Earn Out Loud
The Math Behind Dividends
Let’s say you have $50,000 invested in the market.
Dividend Strategy:
A solid 4% dividend yield would generate about $2,000 per year.
Reliable? Yes.
But it’s about as slow as my 2-year-old is when it’s time to clean his room.
The Math Behind Covered Calls
If that same $50,000 is used strategically with covered calls, it’s possible to generate roughly 2-4% each month:
$1,000-$2,000 per month.
That’s a big difference!
But of course, covered calls aren’t passive.
So, you’ll spend roughly 30 minutes to 1 hour each month executing this.
The Real Trade-Off
Pros | Cons | |
|---|---|---|
Dividends | Mostly passive Extremely simple Low effort | Slow income Requires more money Takes longer to build |
Covered Calls | Higher income Weekly cash flow potential More control | More active A little more complex Slightly higher risk |
Dividends
Are a wise choice if you’re older, preserving your wealth, and want a simple income strategy.
Covered Calls
Makes sense if you’re younger, building your portfolio, and focused on accelerating income.
The Bottom Line
A strategy should only be chosen as a tool for the life you’re building right now.
Because great investors don’t chase all income. We build it intentionally.
That’s why I focus on covered calls now—because in my 30s, I’m in acceleration mode.
Later, I fully expect dividend investing to play a huge role in preserving the wealth I’m building today.
Helpful Resources
We just spent a full month on Covered Calls discussing what they are, how you can generate weekly income, the best stocks to buy for this strategy, and more.
So, to be sure you’re equipped for both strategies, here’s a helpful resource on dividends if you’re in that phase of life:
A Final Note
More Updates to Come
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Until next time,
-Isaiah from Earn Out Loud