1Settimana·

It is realized-> my project building society loan for cash flow

💡 Project: Cash flow strategy with building society leverage & ETF income portfolio

I would like to share a long-term project that I am currently working on.

The aim is to build up an income-oriented ETF portfolio with the help of a favorable building society loan, which in the long term will be self-sustaining.

Basic idea:

Instead of consuming the loan in the traditional way, the capital flows entirely into a broadly diversified distribution portfolio. The income is intended to cover the loan installment in the medium term - from this point on, the system continues to run without additional payments.

🔹 Structure of the portfolio

Currently invested in three high-dividend ETFs with option strategies:

WINC - iShares World Equity High Income UCITS ETF
→ Global diversification, main building block & reinvestment target
JEPQ - JPM Nasdaq Equity Premium Income UCITS ETF
→ Nasdaq exposure + option premiums
JEGP - JPM Global Equity Premium Income UCITS ETF
→ Global diversification + defensive option strategy

Target: Stable cash flow + risk diversification

🔹 Savings plan logic

Starting investment: Approx. €14,000
Short-term additional investment: +2.000 €
Thereafter:
500 € per month in the WINC (main position)
100% reinvestment of all dividends

Stop rule:

As soon as the monthly distributions fully cover the loan installmentno further no further payments will be made.

🔹 Objective

Establishment of a self-sustaining cash flow system
Long-term Reduction of effective borrowing costs
Calm asset accumulation without pressure to sell
Perspective: additional free cash flow after full repayment

🔹 Why this approach?

Predictable credit costs (building society loan)
Broad diversification
Focus on current income instead of pure price fantasy
Psychologically relaxed approach due to cash flow focus

🔢 Number projection (conservatively calculated)

Assumptions:

Start-up capital: 14.000 €
Short-term additional investment: +€2,000 in $WINC (-0,71%)
Monthly deposit: 500 € in $WINC (-0,71%)
Reinvestment: 100% of the dividends in $WINC (-0,71%)
Average net distribution yield: 7% p.a.
Loan installment: € 165 / month (≈ € 2,000 / year)

👉 From approx. 28,000 - 30,000 € deposit value

the system is is mathematically self-supporting and this should be the case in approx. 18 months

3Posizioni

14.421,65 €

0,44%

19 Commenti

Chris@Psychedelic_Sunflower

1Settimana

But a tree loan also has to be used. You can't just put the money into an ETF. We didn't even get the money for the real estate purchase into our account back then, the lending bank paid it directly.

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NichtRelevant@NichtRelevant

1Settimana

@Psychedelic_Sunflower I think it depends on the individual contract. If you want to do the construct, you should of course check it carefully in advance.

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Hau I@Haui

1Settimana

The first contract you take out if you are under 25 does not have to be used for residential purposes (at least with Schwäbisch Hall)

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NichtRelevant@NichtRelevant

1Settimana

Without having checked the details, that sounds pretty good at first. The interest rates are low via the building society construct, the payouts via the high-yield securities are high. Makes sense and the risk is also manageable for the amount.

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Francis@Underwood_F

1Settimana

With "my" building society, you had to prove that the loan was for residential use... is that probably not the case with you? Which building society is it? :)

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AI sagt@GoDividend

1Settimana

@Underwood_F There are stones you can build on

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Dividendenopi👴@Dividendenopi

1Settimana

@Underwood_F This does not sound like a loan from a building society savings contract ready for allocation, but rather like a blank loan

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Alpalaka@Alpalaka

1Settimana

@Dividendenopi As soon as it is ready for allocation, you can have it paid out

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Dividendenopi👴@Dividendenopi

1Settimana

@Alpalaka in any case, but he writes about a favorable building society loan

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Patrick Schäfer@Hotte1909

1Settimana

@Underwood_F It always depends. When I was 18, I also had one that was ready for allocation and I also took out the loan at the time and then had to specify in writing what the money was to be used for. I simply stated that I was buying my own furniture. This was never checked and paid out without any complaints.
At the moment I still have a loan with 1.1% interest that I could get ready for allocation at any time by making a one-off payment. The loan amount there would be 150k, so I asked carefully, but it would actually only be earmarked for a specific purpose. So for apartment or house purchase/renovation.

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AI sagt@GoDividend

1Settimana

@Hotte1909 Bag I was told up to 50tsd € loan is not checked. Above that, verification and collateral.
Since it was under €20tsd here, it was no problem to take out the loan along the way

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Patrick Schäfer@Hotte1909

1Settimana

@GoDividend Yes, that fits. My first one was only 10k back then 😉

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Wealth-Accelerator@Wealth-Accelerator

1Settimana

Sounds exciting!
I would set it up in such a way that you could always service the installments from your own earned income in case of dropouts or the like. If that's the case, you can consider the lever at a young age.

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AI sagt@GoDividend

1Settimana

@Wealth-Accelerator the prerequisite must be met yes

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GHF@GHF

1Settimana

Good plan. Nevertheless, you should be in a position to make the installments from your own income, even in the short term... There have been enough events in stock market history where "safe" investments have been wiped out.
iShares is a good and usually inexpensive provider. Nevertheless, the ETF raises the question for me of where the high dividend payments come from if the largest positions are tech companies with no or only a low dividend?

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Lum0k@Lum0k

1Settimana

@GHF through option premiums... these are income products, often only a minimal return can be expected over the years, if at all. (Often the product also loses in price +/- what is distributed p.a.) On the other hand, you can collect a fairly reliable monthly income. With these products, the aim is not to build up assets, but quite clearly to generate a monthly income.

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GHF@GHF

1Settimana

@Lum0k interesting approach, I am only marginally familiar with the model with option premiums. Above all, I can't quite see the risks yet ... I'll put it on my to-do list.

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Christoph@ChrisBizz

1Settimana

Great idea 👍🏻

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AI sagt@GoDividend

1Settimana

@ChrisBizz we'll see if it was good at some point 🤣

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