I have a relatively small income currently of about 2500 EUR net. It’s very difficult to allocate any meaningful amount to a dividend portfolio.
So I have just started a small loan book, the plan is to have each loan average approx 20% and I’ve found somewhere that provides a somewhat steady stream to do this. Each loan can range from 20-200 USD/EUR/GBP. I hope to get the loan book to approx. 8000 EUR. To do this I plan on issuing approx 400 EUR of new loans each month (monthly contribution) and then all the previous months combined initial and interest . I will then liquidate and build a dividend portfolio.
I was thinking something to start maybe KO or O. It has a relatively stable price and with an 8000 initial each dividend payout would allow for 1 additional share. Plus I will continue monthly contributions of 400 EUR. Would it be a smart Idea to combine this with the Wheel strategy? I was thinking I could sell covered calls to help lower the cost basis and have the calls expire a couple of days ex dividend. On the inverse sell puts expiring just before ex dividend.
As I understand it my risks are:
Default on loans
KO stock price tanks when I hold it.
I cap my potential upside.
However I will always get dividend (European Option if possible)
By running a wheel it should accelerate the snowball effect.
I plan on running the options on something simple like the 30 moving average maybe.
