🛡️ My "3-pillar portfolio": cash flow as an interest shield before 2028

Hello community,

Since there are controversial discussions under every post about CC ETfs

-> here are my reasons why I have them in my portfolio (and yes I have ki in the conversation)

At the age of 43, I am not only concerned with growth, but above all with risk management - because my real estate interest commitment expires on 30.09.2028, with a remaining debt of € 147,000.

My goal is to set up the portfolio in such a way that I can either offset the refinancing costs or pay off the debt completely.

1. the logic: cash flow meets growth

My investments are divided into three pillars with a clear function:

The cash flow engine

$JEPQ (+1,37 %) & $JEGP (+0,72 %) /JEPI

Generation of high monthly income (option premiums)

The growth cores

$HMWO (+0,74 %) (MSCI World) & $VUSA (+0,58 %) (S&P 500)

Long-term build-up of capital and substance

2. the strategy:

Two phases for the JPM cash flow (approx. 450 € net/month)

I use the high monthly net income from JEPQ/JEPI flexibly in two phases to achieve my goals:

🟢 Phase 1: Accumulation (Currently until approx. 2027)

* Measure: The monthly JPM distributions are reinvested directly into the VUSA ETF.

* Purpose: Utilize interest rate arbitrage (pay 1.88% interest, generate 8-10% gross return) to accelerate growth capital. The reinvestments are expected to increase the VUSA portfolio by over € 30,000 by the reporting date!

* In addition: The HMWO will continue to be built up separately with its own savings rate.

🔴 Phase 2: The interest shield (from 2028)

* Measure:

Reinvestment ends. The JPM cash flow is used to offset the increased monthly burden of the follow-up financing.

* Result: Even with a pessimistic 5.0% interest rate, the additional monthly burden of approx. +€227 is more than doubly compensated by the JPM cash flow (approx. €450 net).

Growth in VUSA and HMWO can continue.

3. the ultimate flexibility in October 2028

Thanks to the deposit cushion of an estimated € 259,000 built up over the next few years, I can choose freely on the refinancing date:

* Option A (Further growth): finance € 147,000 at the then applicable interest rates and subsidize the higher rate with the JPM cash flow. The entire growth deposit is retained.

* Option B (debt-free): Partially liquidate the deposit and pay off the €147,000 remaining debt in full. The property would be debt-free and my rental income of €520 would be pure surplus.

4. the tax advantage

Since all my ETFs (JEPQ, JEPG, VUSA, HMWO) receive the 30% partial exemption for equity funds, there is no tax disadvantage for the high-yield JPM funds compared to the growth stocks.

In addition, the rising interest costs of the property can be offset against the total income for tax purposes as income-related expenses from 2028.

Conclusion: I deliberately trade maximum capital growth in strong bull markets for financial security and compensation with a calculable real estate debt risk.

The JPM ETFs are

my active "interest rate buffer". -> we'll see if that works out

@Koenigmidas -> we've already had this conversation on another channel😅

$JEGP (+0,72 %)

There is not rice, but dividends.

https://youtu.be/AainIbNwIcY?si=KI6XV2xQLwp_3m5I

October was the month of big decisions and consistent adherence to the plan! While the crypto market was still euphorically looking upwards, I think I recognized the signals: The bull market came to an end around October 21, For me it was time for an exit from this asset class. With the exception of a small holding of a few euros in $BTC (+0,7 %) as a souvenir, I am completely out of crypto. Everything was shifted to my crypto successor portfolio. Sure, there was a brief tingling sensation and I wondered whether I was getting out too early.

But there are plans precisely for scenarios like this. To conquer emotions that jeopardize profits and let discipline prevail. And how am I feeling now after the exit? Pure relief! Finally no longer sitting there hoping that things will rise to my desired level or stay there. I'll reveal in detail what happens next for me in the coming year.

At the same time, the half-year bonus was added to the portfolio, the dividend base was broadened and I was able to relax and let it all sink in while hiking in the autumn air. My portfolios continued to do their job. The cash flow is flowing. Time for a review of a month that shows that a strategy beats FOMO.

Overall performance

October brought another boost for me in some assets, while others consolidated somewhat. Perhaps this is already a sign that stocks are positioning themselves for the year-end rally? I am firmly convinced that the current shutdown in the US administration will not act as a brake here. My key performance indicators for my overall portfolio at a glance:

• TTWROR (month under review): +1,39% (previous month: +1.76%)
• TTWROR (since inception): +77,04%
• IZF (month under review): +17,65% (previous month: +9.64%)
• IZF (since inception): +10,94%
• Delta: +1,160.94€
• Absolute change: +€2,224.10

Performance & volume

$AVGO (+1,21 %) is still my largest single position, but is losing momentum this month. However, its distance to the other positions is large enough, no one in the portfolio can hold a candle to my +337% share. But $NFLX (-1,32 %) and $GOOGL (+1,9 %) and others are trying hard to get there. Alphabet is now in the top 5 by volume and performance. I like the company. With YouTube and Cloud Services, they have good cash cows that enhance traditional search. And this is now also being upgraded with Gemini integrated into search. And Nano Banana ... wow.

Google is not always the leader, but it is always catching up. The competition between the tech giants is a spectacle that I love to watch.

And yet I prefer to rely on the more stable industries. Even the $BAC (-0,3 %) and $WMT (-0,47 %) continue to cut a good figure. Boring, but still good businesses that generate income. That's what I want! These are really two sectors that I have become very fond of. Nevertheless, the red lantern once again goes to $TGT (+1 %) which continue to have a hard time. But I'm sticking with it and buying more. Because $TGT (+1 %) is systemically relevant and will not go to the dogs. They just have problems with theft and competition.

Size of individual share positions by volume in the overall portfolio:

Share (%) of the total portfolio and associated securities account:

$AVGO (+1,21 %) 3.14% (main share portfolio)

$NFLX (-1,32 %) 1.72% (main share portfolio)

$WMT (-0,47 %) 1.65% (main share portfolio)

$BAC (-0,3 %) 1.48% (main share portfolio)

$GOOGL (+1,9 %) 1.41% (main share portfolio)

Smallest individual share positions by volume in the overall portfolio:

Share (%) of the total portfolio and associated securities account:

$NOVO B (+0,77 %) 0.45% (main share portfolio)

$BATS (-0,36 %) : 0.50% (crypto follow-on portfolio)

$GIS (+0,24 %) 0.55% (main share portfolio)

$TGT (+1 %) 0.58% (main share portfolio)

$MDLZ (+1,59 %) 0.60% (main share portfolio)

Top-performing individual stocks

Shares with performance since initial purchase (%) and the respective portfolio:

$AVGO (+1,21 %) : +337% (main share portfolio)

$NFLX (-1,32 %) +151% (main share portfolio)

$GOOGL (+1,9 %) +99% (main share portfolio)

$WMT (-0,47 %) +77% (main share portfolio)

$BAC (-0,3 %) + 74% (main share portfolio)

Flop performer individual stocks

Shares with performance since initial purchase (%) and the respective portfolio:

$TGT (+1 %) : -35% (main share portfolio)

$GIS (+0,24 %) -34% (main share portfolio)

$NKE (-5,18 %) : -32% (main share portfolio)

$NOVO B (+0,77 %) -28% (main share portfolio)

$CPB (+0,12 %) : -27% (main share portfolio)

Asset allocation

Due to my crypto reallocation, the ETF share is increasing. My asset allocation is as follows:

ETFs: 41.5%

Equities: 58.4%

Crypto: less than 0.01%

P2P: less than 0.01%

Investments and subsequent purchases

I have invested the following amounts in savings plans:

Planned savings plan amount from the fixed net salary: €1,030

Planned savings plan amount from the fixed net salary, incl. reinvested dividends according to plan size: €1,140

Savings ratio of the savings plans to the fixed net salary: 49.75%

In addition, there were the following additional investments from returns, refunds, cashback, etc. as one-off savings plans/repurchases:

Subsequent purchases/one-off savings plans as cashback annuities from refunds: € 73.00

Subsequent purchases/one-off savings plans as a cashback annuity from bonuses: € 894.97

Subsequent purchases from other surpluses: €31.00

Automatically reinvested dividends by the broker: €2.76 (function is only activated for an old custody account, as I otherwise prefer to control the reinvestment myself)

Additional purchases from crypto sales: €1,604.86

Additional purchases were made in various custody accounts outside the regular savings plans:

Number of additional purchases: 9

124.97€ for $SPYD (+0,08 %)

770,00 $JEPQ (+1,37 %)

28.00€ for $JEGP (+0,72 %)

45,00€ for $GGRP (+0,89 %)

477,77€ for $DXSA (+0,22 %)

252,51€ for $EXX5 (+0,29 %)

270,99€ for $SHEL (-0,55 %)

102,97€ for $HSBA (+0,85 %)

445.58€ for $BATS (-0,36 %)

Passive income from dividends

My income from dividends amounted to € 148.90 (€ 81.32 in the same month last year). This corresponds to a change of +82.43% compared to the same month last year. The strong increase is due to the fact that my large Vanguard ETFs postponed the distribution to the reporting month. Further key data on the distributions follows:

Number of dividend payments: 26

Number of payment days: 10 days

Average dividend per payment: €5.73

average dividend per payment day: €14.89

The top three payers are:

$ISPA (+0,34 %)

$VHYL (-0,12 %)

$VWRL (+0,43 %)

My passive income from dividends (and some interest) mathematically covered 16.05% of my expenses in the month under review.

Crypto performance

My crypto portfolio is distorted by the sell-off and will not be calculated again until I get back in. That will now take quite a while. I got out later than I wanted to, but still made a good profit. Only the Oracle of Delphi knows whether I am right with my approach. My key figures:

Performance in the reporting period: -

Performance since inception: -

Proportion of holdings for which the tax holding period has expired: 100%.

Crypto share of the total portfolio: less than 0.001%

Now it's time for the same thing as last crypto winter. Learning and understanding. And the current crypto winter hasn't even started yet. However, I think that prices will fall less sharply than in previous cycles and that the decline will be more orderly due to institutional adaptation. That's a good thing right now, as it makes it easier to get back in.

Performance comparison: portfolio vs. benchmarks

A comparison of my portfolio with two important ETFs shows:

TTWROR (current month): +1,39%

$VWRL (+0,43 %) : +4,66%

$VUSA (+0,58 %) : +2,76%

I am lagging behind the ETFs. 🤷🏼‍♂️

Risk ratios

Here are my risk figures for the month under review:

Maximum drawdown: 1.94% (YTD: 17.17%)

Maximum drawdown duration: 13 days (YTD: 702 days)

Volatility: 2.51% (YTD: 28.02%)

Sharpe ratio: 7.03 (YTD: 0.39)

Semi-volatility: 1.69% (YTD: 20.82%)

A drawdown of only 1.94% in October? That's exactly how it should be. While the markets trended sideways to slightly upwards, my portfolio remained frighteningly boring. And in the best sense of the word. The volatility of 2.51 % and the semi-volatility of 1.69 % confirm that my crypto exit has increased the stability of my portfolio. No more wild swings, just solid growth. The Sharpe ratio of 7.03? Brutally good. Maybe Trump's China deal helped the markets, maybe it was just my perfect timing. No matter! The figures speak for themselves: strategy beats chaos.

Outlook

Thanks for reading, this time I want to keep the outlook deliberately short. I'm glad that you're honoring the several days of work in front of the computer in the evenings when others are chilling with Netflix with your lifetime. I don't have anything else for the miscellaneous category this time. If you want to know what else is on my mind, please refer to the August review. I'll have something to say about that next December, I think. Stay safe and sound!

👉 Would you like to see my review as an Instagram Carousel post?

Then follow me on Instagram:

📲 In addition to the portfolio and budget review, there are currently three posts a week: @frugalfreisein

Please pay close attention to the spelling, unfortunately there are too many fake and phishing accounts on social media. I have also been "copied" several times now.

👉 How was your month in the portfolio? Do you have any tops and flops to report?

Leave your thoughts in the comments!

0.1596$ $JEGP (+0,72 %)

0.2312$ $JEPQ (+1,37 %)

Just in time for St. Nicholas Day, there's another decent bonus/dividend - call it what you will 🤣

In any case, the December payout is higher than the last one.

Vola is your friend with these etfs

listened to an older podcast on this type of investment yesterday :-)

The ETF for monthly equity income - JP Morgan reveals how | Asset class no. 15

https://www.youtube.com/watch?v=28AaigRvtx0

https://www.eqs-news.com/de/news/corporate/dividenden/39bbb571-aba0-4d2e-bb7b-4d02330deb30_de

I am currently in the process of restructuring my portfolio and would be pleased to hear your views.

Total approx. 400 k €currently divided as follows:

• $VWRL (+0,43 %) ≈ 55 %
• $JEGP (+0,72 %) ≈ 10 %
• $TDIV (+0,34 %) ≈ 9 %
• $ALV (-0,06 %) ≈ 6,5 %
• $BATS (-0,36 %) ≈ 4 %
• $PEP (-0,85 %) ≈ 4%
• $BTC (+0,7 %) ≈ 9 %

From the beginning of next year, I will start a sabbatical / longer travel phase (1-2 years) and during this time have no income during this time. I plan to start with about 2.000€/2.500€ per month per month.

My aim is to keep the portfolio running for the long term - i.e. clearly return-oriented - but at the same time not be completely tied down completely if investment opportunities arise in 1-2 years.

I am therefore looking for the the right balance between long-term wealth accumulation, liquidity and moderate risk.and I'm curious to know how you would approach this in my situation.

ETFs that partly implement a CC strategy also underperform the market over the long term.

$QYLE (+0,24 %)
$JEPI (+0,54 %)
$JEGP (+0,72 %)
$JEPQ (+1,37 %)
$WINC (+0,52 %)
$IE000MMRLY96 (+0,43 %)

https://www.youtube.com/watch?v=K3sYY3T7V8k

...just 3 months ago the 3rd milestone of 20k was reached earlier than expected, last month we also raised our personal year-end forecast from 23k-25k to 25k-28k and now, 1 month later, we are pleased to have to raise it again.

The new target is now 27k-30k and should the upper limit be reached here, the last 10k would be realized in just 6 instead of 10-12 months.

Some people may smile at this numerical example, but this is still a boring dividend portfolio 🤫

...but a quick look at the facts...

...September, even if it wasn't my strongest month, delivered average results in contrast to the past, but we probably owe that more to the April🍊 correction than to the usual course of events...

...for the year as a whole, as I mentioned at the beginning, things are still looking pretty good...

...and more than satisfactory over the entire term so far 🫠

Above all, however, because the currently forecast dividend value for 2026 is mathematically a good ~27% of the average annual investment amount or, to put it another way, this increases by a good ~27% on its own (without taking into account any increases/caps) 💪🏻

Which brings us to the topic of dividends...

...September was a good month and, despite the still modest portfolio value, brought us a monthly dividend of €275.42 net (gross €298.99) for a good reinvest 🤑

There was also a small change to the portfolio itself this month:

》🟢 Top 3

$3750 (-2,87 %) +35,19% (+74,45%)

$HSBA (+0,85 %) +9,41% (+23,42%)

$RIO (+0,65 %) +4,91% (+5,95%)

》🔴 Flop 3

$HAUTO (+0,9 %) -8,32% (+44,10%)

$BATS (-0,36 %) -6,64% (+80,26%)

$1211 (+0,24 %) +1,28% (-16,36%)

》Disposals

$PETR4 (-0,37 %)

$JEGP (+0,72 %)

》Additions

$DTE (+0,87 %)

$WINC (+0,52 %)

》Increased

$DTE (+0,87 %)

$VAR (-0,88 %)

All in all, a good look back at the future 📈

Wishing everyone a nice rest of Sunday and a good UPtober together ✌🏻