Cash Flow
Reliable, Substantial, and Consistent
The Cash Flow memo is a monthly portfolio management newsletter focused on generating dependable and growing income through dividend-paying securities. Each month, you’ll receive a complete model portfolio with specific holdings, precise weightings, current yield data, the detailed research and reasoning behind every portfolio change.
This isn’t a collection of high-yield tickers with no explanation. It’s a fully built income strategy—designed to deliver real cash flow you can count on, from sources you can understand and trust.
The Goal
The objective of the Cash Flow portfolio is to generate reliable, substantial, consistent, and growing current income through a disciplined portfolio of dividend-paying securities. This is income you can live on, reinvest, or use however you see fit—built to be dependable month after month, quarter after quarter and to grow over many years.
This portfolio is built for investors who prioritize cash flow—whether you’re supplementing your income, building toward financial independence, or already living off your portfolio. The focus is on quality, sustainability, and steady growth of the income stream.
Why The Compounding Memo?
No Financial Engineering. No Gimmicks.
1
A lot of income-focused funds and strategies inflate their yields with financial engineering—covered call strategies that cap your upside, or distributions funded by destructive return of capital that quietly erode your principal. The headline yield looks impressive, but the income isn’t real, and your investment base is shrinking underneath you.
The Cash Flow portfolio doesn’t rely on any of that. Every dollar of income comes from actual dividends and distributions generated by real businesses. No financial engineering. No destructive return of capital. What you see is what you actually earn.
Cheaper Where It Counts
2
For income investors, costs aren’t just a drag on returns—they’re a direct cut to your cash flow. When a fund charges a high expense ratio, that fee is eating into the very yield you’re relying on. A fund advertising a 5% gross yield with a 1% expense ratio is really only delivering 4% to your pocket. Scale that across a portfolio and the difference compounds against you every year.
The Compounding Memo gives you a fully built model portfolio—with exact holdings, precise weightings, yield data, and monthly updates—at a fraction of what those fund fees would cost you. You keep more of the income your portfolio generates, which is the entire point.
Income You Can Actually Depend On
3
Not all income is created equal. A sky-high yield means nothing if the dividend gets cut six months later. The Cash Flow portfolio is built around four principles: the income should be reliable, substantial, consistent, and growing.
Reliable means the underlying businesses can sustain their payouts through different market environments. Substantial means the yield is meaningful enough to matter—not a token 0.5% that barely registers. Consistent means the income arrives on a predictable schedule you can plan around. And growing means the portfolio is positioned so that your income stream increases over time, not just holds steady.
Taxable When It Matters, Efficient Where It Counts
4
This might seem counterintuitive, but for many income investors, having taxable income is actually an advantage. The majority of the income generated by the Cash Flow portfolio is taxable—and that’s by design.
Why does that matter? For U.S. residents who purchase health insurance through the ACA Marketplace, your eligibility for premium subsidies is based on your taxable income. A portfolio that generates tax-exempt or non-reportable income can actually work against you by making it harder to demonstrate the income needed to qualify for those subsidies. The Cash Flow portfolio’s income shows up where it needs to—on your tax return.
At the same time, the portfolio is structured so that a meaningful portion of the income qualifies for long-term capital gains tax rates, which are significantly lower than ordinary income rates for most investors. The result is a portfolio that’s taxable when it matters for benefits eligibility and tax-efficient where it counts for your bottom line.
Performance
Total Return Versus Benchmark (%)
The line chart above shows the cumulative percentage total return of the Cash Flow model portfolio versus its benchmarks since inception, measured at monthly intervals. Cumulative total return reflects the combined effect of price appreciation and reinvested dividends over time, giving you a complete picture of how the portfolio has grown since day one.
Past performance is not indicative of future results. The model portfolio is hypothetical and does not represent an actual investment account. Please review our Investment Disclaimer for important information.
Trailing Twelve Month Yields (%)
The line chart above shows the trailing twelve month (TTM) yield of the Cash Flow model portfolio versus its benchmarks, measured at monthly intervals.
TTM yield represents the total income distributed by the portfolio over the prior twelve months as a percentage of its value, giving you a real-time picture of the income the portfolio is generating. This chart is updated monthly.
Start Generating Income
Get a complete income portfolio—the holdings, the weights, the yield data, and the reasoning—delivered to your inbox every month at a price that doesn’t eat up your income, $7.99 per month.