Build a portfolio that pays you
every month.
Free yourself from reliance on a job or business by building a high monthly income portfolio with modern ETFs.
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Build a portfolio that pays you
Education only, not investment advice. Investing involves risk, including loss of principal. Past performance does not guarantee future results.
How it works
Many independent streams. One monthly paycheck.
Instead of one big bet and a hundred buy or sell decisions, SnowX Income™ spreads cash flow across 10 to 15 sources that do not move together, aiming to pay you every month so selling becomes a choice. Ray Dalio calls 15 to 20 good, uncorrelated return streams the "Holy Grail" of investing, because they can lower risk a great deal without giving up expected return.1
Your monthly income line
Many sources, one deposit. Categories shown are examples for education, not recommendations.
- Nasdaq-100 covered calls
- S&P 500 covered calls
- Small-cap covered calls
- Dividend growth stocks
- Real estate (REITs)
- Energy infrastructure (MLPs)
- Gold and silver income
- Bitcoin covered calls
- Preferred shares
- Private credit
- Treasury bills
1 Ray Dalio, Principles (Simon & Schuster, 2017). Diversification does not ensure a profit or protect against loss.
What qualifies
Every stream has to earn its place.
Seven tests every fund has to pass.
- 01
A time-tested index underneath
The fund is built on a broad, established index or asset (for example the Nasdaq-100, the S&P 500 or the Russell 2000), not a narrow bet on a handful of names.
- 02
Total return that holds up
Distributions are judged next to total return. A high payout that comes from a steadily falling share price does not qualify.
- 03
Monthly income
Distributions are paid monthly (or more often), so income arrives on the schedule bills do.
- 04
Tax character
The history of how distributions were classified (ordinary income, qualified dividends, return of capital, or Section 1256 treatment) is reviewed, because it changes what an investor keeps.
- 05
Size, liquidity and cost
Enough assets and trading volume for tight bid-ask spreads, and an expense ratio that is reasonable for the strategy.
- 06
The manager
The issuer's track record, how clearly it explains the strategy, and whether the option overlay leaves room for upside.
- 07
A different stream
Each fund has to add something the others do not, so the list covers 10 to 15 sources that do not all move together.
How return of capital works
Defer the tax. Reset the clock.
Many income ETFs report part of their distributions as return of capital (ROC). ROC is not taxed when you receive it. Instead it lowers your cost basis, which defers the tax until you sell, when it is generally taxed as a long-term capital gain if you held for more than a year.
Educational example only. How much of a distribution is ROC changes by fund and by year and is reported on Form 1099-DIV after year end. ROC can also mean a fund is handing back your own principal, so always look at total return, not just the payout. Talk with a tax professional about your situation.
See the full cost basis walkthroughAssumes, for illustration, that 10% of the original investment comes back as ROC each year and that the tranche is worth 104% of its original cost when reset. Not a projection.
Free tool
Find your Freedom Number.
Enter what you spend each month. See the portfolio size it would take to cover that spending at a distribution rate you choose. Then build your own portfolio and see how close it gets.
Start with the guide.
The SnowX Income™ Guide
The principles behind SnowX Income in about 15 minutes: diversification across income streams, distribution rate versus total return, and how the pieces fit together. Free.
The free SnowX Income™ Workshop
Seven short, self-paced modules on income ETFs, total return, diversification, fund selection and taxes. Each ends with a quick three-question check. No cost, no sign-up.
Start the Free Workshop