STRC For the Win... (9% RoC vs. Bonds)
Posted by CaptainKirk 1 day, 8 hours ago to Economics
Everyone, this is a creation of Michael Saylor.
This is one of his many attempts to make BTC something "regular" people can invest in.
This means if you are dead set against BTC... It's not for you.
That said, it took Saylor 3 tries to get to this "Creation". This is a MicroStrategy Preferred Stock.
It pays out 9% annually. It is secured with BTC, and is over collateralized by 500%...
But here is the MAGIC of this investment. He's designing it for companies, or individuals, or retirees
to get BETTER than bond yields, without the risk of ZIRP destroying your yields.
And the magic is... It's dividend is NOT a dividend. It is return Of Capital. Which makes it untaxable,
until you get your stock price down to $0. (You must subtract any RoC from your entry price). Once you
have Zeroed out your entry price (about 11yrs), THEN you pay LTCG (Long Term Capital Gains) on your earnings.
In retirement years, this can be 0% if managed well. (My goal).
Finally, if you SELL this, you have to pay taxes on the difference between your Cost Basis and your sell price (obviously).
His offerings do offer DRIP (Dividend Reinvesting) which I will be doing, but it is also brokerage dependent.
Now, STRF pays 10% and is taxable as ordinary income. It's best placed in an IRA or tax deferred shelter.
As I approach retirement, I own this. My goal is to have the dividends from this cover my basic living expenses.
Until then I will DRIP this. The year before I retire, I will turn off the DRIP.
I am NOT a financial advisor. My finances include many other investments. This is not financial advice.
He pays the dividend Monthly. They want a bit of price stability in this. They want it to be liquid for companies
to get into/out of based on their cash flow, to compete with SGOV (paying 4% and taxed as ordinary income).
How excited am I about this? TOTALLY...
DO I have ALL of my money in this? No. But I am even letting go of IBIT (BTC ETF) to hold this instead.
IBIT has been good to me. Way more than 10%, but I would rather have something more dependable...
This, to me, is SOLID outside of the box thinking. Creating almost a new class of investment. (It is similar to some old Energy Trusts, but not with the goal of the underlying being able to hold it's price)...
This is one of his many attempts to make BTC something "regular" people can invest in.
This means if you are dead set against BTC... It's not for you.
That said, it took Saylor 3 tries to get to this "Creation". This is a MicroStrategy Preferred Stock.
It pays out 9% annually. It is secured with BTC, and is over collateralized by 500%...
But here is the MAGIC of this investment. He's designing it for companies, or individuals, or retirees
to get BETTER than bond yields, without the risk of ZIRP destroying your yields.
And the magic is... It's dividend is NOT a dividend. It is return Of Capital. Which makes it untaxable,
until you get your stock price down to $0. (You must subtract any RoC from your entry price). Once you
have Zeroed out your entry price (about 11yrs), THEN you pay LTCG (Long Term Capital Gains) on your earnings.
In retirement years, this can be 0% if managed well. (My goal).
Finally, if you SELL this, you have to pay taxes on the difference between your Cost Basis and your sell price (obviously).
His offerings do offer DRIP (Dividend Reinvesting) which I will be doing, but it is also brokerage dependent.
Now, STRF pays 10% and is taxable as ordinary income. It's best placed in an IRA or tax deferred shelter.
As I approach retirement, I own this. My goal is to have the dividends from this cover my basic living expenses.
Until then I will DRIP this. The year before I retire, I will turn off the DRIP.
I am NOT a financial advisor. My finances include many other investments. This is not financial advice.
He pays the dividend Monthly. They want a bit of price stability in this. They want it to be liquid for companies
to get into/out of based on their cash flow, to compete with SGOV (paying 4% and taxed as ordinary income).
How excited am I about this? TOTALLY...
DO I have ALL of my money in this? No. But I am even letting go of IBIT (BTC ETF) to hold this instead.
IBIT has been good to me. Way more than 10%, but I would rather have something more dependable...
This, to me, is SOLID outside of the box thinking. Creating almost a new class of investment. (It is similar to some old Energy Trusts, but not with the goal of the underlying being able to hold it's price)...
