Motley Fool Total Income Review
Motley Fool Total Income is a premium service offered by the Motley Fool with a focus, as the name suggests, on income producing strategies. It is geared towards retirees who need to generate income on which to live or anyone else who wants to generate income from their investments. It focuses primarily on different dividend strategies, but also spans across REITs, bonds, and covered call options.
Launched on February 22nd, 2017, the Lead Advisors are Ron Gross and Robert Brokamp. Robert Brokamp is also the Lead Advisor for the Rule Your Retirement service, which offers general retirement and estate planning content and advice. Ron Gross was most recently the Lead Adviser for Million Dollar Portfolio and the now defunct MDP Deep Value service.
How does Motley Fool Total Income Work?
Motley Fool Total Income provides a handful of income-producing investment ideas each week, from among the 6 income strategies they focus on:
- High yield dividend stocks
- Dividend-growth stocks
- Low-risk dividend stocks
- Covered calls (options strategy)
- Real Estate (seemingly REITs and related ETFs)
Although you can always see all the recommendations, you can choose to focus on just some of the above strategies to tailor the amount of information you see. When they make new recommendations they will send an email at the end of the day to alert you. Although they will try to provide new REIT and stock recommendations each week, they do say that if they don’t find any ideas that meet their criteria, they won’t give any new recommendations. The bond and covered call recommendations will be less frequent, and in fact they say that their bond recommendation will rarely change and they are targeting 6 covered call recommendations each year.
They provide a short blurb and video on each strategy to help you understand what it’s about, and while the info is helpful, it’s limited and not nearly as in depth as I would like.
For each individual recommendation they make, they provide a couple of blurbs about why they chose it, and related Motley Fool coverage. Again, it’s helpful but the coverage seems to be limited to what you can find for free on the Fool.com site anyway.
One thing that is unique to this service is a dividend calculator they provide for each of their recommendations which helps you to calculate how much income you might expect to generate.
There is also a weekly email with commentary on the economy, the markets and the recommendations they made that week.
Members also get access to Motley Fool Options, so you can learn about covered calls.
Noticeably absent are any community forums that all the other Motley Fool services offer, and are usually a great source for asking questions, getting additional advice and and learning more beyond what the official service provides.
The price for all this as of their February 2017 roll out is $1,199 for 1 year, $1,499 for 2 years, and $1,699 for 3 years, with their usual generous 30 day 100% money back guarantee.
My Take on Motley Fool Total Income
I’m writing this review just a couple days after the launch of the service, so my assessment is based on my initial thoughts and impressions.
On the positive side, I think the focus on income producing investments strategies addresses an important niche of the investing world. Income investing is a necessary investing approach for those with a fixed portfolio size, such as retirees, and can be a successful strategy for others as well, particularly in a stagnant market. I also appreciate that the service attempts to look beyond the typical dividend stocks and incorporates REITs, bond investments and even some basic options strategies. I also appreciate that they purportedly will not necessarily make new recommendations each week, but only if they find investments that meet their specific criteria. Although that might be potentially disappointing for members if there aren’t enough new recommendations, I think a disciplined approach to investing is absolutely critical, and would rather see fewer, higher quality recommendations each week at the expense of variety.
But I also see some significant holes in this service that make me question the value. First, there is no mention of providing sell recommendations, which is a flaw. Second, there is also no mention of tracking the performance of their investment recommendations. I guess that since they are focused on generating income they aren’t as concerned about the performance of the actual stocks themselves, because in theory you will collect the dividends regardless of whether the stock declines or goes up. But that’s a major fault, which brings me to the biggest problem with Total Income, and that is the simple fact that most retirees can’t afford (pun intended) to rely on income alone. With people living longer and longer, retirees need to be as concerned about the growth of their portfolio in order to ensure that their money lasts through their lifetime, and potentially beyond if they want to leave an inheritance to their children and/or make charitable contributions.
The good news is that the Motley Fool already offers at least 3 other services with a general focus on both growth and income. The first is Motley Fool Pro which while not geared specifically towards retirees does have a stated purpose of providing positive returns in any environment through a combination of many different investing strategies. Read my review to get more details on that service.
The second existing service is Income Investor, which is focused purely on dividend stocks that provide both growth and income, thereby in theory addressing the main hole in Total Income. And while it is only a subset of the strategies that Total Income covers, in reality if Total Income’s bond recommendations will “rarely change” and they will only provide 6 covered call recommendations each year, it’s primarily a dividend stock service anyway. Income Investor is also a much more affordable service with a pretty good track record, and provides price guidance on its buy recommendations and also provides sell recommendations.
Finally, there is Supernova Phoenix, which is a premium service geared towards retirees with a focus on growth and income. While it is substantially more expensive than Total Income, it has a great performance record, and because it is a real money portfolio service, provides allocation guidance, and buy and sell recommendations. By joining Supernova, you also get access to all the other portfolio services there (e.g Odyssey and Explorer), which is a significant benefit.
So while Total Income serves a useful niche, it’s focus purely on income makes it of very limited real world use. For retirees looking for a Motley Fool service to help them, I would instead recommend Income Investor or Supernova Phoenix, for those willing to spend more money.