After weeks of strategizing and calculating, I am proud to announce that I had garnered nearly $400 USD in Dividends from those ETFs I mentioned in Part I of this Post. Although some losses were sustained, I nevertheless broke even and still walked away with the Dividends intact. Going into December, I now have the important, yet delicate task of figuring out how much to allocate toward the Schwurhand-Strategie, how much to allocate toward donations, and how much to save for paying taxes owed to the Federal Government and the State Government.
The difficulty itself self-imposed; everything depends on me cutting back on my living expenses for the next three months. What I have in mind is for me to save at least $2,000 USD in cash by the end of March 2025. That should be enough for me to pay off any Income Taxes.
The Dividends alone should be suitable in alleviating some it. Since November was an unusual month, I am expecting a monthly average of $217 USD in Dividends. This money needs to be allocated toward investments in Positions poised to grow steadily throughout 2025. I will be needing the Unrealized Gains to offset any losses incurred on my ETF Positions. Based on a list of Stocks, several of them stand out: BRK/B, BKNG, FICO, NOW, NVR, and TDG. Only BRK/B is the most self-explanatory as it is the Class B of Berkshire Hathaway.
- TDG is involved in the designing, production, and logistics of aircraft components in America and abroad.
- NVR is a financial institution responsible for providing loans to the construction of homes and the lending of mortgages for those homes.
- NOW specializes in information technologies related to Artificial Intelligence, automation, and robotics.
- FICO develops software for financial institutions, particularly in areas such as predicting credit score ratings and combating fraudulent transactions.
- BKNG is hospitality focused, specifically in areas such as online bookings of airline flights, cars rentals, and reservations for cruises and hotels.
Overall, given that I have to save enough to pay any Income Taxes incurred on my investments, I feel that I should prioritize BRK/B, BKNG, and FICO. If I am going to receive $217 USD in Dividends, and after deducting $50 USD for tax purposes, that should leave me with approximately $162.75 USD. I also plan on allocating $200 USD in the first half of December; exactly how much I allocate in the latter half of next month will depend on my overall expenses in the early half.
But because I am not going to get those Dividends on a single day, I decided to sell off 2 of my 3 Shares of ALX, a Real Estate Stock, because the Dividends earned through the usual ETFs more than offset the loss of $9.00 USD. Thus, I have $523 USD available for investing. Of that initial figure, I plan on investing $140 USD into BKNG because it will be paying a Dividend at the end of December 2024, splitting the remaining $60 USD evenly between BRK/B and FICO. The $200 USD allocated for early December will be split between BRK/B and FICO. The former has demonstrated resilience, the latter promising growth that could be sustained anytime between the next one and two months.
This leaves me with the $300 USD from selling my 2 Shares of ALX and the $162.75 USD from Dividends after taxes. At the moment, I am split between whether to consolidate my Position in PLTY or whether to reinvest in CONY. The problem with doing the latter, apart from the implications of being hit with a potential Wash Sale, is that I already have a Crypto-heavy Portfolio. The various Yieldmax ETFs for Group Charlie are not interesting, apart from NFLY, which tracks Netflix. Not to mention that I have too many qualms about investing in ULTY.
At the same time, I am also skeptical about PLTY, based on its performance thus far. Even though it has risen alongside its underlying PLTR, the Value of PLTY is comparable to that of the Value of ALX. In essence, the Value is determined by the Bid Price (the Selling Price), and the Ask Price (the Buying Price) is slightly larger than the Bid Price. I think 4 Shares of PLTY should suffice. The remaining cash should be held as a reserve for investing into MSTY and NVDY, both of which have been raking a lot in Dividends. Since the Price of NVDA has been dropping lately, this leaves me with MSTY.
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