ETFs for Passive Income: Beyond the Vanguard S&P 500

Dear Diary, 12 August 2025. Units of Coffee Consumed: 3. Number of Times Checked Portfolio: 47. Capital Gains Realized: 0. Dividend Checks Received: 0. Vanguard S&P 500 ETF Yield: 1.2% (a cruel joke, surely?).

Let me confess: I once believed the S&P 500 was my financial soulmate. We’ve shared 10% annual returns, candlelit spreadsheets, and those heady 2023-2024 trysts where we hit 20% gains. But now? It’s grown cold. Distant. This year’s 9.7% gain feels like small talk at a party. And its dividend yield – 1.2%! – might as well be a microwaved meal after a gourmet feast.

Remember when the S&P 500 yielded 2% a decade ago? I was 28 then, still buying “investment crockery” at Bed Bath & Beyond. Today, the Vanguard S&P 500 ETF (VOO) feels like that friend who brags about crypto gains but still lives in their parents’ basement. Hence my current project: ETF infidelity. Three tempting options beckon…

1. Vanguard Mega Cap Value ETF (MGV): The Anti-Rom-Com

Dear Reader, let us discuss the anti-heroes of investing. No “Ten Titans” here – no Nvidia, no Meta, no Tesla’s Elon Musk doing his Marvel villain impression. Instead, MGV courts stodgy blue chips with dividend pedigrees. Imagine a wine-and-cheese evening with Warren Buffett, not a TikTok IPO party.

Yield: 2.1% (modestly thrilling). Expense Ratio: 0.07% (barely noticeable, like a whisper). Ten-Year Total Return: 185% (with 120% from capital gains – it’s not just about the yield, darling).

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Pro Tip: Best for investors who want more passive income than VOO offers but still crave the thrill of capital appreciation. Like choosing a hybrid rose bush – both thorns and blooms.

2. Vanguard Energy ETF (VDE): Oil, Dividends & Denial

Let’s address the elephant in the room: Concentrating 45% of holdings in ExxonMobil, Chevron, and ConocoPhillips is basically investing in a fossil fuel mixtape. But hear me out – these dinosaurs have increased dividends for 42 and 38 years respectively. Their balance sheets gleam like freshly polished oil rigs!

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Yield: 3.1% (decidedly non-virtual). P/E Ratio: 16.3 (value investing without the Birkenstock aesthetic). Renewable Energy Exposure: 12% (enough to sleep at night, but not enough to cancel your carbon footprint).

Personal Note: My therapist says this ETF is my “emotional support sector.” Who knew oil could be so comforting?

3. JPMorgan Equity Premium Income ETF (JEPI): The Monthly Paycheck Fantasy

Imagine selling call options on the S&P 500 like selling your soul to the devil – but with a 7.92% SEC yield. JEPI trades upside potential for monthly income. Example: Selling a $600 strike call on VOO at $591.57/share nets 1% monthly – compounding to 12% annually if market stays stable.

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Expense Ratio: 0.35% (worth it for the premium support). Strategy Complexity: Requires a whiteboard and three colors of Sharpie. Risk Level: Moderate (unless you’re prone to panic-selling during volatility).

Final Reflections

Units of Passive Income Gained: 0 (still waiting on first dividend). Units of Investor Confidence: +1. Vanguard S&P 500 ETF Regret: Minimal, but the grass does seem greener. Tomorrow brings new market chaos – but perhaps also a better yield.

PS: If you’re reading this, VOO – it’s not you, it’s me. We’ll always have 2013. 💸

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2025-08-21 17:41