companies, those cash questions are a useful starting point. Banks, REITs, and other specialized businesses need measures suited to their economics.

For an income fund, I’d add a review of total return, changes in net asset value, and the sources of its distributions. Cash arriving in the account is only one part of the result.

Then I’d stress the valuation assumption. A stock priced at 19 times expected earnings becomes roughly 21.1 times earnings if that forecast falls 10% and the share price stays unchanged. Nothing about the price chart has to move for the apparent bargain to shrink.

That’s the risk I want attached to the bullish case. Demand can disappoint, spending can stay elevated, and higher required returns can push valuations lower even when profits grow.

I’m willing to look for opportunity while the index is high because the underlying businesses can improve faster than the price suggests. But the evidence I want is fairly specific: recurring earnings, cash after reinvestment, and a clear role for the investment in the income plan.

My goal is a portfolio that gives me more financial freedom over time. A bigger dividend check helps. So does a larger pool of capital capable of supporting those checks later. The challenge is knowing what today’s income is costing me to collect.

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Which matters more at your current stage: increasing the cash your portfolio pays today, or building what it could pay five years from now? Let me know in the comments.

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A subscriber asked me this week what I make of the SpaceX headlines, so this is my full answer, and I’m still holding. The FCC approval and the spectrum purchase that caused the selling are real, and they come with a timeline the market skipped past: SpaceX’s own cell service doesn’t start until late 2027, and the constellation that just got approved isn’t due to be half built until 2032. ASTS has 13 satellites in orbit today, $1.3 billion of backlog and two governments publicly backing its next expansion.

The covered call premium this volatility generates has to go somewhere, so after the ASTS update I get to the three names on my buy list. Two are growth positions I’ve been building since August. The third is a 54-year dividend grower trading at a 4.70% yield and 14.9 times forward earnings, and I’m accumulating it with a rule about patience that I’ll explain.

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What SpaceX Actually Did This Week

Three things landed inside 72 hours. On Tuesday the FCC’s Space Bureau authorized SpaceX to build a 15,000-satellite constellation at 326 to 335 kilometers that connects directly to ordinary phones, and it waived the rule that would have forced SpaceX to lease spectrum through a carrier, according to 24/7 Wall St. The FCC’s own words were that “requiring SpaceX to enter into a leasing arrangement with itself would be an unnecessary regulatory burden,” which means Starlink can sell phone service to you directly instead of only through AT&T or T-Mobile.

On Thursday night SpaceX announced it will buy Grain Management’s nationwide portfolio of 800 MHz low-band licenses, the frequencies that travel far and pass through walls. Terms weren’t disclosed and the deal still needs FCC approval, and the part that matters for ASTS is that AST had been pursuing those same frequencies, per 24/7 Wall St.

SpaceX has been a public company since June 12, when it raised $75 billion at $135 a share and closed its first day above a $2.1 trillion market cap, according to TIKR. A company that size with $93.52 billion of cash, per the same 24/7 Wall St. report, can outspend every satellite startup on earth, and the market priced ASTS this week as if that spending had already happened.

SpaceX has none of these phone-service satellites in orbit, its EchoStar spectrum can't be used commercially until the later stage of that deal closes by November 30, 2027, and the FCC gave it until October 2032 to get half the constellation up.

What Changed For ASTS & What Didn’t

The list of what changed is short. ASTS lost its shot at the Grain low-band licenses, and telecom analyst Roger Entner of Recon Analytics said “Ligado is next,” which puts AST’s mid-band agreements with Ligado Networks in the spotlight. If SpaceX ends up with that spectrum too, AST’s U.S. plan leans harder on its carrier partners’ airwaves.

The other change is sentiment, because a rival with its own licenses and a regulator willing to let it skip the carriers makes the “who needs AST” question louder, and that’s what Friday’s volume was.

What didn’t change is most of the business. AST reported $31.5 million of revenue in the second quarter, reiterated 2026 revenue guidance of $150 to $200 million with the weight in Q4, and still plans about 45 BlueBird satellites in orbit by early 2027 from 13 today, with BlueBirds 14 through 16 in final testing and 17 through 46 in production, according to the Q2 release.

Ten launches are booked with two providers. More than 60 mobile operators covering over 3 billion subscribers are signed, backlog sits near $1.3 billion, and pro forma cash topped $3.7 billion at June 30 after the July convertible raise.

Two governments putting their names on your satellites the same week a rival gets approved is not something a 10% down day prices.

The carriers haven’t moved either. AT&T, Verizon and T-Mobile formally set up a joint venture on October 2 to standardize satellite-to-phone service, per Via Satellite, and that venture still needs someone’s satellites. Those three companies just watched SpaceX get permission to poach their customers from orbit, and AST is the partner that extends their coverage without taking the customer relationship, so that argument got stronger this week.

The real bear case is cash. Consensus compiled by TIKR has AST burning about $1.96 billion of free cash flow this year, $1.49 billion next year and $723 million in 2028 before turning positive in 2029, roughly $3.2 billion in total against that $3.7 billion of cash, with second-quarter capex alone at about $610 million. The cushion is thin, a delayed launch or a slower ramp means another raise, and that was the risk before this week too.

How I’m Handling The Position

I’m not selling into a 62% drawdown on news that changes the competitive picture in 2028 rather than 2026. I’m also not adding until a launch actually lands, because the thing that moves this stock from here is satellites in orbit, and the next three have been “shipping shortly” since August. I said the same in my August report and the plan hasn’t changed.

What the drawdown does give me is premium. ASTS covered calls paid me $1,002.25 in September, my own total from the September report, and the volatility that produced Friday’s volume is the same volatility that fattens the calls I write. The strikes come down with the stock, so I’ll be writing closer to the money than the $65 to $95 strikes I used in July, and that premium funds the buys below, which is how the dividend stack works: the position I’m waiting on pays for the positions I’m not.

The FCC votes October 29 on auctioning 25 MHz of spectrum for direct-to-device service, and whether AST or SpaceX ends up with it matters more than the Grain deal did. The Q3 report in early November needs to show BlueBirds 14 through 16 either launched or on a rocket with a date, and until one of those two lands, the premium goes into the three names below.

Three Names I’m Watching Right Now

Every covered call premium I collect goes into one of these three. I firmly believe in the idea of accumulating positions while they are out of favor with the market.

Read more

That’s the shift I care about as an investor. For twenty years software got paid per seat, so revenue grew as fast as companies hired.

Agents don’t need seats, and the companies that bill by the query, the gigabyte or the compute hour get paid on every step they take. I own a weekly paying fund whose second largest position is one of the cleanest examples of that model, and it paid me $194 in September alone.

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This ETF is currently estimated to generate me $3,500 in annual dividend income. As the software and technology market faces more volatility, I suspect that this fund will continue to harness that uncertainty and reward me with weekly dividends.

The portfolio’s estimated annual dividend income has now risen above $43,000.

The Meter Doesn’t Stop At 5PM

The pool of money underneath all of this is growing faster than it has in almost a decade. Companies spent $143.4 billion on cloud infrastructure in the second quarter, up 43% from a year earlier, according to Synergy Research Group. That was the 11th quarter in a row where the growth rate itself went UP, and the market doubled in size over that stretch.

The 165% number is the one to focus on. Generative AI cloud services are growing almost four times faster than the cloud market as a whole, and that’s the category where agents live. A person asks one question, and behind it the agent queries a database, checks the answer, retries what failed and writes the result somewhere, so a single request turns into a stack of billable events.

Seat-based software can’t capture that. A company with 500 employees pays for 500 seats whether those people run ten agents or ten thousand. Usage-based software gets paid on the ten thousand, which is why I think the growth in this market is heading to the companies holding the meter rather than the ones counting heads.

Snowflake Is Where The Bill Shows Up First

Snowflake runs the data warehouse a lot of these agents read from and write to, and it charges for the compute each query uses. Its fiscal second quarter is the clearest proof I’ve seen that agent usage is turning into revenue. Product revenue hit $1.49 billion, up 37%, the third straight quarter of faster growth, per the company’s Q2 results.

Look at how the new dollars stacked up. Snowflake added $68 million of product revenue two quarters ago, $108 million last quarter and $158 million this quarter, and net revenue retention rose to 126% from 124%, the first sequential improvement in more than two years. Existing customers are running more work through the platform every quarter, and the bill rises with them.

Management raised its full year product revenue guide to $6.07 billion from $5.84 billion, lifting expected growth from 31% to 36%. The number of customers spending over $1 million a year climbed to 828, and 65 now spend more than $10 million. Those are enterprises running production workloads at scale.

What I’m Watching Through 2027

Growth like this doesn’t move in a straight line, so here are the specific checkpoints that tell me whether the usage story keeps compounding, with the number attached to each:

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I’m adding more anyway, because Netflix is guiding to about $12.5 billion of free cash flow this year and operating income growth above 20%, and the market is pricing it like the growth story is finished. When a company makes MORE money every quarter while its stock gets cheaper, that’s the setup I want to be buying. You can see how I first funded the position in my August 2026 dividend report.

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Why The Stock Is Down

Netflix has dropped the day after each of its last four earnings reports, falling 10%, 2%, 10% and 7%, according to The Motley Fool. None of those quarters were disasters. The problem is that every report came with a slightly lower growth forecast for the quarter ahead, and the market has been repricing the stock one step down at a time.

September piled engagement worries on top. Co-CEO Ted Sarandos said viewing grew only about 2% in the first half of the year, and on September 18 Wells Fargo downgraded the stock to underweight with a $57 target, projecting a 21% drop in viewing hours for Netflix’s top 100 original shows in the second half. HSBC followed with a downgrade to hold and a $76 target, pointing to time lost to YouTube, per Yahoo Finance. A weak showing at the Emmys didn’t help.

The Warner Bros. situation added to it. Netflix pursued the deal earlier this year and walked away, collecting a termination fee, and about $275 million of deal costs still sit inside this year’s margin target. To a market that already wanted a reason to sell, a failed acquisition looked like a company searching for growth.

False Narratives

Three stories are doing most of the damage to this stock right now, and the company’s own Q2 shareholder letter pushes back on every one of them.

The YouTube argument assumes Netflix needs more hours to grow. It doesn’t, because Netflix sells subscriptions and ads, and both are getting more valuable per viewer. Revenue grew 13% in Q2 on viewing that grew about 2% in the first half, which means the average hour on Netflix is earning a lot more money than it did a year ago. YouTube competing for attention is real, and Netflix keeps raising prices anyway without losing the growth.

The cash flow scare comes from one number. Q2 free cash flow fell to $1.5 billion from $2.3 billion, and the letter explains it plainly: higher cash tax payments tied to the Warner Bros. termination fee. Zoom out to the first half and free cash flow came in at $6.62 billion against $4.93 billion a year earlier, a 34% increase by my own calculation.

Excellent Financials And Growth

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In September I had twenty of those employees on payroll, and together with the covered calls I wrote they paid me $3,220.01.

For instance, Microsoft paid me $56.95 to support my Xbox habit, Meta paid me $33.30 from everyone doom scrolling, Simon Property Group paid me $161.77 out of the rent it collects on its malls.

I didn’t send an invoice, take a meeting, or ask anyone for a raise to get a single dollar of it.

This month’s report breaks down every payer, how much came in each week, the covered calls that added to it, where the money went next, and the two positions I’m building at these levels. I’m also sharing my outlook on the memory chip shortage, because I think it’s the most important supply story heading into 2027. Last month’s numbers are in my August 2026 dividend report.

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September 2026 Passive Income At A Glance

Dividends paid me $2,106.77 from twenty different positions this month, and covered calls on AST SpaceMobile , Amazon , and Uber added $1,113.24 in premium, for a September total of $3,220.01. Dividends made up 65.4% of it and option premium the other 34.6%.

That's down from August's $4,918.01, and I expected it to be. I sold four income positions last month and moved that capital into growth on purpose, which pulled dividends from $2,600.45 down to $2,106.77, and August also carried an unusually large covered call month at $2,317.56.

I'm trading some income today for positions I expect to grow into much bigger income later. I track exactly where that leaves my forward income in the Yieldly Dashboard, which updates every time I add or sell a position.

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What I’m Buying At These Levels

Two positions get the bulk of my new money through the end of the year, and they do completely different jobs. Amazon is my growth engine, funded by option income. CGDV is the dividend core I’m building to $50,000.

Amazon: still dollar cost averaging

Amazon closed at $248.23 on October 1, according to StockAnalysis, which is 13.6% below its 52-week high of $287.20. The average analyst target sits at $329.54, 32.8% above the current price, and the next earnings report lands October 29 after the close. I laid out the full plan in Buy Alert: I’m Adding Another $15,000 To Amazon, and nothing about it has changed.

I’m adding $15,000 to Amazon by December 31. Every covered call premium I collect goes into the stock on a schedule regardless of price, which was $1,113.24 of premium in September alone, and three tranches only fire if the pullback deepens. I don’t need Amazon to pay me, since the positions writing the calls already do that, and its job is to compound the capital they throw off.

The one thing that would pause the tranches is the October 29 report. If AWS growth falls back into the twenties, or capex guidance climbs past $220 billion without matching revenue, I’ll stop the tranches and let the premium keep buying at a slower pace while I reassess.

Market Outlook: The Memory Shortage Into 2027

Every AI data center needs processors to do the computing and memory chips to hold the data those processors work on. Everybody talks about the processors. I think the memory side is where the more interesting supply problem sits heading into next year.

TrendForce expects capex at the nine largest cloud providers to grow another 50% in 2027 to roughly $1.38 trillion, after nearly doubling this year, with chips absorbing close to half of it. That spending runs straight into a market that's already tight. Regular DRAM contract prices rose another 13% to 18% in the third quarter, according to TrendForce, after roughly doubling earlier in the year, and the only reason the increase slowed is that PC and phone buyers hit the limit of what they could pay.

The bigger move is still ahead. High bandwidth memory, the kind stacked directly onto AI accelerators, reprices once a year, so the contracts most buyers are paying today were signed before the shortage fully hit. TrendForce's research says HBM contract prices could move multiples higher when the 2027 agreements land, and Nvidia's next platform carries 384GB of HBM per GPU against 288GB on the current generation.

Supply can’t catch up quickly. SK hynix’s major expansion projects target volume output in 2028 and 2029, according to this industry review, which means the gap between demand and supply stays open for roughly two more years. I made the case for why 2027 is the year this spending pays off in Buy Alert: I’m Betting On 2027 And Collecting 11%.

Two risks keep me from getting carried away. Memory stocks swing violently on guidance, even when earnings are fine, so position sizing matters more here than almost anywhere else. And China’s CXMT keeps gaining ground, and a fourth major producer scaling quickly would weaken the pricing power the big three have today. I’d rather own memory through diversified funds than bet on a single producer.

September Dividend Report FAQ

How much did I earn in dividends in September 2026?

I collected $3,220.01 in September, made up of $2,106.77 in dividends from 20 payers and $1,113.24 in covered call premium.

Which position paid me the most?

QDTY, the YieldMax Nasdaq 0DTE ETF, paid $288.95 across four weekly distributions, followed by Ares Capital at $275.02.

Do weekly dividend ETFs actually work?

For cash flow they absolutely do, since six weekly payers produced $872.96, or 41.4% of my September dividends, and paid me every week of the month. The tradeoff is that their payouts move with the market, so I size them as one part of a portfolio rather than all of it, and track them in the Yieldly Dashboard.

Why build CGDV to $50,000 if it only yields about 1.2%?

Because its job is growth plus a rising dividend rather than high current income. The weekly payers produce the cash, and CGDV is where some of that cash goes to compound.

The Bottom Line

Twenty positions paid me dividends in September and three more paid me option premium, for a total of $3,220.01. That’s lower than August by design, since I sold four income positions last month to fund growth, and there still wasn’t a single week where the portfolio didn’t pay me.

The money didn’t sit still either. $992.81 reinvested automatically, $499.98 went into CGDV on the way to $50,000, and $1,113.24 of covered call premium keeps flowing into Amazon through year end. The memory shortage is the supply story I’m watching most closely heading into 2027, and the stocks and funds tied to it are a big reason I’m comfortable holding through the volatility.

If you take one thing from this report, start hiring employees. Every share you own works for you whether you show up or not, and the first one is the hardest to hire.

Dividends flip that around, because when you own a fund that pays them, the companies inside it send you a slice of their profits every month or quarter, whether you worked that week or not. Most people hear “$5,000 a month in dividends” and assume it’s only for people who already have money, but getting there comes down to two phases anyone can follow.

1. The build: you pay the account. Every month you add money to growth funds that pay you almost nothing, so the balance can get big. This is how most of the world invests.

2. The switch: once your balance hits one number, which you’ll find in the table below, you move the money over.

3. The payout: the account pays you. The money sits in income funds built to send cash, and they send you a check every month.

👉 By the end of this post you'll know how much to invest each month, roughly how many years it takes, and the exact point where you stop building and start getting paid.

What $5,000 A Month Actually Takes

Income funds pay you a percentage of what you own every year, called the yield. At a 10% yield, every $100,000 you own pays about $833 a month, so $5,000 a month ($60,000 a year) takes about $600,000 invested.

I call that balance your switch number, because it’s the point where you flip from building to getting paid.

A higher yield lowers the switch number, so 8% needs $750,000 and 12% needs $500,000. For scale, $60,000 a year is about 92% of what the typical full-time worker earns, based on the BLS median of $1,251 a week in the second quarter of 2026 ($65,052 a year), so hitting your switch number replaces most of a normal paycheck.

I am currently sitting under that number but gradually working my way to $60k.

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Find Your Row

Pick the amount you can realistically invest every month on the left side of the table, then read across to the yield you expect your income funds to pay, and the number in that box is roughly how many years it takes to go from $0 to your switch number.

You may think this process takes a long time. It does. That’s why I encourage folks to invest as much as they possibly can, as quickly as possible. Who wants to sit around for 20 years doing this?

At $1,500 a month and a 10% income yield, you're looking at about 15 YEARS from a $0 balance. Push the deposit to $3,000 and it drops to 10 years, while $500 a month still gets you there in just under 25. Every cell uses the S&P 500's long-run pace, where $100 invested in 1928 grew to $1,157,599 by the end of 2025 with dividends reinvested, which works out to 10.02% a year compounded using NYU Stern's data.

Let The Market Do More Than Half The Work

At $1,500 a month, you’ll have deposited $271,500 by the time the balance crosses $600,000, and the other $333,448 came from growth. The growth barely shows up for the first decade because the balance is still small, and then around YEAR 13 the market’s contribution passes everything you’ve put in yourself.

The same pattern runs through every row of the table, and the smaller your deposit, the bigger the share the market covers, because a longer runway gives compounding more years to work. At $500 a month the market ends up supplying 75% of the $600,000.

That’s why the build belongs in growth funds that pay out almost nothing. While you still have a paycheck you don’t need the income, and every dollar paid out early is a dollar that stops compounding and, in a taxable account, gets taxed along the way. I laid out which layers to own over time in How To Build A Portfolio That Eventually Produces $5K A Month, and the table above puts a timeline on it.

The income side is where the switch number gets smaller, because the pair of income funds I’d use pays a blended 10.7%, which pulls the switch number down to about $560,000 and takes roughly seven months off the $1,500 row.

The Build: Two Growth Funds

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This fund is how I fix that without selling a single share, and on $5,000 its payouts over the last year add up to about $2,221 (my math), although what you should realistically expect from it depends on what Meta does next.

👉 This fund I will be highlighting today offers a massive 44% dividend yield.

👉 $10,00 invested = $4,400 in estimated annual dividend income.

👉 The caveat here is that this ETF only makes sense if you currently hold regular META shares as well.

Key takeaways

• $5,000 in Meta stock pays about $13.50 a year in dividends at today’s price.

• The same $5,000 in the weekly income fund I use would have collected about $2,381 over the last 12 months of payouts.

• The fund’s payout doubled in the three weeks after Muse launched, because bigger stock moves mean bigger option premiums.

• It captures part of Meta’s rallies and most of its drops, which is why it sits next to my Meta shares instead of replacing them.

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Why Doesn’t Meta’s Dividend Pay My Bills?

Meta pays $0.525 a share every quarter, according to StockAnalysis, and at $777.59 a share that works out to a yield of about 0.27%. Put $5,000 into Meta and you own about 6.4 shares, which pays you roughly $13.50 a year, or about $1.13 a month.

That’s fine for a growth position, and I’m not asking Meta to change anything. The company expects to spend $130 billion to $145 billion this year building out AI, per its Q2 results, and I’d much rather it put its cash there than into a bigger dividend.

So I split the job in two. My Meta shares handle the growth, and I never sell calls against them because I want every dollar of upside on the run I laid out in my last piece. A separate fund handles the income, and it paid out more than 170 times as much per dollar invested as Meta’s dividend over the past year.

How Does A Stock’s Swings Become Weekly Income?

Picture someone paying you a fee every week for the right to buy your Meta shares if the price jumps past a certain level. That’s what selling a call option is, and the fee is called the premium. The more a stock swings around, the more people will pay for that right, because a big move is more likely to happen.

The fund I own does this every single week on Meta and passes the premium out to shareholders as a weekly distribution. So yes, you can get paid passive income every single week with this ETF.

It doesn’t need to own Meta shares to do it, since it holds options that track Meta’s price and keeps most of its money in short-term Treasuries as collateral.

September showed how that plays out: Meta jumped 11.43% in a single day on September 21 after Muse hit number one on the App Store, according to TipRanks, and a stock that moves like that suddenly makes its options a lot more valuable. The fund’s weekly payout DOUBLED in three weeks, from the first week of September to the last.

When Meta goes quiet and trades in a tight range, option buyers pay less, and the weekly checks shrink. You’re collecting income from Meta’s volatility, so the size of the paycheck moves with how exciting Meta is on any given week.

What Does Weekly Income Actually Do For Me?

Every one of those Friday deposits goes straight back into my growth positions, which is what I call the dividend wheel. The income fund throws off cash, the cash buys more of the companies I want to own for the next decade, and none of it requires me to trim a winner or time the market.

👉 Learn The Dividend Wheel Strategy

A quarterly dividend gives you four chances a year to put money to work, and a weekly one gives you 52, so I’m buying on the dips as they happen instead of waiting three months for the next check. It also gives me a buffer of cash coming in every Friday no matter what the market did that week, which makes it a lot easier to sit tight through a bad stretch.

If option income is new to you, I compared ten of these funds side by side in I Analyzed 10 Option Income ETFs, and it’s a good primer before you go further.

Paid subscribers get the exact fund I’ve built into a $5,000 position below, its full payout history, what that $5,000 pays me each week, and the real numbers on how it behaves when Meta rallies and when Meta drops, so you know what to expect before you own it.

Paid subscribers get the rest

• The fund’s name and ticker, and how it’s built under the hood

• Every weekly payout in 2026, and the planning number I actually budget off

• Real results from Meta’s last rally and last drop, side by side

• Why 95% of the latest payout wasn’t taxed right away, and my position

The Fund: FBY

The fund is the YieldMax META Option Income Strategy ETF . According to YieldMax, it launched in July 2023, sells call spreads on Meta to harvest premium from its volatility, and still keeps some participation in Meta’s share price gains. It had $123.75 million in net assets and closed at $9.87 on September 25, with a 1.06% gross expense ratio.

Its latest holdings file shows about 75% of the fund sitting in Treasury bills and notes. The Meta exposure comes from a paired call and put that together act like owning the stock, worth about 25% of assets, with a layer of short-dated Meta call options on top that generates the weekly premium.

The 44% - 52.04% distribution rate on the issuer page takes the latest weekly payment and annualizes it, while the 2.82% 30-day SEC yield only counts the interest from the Treasuries and leaves out option income entirely. The real answer on what it pays is in between and changes every week, which is why I plan off the payout history instead of either headline number.

What Has FBY Actually Paid?

FBY has made 39 weekly payments so far in 2026, and they’ve ranged from a low of $0.0466 a share in late August to a high of $0.2473 in early February, according to the issuer’s distribution table. The median payment was $0.0711, and that’s the number I use when I think about what this position will pay me over time.

At the $9.87 close, my $5,000 position works out to about 507 shares, which pays about $50 a week at the latest payout and $36 a week at the 2026 median, and would have collected about $2,381 over the last 12 months of payouts.

I budget off the median. If the latest payout is the best week I see for a while, the median still has me collecting about $1,870 a year on $5,000, and anything above that is a bonus that goes straight into the dividend wheel.

What Should You Expect When Meta Rallies Or Drops?

In a rally, expect to keep a good chunk of the upside but not all of it. Selling calls means handing some of Meta’s biggest moves to the option buyer, and the fund’s own disclosures say it captures only a portion of Meta’s gains. Keeping roughly 70% of a 44% run while getting paid every Friday is a trade I’m happy with, and it’s exactly why my core Meta shares stay uncovered.

In a drop, expect to take most of the hit. The weekly premium cushions a bad day a little, but FBY is still Meta underneath, and the issuer is clear that it’s exposed to all of Meta’s downside. Its one-year NAV total return through August 31 was -21.98% against +20.38% for the S&P 500, and since launching in July 2023 it has returned 14.04% a year on NAV against 20.15% for the index. That’s a real return with a paycheck attached, and it’s also why this is my income sleeve instead of my growth engine.

In a sideways market, expect FBY to shine. A Seeking Alpha analysis from August found the fund does best when Meta moves sideways or rises gradually, since you keep collecting premium without giving up a big rally, per Seeking Alpha. If Meta spends the next few months digesting its 40% run, this is the setup where the weekly checks do the heavy lifting.

Why 95% Of My Latest Payout Wasn’t Taxed Yet

The September 25 payment was estimated at 95.82% return of capital, according to the issuer, which means almost none of it counted as taxable income when I received it. Return of capital lowers my cost basis instead, so the tax gets deferred until I sell, and if I hold long enough it can end up taxed as a long-term capital gain instead of ordinary income.

That estimate changes week to week, and a few 2026 payments came in at 0% return of capital, so I check the final breakdown on the issuer’s ROC Center and my year-end tax forms rather than assuming. It’s also why I keep funds like this in a taxable account, since the deferral is wasted inside an IRA where nothing is taxed anyway.

FAQ

How often does FBY pay?

FBY pays every week, and most 2026 payments landed on a Friday, per the issuer’s distribution table.

How much does FBY pay on $5,000?

At the $9.87 close, $5,000 buys about 507 shares, which would have collected about $2,381 over the last 12 months of distributions and pays about $36 a week at the 2026 median payout.

Does FBY own Meta stock?

No, it uses Meta options to track Meta’s price and holds most of its assets in short-term Treasuries.

Does FBY keep up with Meta in a rally?

Only partly: from July 30 to September 24, FBY returned about 30.8% including payouts while Meta returned about 44.4%.

Sources

• FBY fund details, holdings, distributions and performance: YieldMax

• Meta dividend: StockAnalysis

• FBY closing prices: Yahoo Finance, StockInvest

• Meta’s September 21 move: TipRanks

I own shares of Meta Platforms (META) and the YieldMax META Option Income Strategy ETF (FBY). This article reflects my own opinions and is not investment advice. Figures labeled as my math are my own calculations from the cited prices and distribution data. Distributions are not guaranteed. Do your own research before buying or selling any security.

The next morning I published Meta Platforms: The King of AI Monetization and argued the sell-off was driven by one-time charges while the AI inside Meta’s ad machine was already paying off, and that the market was pricing Meta like Zuckerberg didn’t have a plan. Paid subscribers also saw that Meta was one of my largest positions. Meta closed at $556.71 that day. On September 24 it closed at $777.59, which puts the stock up 39.7% in under two months by my math.

The plan I said the market was missing now has a name, and it's called Muse. Since it launched on September 8, Meta has gained 26.7% (my math), with a single 11.43% day on September 21 that added close to $190 billion in market value. I still own my shares, and I think the part of this story that matters most for the business hasn't shown up in the financials yet.

Key takeaways

• Meta is up 39.7% from my July 31 call and 26.7% since Muse launched on September 8 (both my math on closing prices).

• Muse logged 1.8 million iOS downloads in the U.S. and Canada in its first 12 days, ahead of ChatGPT’s 1.3 million over the same stretch.

• Muse can earn money three ways: paid subscriptions at $20 and $100 a month, checkout on partner stores, and deeper engagement inside apps Meta already owns.

• The agent gives Meta’s $130 billion to $145 billion capex budget something investors have been demanding since July: a consumer product people will pay for.

• At $777.59, Meta trades at 22.3 times 2027 earnings, right on its five-year average, and $1,000 a share needs as little as 24.8 times if Muse lifts EPS toward the high-end estimate (my math).

What Is Meta Muse?

Picture telling your phone to find a dinner reservation for four on Friday, email the group the details, and put it on everyone’s calendar, then going back to whatever you were doing while it handles the whole thing. That’s the pitch for Muse, a personal AI agent that opens a browser, fills out forms, sends emails, books travel and pays for things through Stripe’s Link checkout, with you approving each purchase. TechCrunch reports it runs on Muse Spark, the model family Meta built specifically for this kind of multi-step work.

Most AI apps you’ve used still stop at the advice stage, where the chatbot drafts an email and you’re the one who hits send. Muse does the sending, and Meta made it available everywhere its users already spend time: a standalone app, the web, WhatsApp, and a Mac app that launched on September 17 and lets the agent work directly on your computer.

Then came Connect on September 23, where Zuckerberg called Muse the centerpiece of everything Meta is building. The company’s own Connect recap lists a wave of new shopping partners, including Walmart, Best Buy, Sephora, Ulta and Wayfair, plus Shop Pay and PayPal for payments, with Expedia and Instacart on the way and work tools like Notion, GitHub and Box already connected. Meta also showed off Muse Charm, a keychain-sized gadget for talking to your agent without pulling out your phone.

Every one of those partners is a place Muse can complete a purchase, and every surface Meta adds is another way to keep people inside its ecosystem for longer, which is where the revenue case for Muse starts.

How Fast Is Muse Growing?

ChatGPT is the benchmark every AI launch gets measured against, since it became the fastest-adopted consumer app in history back in 2023, and Muse beat its opening pace. Yahoo Finance reported that Muse picked up 1.8 million iOS downloads in the U.S. and Canada during its first 12 days, compared with 1.3 million for ChatGPT over the same window, and reached about 2.8 million installs across every platform.

Muse also climbed to the number one spot on Apple’s U.S. App Store, and that’s what set off the September 21 rally. TipRanks reported that Wells Fargo analyst Ken Gawrelski raised his price target from $640 to $796 that morning, arguing that Meta’s AI launches are finally giving it a real story to tell after a year of delayed models and spending questions.

JPMorgan’s Doug Anmuth went further, writing that Muse has the potential to become “the most widely used consumer AI application since ChatGPT,” according to The Motley Fool. After Connect, Jefferies lifted its target from $710 to $875 and Tigress Financial went from $945 to $995, per the news feeds on StockAnalysis and CNN Markets.

Downloads and price targets tell you people are excited, and that’s worth something, but I own Meta for the cash flow it can produce five years from now, so what matters is whether Muse moves the revenue and margin numbers that drive it.

How Does Muse Make Meta Money?

In July I split AI into three layers, the apps that distribute it, the models, and the infrastructure underneath, and said Meta was the rare company with a real stake in all three. Muse is the first product where all three show up at once: Muse Spark is the model, Meta’s own data centers run it, and Facebook, Instagram and WhatsApp hand it to billions of people.

The bear case back then came down to one complaint: Meta doesn’t rent out cloud computing the way Microsoft and Amazon do, so there’s no clean line on the income statement that shows AI paying for itself. Muse gives Meta three new ways to fill in that line.

Subscriptions come first.

Muse is free up to a weekly usage cap, then moves to paid plans of $20 or $100 a month depending on how hard you work the agent, according to TradingKey. That’s a consumer revenue stream Meta has never really had, and the business line it lands in is already growing fast: Family of Apps “other revenue” hit $1 billion for the first time in Q2, up 73% year over year, driven mostly by WhatsApp paid messaging and subscriptions, per Meta’s Q2 earnings call.

Meta hasn’t said how many Muse users pay, so the chart below is my own illustration rather than a forecast. Every million people on the $20 Power plan works out to $240 million a year, and ten million would add $2.4 billion, which is more than half of what that entire “other revenue” line produces today on an annualized basis.

Commerce is the second lane.

Every partner Meta signed at Connect is a store where Muse can finish a checkout, and an agent that buys things for you sits right where advertisers want to be, at the exact moment someone is ready to spend. Meta’s ad business already runs on predicting what you’ll buy next, and Muse closes the loop by completing the purchase inside Meta’s own product.

Engagement is the third, and the biggest over time.

TECHi, citing Apptopia, estimates that more than 95% of Muse users also use Facebook and 63% use Instagram, which means Meta can put Muse in front of the record 3.6 billion people who use its apps every day, per 24/7 Wall St., without paying to acquire them, the same way it scaled Threads. More time spent in Meta’s apps means more ad impressions, and in Q2 ad impressions were already up 14% with the average price per ad up 12%, according to Investing.com’s breakdown of the Q2 slides.

Meta signing with AWS is part of why I'm putting every covered call premium into Amazon each week. Here's that full breakdown: Buy Alert: I'm Adding Another $15,000 To Amazon.

Owning the shares is only half of how I'm playing this. Meta pays me a tiny dividend, so this week I'm putting another $2,500 into an income position that pays me every single week, and at its recent payouts that's hundreds of dollars a year of new income landing in my account without selling a share of anything. The ticker, the math on what it pays, and why I picked it over buying more stock are below.

Does Muse Fix Meta’s Capex Problem?

Cash flow is what sank the stock in July. In Q2, Meta generated $31.9 billion of operating cash flow and spent $31.1 billion on servers, data centers and networking, leaving just $784 million of free cash flow, according to Fortune, compared with roughly $12 billion a quarter over the prior two years.

Meta isn’t slowing the spending down, either: the company expects 2026 capital spending of $130 billion to $145 billion, guided Q3 revenue to $61 billion to $64 billion, and still expects full-year operating income to come in above 2025, per its Q2 press release.

What changed in September is that all of that computing power now has a consumer product running on it, one that people are downloading faster than ChatGPT and that Meta can charge for. Muse turns the capex from a cost investors had to take on faith into the engine behind a product with a price tag, and that’s the shift that re-rated the stock. The free cash flow squeeze won’t disappear in one quarter, but the story around it has flipped from “where’s the return?” to “how fast does it show up?”

The next checkpoint is Q3 earnings, which CNBC estimates for October 27. I’ll be watching three things: whether revenue lands at the top of the $61 billion to $64 billion range, whether “other revenue” keeps growing at a 70%-plus pace now that Muse’s paid tiers are live, and whether management shares a single Muse usage number on the call.

Is Meta Still A Buy, And Can It Reach $1,000?

When I wrote the July piece, Meta traded at 17.97 times forward earnings against a five-year average of 22.28 times. The rally has used up part of that discount, but a lot less than the price chart suggests, because Wall Street expects earnings to keep climbing underneath it. The S&P Global consensus on StockAnalysis puts Meta’s 2026 EPS at $31.07 and 2027 EPS at $34.84, with revenue expected to reach $306 billion next year, up 20.4%.

At $777.59, Meta trades at 25.0 times this year’s earnings and 22.3 times next year’s (my math), which puts it right on its five-year average and about level with the S&P 500’s roughly 22 times, according to 24/7 Wall St. You’re paying a market multiple for a company growing revenue above 20% a year with 3.6 billion daily users and a brand-new product that just out-downloaded ChatGPT, and that’s why I think it’s still a great buy after a 40% run.

The consensus numbers also leave a gap Muse can close. Analysts expect revenue to grow 20.4% next year but EPS only 12.1% (my math on the two estimates), which tells you they’re assuming depreciation from the AI buildout keeps squeezing margins. Muse subscriptions and checkout fees run on data centers Meta has already paid for, so every dollar they bring in carries a high margin, and if EPS simply grew as fast as revenue next year it would land around $37.42 instead of $34.84 (my math).

On today’s consensus, $1,000 would mean paying 28.7 times 2027 earnings, which is a stretch. If Muse helps EPS keep pace with revenue, $1,000 drops to 26.7 times, and on the high-end 2027 estimate of $40.31 from the same 24/7 Wall St. piece, it’s just 24.8 times, below the 24.69 times Meta traded at on forward earnings back in 2021. Getting to $1,000 comes down to Muse adding a few dollars of EPS, and a paid product with a head start on ChatGPT’s launch pace is exactly the kind of thing that does it.

The highest target on the Street is already $1,000, 28.6% above the September 24 close. The $761 average still includes holds like BMO at $580 and Wedbush at $650, both reaffirmed this week, while Tigress lifted its target to $995 and Raymond James went from $650 to $860 on the same day.

What Could Slow Muse Down?

Amazon is the first roadblock. On September 20, Amazon started blocking Muse from checking out on Amazon.com, citing security and customer-experience concerns, according to Simply Wall St. I’m buying Amazon every single week, so I don’t take that lightly, but Meta answered it three days later by signing Walmart, Best Buy and a dozen other retailers at Connect.

Privacy is the second roadblock, since Muse asks for access to your email, calendar and payment methods, and Meta has a history people remember. Bank of America wrote that privacy and trust remain key considerations for broader adoption, per CNN, and the company is running the same gauntlet with its camera glasses right now.

The third is how little Meta has disclosed. Muse is U.S.-only at launch, and Tech Insider points out there’s still no published figure for total sign-ups or how many users are paying. Download data from app trackers is a strong early signal, but I want Meta’s own numbers before I treat Muse revenue as a sure thing.

My Position In Meta

Meta is one of the growth positions my dividends and option premiums get reinvested into, which is how I run my portfolio today. The dividend is small, but the company underneath it just found a product that could pay for the biggest spending cycle in its history.

My Income Sleeve: Another $2,500 Into FBY

My Meta shares give me the upside, but at $0.525 a share each quarter they barely register on my monthly income. So I’m adding another $2,500 to the YieldMax META Option Income Strategy ETF , which takes Meta’s price swings and turns them into a paycheck that lands every single week.

According to YieldMax, FBY sells call spreads on Meta to collect option premium while still participating in Meta’s share price gains, and it holds mostly Treasuries alongside its Meta options, with $125.02 million in net assets and a 1.06% gross expense ratio.

Muse made this a better time to own it. Option premiums grow when a stock starts moving the way Meta did on September 21, and FBY’s weekly payout doubled from $0.0493 a share on September 3 to $0.0983 on September 24, which works out to a 52.04% distribution rate on the issuer’s latest numbers and puts Meta’s volatility straight into my account as cash.

At the $9.83 close, $2,500 buys about 254 shares. If the latest payout holds, that’s around $25 every week and $1,300 a year, and even at the average of the last four weeks it’s about $18 a week and $919 a year (my math). Every one of those weekly payments goes straight back into my growth positions, which is the dividend wheel I’ve been running all year, and it gives me a buffer of cash coming in no matter what the market does on any given day.

The latest payment was estimated at 95.82% return of capital, which lowers my cost basis instead of getting taxed as income right away, and that’s why funds like this fit a taxable account better than an IRA. I’m using the fund rather than writing calls against my own shares because I want those shares completely uncovered for the run toward $1,000, and FBY gives up part of Meta’s upside in exchange for the weekly checks, which is exactly why it sits next to my core position instead of replacing it.

The Bottom Line

In July the market treated Meta like a company burning cash on AI with no plan, and I argued the monetization was already happening inside its apps and that Meta owned a piece of every AI layer. Eight weeks later the stock is up 39.7% from my call, Muse is out-downloading ChatGPT’s launch, and Wall Street is raising targets as high as $995. At 22.3 times next year’s earnings the stock is still priced like a market-average business, and if Muse adds even a few dollars of EPS, $1,000 a share is well within reach. Meta now has to prove that downloads turn into paying users and higher ad revenue, and October 27 is the first real test. I’m holding through it, because the setup for the next leg is better today than it was when the stock was cheap.

FAQ

What is Meta Muse?

Muse is Meta’s personal AI agent, launched September 8, 2026, that completes tasks like sending emails, booking travel and making purchases on your behalf.

How much does Muse cost?

Muse has a free tier with a weekly usage limit, plus paid plans reported at $20 and $100 a month.

How much has Meta stock gone up since Muse launched?

Meta closed at $613.48 on September 8 and $777.59 on September 24, a gain of 26.7% by my math.

Can Meta stock reach $1,000?

By my math, $1,000 equals 24.8 times the high-end 2027 EPS estimate of $40.31, below the 24.69 times forward earnings Meta traded at in 2021.

What is Meta’s forward P/E?

At $777.59, Meta trades at about 25.0 times 2026 consensus EPS of $31.07 and 22.3 times 2027 consensus EPS of $34.84 (my math).

When does Meta report Q3 2026 earnings?

CNBC estimates October 27, 2026, and Meta has guided Q3 revenue to $61 billion to $64 billion.

Sources

• Price history and dividend: StockAnalysis

• Q2 2026 results and guidance: Meta investor relations, Q2 call transcript

• Muse launch and Connect: TechCrunch, Meta Connect recap

• Download data: Yahoo Finance, TECHi

I own shares of Meta Platforms (META), the YieldMax META Option Income Strategy ETF (FBY) and Amazon (AMZN). This article reflects my own opinions and is not investment advice. Figures labeled as my math are my own calculations from the cited closing prices and filings. Do your own research before buying or selling any security.

I’m going to leave that fight to the politicians, because the word “dividend” in that headline hit a nerve for me in a different way. I’ve been building dividend income since 2018 for one reason, which is that I hated working and wanted a paycheck that didn’t need me to show up. In August alone my portfolio paid me $4,918, which is almost the entire Trump check in a single month, and it’ll pay me again in September, October and every month after that without anybody needing to win an election.

So let's answer the question nobody covering this story is asking: how much money do YOU need invested to collect $5,000 a year in dividends on your own, and how long does it take to get there starting from zero?

Key takeaways

• The proposed Trump dividend is $5,000 per adult citizen, tied to Republicans winning the midterms, and would need Congress to approve it.

• To earn $5,000 a year on your own you need about $142,900 at a 3.5% yield, $71,400 at 7%, or $50,000 at 10%.

• $5,000 a year works out to about $417 a month, or roughly $96 a week from weekly payers.

• Investing $500 a month into a 7% payer gets you to the $5,000 mark in under nine years, and $1,000 a month gets you there in about five.

👉 By the end of this you'll know your exact number, which kinds of funds shorten the timeline, and the first move to make this week.

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What is the $5,000 Trump dividend check?

It’s a proposed one-time payment of $5,000 to every adult U.S. citizen, promised on the condition that Republicans keep the House and Senate in November. Trump’s own words at the convention were that he would “issue a dividend to every adult citizen in the United States of America for $5,000,” and he added that the money “must be spent in the United States of America,” although nobody has explained how that part would be enforced. Senator Bernie Moreno has said he’ll introduce legislation to pass it right after the election.

With roughly 245 million adult citizens eligible, PBS puts the cost at about $1.2 trillion, and Vice President JD Vance has said some of it would come from tariff revenue. PBS also reports that any payment like this needs Congress to approve it, and that the $2,000 tariff dividend Trump floated in November 2025 never went out.

None of the reporting so far says whether this would be a single check or something that repeats, so the safest way to read it today is as a one-time payment. That's where the money question gets interesting for anyone who invests, because a dividend you build yourself doesn't come once. It comes every year you own the shares, and if the companies behind it keep growing, it gets bigger over time.

How much do you need invested to earn $5,000 a year in dividends?

You need somewhere between $50,000 and $142,900 invested, depending on the yield you collect. The formula is the annual income you want divided by the yield, so $5,000 divided by 0.07 is $71,400.

Every number in the ladder below is my own math using that formula.

Going from 3.5% to 10% cuts the capital you need by almost two thirds, which is a big reason high-yield funds are such a large part of how I get paid, since at 10% a year $50,000 produces the same $5,000 that would take nearly $143,000 in a fund paying 3.5%.

The second thing is that none of these numbers need you to be rich. $50,000 is a lot of money, but it’s a number a regular person with a job can reach, and I walked through a starting portfolio at almost exactly that size in How To Build A Portfolio That Eventually Produces $5K A Month.

The yield you pick also decides how the income behaves later. A 3.5% payer usually raises its dividend every year, so your $5,000 turns into $5,500 and then $6,000 without another dollar from you. A 10% payer hands you more today and gets you to the finish line faster.

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What does $5,000 a year look like paid monthly or weekly?

$5,000 a year is about $417 a month, or roughly $96 a week if you own funds that pay weekly.

$417 a month covers a car payment for a lot of people, or phone, internet and groceries together. Picking one bill and building a portfolio big enough to cover it is how I’d tell anyone to start, and I walked through the basics of getting that first payment in Here’s How To Get Paid A Dividend.

Weekly payers take the rhythm even further. A fund like QDTY pays every single week, so you’ve got cash coming in on a schedule that looks more like a paycheck than a quarterly statement, and that steady flow works as a buffer when something unexpected comes up. You don’t have to sell shares to cover a surprise bill when next week’s payment is already on the way.

Stretch that out over a decade and the gap between a check that comes once and a check that comes every year gets hard to ignore. Even if your own $5,000 never grows a single dollar, ten years of it adds up to $50,000 collected, which is my own math on a flat payment with no raises at all.

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Which kinds of funds get you there fastest?

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Most high yield funds pay you by slowly handing back your own capital. The payout shrinks, the share price bleeds, and you end up with less money working for you every year. This fund does the opposite, and the reason comes down to how it writes its calls.

The NAV HAS INCREASED here— which is why I’m excited to share it with you all.

I ran a backtest on it. $50,000 at launch with every payment reinvested grew annual income from $4,777 to $6,024 in two years, without adding a single dollar. It yields about 8.75% and pays monthly, and paid subs get the ticker, the holdings and the tax breakdown below. I went through the wider group of these funds in I Analyzed 10 Option Income ETFs.

👉 Upgrade Your Subscription for $0.82 a day and get every buy alert first, plus the funds paying my bills.

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Why Most Monthly Payers Shrink

A typical option income fund buys a basket of stocks and then sells call options against those exact stocks. Each call hands away the gains above a set price, so when the market runs, the fund pockets a premium and gives up the rally. That trade works well in a flat year and badly over several, because the share price gets stuck while the payouts keep drawing down capital.

The problem is that the yields offered by these income ETFs are often times unsustainable. This is where NAV erosion comes in.

This fund has INCREASED ITS NAV since inception and total AUM continues to rise because of the success.

Two design choices account for that gap. It caps far less of its upside than its peers do, and it owns stocks chosen because they keep raising their own dividends.

For instance, it was determined that this fund was still able to capture ~73% of the monthly upside of the market, unlike most other option ETFs.

The fund also offers a starting dividend yield of about 8.7%.

So $10,000 invested will earn you about $870 annually.

$100,000 invested earns you $8,700 annually.

$1M invested earns you $87,000 annually. You get the idea.

The monthly distribution grew 15.78% over the past year and 6.86% a year across three years, according to stockinvest.us, with the June payment coming in at $0.204 a share. The fund has an excellent track record of keeping distributions within a tight range. So if you care about income stability, this would be a great fund to consider.

The fund we’re highlighting today is the…

RDVI: Dividend Growers

The fund is RDVI, a First Trust product sub-advised by Vest, launched in October 2022. It holds roughly fifty companies drawn from Nasdaq's rising dividend screen, which looks for businesses with a history of raising payouts and the finances to keep going. Its payout goal is set at about 8 percentage points above whatever the S&P 500 yields, and it fills the space between what its stocks pay and that target with option premium, according to the First Trust fund pages.

Financials make up 31.38% of the fund, technology 24.55% and industrials 22.13%. The industrial names include GE Vernova, which sells the turbines and grid gear the AI buildout runs on.

The top ten mixes three chip equipment makers, Lam Research, Applied Materials and KLA, with insurers Travelers and Allstate and custody bank BNY. That combination gets you a piece of the semiconductor spending cycle without the valuation that usually comes with it, since the whole portfolio trades near 16.98 times earnings against roughly 26.36 for the S&P 500.

What The Monthly Check Is Made Of

First Trust’s latest Section 19(a) notice breaks this fiscal year’s distributions into three pieces, and the split tells you where to hold the fund. It’s posted alongside the distribution history.

Roughly 48.6% came from short-term gains on the option book, 44% was return of capital, and 7.5% was income from the dividends the stocks paid. Return of capital isn’t taxed when you receive it, since it lowers your cost basis and gets settled when you sell. Short-term gains are taxed like wages.

That mix makes an IRA or HSA the natural home for RDVI if you’re reinvesting, because the short-term gains portion never gets taxed there and the compounding runs uninterrupted. In a taxable account the return of capital piece still helps, just less than in funds where nearly the whole payout is classified that way.

How It Held Up When Stocks Went Nowhere

The best test so far came between November 2025 and February 2026, when big tech stalled over spending worries and the major indexes chopped sideways. RDVI returned 8.37% over those four months while the S&P 500 made 0.87% and the Nasdaq 100 lost 3.34%.

A weekly call writer is built for exactly that kind of market, since the option book harvested the chop while the dividend growers held their value better than the growth names leading the big indexes.

Net asset value sits at $29.24 and assets have grown to $3.79 billion, with a worst three-month stretch of 11.73% and a best of 15.07% since launch, according to Schwab's fund report. A NAV climbing alongside rising assets is what you want from a high-yield fund, since it shows the payout isn't eating the base.

Against Three Popular Alternatives

RDVI is the most expensive fund in the group and the smallest, and on total return since late 2023 it trails only , the Goldman fund built on the Nasdaq 100. Data comes from the issuers and Yahoo Finance.

pays the most at around 11.7% and grew its share price just 18.92% over the stretch, while RDVI’s price rose 45.96%. A higher payout pulls harder on the share price, and the gap between those two numbers is what that extra three points of yield cost. is the closest cousin since it also owns dividend payers, and RDVI beat it by nearly 20 points of total return.

For readers who already hold a tech-heavy option fund like GPIQ, RDVI works as the counterweight. Only about a quarter of its assets sit in technology, and its biggest bets are on banks, insurers and industrial companies that behave very differently when chips sell off. That pairing logic is the same one I used in Low Risk 10% Dividend Yield From One Fund.

Four Things To Check Before Buying It

A real bear market arrives. RDVI launched in October 2022, right at the bottom of the last one, so it has never been through a long decline. Its worst three months since launch was a loss of 11.73%, and a genuine recession could be deeper and longer than anything in that record, per Schwab’s report.

Financials and industrials fall together. More than half the fund sits in those two sectors, and a slowdown hits both at once. The calls soften a drop slightly and put no floor under it, so a sharp downturn would show up fully in the share price.

Markets calm down for a long stretch. Lower volatility means smaller weekly premiums. If the option book stops covering the gap to the target payout, more of each check would come from capital, and the rising NAV would stop rising.

The fee keeps it expensive. At 0.75% RDVI charges more than two and a half times what GPIQ does. That cost is easy to ignore when the fund is outperforming and much harder to justify in a year when it isn’t.