I've been (slowly, deliberately) considering moving some money I have (about $68k) at into a SPIA, which would give me ~$500/month more income than I currently have (a significant 'raise', in my case). I already have a SPIA, so I'm kinda pro-SPIA generally -- recency bias due to low inflation, until a couple years ago.
However, my reading of most(?) Boglehead's opinions of nominal SPIAs (inflation erosion of purchasing power) plus loss of the cash used to purchase, has me reconsidering. So, another (crazy!) idea has presented itself -- buy only about $40k worth of HAFN (Hafnia Shipping), a big tanker company with 200 vessels and a very strong balance sheet, and ... a 16% annual yield. So, I could get my $500/month, obviously not as consistently, but ... I'd still have my $40k (or $20k, or $55k, or whatever valuation Mr. Market gives to HAFN over time). This would initially represent <7% of my total portfolio.
For me, the income is probably the most important thing.
So my question is, from your perspective, which might be the more attractive proposition? $68k into a SPIA (premium gone, but $500/month 'til I assume room temperature), or $40k into an (admittedly) not riskless, high-yielding stock, collect the same $500 (uh, variably but with potential for dividend growth) and still own something? ...
Please be gentle![:happy]( "smile")
However, my reading of most(?) Boglehead's opinions of nominal SPIAs (inflation erosion of purchasing power) plus loss of the cash used to purchase, has me reconsidering. So, another (crazy!) idea has presented itself -- buy only about $40k worth of HAFN (Hafnia Shipping), a big tanker company with 200 vessels and a very strong balance sheet, and ... a 16% annual yield. So, I could get my $500/month, obviously not as consistently, but ... I'd still have my $40k (or $20k, or $55k, or whatever valuation Mr. Market gives to HAFN over time). This would initially represent <7% of my total portfolio.
For me, the income is probably the most important thing.
So my question is, from your perspective, which might be the more attractive proposition? $68k into a SPIA (premium gone, but $500/month 'til I assume room temperature), or $40k into an (admittedly) not riskless, high-yielding stock, collect the same $500 (uh, variably but with potential for dividend growth) and still own something? ...
Please be gentle
Statistics: Posted by Lawrence of Suburbia — Wed Jul 03, 2024 11:16 pm — Replies 0 — Views 16