can I beat this mututal fund anywhere else?

[Alan]

My plan for ER is to replace my income with dividends from a mutual fund. My retirement account is invested in a target date fund, so I have the appropriate risk/reward setting there, and can take advantage of market movements. But for the non-retirement investment account I handle manually - the one I plan to replace my current income eventually - I have everything invested in TGMNX, a mutual fund with a very stable record, a five star morningstar rating, and a ~.5% dividend payout every month (which gives it an annual dividend payout of ~6%).

So by my calculations, once I hit $500,000 saved in these mutual funds, the dividend payouts will be $30,000 per year, which would just pay my few bills and let me have a little fun money each month without ever having to touch my principle.

Are there any mutual funds out there as reliable as my TGMNX that pay out any higher of an annual dividend?

[Tyler]

Personally, I would never put all of my eggs in one basket.  TGMNX invests most of its money in mortgage backed securities.  Whatever you think of that particular investment class, I would highly recommend mixing up your investments for safety.  Find at least 3 more funds in very different sectors (treasuries, stocks, whatever) and I'd be a lot more comfortable.

FWIW, I've seen Morningstar ratings go from 5 to 3 or less virtually overnight.  IMHO, diversification is more important than historical charts.

[arebelspy]

Depends on your investing philosophy.  I think you could beat it with an index fund, over time.

Would elaborate more, but probably a waste of time.  Feel free to ask questions if it isn't.

[tooqk4u22]

30% of the holdings are rated below BBB, which is the cout off for junk bonds and is what is giving the higher yield.  If rates move the portfolio will get whacked. 

Better to diversify, but it is really about your tolerance for risk/return and you really should know the risks so do the research.