A $625,000 portfolio in ARCC, MAIN, and BXSL generates $50,400 annually at an 8.06% blended yield, cutting capital needs by 57%.
A $625,000 portfolio split across three business development companies—ARCC, MAIN, and BXSL—delivers $50,400 in annual income at an 8.06% blended yield. The strategy requires 57% less capital than a traditional 3.5% dividend-growth approach targeting the same payout.
At a 3.5% yield, generating $50,400 annually demands $1.44 million in capital, while a 6% yield reduces the requirement to $840,000. After federal taxes in the 24% bracket, the $50,400 gross income shrinks to roughly $38,000 net.
The BDC portfolio’s income may remain flat or decline over time, unlike a dividend-growth strategy compounding at 8%, which could double payouts to $100,000 by year nine.