Welcome back, welcome back. Rico here.

If you’ve been following my journey for any amount of time, you know I’m a big NEOS fan. QQQI is my largest holding. SPYI is my portfolio glue. The 1256 contracts, the tax efficiency, the data-driven call writing — I’ve talked about why I trust their approach in video after video.

So when NEOS dropped two brand new “Boosted” versions of my two favorite funds back in February? Yeah. I paid attention.

Today I’m breaking down XSPI and XQQI — what they are, how they compare to the originals, and what I’m personally doing with them. This is also the topic of this week’s YouTube video, so if you want the full visual breakdown with charts and side-by-side comparisons, keep an eye out for that dropping soon.

Let’s get into it.

Quick disclaimer — I’m not a financial advisor. Everything here is what I’m personally researching and doing in my own portfolio. This is educational, not advice. Always do your own research before investing your hard-earned money.

What Are XSPI and XQQI?

Both launched on February 2nd, 2026. So we’re looking at roughly three months of live data. That’s it. I want to be upfront — this is early. Really early.

XSPI is the NEOS Boosted S&P 500 High Income ETF. Think of it as SPYI’s bigger sibling. Same foundation — holds S&P 500 stocks, writes covered calls using SPX index options, uses 1256 contracts for tax efficiency. But XSPI adds a synthetic options layer that gives it approximately 150% notional exposure to the S&P 500. Not through daily-reset leverage. This is done through longer-dated index options.

XQQI is the same concept for the Nasdaq-100. QQQI’s bigger sibling. Same stock portfolio. Same covered call strategy with NDX index options. Same 1256 tax treatment. Boosted to approximately 150% notional exposure.

NEOS also launched a third boosted fund — XBCI, the boosted Bitcoin version of BTCI. I’m not covering that one today. Personally it’s less compelling to me because BTCI already has a higher yield and gives direct Bitcoin exposure. The boosted Bitcoin version just isn’t calling my name the same way.

The Key Numbers

XSPI: Distribution target of 15-18% annualized. Current distribution rate around 17%. Net assets roughly $37 million. Monthly distributions. Expense ratio: 0.98%.

XQQI: Distribution target of 19-23% annualized. Current distribution rate around 20.6%. Net assets around $93 million — significantly more, which tells me investors are gravitating toward the Nasdaq version. Also monthly. Same 0.98% expense ratio.

Now here’s the thing I want to flag immediately. SPYI and QQQI both have an expense ratio of 0.68%. These boosted versions come in at 0.98%. That’s a 30 basis point jump. On a $100,000 position, that’s an extra $300 a year. Does the extra yield justify the extra cost? That’s the central question.

Do the Holdings Actually Match?

Before I looked at performance, I wanted to look under the hood. If these funds are supposed to track the S&P 500 and Nasdaq-100, I want to make sure they actually do.

Short answer — yes.

XSPI’s top holdings mirror SPY almost identically. Nvidia, Apple, Microsoft, Amazon, Alphabet, Broadcom, Meta, Tesla — all within a percentage point of SPY’s weightings. The one difference is an SPX index call option position sitting at about 5.2% of the portfolio. That’s the boosted component. That’s the synthetic exposure showing up.

Same story with XQQI and QQQ. Top holdings are nearly identical. The NDX call option position at about 6.8% is where the boost lives.

The equity side is not a mystery. These hold the same stocks. The differentiation is entirely in the options strategy.

Performance Since Launch — Price Return vs. Total Return

This is where it gets interesting. And I want to break this into two views because for income investors, the distinction matters.

Price return since launch (share price only, no distributions):

QQQ leads at about +7.6%. SPY at +3.7%. XQQI at +2.1%. QQQI at +0.65%. SPYI at -0.7%. XSPI at -1.1%.

On price alone, the boosted versions are performing in the same neighborhood as the originals. XQQI is slightly ahead of QQQI on price. XSPI is slightly behind SPYI. But both boosted funds are paying out higher distributions, which naturally pulls the price down more.

Total return since launch (distributions included):

This is the number that matters. QQQ at +7.7%. XQQI right there at +7.6%. Almost identical. That is impressive for a fund paying out a 20% annualized distribution. QQQI at +4.3%. SPY at +4%. XSPI at +3.2%. SPYI at +2.3%.

On the Nasdaq side, XQQI is meaningfully outperforming QQQI on total return. On the S&P side, XSPI is outperforming SPYI as well.

But — three months is not a trend. Three months during a recovery from the tariff selloff is a very specific market environment. The boosted exposure helped these funds snap back harder because of that 150% notional exposure. In a sustained downturn, that same leverage works against you. We saw all of these funds dip 10-15% during the April correction. The boosted versions went a little deeper.

Early returns are encouraging. But I’m treating this as data, not a conclusion.

So What Am I Doing?

Here’s where I land.

The distribution targets are attractive. XSPI at 15-18% versus SPYI’s 11-12%. XQQI at 19-23% versus QQQI’s 13-14%. That’s meaningful extra income.

But it comes with a higher expense ratio. It comes with amplified downside risk during corrections. And these funds are three months old — no long track record, no full market cycle data, no recession test.

So I’ve opened very, very small test positions in both XSPI and XQQI. Just enough to have skin in the game. Real distributions hitting my account. Real NAV movement I can track with actual dollars — not just charts on a screen.

I’m going to hold these test positions and report back. I want to see if the distributions stay consistent. I want to see if the NAV erodes faster than the originals over time. Because that’s the real question — does the extra yield come at the cost of capital erosion, or does the boosted market participation offset it?

I’ve learned that lesson the hard way with other high-yield positions. Every dollar has a job — and one of those jobs is to not disappear.

QQQI and SPYI remain my core NEOS positions. XQQI and XSPI are in the testing bucket. If they prove themselves over the next six to twelve months, I could see increasing the allocation. But I’m not rushing. And when the data comes in, I’ll do a full follow-up.

I Want to Hear From You

Are you looking at these? Already in? Skeptical? Sticking with the originals? Drop a comment or reply to this post — I read every single one.

And if you haven’t already, check out the Freedom Calculator — it’s completely free and it can help you figure out your freedom number and timeline. Link is right here on Substack.

If it doesn’t challenge you, it doesn’t change you. Messy action is better than no action.

Talk soon — BOOM.

— Rico

About a month ago, I started a test.

I added four State Street sector-based premium income ETFs to my Defensive Moat bucket. The thesis: I’m very tech-heavy. QQQI, SPYI, CHPY, FEPI — incredible funds, but they all move with tech sentiment. I wanted to explore what non-tech income looks like.

Not because I’m bearish on tech. I’m extremely bullish. But concentration is a risk that sneaks up on you when you’re not paying attention. From my experience, the time to diversify is when you don’t feel like you need to.

So I started small. Test positions. Let the data tell me what to do next.

Here’s what the data said after 30 days.

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Most of the covered call ETF conversation in the income investing community revolves around the same handful of names — YieldMax, NEOS, Roundhill. And for good reason. Those funds have track records, audiences, and content ecosystems built around them.

But in July 2025, State Street quietly launched something worth paying attention to: 11 sector-specific covered call ETFs, each built on top of their established SPDR sector funds — the same funds that have been institutional staples for decades. They added a covered call overlay and started generating monthly income from sectors most income investors had never touched.

I’m currently testing three of them in my own portfolio: XLUI (Utilities), XLII (Industrials), and XLBI (Materials/Chemicals). Here’s why I started looking at them and what I’ve found so far.

The gap these funds fill

My existing portfolio was heavily concentrated in tech and growth-adjacent covered call strategies. QQQI, SPYI, FEPI, CHPY, AIPI — these are all either directly tied to the Nasdaq, the S&P 500, or individual tech and semiconductor companies. When the tech sector sells off, most of my income engine sells off with it.

The question I started asking was: where are the covered call ETFs that generate income from sectors that don’t move with tech? Sectors that might actually hold up — or even benefit — when the Nasdaq is getting hit.

State Street’s XL suite was the answer.

Why sector-specific covered call ETFs are different

Most covered call ETFs use broad market indices — the S&P 500, the Nasdaq 100, or individual mega-cap stocks. When you own SPYI, your income and NAV are tied to the performance of 500 large-cap companies across every sector.

A sector-specific covered call ETF concentrates that exposure. You’re generating income from covered calls on a specific slice of the market — utilities, industrials, materials — rather than the whole thing. That concentration is a risk, but it’s also an opportunity: you can now build a genuinely diversified income portfolio where each position responds differently to different market environments.

A utilities covered call ETF behaves very differently than a tech covered call ETF in a rising rate environment. An industrials fund responds differently to infrastructure spending than a semiconductor fund does. That non-correlation is exactly what I was looking for.

The three I’m testing

XLUI — Utilities covered call. Utilities are domestic, regulated, and largely insulated from the kind of geopolitical and tariff-driven volatility that has hit the tech and materials sectors. When markets sold off hard during the March 2025 tariff announcements, XLUI barely moved. The NAV has been nearly flat since inception. The yield has been running around 19–20%.

XLII — Industrials covered call. Manufacturing, transportation, infrastructure. More economically sensitive than utilities but still diversifying relative to my tech-heavy existing holdings. NAV has been stable to slightly positive since inception. Yield running around 17%.

XLBI — Materials/Chemicals covered call. This one has the most direct tariff exposure of the three — chemicals and materials companies face real input cost pressure from trade policy. The NAV has shown modest erosion since inception, more than the other two. But the yield is real and the sector diversification argument still holds. I’m sizing this one smaller.

What I’m watching

I’m entering all three via DCA — adding weekly rather than deploying a lump sum. This gives me time to observe how each fund behaves across different market conditions before committing to a full allocation.

The expense ratio on all three is 0.35% — significantly lower than most of what I hold. State Street’s institutional infrastructure means these are well-managed, transparent funds without the black-box mechanics I avoid.

Full breakdown of each fund’s PLAN analysis is coming in the next paid issue.

→ Freedom Builder newsletter — free to start: newsletter.riconasol.com Paid subscribers ($9/mo) get the full PLAN analysis on all three XL funds.

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Quick confession before I start: when I first added CHPY to my portfolio, I thought the “CH” stood for China. It does not. CHPY is a YieldMax fund — specifically a Tidal Trust II YieldMax fund — built entirely on US-listed semiconductor and chip-adjacent companies. No China exposure. No FXI. Pure semiconductor sector income with a call spread overlay.

Once I pulled the actual holdings and understood what I owned, I liked it even more. Let me walk you through it using the PLAN framework — and then show you exactly what I hold and why.

This is a paid subscriber post. Upgrade to read the full issue — $9/mo.

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Quick confession before I start: when I first added CHPY to my portfolio, I thought the “CH” stood for China. It does not. CHPY is a YieldMax fund — specifically a Tidal Trust II YieldMax fund — built entirely on US-listed semiconductor and chip-adjacent companies. No China exposure. No FXI. Pure semiconductor sector income with a call spread overlay.

Once I pulled the actual holdings and understood what I owned, I liked it even more. Let me walk you through it using the PLAN framework — and then show you exactly what I hold and why.

This is a paid subscriber post. Upgrade to read the full issue — $9/mo.

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Every ETF I evaluate, every dividend stock I consider, every position I’m thinking about adding — it goes through the same four questions. I call it the PLAN framework.

I didn’t invent these questions. I developed them over years of making investing mistakes that cost me real money, and then slowly figuring out what I should have asked before I pulled the trigger. PLAN is the shorthand for those four lessons.

P — Payout sustainability

The first thing I look at is not the yield. It’s whether that yield is sustainable. A 60% annual yield means nothing if the ETF is going to cut distributions in six months or if it’s eroding NAV to manufacture income.

What I look for: 12+ months of distribution history. Is it consistent? Growing? Declining? Has it been cut? I also look at the coverage ratio — is the ETF actually generating enough from its strategy to support the payout, or is it returning capital?

If the payout isn’t sustainable, nothing else matters.

L — Liquidity and structure

How does this ETF actually make money? What’s the underlying strategy? Who manages it and how do they implement the options overlay? Average daily volume matters too — if I can’t get in and out without moving the price, that’s a problem.

I want to understand exactly why this thing pays what it pays. If I can’t explain it in two sentences, I don’t own it.

A — Alignment with my income goals

Does this position fit where I am in my 3-Bucket System? A high-yield, high-risk covered call ETF might be appropriate for Bucket 2 but completely wrong for Bucket 1. A growth ETF that pays no dividend has no place in my income engine.

Every position needs a job. If I can’t clearly articulate what job this position is doing in my portfolio, I don’t add it.

N — NAV trend

This is the one most income investors skip — and it’s where they get burned. The NAV (net asset value) of an income ETF tells you whether you’re actually building wealth or slowly liquidating it.

The brutal math: If your ETF pays you 40% in distributions but its NAV drops 35% over the same period, your real return is 5%. That might still be acceptable — but you need to know the real number, not just the distribution headline.

I look at 1-year, 2-year, and inception-to-date NAV trends. A declining NAV isn’t automatically a dealbreaker — some strategies are designed that way. But I want to know what I’m buying into, and I want it to fit my overall picture.

Using PLAN in practice

When I’m evaluating a new ETF — AIPI, CONY, whatever’s making the rounds — I run through these four questions before I look at the yield number. In that order. If it fails on Payout sustainability, I stop there. If it passes all four, it earns a spot on my watchlist.

For paid subscribers, I run this framework explicitly on each ETF I cover in the deep-dive issues. You see my actual scoring, my actual reasoning, and whether I ended up buying it or passing.

Next week, paid subscribers get a full PLAN analysis on one of the most talked-about ETFs in the covered call space right now.

Want to see me run PLAN on my actual holdings — with real scores and real reasoning? That’s what paid subscribers get. $9/mo.

Subscribe now

This is my favorite thing to write. Because this is what makes income investing real — not the theory, not the frameworks, not the YouTube videos. The actual monthly check from your own portfolio.

Every month, I’m going to share exactly what my portfolio paid me, what changed, and what I’m thinking about going into next month. No rounding up. No cherry-picking the good months. All of it.

This is a paid subscriber post. Upgrade to read the full issue — $9/mo.

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If you’ve been watching the YouTube channel, you’ve heard me talk about covered call ETFs more than almost anything else. There’s a reason for that: they’re the engine behind my Bucket 2 income strategy, and they’re one of the most misunderstood investment vehicles out there.

People see a 30%, 40%, 60% yield and immediately think: scam. Too good to be true. There must be a catch.

Sometimes they’re right. Sometimes they’re wrong. The answer depends entirely on understanding what a covered call ETF actually does — and what it doesn’t do.

The basic mechanic

A covered call ETF owns a portfolio of stocks (or tracks an index) and simultaneously sells call options on those holdings. When you sell a call option, you collect a premium immediately. That premium is what gets paid out to investors as “yield.”

Think of it this way: you own a house and you rent it out. The rent is the premium income. The covered call ETF is doing the same thing with stocks — collecting regular income by giving someone else the option to buy at a specific price.

The trade-off: By selling call options, you cap your upside. If the underlying stock rockets past the strike price, you don’t fully participate in that gain. You already sold that potential to someone else. In exchange, you got paid income right now, regardless of what the market does.

Why this fits an income investing strategy

If your goal is growth — building a nest egg over 30 years — covered call ETFs are probably not your primary vehicle. The upside cap works against you in bull markets.

But if your goal is income — generating cash flow that replaces a paycheck — that trade-off flips completely. You’re not trying to capture maximum upside. You’re trying to generate consistent, predictable income. The covered call ETF does exactly that.

This is why they sit in my Bucket 2, not Bucket 3. They’re not growth vehicles. They’re income machines.

What most people get wrong

The biggest mistake I see is buying a covered call ETF purely based on yield percentage without understanding the underlying strategy. A 50% yield on an ETF that’s losing 30% per year in NAV (net asset value) is not a 50% yield. You’re just getting your own money back as income while the principal erodes.

This is why I use the PLAN framework when evaluating any ETF — and why I go through each position in detail for paid subscribers. The yield number is not the only number that matters.

The five things I look at before buying

Without getting into specific financial advice, here’s what I evaluate for every covered call ETF I consider:

1. The underlying index or stocks it holds — what’s actually in the portfolio?

2. The option strategy being used — full vs. partial coverage changes everything

3. The historical NAV trend over 12+ months — is the principal holding up?

4. The distribution history and consistency — has it been cut? Is it growing?

5. The expense ratio relative to the yield generated — what are you actually paying?

Each of those five things tells a different part of the story. A high yield with a declining NAV and inconsistent distributions is a red flag. A moderate yield with a stable NAV and growing distribution is a very different conversation.

Paid subscribers see me walk through all of this on my actual positions every month — which specific ETFs I hold, what the numbers look like, and what I’m watching.

The bottom line

Covered call ETFs are a legitimate income tool when used correctly — as an income-generating component of a diversified portfolio, not as a get-rich-quick play.

They pay you for owning them. That’s the deal. In exchange, you give up some upside. For someone trying to build income that replaces a paycheck, that’s often a trade worth making.

Next week, paid subscribers get my first monthly income report — real dividend numbers from my real portfolio, plus every move I made this month. If you’re not subscribed yet, that’s a good reason to start.

Want to see the specific ETFs I hold and what they’re yielding right now? Paid subscribers get the full picture — $9/mo.

GDXY — my largest income generator at the time — dropped 26% from my cost basis in what felt like hours. Not because the fundamentals of gold mining broke. But because when geopolitical fear spikes, the market sells everything that isn’t cash or Treasuries. It’s algorithmic. It’s indiscriminate. It’s terrifying if you’re not ready for it.

Most people panic-sell and move on.

I did something different. I trimmed concentration risk. I bought the bottom of an asset that got hit even harder. And I restructured the entire portfolio around two macro scenarios — not one.

Here’s what I learned.

THE SCENARIO FRAMEWORK

I don’t try to predict geopolitical outcomes. I can’t. Nobody can.

But I can think in scenarios.

Right now, the world is split between two possibilities:

Scenario A — Geopolitical De-escalation

War winds down. Negotiations stick. Oil falls back toward $50-60 range. Risk-on assets rally. Semiconductors recover. AI sentiment shifts back to “this is the future.” Gold corrects down. Tech stocks appreciate 15-20% in a recovery bounce. This is the world where CHPY, QQQI, and FEPI make their best money.

Scenario B — Prolonged Conflict

War continues. Talks stall. Oil stays elevated at $70-85. Energy plays keep paying. Defensive assets hold ground. Volatility stays elevated. This is the world where MLPI, USOI, and USOY do the heavy lifting, and broad market growth is muted.

Here’s the thing I learned building this portfolio: I don’t need to predict which scenario wins. I need to structure the portfolio to survive both.

That’s what the 3-Bucket System is actually for.

THE REBALANCE — WHAT I DID

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Every dollar has a job. That’s the framework I use to make portfolio decisions. Some of my dollars are in my Income Engine, cranking out 45-50% yields on semiconductors and gold miners. Some are in my Core, building the foundation with QQQI and SPYI. Some are defending in treasuries and volatility plays.

But right now? A few of my dollars have a temporary job. And that job is capturing the geopolitical premium in oil while the Middle East conflict persists.

This isn’t strategy drift. It’s not panic buying. It’s tactical positioning based on where the world is today — and a clear exit plan for when the narrative shifts.

Let me walk you through my thinking on two instruments I’m watching closely: USOI and USOY. One I’m monitoring. One I’m adding.

The Oil Environment Right Now

Oil isn’t normally in my income portfolio. It’s volatile. It’s geopolitically exposed. It’s subject to long-term structural decline (or is it?). But right now, the equation has shifted.

The Middle East conflict has created a risk premium in crude oil. People are buying energy as a hedge against supply disruptions and inflation. Demand for oil hedges is rising. Prices are moving.

This creates a window. Not a permanent strategy shift. A window.

The question isn’t “Is oil a forever hold?” The question is “Can I capture this premium tactically, for 6-12 months, and then rotate back to my core strategy?” The answer is yes.

But I need to pick the right instruments for the right timeline.

USOI: The High-Yield Income Play (Monitoring Closely)

ETRACS Crude Oil Shares Covered Call ETN

• Price: $55.77

• Yield: 27.8% annualized

• Distribution: Monthly

• Issuer: UBS

On the surface, USOI is compelling. 27.8% yield paid every single month is hard to ignore. If I need cash flow, this delivers.

Here’s how it works: USOI tracks an index that replicates a covered call strategy on crude oil. Every month, the index notionally sells call options on oil, captures the premium, and distributes it to me. In exchange, I cap my upside. If oil rallies hard, I don’t benefit above the strike price.

The math over 5 years tells the real story:

USOI has fallen 45% from $102 (March 2021) to $55.77 today. Even with that 27.8% yield being reinvested, an investor who bought at the peak and held would have weathered significant principal erosion. They’d have collected substantial income, but the share price decay would’ve offset a good chunk of those gains.

This is the classic income-first trade in a declining asset. You get paid to hold something that’s losing value.

So why would I even consider it?

The 6-month picture is different. USOI is up 6.38% from late September to March 2026. Over the same period, the S&P 500 is down roughly 2.5%. Right now, the geopolitical premium is working.

But here’s my constraint: I’m not holding this for 5 years. I’m not betting that oil will reverse its 20-year decline. I’m capturing a 6-12 month window where conflict premium is priced into crude.

The risks with USOI:

1. Credit risk — I’m holding a debt promise from UBS, not owning the asset. If UBS stumbles, my position is at risk.

2. Capped upside — If oil spikes significantly, I don’t fully participate.

3. Price decay — The 5-year chart is sobering. This is a wasting asset.

4. Early redemption charge — If I exit before 2037, UBS charges 0.125% of my redemption value. Small, but it’s there.

5. Complex structure — This is an ETN, not an ETF. It requires active monitoring and understanding of issuer risk.

My move: I’m watching USOI closely but haven’t added it yet. The yield is tempting, but the complexity and credit risk require me to understand exactly when I’ll exit. More on that below.

USOY: The Tactical Hedge (Adding This Week)

Defiance Oil Enhanced Options Income ETF

• Structure: ETF (not an ETN — this matters)

• Strategy: Oil + enhanced options income

• Holding period: Short-term tactical (2-5% allocation)

• Purpose: Hedge against inflation, diversify from equities during geopolitical uncertainty

USOY is different from USOI in one critical way: it’s an actual ETF, not an ETN.

I own real assets — oil futures and equity positions. I’m not holding a debt promise from an issuer. That structural difference matters, especially for a tactical position I’m monitoring closely.

USOY uses a similar covered call framework as USOI but wraps it in an ETF structure. It’s more transparent, more liquid, and less risky from a credit perspective.

Why I’m adding USOY now:

1. Diversification during uncertainty — My core portfolio is heavily tech-weighted (QQQI, CHPY, GDXY). Oil and energy behave differently during geopolitical stress. This hedge is cheap insurance right now.

2. 2-5% is tactical, not core — I’m not committing significant capital. This is a small tactical position that either works in the next 6-12 months or doesn’t. If it doesn’t, the portfolio damage is minimal.

3. The window might close — The moment peace talks look credible, or the Fed signals rate cuts are coming, the oil premium evaporates. I’d rather be in and exit strategically than miss the move entirely.

4. ETF structure is simpler — No issuer risk to manage like with USOI. This reduces my monitoring burden.

The reality: USOY will likely underperform in a bull market and outperform in a down market. That’s exactly what I want right now.

USOI vs USOY: Why I’m Adding One and Watching the Other

USOI vs USOY Breakdown

Structure USOI: ETN (debt promise) USOY: ETF (owns assets)

Yield USOI: 27.8% USOY: Lower but more stable

Credit Risk USOI: Real (UBS dependent) USOY: Minimal

Complexity USOI: High USOY: Medium

Best for USOI: Pure income, high risk tolerance USOY: Tactical diversification

My Stance USOI: Monitoring closely USOY: Adding this week

USOI is seductive. The yield is insane. But the structure, the credit risk, and the long-term price decay make it feel like a trap. It’s a tool for a very specific purpose: generating maximum income while accepting maximum complexity.

USOY is more conservative. Lower yield, but simpler structure, real assets, and built for exactly what I need right now: a tactical hedge against geopolitical uncertainty that I can exit cleanly in 6-12 months.

My Exit Plan (This Is Critical)

Here’s where most investors fail with tactical plays: they don’t have an exit.

I’m adding USOY with a specific thesis: the Middle East conflict persists for 6-12 months, oil premiums remain elevated, and I can capture that difference before rotating back to my core strategy.

My exit triggers:

1. If a credible peace deal emerges — The risk premium collapses immediately. I’m out.

2. If the Fed cuts rates 2+ times — The dollar weakens, oil becomes less attractive. I’m rotating back to my Income Engine.

3. If oil prices stabilize — The volatility premium disappears. Time to exit.

4. If 12 months pass — Regardless of conditions, I’m re-evaluating whether this tactical position still makes sense.

5. If my overall portfolio allocation shifts — If I need the capital elsewhere, USOY is the first thing I trim.

This isn’t “hold and hope.” This is “test and exit strategically.”

The Bigger Picture: Income Engine vs Tactical Flexibility

My core strategy is simple: build recurring income through high-yield ETFs, reinvest through DRIP, and compound that snowball. QQQI, SPYI, GDXY, CHPY, MLPI — these are forever holdings (or close to it).

But the world isn’t static. Geopolitical events happen. Market cycles shift. Asset correlations change. That’s where tactical flexibility comes in.

USOY is a small tactical bet on the current environment. If it works, great — I’ve captured some oil premium while diversifying. If it doesn’t work, I’ve lost 2-5% of my portfolio, which is acceptable and manageable.

This is what I mean by “every dollar has a job.” Some dollars are building my income snowball long-term. Some dollars are testing tactical opportunities short-term. Both matter.

What I’m Watching

Before I finalize my USOY position, I’m monitoring:

• Oil prices: Is the geopolitical premium sticky or temporary?

• Fed policy: Any hint of rate cuts changes the calculus.

• Conflict headlines: Is de-escalation coming?

• My portfolio performance: Is my core strategy still working? Do I need the capital elsewhere?

I’ll share updates in my weekly newsletter as things evolve.

The Takeaway

Tactical positioning in uncertain times is different from strategic positioning. I’m not adding oil because I believe in it long-term. I’m adding it because I see a 6-12 month window where geopolitical risk is creating yield and price appreciation opportunity.

USOY is my tool for capturing that. USOI is a higher-risk alternative I’m watching but haven’t pulled the trigger on yet.

The moment the window closes — and it will — I’m rotating that capital back into my core Income Engine. Back to the strategy that’s proven itself over time.

Every dollar has a job. Right now, a few of my dollars have a temporary assignment. And I’m watching them closely.

What are you watching in this geopolitical environment? Are you adding energy hedges? Or staying focused on your core strategy? Drop a comment below — I’d love to hear your thinking.

If you want real-time updates on my portfolio moves and market analysis, you’re in the right place. This newsletter is where I share everything I’m researching and testing. Thanks for being here.

Welcome to Freedom Builder. I’m Rico Nasol — and if you’re coming from YouTube, you already know the gist of what I do. If you’re new here, here’s the short version: I spent 20 years as a creative executive at Netflix and Zappos, building things from nothing. In 2023, I retired from corporate life. Not because I hit some magic number. Because I built a system that generates income whether I work or not.

This newsletter is where I share that system in full. Every week. No fluff, no hype — just what I’m actually doing with my own money and why.

Before anything else, you need to understand the 3-Bucket System. It’s the foundation for everything I talk about here. Once you get it, every ETF, every dividend, every portfolio decision I share will make sense immediately.

The problem with most income investing advice

Most people approach income investing one of two ways. They either chase yield — buying whatever pays the highest dividend without understanding the risk — or they play it so safe they barely beat inflation. Neither works if your goal is actually building an income stream that replaces your paycheck.

What I needed was a system. Something I could look at every month and know exactly what was working, what wasn’t, and where my next dollar should go.

That’s what the 3-Bucket System is.

Bucket 1: Safety net (Capital preservation)

This is your foundation. The money in Bucket 1 does not chase yield. It sits in stable, lower-risk positions — Treasury ETFs, high-dividend blue chips, or money market funds — and its only job is to exist when everything else goes sideways.

Think of it as the thing that lets you sleep at night. Without Bucket 1, every market dip feels like a crisis. With it, you have the emotional armor to let Buckets 2 and 3 do their work without panic-selling.

Rule of thumb: Bucket 1 should cover 6-12 months of your essential expenses. If you don’t have that yet, this is where you start — before you touch anything else.

Bucket 2: Income engine (Cash flow generation)

This is where the income lives. Covered call ETFs, high-yield dividend funds, REITs — positions that are specifically engineered to pay you regularly. This is the bucket most of my YouTube content focuses on because it’s where the most interesting decisions happen.

ULTY, QYLD, AIPI, CONY — these aren’t stocks you buy and forget. They require understanding the strategy behind them: covered calls, premium income, yield sustainability. We’ll go deep on all of these in future issues.

The goal of Bucket 2 is simple: generate monthly income that covers your lifestyle. Not someday. Now, or on a clear path to now.

Bucket 3: Growth engine (Long-term appreciation)

This is the part most income investors neglect — and it’s where they pay for it later. Bucket 3 is your long-term growth positions. Index funds, growth ETFs, or individual companies you believe in for the long haul. This bucket doesn’t pay you today. It pays your future self.

Without Bucket 3, you’re running a business with no reinvestment. The income feels good until inflation quietly erodes everything you’ve built.

How the three buckets work together

Here’s what nobody tells you: the buckets aren’t equal. They’re not meant to be. The allocation shifts based on where you are in your journey. Early on, you might be 20% Bucket 1, 40% Bucket 2, 40% Bucket 3. As you get closer to financial independence, that shifts — more weight to income, because that’s what you’re living off.

Every month in this newsletter, I’ll show you my actual allocation, what changed, and why. That’s what paid subscribers get — the full picture, not just the framework.

What to expect from Freedom Builder

Every Wednesday, you’ll get a new issue. Free subscribers get the frameworks, the concepts, and the ETF education — genuinely useful stuff, not teasers. Paid subscribers get the specifics: my actual positions, monthly income reports, full ETF deep-dives, and the behind-the-scenes decisions I don’t share anywhere else.

If you’ve been watching the YouTube channel, you know I don’t do vague. I don’t do “it depends.” I give you my actual thinking and let you decide what to do with it.

That’s what this newsletter is. Let’s build something real.

“Messy action is better than no action at all.” — If you want the full picture — real positions, real income numbers, real decisions — consider upgrading to a paid subscription. $9/mo. Cancel anytime.