Three Buckets, Steady Income: $1.75M Yields $10,200/Month
A three-bucket income strategy targets a 7% blended yield from a $1.75M portfolio to generate about $10,200 per month (roughly $122,400/yr). Bucket 1 uses the ultra-short Treasury ETF SGOV to hold 12–24 months of expenses for safety; Bucket 2 focuses on dividend growth with Johnson & Johnson, Procter & Gamble, and broad dividend-growth ETFs to provide 2%–4% yield growth; Bucket 3 seeks 8%–12% yields with high-yield assets like BDCs, mortgage REITs, and covered-call ETFs for current income. Tax notes highlight ordinary income for many high-yield distributions, with qualified dividends favoring lower rates for names like JNJ and PG. The article stresses the approach reduces risk of drawdowns compared to a single-high-yield portfolio, but high-yield sleeves bring credit risk and NAV volatility.