Passive income investing requires a strategic portfolio built on three pillars: Anchors (stable, low-yielding investments like conservative cover call ETFs yielding 8-20% that provide reliable monthly income), Boosters (moderate-yielding investments with composite underlyings yielding 25-60% that offer higher returns with some volatility), and Juicers (high-yielding, single-asset investments yielding 20-90% that are extremely volatile). Successful income investors must distinguish their mindset from growth investors by focusing on consistent monthly distributions rather than capital appreciation, and they should avoid panic selling during market downturns since income investments are designed to generate cash flow regardless of NAV fluctuations.
She Started Income Investing 9 Months Ago…Hear her progress during this Kitchen Counter CashflowAñadido:
Welcome to Kitchen Counter Cash Flow, where real investing meets real life.
Hi, I'm Perry and welcome to my channel, Perry's Pyiverse. And today I'm sitting down again with my sister Karen for our second episode of Kitchen Counter Cash Flow. Only 9 months ago, she started her DIY and income investing journey. At that time, she didn't even know the difference between a stock and an ETF or anything about how to invest. Just 3 months into her journey, we sat down for a long interview which became a very popular first episode of which we will now call Kitchen Counter Cash Flow.
Fast forward 6 months, we're back at the kitchen counter for a full progress report. the lessons she's learned, the confidences she's built, and the things all about income investing. So, grab a coffee, sit down, and join us at the counter as we find out how Karen's journey has evolved since then.
Please note the following disclaimers. I am not a licensed nor registered adviser, just a retail investor sharing my own opinions and experiences.
Therefore, this video and channel provides no financial, investment, or tax advice. Do your own research and consider using a qualified professional before making any decisions. Everyone's situation is different and past performance does not guarantee future results. I might be right, wrong, or somewhere in between. As such, this content is for education, discussion, and entertainment only. Thank you.
Hello everybody. My name is Perry and welcome to the Pyiverse. And we're doing an updated uh I guess a turning into a sequel. This is my sister Karen. Um, for those that you don't know, we did an interview about 6 months ago, December 10th.
>> Yeah.
>> of, uh, last year. And apparently my sister is very popular. By the way, I said her name's Karen. Last time some people commented to me that uh, I forgot to even mention her name for about five minutes. So, I'm not making that mistake right now. So, yes, this is Karen. This is my sister. Um we didn't we did this uh this interview u December 10th and it turned out really well. Um at the end at at the the reason we did it then is because at that time you had just started getting into investing. Yeah.
>> Um >> I'll say if I'm correct me if I'm wrong but it was in July of 2025. She didn't even know what the difference is between a TFSA and a RIFF. So, um, so these are the kind of like she was really new to investing, like didn't have an investment account, literally just went to the bank and stuff. And maybe we'll recap that so that for those that didn't watch that video. For those that didn't watch that video, uh, I don't know which I'm going to point. It's in the upper right hand corner, wherever YouTube puts it. I'm putting the link there right now. You'll find it very fascinating.
So, you'll actually, if you haven't seen it, you'll see where Karen was about 6 months ago and where she is today. For those that have seen it, um, welcome back to that. Um, and so what we're going to do today, and we're we're going to give this a nickname because I think we're going to be doing this maybe every two or three times a year. We've decided we're going to call it the kitchen counter cash flow. Don't uh give us credit for that one. AI helped us out with that. So, >> we got half of it. Yeah, we got half of it. So, it sort of figured out the rest of it. But we are going to call this the kitchen counter cash flow series uh again between my sister and myself. Um she's basically, like I said, started investing last year. Um we're going to basically do an update of that, find out where she's been since then because, you know, again, I think we were talking about that before this video. um in your first year or two or 3 years of investing, it's the steepest curve. It's where you learn almost like from a from a fire hose. Like things you fundamentally didn't know last month, you learn this month and and and it's very it's a very steep curve. So even though you've you're still around 10 months as opposed to four or five months, >> um there's still a ton that you've >> likely learned and we're going to talk about that, right? Um, so I think we're going to do that. Again, as you get more and more into it after your fifth or seventh year of in of investing, things the things you learn become less and less. It doesn't it's only, oh jeez, I didn't know that one. So, but yeah, so I think it's going to be good. I think this really gravitated well um the last video because a lot of you are newer investors. You're just starting. Maybe you haven't even invested at all, which is was your case. Some of you have have been investing for several years as a growth investor.
>> Um, and so you're new to income investing, which is a different mindset.
And I we're going to talk about that, I think, today as well, because the mindset of an income investor is so much fundamentally different than a growth investor. And as a a a younger investor or a a newer investor of investing and income investing, I I want I want to call that out because that is such a fundamental uh factor to success. So, all right. So, I think what we're going to do >> I'm going to stop talking here and I'm going to ask what we're going to do is we're going to ask each other questions back and forth. So, I'm gonna actually be interviewed as well. not just Karen, but she's going to ask me questions that I'm going to try to answer hopefully uh appropriately as well. So, all right.
So, I'm going to kick it off with the first question because it's more like Karen, everyone knows who I am because you're following they follow me on my channel, but who are you?
>> Uh let's get you back update for those that didn't watch the video is like >> what was your journey >> beforeh >> when it started and up to December, >> right?
>> Okay. Okay. Okay. So, um I am uh Perry's younger sister.
>> There are no older anything, brothers or sisters.
>> Um uh and yeah, I guess um we spent a fair bit of time at the hospital together uh when my mom was ill. And so, you know, I would keep hearing these stories about Perry's investments and I'm thinking, okay, well, like I have a little bit of money, but it's all in mutual funds. And then our mom, when I was chatting with her, she would say, oh, Perry just made so much money this month. I'd be like, "Wait a minute. What?"
And uh I'm like, "Well, that can't be right." And so, we just started talking a little bit more and more. Mhm.
>> And prior to that, um I mean I I have and my husband has a pension, so we weren't um I mean, and our pension is pretty good.
We can totally live off of it. And so when we both retired, I've been retired for six years, right?
>> Um and then my husband retired about two, three years ago, and we've been fine. We don't uh we don't >> because you had a pension.
>> Because we have our pension and we knew we had a little bit of savings in a mutual fund.
>> And >> were you drawing from it?
>> No.
>> So it was still you were still both of you were living on the pension >> just the pension >> of your pension and not the >> not the investments.
>> Right.
>> And just maybe clarify what these investments were. Yeah.
>> You said mutual funds, but it's like big bank type.
>> Yeah. Uh well yeah like Yeah. Big bank.
mutual fund.
>> And so we both, my husband had some in his name, I had some in mine. Um, couple times we needed a little extra money, so we withdrew it. And >> that's kind of it was just our rainy day fund, >> right?
>> So you were treating your RRSPs because they weren't even riffs at that time, >> right? Yeah.
>> You were treating them as emergency cash funds.
>> Yeah. Not not So you didn't convert them into RIFFs. You weren't uh generating a monthly income with them. Okay.
>> Nothing. No, I didn't know what a RIFF was. So, >> they were still an RSP.
>> They were RSPs. Yeah.
>> Um, so yeah. Anyway, um, started thinking a little bit more about it. You and I started chatting about a little bit more. Um, and I thought, well, this, you know, I mean, this sounds really interesting, but I'm not good with money. I don't know the first thing about it. So, I was a little bit nervous. And you had recommended that if I was interested, I should open a practice account, which I did with Royal Bank.
>> Mhm. and I played around and I made some really big mistakes and um you know I didn't know the difference between market and limit. I didn't know like lots of things and so I made those mistakes >> on your practice >> on the practice account which was really good I think >> which was a again and just and also to clarify expand on that not only was it because and this is what I tell a lot because I get a lot of comments private messages in Blossom or people messaging me wherever they can. Yeah. and they turn and say, "I have I I watched your videos. It's great. I have $10,000.
Where do I invest it?" And it's like, "My my response is going to be to you what I told my sister, and that is, >> I'm not here to tell you what to invest in."
>> Yeah.
>> If you really seriously want to take investing, and this is what I was doing with Karen. So, she went from I I'm interested in it, but I don't even know where to start.
>> The first advice is >> sit down and if you really want to do this, you need to learn. Yeah, >> watch my videos, watch the other people's videos, join Blossom, get into the conversation threads, really start >> absorbing the investment, the DIY investment community, the world that's aligned with and get a practice account.
>> Yeah.
>> So, the practice account as you're learning, you can make these kind of uh experiments and mistakes and say, "Oh, I bought this. Oh, gee, that I forgot to put a limit on this or I bought the wrong stock." So you'll do the real beginner things.
>> But again, the major the major advice to anybody is that if you want to start entering the DIY journey, the >> the do-it-yourself investment journey, and that doesn't matter if you're growth or income.
>> Yeah.
>> If you're going to take on investing and move it away from managed banks where you just walk in, >> here's my $1,000, put it into something, and you're moving it where you're managing it. You need to learn what you're doing.
>> Yeah. Don't just read what you read on the internet and say, "I heard that XYZ ETF is really great. I'm just going to buy a thousand of them." You got to know what you're doing. So, okay. So, it's very important.
>> Yeah. And so, in addition to um getting the practice account, I also joined Blossom >> and um I learned a lot there because I didn't know anything. And so, I just read and read and read. I've probably spent an hour a day just reading uh what posts and comments were saying. Y >> um and watched your videos as well and yeah, there were times where I wish you would have just said >> buy this and you'll be fine.
>> Uh but I'm glad you didn't because it was like I really had to figure it out.
>> Yeah.
>> And I was nervous. Now I wasn't nervous.
Um >> and again that goes to the analogy of >> I can fish for you >> or I can teach you to fish, >> right? and or you teach yourself to fish. So, because that's going to be the long-term success because you want to be able to stand on your own. Yeah. So, >> yeah. And I mean, we like I wasn't worried, oh my gosh, if I make a mistake, we're not going to have any money. I wasn't living off of it. So, >> that was a little bit um easier, you know, for us.
>> Um had if I had to live off of it, I probably >> more scared. I would have been way more nervous, you know, than than it just being like a bit of a slush fund for us.
>> Um, >> and counter to that, because I've seen the blossom stories, and I think we've all heard some of those blossom stories.
Unfortunately, a lot of times when you don't have enough money maybe coming in from your employment income and you just maybe have maybe $5,000 or whatever and you see some of the stories on Blossom and on YouTube where they're like, "I'm making $500 a month."
>> Unfortunately, it also may turn from fear to desperation and you think this is the magic bullet.
>> And you just turn around and say it's well now it becomes gambling. It's gambling because if you're not, not that you won't succeed >> if you take on DIY investing and that, >> but you're going to maybe go in it with the wrong mindset. You'll go in it with a panic. I need to make some extra cash.
I got to do it now. So, it's either fear >> or gambling, desperation of making the money. Both are bad.
>> Yeah.
>> Reasons Yeah.
>> to do it. You need to go slow.
>> Yeah.
>> Steady.
>> Yeah.
>> Grow. Learn from your mistakes. then take that next step. It doesn't matter if you're comfortable.
>> Yeah.
>> Or if you're desperate, you should always be >> Yeah.
>> taking one step at a time, especially when you don't have the cash flow to afford.
>> Right.
>> Right.
>> Right.
>> Yeah.
>> And I'm I guess for me um well, this might be coming up later, but for me it was like I could see people doing really well and I was like, well, if they're doing really well, I think I could do really well. And but you don't know anybody's backstory, right? Like maybe they have an investment background, maybe they >> already have a portfolio of a million dollars and so seeing $10,000 a month come in is like >> like I I'd like that to be me, you know?
Um, so yeah, like I'm I'm glad I spent the time really reading a lot and learning a lot and asking a lot of questions >> and being critical too because I think this is what I always told you. You could read and again, Blossom is a godsend for DIY investors because they they're getting flooded with so much information related to exactly what you want to do, which is do your own investing. And you hear John and Mary and Stan and they're all talking about how they bought this stock or they bought this ETF or they sold or they they're putting things into TFSAs because Blossom's more than just ETFs and and stocks and bonds. It's also about uh investment styles and strategies and if you're Canadian versus American and right and those kind of things. So >> the key part of the crit critical thing is doing your own critical thinking. And I put it in my you saw the disclaimer in my video, but it should be a disclaimer that >> is in front of almost every comment in Blossom.
>> Yeah, >> this is somebody's opinion. It could be very expertise. He could he or she could be right or they could be wrong or they could be somewhere in between. But you you need to always say what did that person say? Is that really true? And do two or three different perspectives or go on to Google and and do a search say is what that person said right? Mhm.
>> And again, Blossom just introduced Beis, which I, by the way, really have enjoyed having long conversations with Beas, but in my recent post, even Beas makes mistakes. AI models, and it's not just Beis, it's Copilot, the chat GPT, they all will make mistakes uh because >> you know, they're reading things and interpret things wrong and and so they will make mistakes. So, >> even when someone like an AI modeling tool tells you that, yeah, this is how it is, >> be critical of even that. be critical of everything and get multiple conversations. So, this is I just wanted to add that because newer investors are watching us here.
>> Yeah.
>> And following your journey and I wanted to make sure they understood >> you were successful in learning because you >> basically went through the be critical, read everything, see many perspectives, >> don't believe everything you see and read. Right. So, >> right. Yeah. And I'm really smart.
>> She is really smart.
Um, but yeah, so that's kind of where I was when I finally transferred over my RRSP and moved it um into my investor's account. And >> so you had an RRSP but no TFSA. What did you have before you started?
>> I had just a just my RRSP and I had >> Well, I'm not even going to say I had a TFSA. We had a little bit of money in a TFSA, but not >> nothing really.
>> Nothing really. Um Yeah. Nothing really.
It wasn't >> Yeah.
>> Uh so yeah, we >> So the first thing you did is you transferred your RSP or that was like August last year.
>> That was September. September.
>> September. Okay.
>> Um before then though, I put $5,000 into my investment account into my TFSA.
>> Okay. And I just kind of played with that a little bit to see.
>> So that that was a TFSA that you also transferred into a DIY TFSA or was that before?
>> No, I had >> I had tried to set up a TFSA just in my regular account. Uh but somehow I opened up a DIY >> Oh.
>> investors account and I didn't know >> Yeah.
>> what to do with it. So it was there but not intentionally. And so, um, so I moved $5,000 into that or probably 2,000 and then I added a little bit more.
>> Um, and I played with that until the transfer came over and, um, yeah, I made some mistakes even with that.
>> Yeah.
>> $5,000. Even the trans and actually the transition is actually even adds even more complexity to your >> beginning journey into DIY investing >> because the hardest part is is not only are you learning about what is income investing or growth investing, what is a cover call, what is an ETF.
>> I mean that's hard enough.
>> Yeah.
>> Then you have to learn how do I make a trade.
>> That's right.
>> That's hard enough.
>> Yeah.
>> And that's all based on if somebody gave you the keys and says you start doing your trading. Yeah.
>> The worst part that makes even hard even for people that are like more advanced is the hoops you have to jump to create >> Yeah.
>> an investment account when you don't even know exactly what an investment account is. It was hard for me.
>> Yeah. They were asking questions that I didn't know.
>> Yeah.
>> I don't I don't >> asking the four pages of questions like are you a director to a company and like Yeah.
>> Yeah. So yeah, I mean, yeah, even opening all of that was a learning curve, but >> you know, got through it and then the money got transferred over and so I think it was like midepptember >> where my money came through and um then I thought, okay, here we go.
>> Yeah.
And um and then we got a I got a little bit of money from uh mom and that's money that I put into my TFSA.
>> So then I had an RSP uh that had about $60,000 in it and then my TFSA that had about >> 40 I'm going to say $40,000 in it. And that's what I started with. It was about a h 100,000, >> right?
>> 100,000. And >> that was by late September.
>> That was Yeah. probably beginning of October, maybe midocctober, somewhere in there.
>> So when we did the interview on December 10th, you had really only been doing about just over two months worth of actual >> realworld nonpractice account.
>> Yeah.
>> Investing.
>> Yeah.
>> Okay.
>> Yeah. Okay.
>> So, and that's that's Yeah. That's where >> that brings us to then.
>> Yeah. Now, when you started, um, what was your I mean, you then look around. It's almost like walking into a kid with a candy store. You walk in, you've got all this money and you walk into a candy shop and you see gummies and juju. Yeah.
So, I guess bring us bring us your mind because again, you were likely thinking like so many other investments. It's like, okay, I created the the the the store. I've got my door, my bank, I got my trading accounts. I've got some cash to spend. And then you walk in and you look at the global market. And if you again, we were moving towards income investing. She wasn't doing growth investing. So, she saw all these covered call ETFs. Everybody on Blossom talking about >> do EH, do HHIS, do so and so so do the.
So what was your thinking from >> October to when we did the interview on what were you thinking when you sort of said, "Okay, I'm ready to do my trades."
>> I just wanted the most money I could get. Yeah, >> that's honestly it was like, >> oh, I I would hear about something and I would look it up on Blossom and then I would look it up on on my RBC account if I was buying it and then what was the distribution and that's all I looked at.
And >> so pure yield chasing >> just Yep. And I thought and I mean you had said like you know is it really volatile blah blah blah. I didn't really even understand all of that. I just thought it.
>> So, you heard the hurt. You heard but didn't >> Well, >> you weren't absorbing it.
>> I didn't know what it was. Like, it wasn't even that I didn't listen. It was more like I'm not really sure what means.
>> Yeah. So, um >> cuz we did talk about and again one of the things right early on because I'm an absolute advocate towards diversification >> especially when you are living off of this. Now again you're not cuz you're using pension but I on the other hand I literally other than my CPP I get >> all my retirement is funded by my investments. So >> and again >> just to bring up the history when I when I converted over from bank manage here >> here here RBC have my $1,000 put it into a mutual fund and I switched over. Um, and then I retired that year when I started my my my new income journey, which was in 2023.
>> I made a huge decision of even um commuting my my pension.
>> Yeah.
>> Which was scary even to my wife because it's like, are you sure you want to do this because >> either we get a secured amount of cash flow every month >> or are you sure this is going to work?
>> Yeah. as part of the justification on what can we do to make sure we protect ourselves from that yes >> big decision diversification was the number thing yeah I'm going to put tons into more conservative income generating ones the ones that are and again I know somebody called me out on this and I'm like okay you know what it's all in context >> if you're buying GIC's anything generating more than 5% yield is risky to you right but my context is is high yield passive ive income investing and to me the some of the most uh conservative income generating cover call ETFs are in the 8 to 12% range >> and again I know that growth investors are like dividend investors are you kidding me 8% that's that's pushing it right but again in the context of high yield income investing conservative cover call ETFs like the ones from and stuff that do basically 8 to 12% uh Hamilton had some really ones that Um, I promised my wife that as part of doing that, diversification was going to include a large group, a very stable, >> yeah, >> paying out almost the same amount of money every month type of thing. So, so that's why I mentioned to you, >> I know that the lure of that yield is, man, I can make 50% yield.
>> So, but still you hear it.
>> Yeah.
>> But your emotional side says, yeah, but just I want a little bit more of that.
>> Yeah. Well, and the thing that you kept saying is, "What's your strategy?"
Because I I would call you and I'd say, "Hey, do you know about this ETF?" And you said, "Yeah." And I'd say, "So, like, what do you think?" And he'd you would always say, "Well, what's your strategy? Does it fit into your strategy?" And I was like, "I don't I don't know."
>> Yeah.
>> I don't really have a strategy. I mean, I >> Yeah. I didn't have a strategy. No.
>> Truthful.
>> And people think a strategy just means I'm an income investor and I'm just going to buy cover ETFs.
>> That's not a strategy. So, I did spend some time um thinking about that and doing a little bit more. Um the problem that I had was um I was doing really well for the first month.
>> Yeah.
>> The markets were on fire.
>> I mean, I was doing really well. Like I think um >> in the first few weeks I went from 100,000 to like 112 or something. And I was like, "This is easy.
>> This is easy money shooting fish out of a barrel."
>> I thought, "Yeah." And I Anyway, and then probably >> and the income also was >> Well, yeah. And so, and I I was only reinvesting like I didn't take any money out. I was only reinvesting. And I think I if I'm remembering correctly, I got as high as like 121,000 >> within the first little bit. Yeah.
>> Um I Yeah, I think that's what it was.
Anyway, um I invested uh I I didn't invest.
Okay, so yes, I went in with the with the money and went, "Oh my gosh, what can I buy?"
>> And I did go to Blossom and go, "Oh, look at all these people are getting D."
And then I went in and I thought, "Oh, that one's going to give me 60 cents per share. Yep. I'm gonna take that one.
>> I'll take that one.
>> Oh, this one's giving me 98 cents. Yep.
I'll take that one. Oh, this. So, anything that was high, I did have some that >> that I had seen over and over and over again that were really reliable. So, I did take a little bit of that. But honestly, when I saw it's giving me 10 cents and this other one's giving me 98 cents. So, part of my strategy that I created was that I was going to try and create an income that was giving me about $5,000 a month >> um in distributions and then I was going to start to kind of scale back on those really volatile ones.
>> Yeah. Build a foundation after.
>> Yeah. because I thought like I can't really do much with just $1,000 like reinvesting $1,000 >> because I'm also with Royal Bank and so the fees to invest $1,000 like >> yeah it literally added another 10 cents to the price of the it for sure did >> yeah it's definitely a disadvantage >> sometimes 20 and if I could only buy you know 20 shares 50 cents a like so it was I had to kind of take all of that into consideration too and then there weren't very many big deals And so, um, so I thought if I can get to 5,000, then I'll scale back and go just more conservative base kind of, um, ETFs.
>> Yeah.
>> Well, I got close. I think I got $5,000 once and then maybe 4,800 like in that range. And I thought, okay. Like, so I did it. And I think it was >> early November maybe. And then all of a sudden, >> I didn't make that much money and it got harder. And >> yeah, and that's just so people clarify.
So people say cuz if you ask a growth investor that just invests in the let's say the general market like >> the S&P 500 or the TSX and stuff like that, >> they'll they'll turn around and tell you, "What are you guys talking about?
Nothing happened in November."
>> Again, nothing really did happen in November unless you were in the NASDAQ.
Unless you were investing in Bitcoin or cryptocurrency or any of the high >> volatility ones and again that's where a lot of the ultra yielding ETFs live the ones that were giving you a dollar a share >> you know back in those days. So when we turn around say then the the floor fell out on you in November >> that I I've nicknamed it the crypto tech chill. Yeah, >> because in November the Bitcoin just started collapsing and the tech market actually temporarily went down. Now, everyone's going to say, "Well, it's doing really good." Yes, it did come back over over the last few months. It's really come back, but both tech and crypto really went for a nose dive.
>> If you invested a lot into ultra yielding cover call ETFs, >> and let's say your portfolio was generally all about that and very little about the conservative ones, >> um, you would have definitely noticed it. I noticed it but I went in it consciously. I >> my my portfolio is at that time was about 35% um ultra high yielders and sort of high yielders. So yeah I noticed a major drop in my my monthly cash flow. Yeah.
>> Um again I was fully aware of that was happening but for somebody like you >> that like you said you thought this was like shooting fish out of the barrel.
Yeah.
>> You got to very quickly and this is good actually that it happened to you because A lot of people don't feel that first crash and again it wasn't a market crash it was a sector crash of which you had investments in it. You personally in your portfolio felt a sector crash >> hard.
>> Yeah.
>> Which is good.
>> Yeah.
>> Because you learned very early why diversification is very important. You learn very early.
>> Yeah.
>> That >> you can't build a strategy or a strategy based on what the market is when it's at its peak. You got to also know what are you going to do with it when it's >> down 40%.
>> Yeah. And I mean I say that and yet I was still so I I probably averaged $4,000 a month at that time.
>> Um so I went down to like 25 $2800 a month of income. So I was still fine. Like I was still doing >> but it wasn't the 5,000 anymore.
>> No. Yeah.
>> No. Well I only got there one time. So yeah. like but it wasn't it wasn't what I was thinking.
>> Um and then I really started to look at what I had and yeah I had everything Bitcoin I had >> tech >> uh tech NASDAQ >> like Yeah. And so I mean one of the things I noticed that I didn't even realize was that I had all kinds of different uh Robin Hood and you name it I had it. H O Y H O W >> H O I W.
>> Yeah.
>> H DD Y. I was like, what? What?
>> Yeah.
>> And of course they all went down.
>> And so I was >> And again, this goes towards the concept of cover call ETFs. People like, oh yeah, they're eroding.
>> If if Robin Hood goes down, >> Yeah.
>> any cover call ETF that holds it as an underlying is going down. Robin Hood was I think around 140. Again, you made H O, which is Robin Hood >> at its peak before November was I think around 140 and it was like, man, this guy's going to take off forever.
>> It's now, if you go look at it right now, it's in the 70 to 80 range. It's gone down almost 50%. So, >> it's not that the cover call ETFs went down because they went down on their own. They went down to follow the underlying. So, they're down 50 >> even though and because Robin Hood's down 50.
>> So, that was my big learning um in all of that. And I mean, I'm still making money off of them. Like, I'm still collecting distributions cuz what am I going to do? Sell them? Like, >> right >> at a loss of 60 70%. So, I I have them.
>> And could I have invested more wisely?
For sure. Like something that was a little bit more stable.
>> But then I think, okay, well, for 3 months I made a ton of money off of it, and now I'm just making a little bit of money. So, maybe it balances out if I had been more stable. But um that's when I kind of in December, probably right around when we had the video.
>> Um that's when I decided uh cuz I we were talking about it, but I don't think your video had come out just yet about the anchors and and boosters and juicers, >> but I had already said, you know, I like if this is where things are going, then I have to start being a little bit more conservative even if I'm going to look get less money, >> right? Because the other thing >> and this really pulls you again you started realizing because of the pain of the crypto tech chill.
>> Yeah.
>> The value proposition of diversification.
>> Yeah.
>> Cuz diversification for you was again you didn't totally grasp the concept of it. Diversification was okay. Well, I'll buy some Robin Hood and I'll buy some Coinbase.
>> Yeah. It just was different.
>> They're all like diversified within an entire sector, but that sector goes down. You're not diversified.
>> That's right. So I did write down sort of what my strategy was then >> and it was I was going to get 60% of stable >> ETFs. So I guess um >> at the time I was thinking boosters would have also been fairly stable because the >> the the distributions weren't kind of all over the place. um that I wanted about 60% for sure Canadian >> and that I wanted to build um to 50% um or I'm sorry $5,000 monthly income and then reduce to >> uh more stable.
>> So that was all I had.
>> So your strategy first was build an income engine like a a supercharged income engine and then use the proceeds from that to start building your your foundation. Yeah.
>> And I've seen that on a lot of Blossom conversations.
>> Again, I can't say that that strategy is right or wrong.
>> The risk to it is, and again, I you can call it risk or not.
>> I don't personally see, and you you sort of brought it up already. You said, "I bought Robin Hood and well, it's down, >> you know, H whatever. It's down like 40%. What am I going to do? Sell it?"
No. If it is an income investment, if it's an income, I call them income engines or cash flow engines. Yeah, >> it's like going buying an annuity.
>> Yeah, >> you bought you bought a contract with that stock or that cover call ETF >> because if you are truly an income investor, you're buying it because you wanted the monthly income from it.
>> You didn't buy it so that it could also appreciate in value. Now, if that is what your objective is, then you got to rethink your strategy because these things are not designed to appreciate in value. their job is to capitalize as much of the gains that it does >> generate and turn it into cash flow. So, this goes right into what I was saying is like, no, as a as an income investor, you're experiencing uh ultra high volatility. You're not in since you're not selling it.
>> Mhm.
>> You don't realize loss, >> right?
>> And guess what? Yes. If the value of the cover call ETF goes down, the distribution price, the distribution amounts go down with it. So, you know that that F1 formula car racing that was doing 200 mph, but again, it does it because it's high performance, very finicky, if anyone knows the car industry, >> you can't run that engine without doing high maintenance. You've got and it has a lot of wear and tear. So, yeah, it drops in distributions, but as long as you keep taking care of it, deciding if it's you want to reinvest more into it.
>> Yeah.
>> Um, >> it will continue to generate income.
>> What's the solution? you reinvest, you buy more. So you increase, you're layering more and more uh income cash flow engines in it so that your your whole objective is is to grow your farm either vertically or horizontally.
>> Horizontally is distribution.
>> Vertically is basically you're expanding on a on a holding you already have uh so that you can bring up that >> Yeah.
>> bring up that that monthly cash flow. So it's almost like you're refilling the tank of that high yielder.
>> Yeah. If it's a somebody like a car that you take to church every morning that you only go 30 miles an hour, you're not doing much wear and tear. It only goes 30 miles an hour, but you know what? It does it for on and on. It'll give you that 30 m an hour forever in a day. You don't really have to do much care and feeding on it.
>> You do, but not as much as a Formula 1 racing. Yeah.
>> So, some people see passive income in these cover call ETFs as risk.
>> Mhm. If you don't sell them, I see them only as volatility.
>> Yeah, >> it's going to >> Yeah.
>> Again, I have Misty that's down 80%.
Yeah. And now it's about 75. It's actually done a little bit better, but it's down 75%. Am I planning on selling it? No. No.
>> It's paid me back more than I paid for it in investments.
>> Yeah.
>> And every month it continues to pay me about $300 to $600 a month.
>> Yeah.
>> It's doing its job.
>> Yeah. And And so Yeah. So, I wasn't too I mean, it hurt a little bit for sure, >> uh, that learning, but I mean, I was still okay. And then it was after your video that I thought, okay, I >> now there's a name to it.
>> Yeah. And so, when I looked at it, I I had a lot of juicers, of course. And >> so, let's let let's preface this.
>> Yeah.
>> Because people are like, "What video are we talking about?"
>> So, >> and again, I don't know if it was November, December. I I I I created a series about three videos that all and they basically formulated into um the three pillars of passive income investing that the three pillars are anchors, boosters, and juicers.
>> Yeah, >> anchors are and again I'm by the way video wherever that is I'm going to put the video here. There's one video and then I'm you're going to see a link to a follow-up update video which is as important as the main video. Yeah. So for those people that want to know more detail on what am I talking about when we talk about anchors, boosters, and juicers, um the video is right there to click. But in summary, basically I've categorized all cover call ETFs into three categories. Anyone can do their own categories, but I'm using these three.
>> So you're either anchors.
>> Anchors are again in the context of passive income investing are low yielding, very stable. They actually even grow in nav because they actually have very they they've really balanced between uh giving enough that it can can grow with its underlying as well as it can generate a conservative amount of of yield.
>> Yeah.
>> Yield meaning like 8% to 20%. That's what I call conservative.
>> Um boosters are anything in the 25 to 60% range.
>> But they're like, "Oh my god, that's that's not a booster. That's crazy. But they use composite underlings. When when you say composite underlings, I mean it's not a single stock cover call ETF.
It's not investing only in >> uh IBM or or Coinbase. It's investing in it either an entire index >> or an all-in-one. It's got other ones in it. Or it does an index um um it does a composite. So >> those are boosters and they're less again I hate using the word risky.
They're less volatile. Yeah.
>> Than juicers because they are they have a a c a grouping of underlyings. Yeah.
That do do good.
>> They're still volatile. Like >> Yeah. Matter of fact, if we I look at my snowball analytics, my boosters actually perform worse than my juicers. In in my case, my boosters are not as good performance-wise as my juicers. Um so don't think that they're just less risky than juicers.
>> Yeah.
>> And then juicers are same category. They could be 20 all the way to 90%. And yeah, I know some people's like, "What do you mean 90%." There are ones that do that. Um, but what makes them juicers are they're extremely volatile. Yeah.
Because they only invest in one underlying. They'll only do Strategy.
They'll only do Coinbase. They'll only do Robin Hood. So, you're literally in if you're buying those, you're you have a conviction in the underlying.
>> Mhm. you're you're going to ride it high or low, but you're going to expect this thing to go way up and down because everything is based on how that company is performing.
>> Yeah.
>> So, those are the three. Again, the links were up there. So, now we're going to say you now you use that >> Yeah.
>> strategy of mine, which said, uh, we've got three categories, anchors, boosters, and juicers.
>> So, now you're saying, okay, now you're going to do an inventory of what is it you had >> based on those categories, right?
>> Yeah. And I don't know what those numbers were. I just remember there was a lot of juicers. And >> so you were highly weighted in juicers.
>> Yeah.
>> Okay.
>> So I consciously in January made a decision probably in even into December made a decision to be a lot more conservative.
>> Um geopolitically I didn't really know what was happening. So, I thought, "No, I'm just going to I'm going to try and stay with Canadian um ETFs and a little bit and and a lot less volatile." So, I wasn't getting rid of my juicers. I just wasn't investing in them anymore.
>> Um, >> which is a good strategy.
>> Yeah.
>> I mean, again, it's a strategy that I'm actually doing cuz what you're saying, I'm doing, too.
>> It's basically you're not selling off your juicers and boosters because again, if you do, you're capitalizing losses, right? But all the money that's being generated, you're focusing your reinvestment on the anchors. So, you're now using the revenue from your boosters and juicers to start building >> Yeah.
>> uh a more solid foundation of anchors.
>> Yeah.
>> Yeah.
So, um, I guess where I'm at now. So, then I decided I was going to do about 40 40ish% anchors, 35% uh, boosters and 20% juicers. And I do have like about 5% in growth, which I'm not going to really include. Yeah.
>> And so, um, >> that's what I've been working on. So then then that's >> And you've been working on that since January.
>> January. Yeah. Yeah. Well, I got to the point where I was way I was probably 50% >> anchors >> and about uh well my my juicers went to like 15%. But then I realized I wasn't really getting a lot of income from that. And that's when I was kind of down like my my whole portfolio dropped >> a lot.
>> Uh like well below what I thought I should have and I thought this like how can I how can I make more money? Even though I was still ahead, how can I kind of boost that up a little bit? So I added a little bit more to my um juicers. I'm still only at 17%. I'm still not at 20.
>> Um but everything else is kind of where it needs to be. So, I'm now I mean the other thing that happened in January is I started to withdraw some money >> and so I converted my my um RSP >> RSP to a RIFF >> and >> and by the way for >> about 50% of my subscribers are American or non-Canadian I'll say because I got people even in Australia.
>> Um just to know in Canada we're we're Canadian so in Canada our registered retirement fund is called an RRSP. Mhm.
>> When you convert it into something that will now now start generating regular income from that sheltered account, it's basically then referred to as a riff.
Okay. Yeah.
>> And sometimes you'll hear a thing called a an a lera or a just another version of an RRSP riff.
>> The other term you'll hear is a TFSA.
It's a tax-free savings account. It is the >> the almighty in sheltered accounts because basically it's taxfree. The money you put in there is basically generates a tax-free income. And the nice thing about it is the money that comes out is taxree. So it is >> the epitome of the perfect type of account.
>> Yes. So >> yeah, for sure.
>> But but it it doesn't be it doesn't bemoone the idea of the value of an RRSP. Some people turn around and say, "I shouldn't have bought RSPS." Well, >> you were you weren't saying that when you were 30, 40 years old with a six figure salary and it was it was basically the money you were putting in it was getting tax deducted. So, it's just you're now being able to you're now paying the p the piper. Yeah. So, that's the thing. So, again, for those people that don't know what those are because you're not Canadian, that's what that is.
>> Yeah. So, >> so you're going to start withdrawing.
>> Yeah. In January, >> and that means you have to convert it to a rift and that will cause an automatic withdrawal every month.
>> Yeah. So, I'm taking out now $500 a month and it's going to pay off some bills and it's paying whatever um whatever I don't need is going into our travel fund and so it's >> or your TFSA like there's things you can do, right? It's >> not going spending it. So, now those are some strategies. One, you can you're retired, use it and actually spend the money. The other thing is is you can actually redirect it.
>> Yeah. take the tax because you get hit on tax when it comes out but redirect it into your TFSA where it could grow there and then generate income and then basically then pay you taxree. So that's another idea.
>> Yeah.
>> And so um so I started doing that and I'm still reinvesting the rest. Um >> so >> I bring this up because I have a an a couple other videos that I've got done about my LEPB, my living expense protection buffer spreadsheet modeling tool. And part of the key part there is uh and again by the way might as well put these videos the link for my leapbuffering tool and what is what is an LEP and what is income you know >> building a model of retirement. So basically it's a modeling tool that >> that models out retirement scenarios.
How big does my portfolio have? How aggressive? How much am I reinvesting?
>> The reason I bring that up in this part right now is because you're talking about the rest I reinvested.
>> Yeah.
currently right now, how much of your monthly income do you reinvest >> versus you withdraw?
>> So, when I I haven't put my specific numbers in, but when you did the video about if I did 15 30 the different scenarios with your um model, >> um my yield is about just under 30%.
Mhm.
>> So I kind of tracked that a little bit so I know I'm fine.
>> So you're currently your average portfolio aggressiveness is 30%.
>> Yeah. Just under.
>> You're doing about an average yield of 30%. Okay.
>> So when I take out my 500 I'm reinvesting all the rest which would be about between 2,000 and 2500.
>> Okay. So on average you generate about 3,000.
>> Yeah.
>> You take 500 out. The rest is reinvested.
What? I don't know what that is. That's about 10%. About 15%. I don't want to do my math.
>> I'm too old for that.
>> You do your own math.
>> Out of the 3,500 she withdraws and the rest or 100% is reinvested that she doesn't use for withdrawals. Yeah.
>> My modeling tool says, how much do you want to reinvest >> of what you aren't withdrawing, >> right?
>> And again, you're setting it at 100, meaning if I don't withdraw it, I'm reinvesting it. Okay.
>> Yeah.
>> All right. Um, and now given that I also don't have a savings uh account. I mean >> emergency cash.
>> Yeah, I don't have that. Um, >> but if you're saving for trips >> Yeah.
>> that sort of is >> Yeah.
>> an emergency cash.
>> I don't have like a three month Oh, yeah. Like I don't have that >> three month emergency.
>> Yeah. I don't I don't >> spending account. Emergency spending account. Yeah.
>> Yeah. Um because I'm not living off of it, right? If I was living off of it, for sure I would do that, but I I'm not.
So, I don't really include the emergency >> um account.
>> Um yeah, I think I could take more out.
Um and then if I didn't need it, I would put it back. Like we're, you know, we have a couple bills we're still paying off.
>> Um a couple of loans that we're still paying off. So, you know, >> and that goes towards finance planning versus investment planning, >> but that should be taken into account.
If I'm paying a 7% >> loan rate, >> yeah, >> should I be increasing my withdrawals to start ex, you know, accelerating the loan payoff so I'm debtree.
>> So, it's something you have to sort of plan out and >> Yeah. And I guess the way I look at it is, do I want to take money out if I can generate 15%.
>> Right. If my loan is only at right so >> it's a very very important part if the money you're taking yeah if if the money you could have reinvested is generating 15 and your loan is only seven it's almost like margin investing >> that's right >> again it's like well why would I pay off a loan it pays seven >> that's right >> charges me seven when I can actually put that money towards reinvesting at 15 >> yeah so why rush >> I mean if I was paying off credit cards for sure I would do that >> yeah because now you're talking 15 or 20 to 20 right so >> yeah that's but that's not the case. So, yeah. So, I'm kind of thinking like maybe I'll up it a little bit, but I'll I'll stay with where we are for right now cuz we're comfortable. So, >> now the one thing you brought up and we passed by, but I want to go back. You said in January you started really reinvesting in anchors >> and then you noticed that you almost had too much.
>> It's almost like your anchors actually built up as too high. Yeah. of a of a a holding weight versus >> so this is what some investors get a little bit confused.
>> There's current weights and then there's book cost weights or or or cost >> weights.
>> So, and I see it myself like we Karen and I both use Snowball Analytics.
>> Really good tool. By the way, I I I'll I'll openly say that I am um >> um basically a partner basically, you know, to do referrals on with Snowball Analytics. So, uh we use it. We both like it uh for what it for what it does for us. Um if you're interested in it, there's a link in my uh top comment.
You'll get 10% off if you decide you want to subscribe. You don't have to subscribe. You can play around with it and stuff, but if you are interested in both of us use Snowball Analytics, so we do a lot of the metrics that we talk about come out of the Snowball Analytics. So, just so you know, if you are interested, there's a 10% off if you use my reference code or my referral code.
>> So, I'm a referral partner is the best way. So, the reason I wanted to bring that up is if you use Snowball Analytics or any other tool, doesn't matter what it is, when you're doing your pillars of anchors, boosters, and juicers, and you can even see it in here, >> it'll tell you what your buyin cost is versus if you click it off, it'll say what's your current.
>> Mhm.
>> What you're going to notice is that your anchors flew up to 3540% really quick.
And the reason is is because your juicers eroded in value. M >> so your booster whereas your anchors didn't really drop in price over the past you know since the crypto chill your juicers and your boosters did they literally dropped in price by half in some cases. So when you look at your current pillar weights it's going to show that your that your anchors are really doing really good. If you if you switch it over to buyin cost, you're going to notice your anchors drop dramatically. Like they're because it's going to say, "Oh, oh, okay. If you're doing at the at what I invested in it, >> right?"
>> It's going to show that your anchors are actually not as bad, >> right?
>> They're not as overweight as they were if you said, "Show me it at my investment cost."
>> Oh, okay.
>> Because your juicers you paid a lot of money for. So, if you look at how much you paid >> paid into it, you're going to notice that your anchors are not really that >> overweight. They're overweight now because your juicers that you paid $25 for might maybe are down at 10, >> right?
>> And of course, you see what I mean? That makes the anchors look so much better.
>> Yeah.
>> So, for those investors that say, "I'm overweight all of a sudden." Well, you're overweight not because you just reinvested. You're also overweight because the boosters stayed stable or grew and your juicers and your boosters actually went down, >> right?
>> And again, I don't know where it is, but there is a tag in here that says, "Show me the uh buyin cost." I think it goes under diversification.
>> Yeah.
>> And if you go um Nope.
>> Sorry.
>> There. There it is. So, see where it says buyin?
>> Yeah, >> there. And if you go, you could also I think it's in this one. So, this shows you what it is at buyin. I don't know if it's here. It's on the other one as well. It'll show you how these change.
Sorry, we're looking at the snowball analytics. It shows how each asset changes depending on if it's buyin cost.
>> I'll do it quickly here so you can see this. Again, we're not looking at the details here, but you can see how the pi changes. This is basically Karen's portfolio assets, all her ETFs right here at current weight. And if I click here, do I is it touchscreen?
>> Yeah.
>> Oh, it is. Look at you. How fancy.
>> Oh, yeah.
>> You'll see it adjusts. And adjust because it says, oh, you're talking about buying weight. Well, you bought Misti at $45 a share. So, your investment portfolio weight at buyin cost is going to be higher towards Misti than if I take it off.
>> Mhm.
>> And you'll see it adjust. And it says, "Oh, okay. Now your anchors are better because your anchors didn't they didn't erode from the cost and your boosters and juicers did."
>> Okay.
>> Okay. I just want people to go because some people will say, "Oh, yeah. All of a sudden, for something weird, I've been reinvesting in anchors, but they're just flying up."
>> Yeah. They're flying up because of bad markets. Your juicers are gone down.
>> So, >> okay.
>> Yeah, I didn't understand that for sure.
>> Anyway, so just something I wanted to catch there. So, >> yeah.
>> Okay. So, we talked about your three pillars. Your strategy is to not sell.
>> Basically, even if they're down in value, you're not going to capitalize losses. You're going to use whatever >> monthly income is going to focus on >> anchors.
And again, the one thing people again, it's the hard part about grabbing something that's really close versus the long-term planning, right? Like if I have $10,000 to reinvest, >> I could put it in something like MSTY or USA and get a 47% yield and say >> right on. I'm going to get $300 a month more now. Versus if I turn around and say, "Okay, but I could put it in something like HYLD and instead of getting $300 a month, I'm only going to get $80 a month." So the one side of you sort of says, >> "Yeah, >> I know." you know, why do I have to be so conservative? Like, why don't I buy some of those?
>> Yeah, >> I know it's hard.
>> It's hard. But again, it's so important as a successful investor that you have and this goes towards >> uh diversification.
>> Diversification, you got to if you're b if you're building this portfolio to last for 20, 30 years, >> you got to make sure that it's rock solid. It's like building a house, beautiful threetory, all that. But I didn't want to invest any money into the foundation because >> who sees the basement anyway? So, and then you find out that your house is sinking.
>> Yeah.
>> Yeah. You have this beautiful three-story house, but it's sinking because you didn't put enough money into your foundation.
>> Yeah.
>> You need to build up that foundation so that even when you have some really bad 20 30% global market crashes, >> which could happen any time now in my opinion, but >> um if that happens, it's going to be the juicers and the boosters that disappear.
not disappear, but they're going to basically go down big.
>> Yeah.
>> You want your anchors to be there to pay your bills.
>> Yeah. And >> this is basically you want to pay the minimum amount.
>> Yeah.
>> Uh you're doing >> Yeah. Well, to today or actually this week, I finally have gotten back. I'm I've broken even. Finally today with what I've put in, >> uh what I've lost and what I've reinvested today. I'm I've broken even to >> Yeah. I'm not on the whole anymore.
>> Now, when we talk about bro breaking even, >> we're talking about nav value, like net asset value. In other words, what I invested, I've got my I'm back at the value that I paid. My book value and my nav are equal.
>> Yeah.
>> Okay. Right.
>> Yeah. So, I feel good about that because I just sometimes need to see the I need to see the number that I'm not losing money is how it feels.
>> Even though I know every month I'm getting money like it's so it's it's this whole like It's a mindset. Yeah.
>> And again, sorry I again I'm going to say this because I even see income investors and influencers and non-influencers, people on Blossom and that >> it's that mindset. You know, if you are truly an a passive income investor or an income investor or a high yield income investor and you're basically your strategy is about focusing on generating consistent growing monthly distributions or maintaining it or keeping it in a range like again >> just because you reinvest does not mean that it's going to be higher every time than the month before. It means that you're sliding your your your ceiling floor uh monthly income higher.
>> Yeah.
>> So, yeah, it's at 30 >> and maybe tomorrow uh because of bad markets, it's down at 28.
>> Uh but at the end of the day, I'm slow.
Every time I reinvest the 28 becomes 29, the 35 becomes 36. So, you're you're sliding up your income window. Yeah.
>> Higher and higher away from your expenses. This is that leapb buffer I was talking about.
>> If my expenses are here >> and my my window is, you know, let's say I need 10,000 a month >> and my my in income range is I'm generating between 28 and 35 or 40 depending and that box is wider as your average yield goes higher, right?
>> At 20, it's going to be a smaller box.
At 40, it's going to be a huge box.
>> But that's the difference of income investing mindset. Well, >> it's that idea that like when you say again and again, everyone sees it. Even I get that twinge every once in a while say, "Yeah, but look at my nav."
>> Look at my nav. But then I remind myself, "But I'm not a growth investor."
>> Yeah.
>> And as a growth investor, I don't care that my Misti is down 80%. Why?
>> Because I never plan on selling it.
>> And again, it's generating income. Maybe it's only >> 15% of what it was doing, but it's still generating income. And I've bought more to augment the ones that were eroding on their thing and they'll never be zero.
>> Yeah.
>> It'll it'll go smaller smaller.
>> Yeah.
>> Because you're using it up, right?
You're using up the ultra yielders.
>> Yeah.
>> On anchors, you're not even using them up. You're actually >> getting a nice dividend income almost.
I'll call it a dividend.
>> Well, and that's kind of where I'm at now. It's like the ones that I invested in that are solid. And I probably invested a little bit more into boosters as well. Like my rock solid boosters that >> Yeah. The ones that are real boosters.
Yeah. Like >> not the not the aggressive boosters.
>> No, like they like the 25 >> 25 to 30% range.
>> They have just consistently been the same since I started. So I >> like I'll rein But now my problem is that they've appreciated >> and so now instead of paying like $22 for a share, I'm paying 27. It's like, oh, I'll wait till it goes down again.
Well, they're not going down.
>> Yeah. But this again and this goes towards and actually I just did another video and you actually triggered it. I just finished this video only about a week and a half ago right up there again. So click on this one.
>> It talks all about reinvestment strategies >> and because a lot of people are like okay how do I rein that was a good one for me too. Yeah.
>> Yeah. Because really there's strategies towards reinvesting. You don't chase and again some people see it differently than me. I'm not that kind of person. I I turned around and I said, "I do not DCA and I do not drip. I can't drip because I have a riff. It has to pay out. So, I can't reinvest everything."
So, but even if I didn't need that, I wouldn't drip.
>> Yeah.
>> The reason I don't drip is because >> um I want to control where I >> move my money. I have 37 ETFs generating income.
>> It moves all into one bucket. And then I decide after I withdraw my money every month for living expenses, where do I want to direct that?
>> I a drip would say, well, oh, look at that cover call ETF is going up. You know, it's up 15%, but I'm still going to dollar cost average it. I'm going to buy more.
>> Again, some people that is a strategy. I don't believe in that strategy. I believe in a strategy is >> if I've got a diversification of say 35 ETFs. Mhm.
>> There's always a deal >> amongst those 35 that says, "I'm going to buy that one because he's a good deal right now."
>> Yeah. Well, that this might be a good time for me to ask you a question.
>> Yeah.
>> Um because along those lines, one of the things I struggle with is what to reinvest in. And not >> in my head, I know which one, >> but my problem is is I don't have a lot to reinvest, right? I maybe have because I have two accounts >> and I don't I can't combine them. So yes, I have, you know, say, let's say $2,000 to reinvest every month, but a th000 is in one account and a th000 is in another account.
>> How would you go about and I have to pay the fees.
>> So >> which is there's nothing about the fees again and again, you know, I hope RBC and the big banks are listening because honestly, I've even sent letters to them. Not that anyone listens to me, >> but the big banks brokerage uh trading fees are ridiculous. And now they're turning around and saying, "Oh, well, we give you free free trades on our ETFs.
We don't want your ETFs. We want our ETFs. We want the ones we pick." So, I'm hoping sooner or later they're going to realize all the young DIY investors and the ones like you, you're not young, but you're new to DIY investing >> that literally you are pushing away the Karens of the world because when they only have $2,000 to invest >> and you tell them that you have to they want to do a trade and they want to buy 50 units and you're hitting them with a $10 fee and again, not just RBC, but all the big banks are charging these crazy fees. Um it it it visibly changes the cost per unit.
>> Yeah.
>> And it's like you know if you're someone on well simple and I'm not a well simple advocate or or or client but when you got no trading fees I can buy half a share or two shares.
>> Well exactly and I do have a well simple account cuz I wasn't sure which way I was going to go when I started. So, I put $2,000 into Well, Simple >> and um and for me, it was more like if that's kind of like my emergency fund, right? Like if I need it, I'll just take it out of there. It's a TFSA.
>> But yeah, if I get a $15 dividend, I can buy one share of HYLD or >> and it doesn't cost >> one share of bank and it's not costing me any money there. I can do it no problem. But what do you do if you only have I generally have about $800 $900 >> um to reinvest in per my account. What would you do? Would you save for a couple months and not buy anything? Do you just leave it sit there? Do you like I don't >> And here's a if you want to do cost efficiency >> I mean the ultimate is to finally just say RBC you're not >> you you you you're not there to uh to focus on the on the small investor. You only want to make lots of trade money on the big guys. So one strategy is unfortunately RBC you got to move it to someone like Well simple where you can make a more granular decision because you're not being hit with a $10 trade fee. So, you turn around and say, "If that were the case, that's one strategy." Yeah.
>> Um I mean, Well, Simple has its own disadvantages. It's a discount broker.
Yeah. Um again, I'm going to call spades on both sides and and I know this has been an ongoing debate. I hold a lot of US cover call ETFs that get hit with a 15% withholding tax in the TFSA. RBC and a lot of the big broker bank brokers actually have the backend systems and the intelligence to know how to refund me back the rock portion.
>> Yeah.
>> If I was well simple I would have lost it all.
>> Yeah.
>> And again people like oh yeah that's only $20.
>> When at my size of portfolio I would have lost $5,000.
>> Yeah. And in my well simple I only invest in Canadian >> which is good. Then you avoid that one limitation.
>> But if I if I transferred my account I would have US in it. But yeah, so what I have been doing is I've been >> it's really hard for me to sit on it cuz it's hard for me to sit with like right now I have about $1,500 >> between the two accounts and it's like I just >> like unless it's a really >> I mean it's one >> again >> if you don't move to something like Well simple and you have to accept the trade fee and >> you've complained to them and they haven't dropped it whatever it is >> the only the efficient way is to turn around and build up so that each trade is more cost efficient.
>> The problem is is that if you are losing say two months worth of income, >> right?
>> Um you know it >> so >> you could be there now >> when you only have $1,000 and investing in a cover call ETF that may only make it 20 cents.
>> Yeah.
>> You know what I mean? So >> yeah, one side of you says you should be reinvesting it all. Well, at the end of the day, if you're only investing $1,000 and in an ETF that's say an anchor ETF that only generates like 10% yield.
>> Yeah.
>> Yeah.
>> It's going to make Oh, boy. Wow. I made 60 cents.
>> Yeah.
>> So, >> yeah. So, >> I don't want to discourage against it.
No.
>> But then it goes like, well, that takes a lot of months of saving to equal a $10 trade fee. You know what I mean? And you don't want to sit for 10 months trying to build up something equal to a trade fee, right? So, what I end up doing is probably not the right thing, but I feel like I should be reinvesting it to get something out of it.
>> I look for my juicers that have really declined.
>> Yeah.
>> And or some of my stable ones that are like a bank where it's only $10 and I I'll buy 30 shares of that even though I know it's not $10 anymore because 30 shares is going to cost me >> 15 cents.
>> Yeah.
>> In addition to that. Yeah.
>> So, I tend to do that or I'll buy like a Misti that's >> $3.88 or $4 and I can buy 50 >> and I'll be like, "Okay, but now I'm getting that 15 cents >> except I'm now kind of buying into my juicers instead of my anchors." So, I I struggle with that a little bit >> and it's not there's no magic bullet to that. I mean, at the end of the day, the trade fees are hurting smaller investors. For me, it's not a big deal. Like >> I'm deciding where do I want to, you know, where do I want to put $10,000?
>> That's right.
>> And when it's $10,000, a 1095.
>> I know.
>> Uh trade cost is not a big deal for me.
I'm that's going to make me I'll make that more than upright. But again, it's unfortunately it's why Wealth Simple and I guess Quest Trade, again, again, I'm not advocating for these guys, but um it's why they're so successful for the young uh DIY investors, and it's why these big bank broker uh brokerages are losing out because why would I put that money into there where I I'm being held back because of your trade fee?
>> Like, I can't invest like I should be investing >> with zero trade fees. So, again, it's a tough thing to do. across and I don't remember where I saw it how much I've paid in fees. It's it was somewhere >> and I was like I could >> I could have invested that and made a little bit of but anyway it is what it is. It is what it is.
>> It's just um >> Yeah. So I don't really have an answer for it.
>> I mean the efficient way would be is you build up and have a make make a make a bigger buy out of that same thing because that that trade cost is a fixed cost. Yeah. So the more the bigger your trade is, the less it's being affected.
>> Like I feel like if I can buy a 100 units of something, it's only 10 like it's 10 cents.
>> Yeah. Again, you could just say, look, it's just a cost of investing. If I don't want to move to a discount broker because I do enjoy the benefits of a full brokerage, then you just say it's just a cost over over a year or two, it's gonna it'll pay it back. And >> yeah, that's Yeah, >> again, there's nothing there's no magic bullet to it, unfortunately. Right. So, yeah.
>> Yeah. Okay.
>> Yeah.
>> Okay. So, I'm going to ask you a question. Um, since December to now May, >> uh, lessons learned, what >> if you were talking to that investor that was you in your first couple months >> and now you're almost at your 10 month, 8 month, 10 month mark, >> what are some of the things as a passive income investor because that's what you generally are.
>> Yeah. um that you'd say, "Man, if I would have only known that." I think we did talk a lot about him, but is there anything else that stands out is what would I tell myself?
>> Yeah. Well, I think one thing would be to be a little bit more passive.
>> Yeah.
>> Cuz for the first three, four months, I sat at my computer and I watched >> hour by hour by hour. I was like, "Okay, do you think okay like when is the right I put in this I put in this uh request is it has is has it gone through? Has it been like I was obsessed with it for a while and I I hardly thought it was passive >> and um so >> but that's more addictive active.
>> Yeah.
>> Not not that you have to.
>> No, >> it's because you want to and you you literally it's like gambling. It's like I press the slides. It's >> Yeah, that's exactly how it felt. Um, so that would be one thing I would be like relax a little bit because >> if you know what you're if you know what you're investing in >> then just sit back and let it do its things. So today I only check I check in the morning >> and I will check >> if I have time at the end of the day.
>> Um, I always have I always I mean I'm an early riser so usually by 7 o'clock if I've received a dividend I put it into Snowball. Yeah. I get all of that sorted out before 8:30 >> and then I just see where things are at and >> which is a and this ties in towards for those investors that are very very new and it's you said it way back in the beginning of the interview is that >> I asked you what's your strategy >> if you really spend the time and I have built videos on how to build a strategy some certain things on your strategy um I'm going to say it here I hope I actually do it when I actually do this video, but I have a video on strategy development. There's the five building blocks. I'm going to actually put that one up.
>> Yeah.
>> But >> the reason I bring it up is because >> it people turn around and say, "Yeah, I I'll work on a strategy later."
>> But it's so important to really take the extra time and build a strategy.
Understand what are my goals? Like the first thing is what are my goals?
>> A lot of people get in there, well, I just want to generate money.
>> What's so that's black and white. My strategy is I want to make as much money as I can.
>> That's not a strategy.
>> Yeah.
>> What is your investment goals? What what are you trying to attain? If I can maybe get to a target of >> $1,000 a month, that's what I'm going to do. Um I'm concerned about volatility and risk. What am I going to do about that? So, building a strategy based on those goals, saying, "I never want to be not sleeping at night."
>> Yeah, >> that's a goal. Yeah, >> if you don't want to lose sleep at night, then you got to make sure you build a proper diversification strategy.
>> If you want to reach a physical goal of say $1,000, then how are you going to structure the portfolio in the balance of >> meeting the other goal you said, which you want to sleep at night.
>> Yeah.
>> Of diversification with a good mix of an average target yield so that you can attain that $1,000 a month. Yeah. So again, building that up and again it won't be perfect. Just start with a first round.
>> Yeah.
>> What are my goals? What do I want to do?
>> And the reason that's so important towards what you were talking about with regards to says I I was following it >> like everything. First of all, you can't help but doing it because you're new investors. So this is exciting stuff.
>> Yeah. But if you know what your strategy is and you know that you you've you've built into that strategy your your category of anchors boosters and juicers >> and you also absorb the mindset that you're an income investor not a growth investor a growth investor does watch the ticker every day they after you watch because even though it's unrealized growth for them or unrealiz they're scared when they see Tesla drop $35. Why? because their whole goal is towards NAV appreciation about wealth appreciation. So, >> they are incented to watch it because literally when they see the markets crash, they've just watched a major goal get a major hit.
>> As a passive income investor, >> the markets go down, I don't lose one minute of sleep on that because at the end of the day, >> yeah, >> I know I'm going to get my month of my weekly or even daily income.
>> And so, I don't worry about it. My biggest thing that keeps me up is like, okay, um, what am I going to buy next?
Because when I get my reinvestment and I want to reinvest, >> using a proper reinvestment strategy, what am I going to focus my next reinvestment on?
>> Yeah.
>> It will keep your mind off >> the ticker. When you see MST down another 30 cents, >> again, if the side of you is a gambler and you're like, I'm trying to see if I I can't wait for it to go to $20.
>> Well, now you're not an income investor.
you're back into a growth mindset, right?
>> Because if you're looking at buying MST because you're hoping that the Bitcoin is going to go up to 100,000 and you're going to make a ton of NAV appreciation.
>> Yeah.
>> I hate saying it, but I see you more as a growth investor, right?
>> Again, they'll turn around and say, "Well, no, I'm going to do it because the NAV the NAV will bring up the distributions up and and by the way, I'll get the bon." That's fine. I'm not saying there's anything wrong with that, but you're not really an income investor if you're treating MST because you're hoping to buy it at three and then sell it at 20, right?
>> That's what a growth investor does, right?
>> That's not what an income investor does.
>> And so I have MST.
>> Mhm.
>> I I see people talking about it every day. Even the influencers are talking about it a lot.
>> I don't even know exactly what I have MST. I think it's maybe 2% of my portfolio. I don't even focus on it >> because I don't care if it's at 350. I don't care if it's at seven. If it goes up to seven and I get some more income, all it means is that I'm going to get a little bit more income.
>> I don't sit there, >> so you bring up a very good one is like >> what can you do to target away from >> Yeah.
>> that mistake you made, which is >> Yeah.
>> Yeah.
>> So that that's one thing I would have told myself is like just relax a little bit >> and focus on your strategy.
>> Yeah.
>> Yeah. Um, but having said that, it's really hard to develop a strategy when you really don't know anything, right?
Like it's hard to say, you know, like I like when I say I didn't know anything, I didn't know anything, right?
>> So >> that's where the practice account came in because I could see some of the things that probably would have impacted that.
>> Yeah.
>> Um maybe I would have uh stayed with the practice account a little bit longer. I don't maybe not.
I'm not sure. But like I could have and learned a little bit more so I wouldn't have made some of those other mistakes.
>> Um >> again, if you have the patience and and and you don't need the money like right away if you have the patience >> building your strategy on your practice account and seeing several months of it actually executing >> and then saying, hm, >> yeah.
>> And now it would be nice if a crash happened >> while you're in the middle of your practice account because then you can say, "Whoa, I didn't know that that happened."
>> Yeah. Well, it's funny because I didn't delete my practice account. It's still there. Yeah. So, when I go into my accounts, I can still see my practice account. And actually, my practice account dropped way less than my real accounts. And I was like, >> well, how how is that possible? Cuz I bought, oh, let's try this. Like, I knew nothing. I'm thinking that was just dumb luck then because it didn't drop as much as my others. But anyway, >> it did. And it brings up a really good point because there was actually and I think was actually I >> I'm gonna say it was Ary from Blossom >> that sort of um posted some report that or study that was done and they said the investor they said which is the best investor the guy that's at you know advanced and they're doing daily trading and they're doing this and they're doing that and versus the you know the person is you know checking their account every month and doing updates and finetuning and they said, again, I could be wrong, but the way I understood it was they found out when they did the study, the investor that literally invested in something and totally forgot that they had an account >> Yeah.
>> had some of the best returns.
>> Yeah.
>> Because they just let it do its job.
>> Yeah. Well, yeah, because I and I I mean, I will say that one of the things I think I did well is that I didn't sell when I was worried, >> right? and >> which is a big problem for newer investors and I'll even say some more advanced investors that panic when they say >> especially high volatility cover call ETFs like you have experienced right >> like there were a couple that I bought and when I told you about them you went >> why why did you buy that and I misunderstood what it was >> um and so like two days later it was up a little bit so I sold it right away cuz I thought well if you're if this is wrong I'll just sell it >> well if it was if it was truly a mistake you get out of it.
>> Yeah, I mean it made some money afterwards but then eventually it dropped. So I I did do a little bit of like correction >> but um but generally I haven't >> Yeah, >> I haven't sold. One time I sold when I thought h like this is just dropping and dropping and dropping and for me to invest in more anchors. I need to get rid of something because I'm only at that point I was only getting >> I wasn't I was reinvesting everything but I was only getting maybe $2,000 a month. So between two accounts.
So I sold something to to reinvest. But >> I think one of the things I did well was not just panic sell.
>> And there's two things. So, and again, um it's in that video that I already said a link to on how do you reinvest.
>> Yeah.
>> Uh for those people, a lot of people get things mixed up between investment, >> reinvestment, and rebalancing.
>> Yeah.
>> Okay. Cuz people like, "Yeah, I sold that one and I reinvest in here." No, that's rebalancing.
>> Yeah. So rebalancing means you have to capitalize a gain or a loss on one of your existing holdings >> in order to reinvest it somewhere else.
That's not reinvesting. That's rebalancing.
>> Um >> some people and again I'll say influencers and non-influencers. Um it's not my strategy. It might be theirs. My strategy is I rarely re rebalance. Mhm.
>> The only reason I'll rebalance is if I believe that I'm maybe overweight in a certain sector or I found that there was a better version of that one.
>> Um, an example I'm just going to say was Bank and 60.
>> Yes.
>> From Evolve. I've had a large position in bank.
>> The fact that I also could sell some of my bank and make and trim some gains on it. Again, what I did is I just trimmed the gains from it and I moved it into 60. Yeah, that's a rebalance, >> right? Yeah.
>> I didn't do it because I want to get out there, capitalize my gains, and go somewhere else. I'm doing it because I felt that there was a better way.
>> Yeah.
>> There was a way of actually expanding my income strategy, right? So, there's other people like, I'm in that one, but it looks like it's losing. I don't want to sit on a loser. That's that's in my opinion not a strong >> as a growth investor that might work.
Yeah.
>> But as an income investor, I mean, if I would have done that, I would have sold Misti long time ago, my MSTY from Yield Max.
>> I would have capitalized my losses. I would not be generating $3, $400 a month.
>> That guy's an income generator. He's doing he's got I have nowhere else to move it.
>> Yeah.
>> So, I I'm going to sit on it. So >> rebalancing is something you're doing to restructure your account.
>> Yeah, >> it's not. It's meant to restructure to rebalance your pillars and stuff like that.
>> Reinvesting is when you take the money that was already generated from your monthly income and then reinvest it into growing your portfolio.
>> Yeah.
>> So that's a big difference between reinvesting and rebalancing. One restructures and one grows. And then investing is when external cash is like say you have employment income and you're adding another $5,000 into it.
That's investing.
>> Yeah.
>> Investing and reinvesting are the same thing. It's just that one's an external source and one's a regenerated source.
Growth investors can't reinvest.
Generally can't reinvest because they don't generate in internal income unless they have dividend stocks or they're swing trading. Yeah. So I just wanted to call that out because some people get that mixed up between the three of them.
So the good part is is if you're really a discipline and you believe that your portfolio is starting to align to your strategy and you're all you're doing is doing fine-tuning now >> you shouldn't be panicking when the markets go down because yeah even though MST is down to whatever or whatever pick an ETF and it's down it's still generating you income. Yeah, >> you can either decide on your reinvestment is your reinvestment strategy feel you want to add more to it and take it while it's down >> DCA >> dollar cost averaging it and taking it down or you're like no just let it do its thing. My my I bought my Misti two two two and a half years ago.
>> Yeah, >> it's been there. I have not touched it in two years. It's still generating income. I have I never even look at it.
Like I I couldn't care less what it's doing. It's still generating income.
Mhm.
>> That's the difference between, >> you know, panicking when something is down.
>> Yeah.
>> Again, if you are doing that, if you are that kind of investor and you're basically saying, "It's down. I want to, you know, cut my losses on this one. I'm going to go somewhere else." Honestly, you're really not an income investor now. You're actually still you're you're being a passive income investor technically, >> but you are mindset >> acting like a growth investor, >> right? And the most successful passive income strategies are the ones where your mindset is income and your portfolio and strategy are income.
>> Yeah.
>> Not that your mindset is growth, meaning buy low, sell high or sell my losers.
That's a growth strategy. An income strategy, like you said, you did it right. I don't worry about it. I don't sleep at night. I lose sleep at night.
Right.
>> Yeah. Yeah. So, >> yeah. So, those are the things that I would probably have told myself. Um, yeah. Not panicking. Yeah.
>> Uh stay the course, make sure you have a good strategy.
>> Um >> try like you said, try to not watch the screen.
>> Yeah.
>> Like >> Yeah.
>> That for me was >> get up in the morning, watch the market opening, see what it's doing. If that's again, you don't have to do it because you have to do it.
>> You do it because psychologically it makes you feel good. How my portfolio doing? You know, that's a nice benefit of a DIY investor. That's my baby. I just want to know how my baby's doing.
and then just walk away and do whatever you do.
>> Yeah. So, it's a lot easier now like I mean I do travel a little bit and so but there were when I was traveling I'd be like first thing in the morning as soon as the market's open I'd be on there and if I could I'd be like thinking like this is not >> that's not passive.
>> Well, yeah. And you don't have to do it.
Like if I don't look at it cuz I'm away for a week, then I don't look at it because I'm away for a week. I I'll catch up with >> So I'm I'm there now, but I wasn't at the beginning. I was like I watched like a hawk.
>> Yeah.
>> So, >> yeah.
>> Yeah.
>> Well, and that's why I say it's passive income investing because even if I were just to leave it alone for a week or two weeks, >> Mhm.
>> even if the markets go flying up or flying down, >> I I can open my account in two weeks and say, "Oh, look it, there's another x thousands of dollars in there."
>> That's passive.
>> Yeah. I don't worry about if the nav is down and stuff because a growth investor would say, "Oh my, how long is this? How long is this uh crash gonna be?" Because if I'm a if I'm a retired growth investor, >> Yeah.
>> I have to every month take money, especially if it's a riff, you have to capitalize >> cash to convert it to into withdrawals.
>> Oh man, how how big's my do I have a cash wedge? Can I take it from that as opposed to >> That's active >> consumption investing. as a passive income investor.
>> Yeah.
>> I wouldn't even have to look at it. My RIP's basically >> I know I generate more cash from distribution than I take out every month, >> right?
>> If I didn't watch it for 3 months.
>> Yeah.
>> That it would still do its job. My bank account every every 15th of the month would get x number of uh dollars for my expenses.
>> That's passive. Yeah.
>> That we're not that passive is more of a decision, a personal decision. You're just doing because you like doing it.
Yeah.
>> Yeah. And you have to decide where you're going to reinvest. Yeah. Right.
>> Yeah. So, I do have one more question for you. Um, >> knowing what you know now, what is something that you would have done differently when you first started?
>> You know, people have asked me that.
>> Um, I don't nothing really screams at me >> and maybe it's because of my IT architecture >> mindset. like for 30 years I was an architect and as an architect everything like if anyone that knows me personally as a family or a friend I'm a I'm an overplanner I will research things to death I will research it I will challenge it I will build a template and stuff like that so again why was I so confident that in January of 2023 I learned about what is a cover call ETF >> and by November of 2023 I had already commuted my entire pension converted all mutual funds over and turned it into a thing. The reason I was so confident about it is because I researched it to death. Like >> so in January when you learned about it, you didn't put any money in yet?
>> Nope.
>> When did you first put money in?
>> I in J late January.
>> Mhm.
>> I was I was still working because I retired at the end of that year. I was still working. I was working from home.
So I always had a TV sitting in the on the side. And even though I was working with here my side TV was on and I had BNN business news network on >> I just liked listening to it and I started seeing all these commercials about Hamilton's HMAX >> cuz I at the time already knew I wanted to be an income investor.
>> Mhm.
>> And I think I've seen a video from Adriano said the same story in his early years as well.
>> I I knew I wanted to generate income. I just didn't know how. I was focusing on high yielding dividend stocks like of course from the energy sector TC Energy Nbridge anything that could give me the highest yield and I laugh now because the highest yield was 6 7%. It's like >> okay but yeah and then I buy like Suncor and basically it goes down $25 $30. So and and again though that's again at that time I thought of it as a growth >> right >> income a growth slash it generates me income right >> and so I was getting frustrated just like this is not winning >> I was like I really like something that generated just focused on income >> and generated me income you know and then I saw the HMAX commercials from Hamilton so Hamilton your commercials got me into doing what I'm doing so and I bought my first I bought my Hmax which are my first cover call ETF I bought in I think midFebruary. So it was only >> three three four weeks after I saw the commercial because I I was like no way you can't have 13%. This doesn't make sense. So I really started researching it. I actually called >> Hamilton and had a 30 minute interview conversation with the one of the fund managers because okay I'm reading all this stuff. They're saying that there's nav erosion. What's this nav erosion?
tell me right from the horse's mouth what nav erosion and that's when they turned around and said yeah people get that wrong there's good nav there's good erosion there's good sorry there's good rock and bad rock and what's this they're returning he said let me explain to you so they did a really good job of easing my fears and I decided my first investment was >> HMAX >> and how much did you put into it >> um I don't remember it wasn't big it was only from one of mine I think it was one of my because my TFSA was my only I think my TFSA was my only one cuz I've moved only one. The rest stayed as mutual funds cuz I was still experimenting.
>> Um, >> so I I may have >> maybe put maybe about $5,000 into it or something like that cuz I didn't believe it. I wanted to know a little bit more about it. And of course, if you watch all the YouTube videos back then and even I didn't know anything about Blossom first. People say, "Oh, Adrian, no, Adriano didn't get me into this and stuff like that." I learned it all by myself. I didn't know what Blossom was.
I didn't know what any of the YouTubers talking about passive income investing.
This was just me learning that there was a thing called a cover call ETF. I learned everything about what they do, how they operate, >> interviews, stuff like that. I think I started learning because of course like YouTube works.
>> The more you research it, the more names show up. Then sometime maybe around 3 months later, Adriano's name and other people's name. Oh, there's a name to this.
>> Yeah.
>> It's called passive income investing.
So, I'm basically doing what they're talking about.
>> So, it gave me more confidence. But I had already converted an entire account.
So I looked at I was like, "Oh, they got another thing called HYLD in there. I'll do that one. I'll do Oh, there's another thing from Harvest. Okay." So I started building a portfolio off of one account.
Then I moved a couple accounts. I moved a RIFF an RSP, two RSPs in there. So, I'd say by July of that >> year, I already felt a lot more confident and I moved my >> I think I moved my lift, which was my It wasn't that big at the time, but I moved it in there.
>> So, I was pretty much there. I really by July, August, I had already said, "That's it. I'm moving this. I like the strategy."
>> Yeah.
>> Again, I was still new on it. Mhm.
>> Um I would turn around and say the only thing if I could go my way back then.
Now again people are like well if I only would have learned this sooner.
>> Mhm.
>> The problem is is that I couldn't have learned it that much sooner because cover call ETFs just started >> 2022 2023 is when they really just started bubbling up. I I know they existed in 2120 and stuff like that early days but they really took off.
>> The year I got into it is when they took off. Now, maybe that's why the commercials were on because they were finally realizing this was something bigger than just a little niche market.
So, I couldn't have gotten into it earlier, much earlier, maybe a year.
>> So, that's not an argument to say I wish I would have learned it sooner. I would have still been stuck.
>> I can't argue that I wish I knew more about diversity. Like, if I look at what I know now and how again as an architect, I always like building patterns. Mhm.
>> Like when when anyone watches my videos, they all I try to establish a pattern or a template or or a a strategy that's that could be repetitive, right?
>> So when you look at me >> and when you look at my videos, you'll see that >> it's my architectural background that's doing it. It's like >> there's things called anchors, boosters, and juicers. That's because I say, "Okay, let me run that through. Let me back test it. Okay, that sort of works."
Or reinvestment strategy. Doesn't matter what your strategy, what your portfolio looks like. If you follow these kind of things, it should fit at a scale small or large. So, I build more and more templates and patterns.
>> I wish I had those back in 2023.
>> Right.
>> Again, that's not a mistake. I wish I had those then because then I would have done it with more confidence.
>> Right. Yeah.
>> Um I'm going to tell you, I did exactly what you did. Not to the same extent because the real >> juicers and boosters really showed up after I started. They the yield max was sort of like the the spawn of it.
>> Yeah.
>> So >> so I really didn't get influenced by by juicers at the time because the only ones that were juicers at then were Hamilton and Harvest and they were they are now considered anchors in my opinion. Um so I started building a base. I actually degraded some of my >> uh anchors as as I started seeing these juicers and boosters. So, I actually retrograded it. Yeah. And I actually said, "I'm gonna sell some of that >> HMAX." I I no longer have HMAX. Again, nothing wrong with it, but I no longer had it. And I basically bought more boosters and juicers with So, I actually started augmenting my boosters and juicers, >> which actually brought down my >> anchors.
>> Um, in hindsight, I could have stayed and left the base there and it just kept on building up.
>> I would that would have been maybe something I would have done. M >> um but I'm not really that wasn't like a fundamental oh that ruined my entire portfolio. I'm doing what you're doing now.
>> I again >> remember we talked about the income >> range is has a floor and a ceiling. Well my because I had so many boosters and juicers in the first couple years. The amount I was able to reinvest back in >> Mhm.
>> was substantial because I was making you know monthly income of $45 $50,000 a month.
>> Yeah. If I had it all in anchors, I would have been maybe making a fraction of it. I would have been making 15 to 20,000, >> right?
>> So people say, "Oh, yeah, but look, it's eroded." Yeah, but look how much money I reinvested back in that built up my base and stuff like that. So I don't look at it as a big problem, but now I'm doing what you're doing, which is basically I've said this since about November that I believe that there, again, >> I could be wrong, but I believe there is a major correction coming in the markets. I maybe it's going to be in a month, maybe it's going to be in six months. I don't know when. Maybe it won't happen at all.
>> But I'm not one that says I'm not doing it until it happens. I'm building a strategy for that.
>> Um, and that strategy includes I'm starting to reinvest back into anchors >> and I'm building a lot more back into Canadian companies. I'm Canadian. I, you know, I want to support my country. So, I'm moving a lot more into Canadian anchors. Um, sector diversification. Um, I'm becoming a lot more defensive.
>> Um, and again, I'm an energy bull. So, a lot of my defensive strategy, especially now with the Iran US war causing basically a major disruption in the oil sector, >> uh, for the good. Nobody else, like the rest of the economy hates this. But if you're an oil sector investor, >> Yeah.
>> you couldn't ask for a I hate saying it.
I feel guilty saying it. You couldn't be in a better mark. I was already at about 30% of my portfolio was in in the energy sector.
>> If the economy goes because of this >> Iran situation, um the energy sector will be that one defensive sector that's going to do really well because >> it's going to be making big money. So, I've been really becoming more defensive and I'm building up my my my energy sector. I believe is a good counter to what could happen. Again, maybe it doesn't. So, that's sort of what I'm doing. Uh, I'm doing what you're doing.
I'm moving my juicers and my boosters, leaving them alone, and re reinvesting down on my anchors.
>> And I agree with you. It's a It is a hard thing to have, say, five or $10,000 and say, "Okay, I've got to reinvest." Yeah, I could buy more HD at say 14%. Mhm.
>> Or I could use that same money and buy you Soy at 47%.
And you're like, >> like I tell you, it even for me as a seasoned income investor, it's hard to say I'll take the $80 a month versus the $300 a month because I know it's the right thing to do.
>> Yeah. Well, one of the one of the things that I read on Blossom a lot, like a lot >> was people were like, you know, the hardest the hardest time is getting to that first 100,000. Once you hit that first 100,000, you're going to sail.
Well, I started with 100,000 and I was like, >> I'm not sailing. I'm going backwards.
Like >> I was down to like 90,000 at one point.
I was like, what what happened to the like you're going to sail? Like I I was like, what? So, I mean, I hope that it comes and I'm hoping that maybe now that I've kind of readjusted and aligned my thinking, >> it's going to start to move in that direction. It looks like it now because I'm a little bit more conservative. But, >> but think about it this way >> again. It's the growth mindset versus the income mindset. You're you're saying, "Look at this. I was at 100. I'm now at 90." That's what a growth investor would say. I would turn around and say if you talked like a pure income investor, >> look at where you at 100,000 where you maybe generating $3,000 a month. If you only had $10,000, >> yeah, >> I find it really hard and noninspirational if I had only $10,000 to invest and I made >> $8.70.
>> Yeah.
>> Again, I >> Yeah, >> you have to start from somewhere. Well, and the thing is >> when they say that, they mean basically is when you get to 100,000, you actually have some substantial reinvestment money that you can actually start putting into it.
>> And if I look at it, even though I went down, I was still generating income. And so, >> was it the same amount? No. But it was still there. And so I'm I'm hoping that now that I'm kind of moving up again that >> those distributions will increase and then it'll be a little bit more of a a machine, right? Not just a like I have to check really carefully and which you know which >> like okay I've got >> you're running a cash flow and again that's the video uh I might not have clicked it. I'm going to put it up right now.
>> I I talk about running your portfolio like a a a cash flow engines operation.
Yeah, >> it's it's a different mindset. So, the video is up here right now >> and basically it actually looks like you basically are building your fleet of cash flow engines. Some wear out quicker because you're putting more torque on them. Some wear out slower.
>> So, it is slowly building, but you will have setbacks. You know, if if it's icy conditions, your entire fleet is going to slow down because they're on icy road conditions. When the weather's really nice, >> Yeah. your fleet's doing really good because they got good traction and they're the good weather and stuff.
>> And that's the big difference is like remember we talked about that >> that income window that box.
>> That's right.
>> You'll look at it say, "Oh my look, it's down here now." Yeah. But at the end of the day, every time you re reinvest, you're moving that box higher and higher and higher and slowly again.
>> And I'm seeing it's slow moving.
>> Yeah. I'm seeing that for sure. And so yeah, I mean I can't complain. like it's >> it's giving us two trips a year and paying off some bills and doing everything that >> it wasn't doing when it was just sitting in a mutual fund.
>> Well, so >> and that's the part you got to look you got to go say looking back before I even started my journey in July.
>> Yeah.
>> Um what was my money doing then?
>> Yeah.
>> Even if I got an inheritance and I had 60 grand or whatever, what you put it in there, >> what was it doing then? Was it generating cash? you know, but were you putting it in a a balanced portfolio and getting a whopping 7%, >> you know?
>> Yeah. I don't I couldn't even tell you what it was.
>> Yeah. Exactly. And tell you >> like when you look back >> the amount of things that is has rewarded you.
>> Yeah.
>> You sometimes for, you know, don't see the forest for the trees. You're so busy looking at the trees blooming right around you that you forget that you walked into this blooming forest that you were once only sitting in a desert.
Yeah.
>> And I was like, "Wow, there's a forest.
There's Wow, look at look at these trees are growing."
>> I still have the same amount in my account and that's with taking >> $500 a month out. And so that >> then in theory >> that's trans >> could last forever, right? Like so um and that wouldn't have happened if I had to just take it out of my mutual fund.
would have dried >> that that is again part of a consumption phase growth >> strategy. If you have a growth portfolio and you're retired and you're taking money out again they can call it all they want. Every financial adviser is going to say and again the most respected ones will all say the same thing.
>> Let's work on your meltdown strategy.
>> Yes. Yeah.
>> It's it's called a meltdown strategy.
Income investors didn't do it to to insult growth investors. It's called a meltdown strategy by the people that actually manage portfolios for growth investors that are consuming it. And the only way you the reason it's melting down is because you have to sell some assets even though they appreciated in half and that's good that they do but you are taking a piece of it away every month >> and at 90 >> you're going to have very little life >> and you again their strategy is and that if you watch I watched some really a parallel wealth and some of them very very good people I watch them and again that's their strategy. Yeah. The idea is that when you turn 90, you should have nothing left or enough left that you want to leave for your >> your inheritance and stuff like that.
Well, as an income strategy, it's a totally different strategy.
>> Yeah.
>> By 90, like literally, I'm not eroding.
I'm taking all the money out that I want every month.
>> Uh I'm at a portfolio that, you know, it's at 1.5 with all my investments. If 25 years from now, it's at 1.5.
>> Mhm. I know. Yeah.
>> I I don't look at it even if it's at 1.0.
>> Yeah. Well, my meltdown only went 500,000. That's right. If I was a growth investor, it would have kept on going down. So, but it's the NAV is not a relevant factor for me. It's the monthly income that I can take out. I could reinvest it back into my TFSAs. I can build my daughter's TFSAs, which >> why not gift >> your inheritance to them while you're alive?
>> That's right. And because of a passive income portfolio and the income I'm generating, which is more than I need, I now can feed and actually build that gift to my girls now while they need it, while they have mortgages to pay, while they're I'm alive to see them enjoy that.
>> And I would like to get that's I mean, honestly, that would be a goal for me is to somehow get to the point where I could >> e I mean, I have given them a little bit of money, but >> but to do it on a regular >> Yeah.
>> basis. Yeah. Yeah. Yeah. Again, give them give them their inheritance before you pass away.
>> Exactly.
>> And the nice thing is with an income portfolio, as long as you get it to a level where >> again um your your expense ratios here, your monthly expenses here, >> and this is called the LEPB buffer, the living expense protection buffer. If the amount you're making at the basement, you know, floor ceiling is three times more or two and a half, three times more than how much you need, >> you can decide to bring that up a little bit more >> and then >> get a little taxed a little bit more and say, "But I'm using that for my daughter's TFSAs or I'm using it to give to charity or whatever." But you now have the freedom >> to do those kind of things that as a growth investor, >> if I had to make that decision, it means I would had to sell more assets to do it. I would had to melt down faster >> so I could give it to my daughters or or whatever. Now again, nothing wrong with that. But you just got to realize I don't have to worry about that.
>> Yeah.
>> That's why it's called passive income.
>> Yeah.
>> Not the other strategy. Again, >> like not to start a war with the growth investors.
>> It is. It's just facts. At the end of the day, it's facts.
>> Again, maybe they have a $5 million portfolio because they grew it over all those years versus my 1.5. I'm making 1.5 work, which for them may have required four million to do the same thing. They can erode off of they can melt down four million and they likely end up where I'm ending up, >> but I can do it at 1.5 >> and survive and still leave a huge portfolio behind.
>> So, >> yeah.
>> Okay. Um I don't know if there's anything more. We We want to save some for our next one.
>> Exactly.
>> Maybe we'll do our fall kitchen counter cash flow episode. Yeah.
>> Um, so we're going to end it here, but again, if you like this video, first of all, like it. It helps the algorithm.
Uh, if you like uh the videos and knowing more about passive income investing, please subscribe to my channel. Um, I also say for Karen and I, um, if you like conversations like this or if this was too boring, please leave comments. Uh, leave a comment saying, "Too much talking.
>> I got bored by it." Or, "I really loved it. It really helped me." Because at the end of the day, your comments help us guide what our next episode's going to be.
>> Like for example, introducing my sister like I didn't the first episode and and that was because of comments from people like you. So it comments mean a lot. So please leave comments and like and subscribe. And again until next time, stay safe, stay investing, and we will see you in the Pyiverse.
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