hi everybody thanks for joining me my
name is Dan Casey today I want to talk
about corporate bonds and how to figure
out exactly how much money will kick off
in your portfolio I also want to look a
little bit into preferred shares and the
same thing there this kind of goes
hand-in-hand with the video I made how
much do I need to retire because if
you're able to put most of your money in
corporate bonds or preferred shares and
it kicks off enough income that you can
live off well you're good right there's
really not a whole lot more you should
do you should mess around with the
market stock market if you don't want to
if that money is in corporate bonds and
preferred shares and it's kicking off
what you need to retire ok alright so
first thing let's go into finance dot
yahoo.com
ok first thing you want to do type in
the ticker symbol L Q D ok that is a
basket of corporate bonds there's no
mutant money manager in there like a
mutual fund that are buying and selling
bonds to try to get the best yield this
is a basket of high-grade corporate
bonds so very very low fees and it gives
you an idea of what income you can get
from being in corporate bonds these are
the big big names that we've all heard
of that are in these particular funds
alright so here it is lqd here is the
share price we're gonna need to know
that 120 dollars 96 cents something to
note here is the yield you can just
multiply how much you plan on investing
like $50,000 times this 3.29 percent or
point zero three to nine and find out on
an annual basis roughly how much money
you would make from that money into this
fund now it's not detailed enough for me
so I'm going to go that next step
because as you can see right here that
yield is
of January 31st and right now as I film
this it's in March not good enough for
me so let's go into the year chart and
as you can see these DS down here if you
hover over these DS these are the
dividends that are paid from this fund
and as you can see in this fund it's on
a monthly basis which is how most bond
funds operate and it's how most of my
clients like it and me as a money
manager prefer it it's a consistent
basis on a monthly so it's easier to
plan okay and as you can see the chart
this is kind of what the bond fund has
done as far as capital appreciation or
depreciation over this last year all
right so let's focus on the dividends
though that's what we're concerned with
right now if you hover over this D you
can see it's 33 and a half cents per
share that it's paying out now we want
to get this dividend amount per share so
we can figure out how much it's got to
pay us and it may or may not change over
a month or every month so let's look at
it see it went down for thirty two point
two shared cents a share
back up thirty-three and a half so for
the most part this looks like it's going
to be thirty three and a half in
December usually there are sometimes
some one-time dividend kickoffs we're
not going to calculate that it's not
accurate I really I mean it throws off
the dividends really just consider that
gray view if they do that ever but let's
just kind of get the average and you can
see it looks like it's about thirty
three and a half cents per share
okay so let's figure out how much that
would kick off if we invested $50,000
into this particular fund let's divide
it by the share price which is Razov
right now one hundred and twenty dollars
ninety three sets this is going to tell
us how many shares that we're gonna have
so let's take fifty thousand whoops
fifty thousand divided by under twenty
dollars 93 cents we are going to have
four hundred and thirteen share
okay so that's the figure that we use to
multiply by this dividend because this
is per share so if we multiply that by
thirty three and a half cents we're
gonna get a hundred and thirty eight
dollars and fifty cents roughly 51 cents
if we really want to get crazy that's on
a per monthly basis okay and that's
gonna be pretty darn accurate every
month you're gonna get a check for a
hundred thirty-eight dollars 51 says but
as you can see as we go back you know it
just changed a little bit but that's
pretty accurate
okay so regardless of what the fund
actually does as far as your principal
amount that you put in your fifty
thousand will fluctuate a little bit as
you can see it kind of does trade in
this range for the most part and just
kind of if you look at it like a farmer
who's growing corn they care about the
yield right they care about the yield of
the corn not necessarily the value of
the land and that's kind of what this is
right here the amount that you put into
this fund is the value of the land you
care about this money that it's kicking
off because no matter what it does no
matter how it fluctuates it's still
going to kick off the same amount
because your share amount doesn't change
alright and this is based on shares
let's go into the well actually let me
show you just the fluctuation of a
corporate bond fund if we go back two
years you can see well this is probably
not exactly typical we are in a court on
quote bubble I'm not quite sure if we
are but the pundits seem to think that
we may be so don't expect this kind of
capital appreciation this is what your
$50,000 would grow to irregardless of
the dividends that it's kicking off okay
two years five years ten years okay so
you can kind of see that of course in
2008 it did did very poorly like just
about everything so if you don't think
we're gonna get another 2008 it's
probably more gonna act like in this
range right here okay alright so let's
look at preferred shares okay type in
the ticker symbol P
F preferred shares are usually issued by
banks other companies do offer preferred
shares there they come in the ranking
higher than common stocks meaning you
know if something happens to the
companies they have to pay the dividends
to the preferred shareholders before
common stockholders but really don't
even get into that mess right now
because preferred shares this basket of
ETFs you own so many and they're all big
blue chip usually that I wouldn't worry
too much about about that so you can see
the yield 6.2 4% a lot juicier then then
bonds but they're going to be a little
bit more volatile like I said in between
bonds and stocks kind of on that
volatility range the the good thing is
mostly retirees own preferred shares so
they're not like owned by a demographic
or a group of investors that buy and
sell and are looking for you know big
gains because you're not going to get
big gains out of preferred shares we're
looking for dividends all right so let's
go into this one-year chart and as you
can see this is kind of what you should
expect from preferred shares this kind
of range see this goes from forty to
thirty nine dollars a share okay of
course in 2008 you did see a nice nice
sized dip a correction down to 1911 per
share okay but this really is the Ranger
you're looking at if you think we're
gonna be in another 2000 Nathan buyer
beware aware but if not this is kind of
the range you're looking at okay so
let's look at a one-year so we can get a
nice idea of what the dividend is going
to be point one eighty point three seven
eight now again this is at the end of
December so it's probably a one-time you
don't spin off kick up pick back
whatever ignore those for the most part
take the other ones and kind of average
them out and you might be thinking after
we did the corporate bond well wow this
is a lot less but because it's only
$39.95 a share as compared to the one
hundred and twenty dollars a share of
the corporate bonds we're able to get
much more shares if we buy into this
fund right so dividends are based on
shares so if you have more shares you're
gonna make more money alright so let's
look at the preferred shares and see how
this works out
okay so let's look at let's pretty much
look at one yeah let's just look at this
last one that seems to be a good average
point one eighty eight so if we invested
fifty thousand and this fun let's divide
it by the share price which right now is
thirty nine ninety eight get back into
my calculator here fifty thousand
dollars divided by thirty nine ninety
eight equals you would own twelve fifty
one thousand two hundred and fifty
shares of this particular fund all right
so let's multiply that by the dividend
which is eighteen point eight cents and
this fund will kick off two hundred and
thirty five dollars and twelve cents
roughly a month okay this one pays out a
month every month two hundred thirty
five dollars now that fifty thousand
will fluctuate as I just showed you but
that dividend is pretty much gonna stay
the same because it's based on how many
shares you own in the shares don't
change all right so that's preferred
shares and that you can see if we go
back to the main area the yield six
point two for the other ones three like
I said about two to three percentage
points more than corporate bonds so if
you can deal with that fluctuation
that's also a good way to boost your
income and if that's what you need to
fill in that gap while you're retired
then you're good alright so make sure
you subscribe to my channel is I will
issue many many more of these kinds of
videos and like like it add comments
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for checking it out