Key insights
- The post discusses choosing between VOO (S&P 500 ETF) and QQQI (Nasdaq 100 ETF) for cash flow generation. The author observes QQQI's potentially faster growth and income generation compared to VOO, while acknowledging the tax implications of converting growth to income. The market impact is slightly bullish as it reflects retail investor interest in growth-oriented ETFs, but it's limited due to the individual nature of the investment decision.
I will be coming into roughly 500K to deploy from a pending real estate sale.
I would like to use this money to augment cash flow in the next 2-5 years and am looking at either QQQI or VOO to do this. Seems like most would say VOO for growth. Looking at the VOO chart it seems the investment doubles every 5-7 years. However, in looking at QQQI and and crunching the numbers on a compound interest calculator, if I invest all of the money in QQQI and drip the investment for 5 years, my investment would be worth roughly $992,000.
Seems QQQI might better as an investment vehicle as it would also double in 5 years and already be producing the income I initially want it for. Whereas VOO would take slightly longer then 5 years to double, and a conversion from the growth vehicle to the investment vehicle would trigger a taxable event.
What am I missing here? Is there any other reason why would VOO be superior to QQQI in this situation?