Passive Income Investing (Adrian): Covered Call ETFs, Split Funds & Risks Of High-Yield Investing

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In this video we have Adrian of Passive Earnings Investing joining the channel to chat about his technique of high-income investing in Canada.

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Passive Income Investing (Adrian): Covered Call ETFs, Split Funds & Risks Of High-Yield Investing

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33 Comments

  1. Thanks so much for that video! You two are my favorite investing youtubers and I have learned so much from both of you. Seeing you two exchange knowledge and talking about the topic of passive income investing is amazing.

  2. As Adrian said, the income received stays the same, but your overall portfolio value drops, so in time you are earning an income off a depreciating asset, so to me this is like an annuity. Also regarding split shares, I will use the Buffett saying that if what you are buying cannot be explained in a couple sentences, don’t touch it, it’s too complicated.

    1. My challenge with Adrian’s approach remains the inability to keep pace with inflation. Sure Canoe or FTN or DFN pays a great yield in today’s dollars, but 5-6 years from now it won’t be enough income to buy the same things. Having said that I think it’s okay to put a small portion of a portfolio into his approach, but the low to zero dividend growth is a huge red flag for me, in terms of addressing inflation over an extended time period.

    2. @James Rankin Agreed, and it is common knowledge that the capital markets go up more than they go down, and covered calls basically only do ok in a flat to down market. So, you are missing the upside total return most of the time to get a higher rate now on a depreciating asset. I can see why older people who require income now and are not concerned about leaving money as an inheritance, would like this application, but I sure don’t see it as a win for young people trying to build wealth.

    3. @HamiltonRb Absolutely. I worry about followers of Adrian in their 20’2 and 30’s who think getting started with this approach to investing is a long term path to financial independence. I myself may choose to use one or two split shares and maybe a covered call ETF to “juice” my retirement income, but the majority of my portfolio (90%) is based in blue chip dividend payers who have a long history of dividend increases that, generally, exceed inflation (I doubt very much they will in the short term). Five to ten years from now there might be a lot of tears spilled when followers of this strategy have 10 – 30% less capital and their distributions pay for less and less.

    4. @James Rankin It comes down to pay me now or let it grow & pay me later. Anyone doubting this, just bring up a 5 year graph on any of these covered calls VS the S&P 500, and you will see the difference.

  3. I watched the video to the end. If you asked me to, I still wouldn’t feel comfortable explaining how covered calls, or split funds work. Maybe it’s just me, but if I cant grasp my head around how it works, I don’t feel comfortable investing in it.

  4. Excellent guest in your channel today. Thanks to interview Adriano today. Passive Income Investment ❤️

  5. Good video, I understand his strategy .. it make sense but not for me or my goals. Why don’t you do a one on one with Griffin Milk, to teach your audience how to loose money in the market, and structure the worst portfolio ever … and maybe we learn from him how to literally follow the crowd 🤣🤣

  6. This collaboration was beautiful. Though I’m not a passive income investor, there are a lot of principles that one could use across any investment style. I appreciate so much how transparent both of you two are with your investment strategies and the ups and downs of it. Definitely two Canadian YouTubers that are in a league of their own 💪💪

  7. Two canadian self educated investors finally meeting. Two guys we’re trying to emulate. Two guys who took paths before we did. Anyone I come across that’s remotely interested in the stock market I refer to you two. Good job guys. I hope your interest in helping all of us get financially educated never fades. Thanks a lot to you both. Thank you Brandon for inviting Adriano. Reallly appreciated by all of us.

  8. Been following both of you for 2 years. I’m almost at 250 a month. Love Adrian’s style and philosophy. Love your market insights.

  9. If your monthly income stays the same for covered call etfs, does inflation pose a risk? If so, what action would you take?

    1. Yeah, this is my concern exactly. Today, I can pay my gas bill or my phone bill, but what about in 5 years? 10 years? That same amount of passive income, which won’t change due to the lack of dividend/distribution growth will now only pay 1/2 my gas bill or 1/2 my phone bill…..now what?

      To answer your question, I might include 10-15% of my portfolio in Adrian’s selections to give a temporary boost to my retirement income, but the other 85-90% is in typical BTSX or TSX60 stocks that pay a reliable dividend that steadily increases over time.

  10. This was actually a crazy collab LOL! I’ve watched your videos when I first started learning about a TFSA, and I’ve watched Adrian’s videos when I switched from growth stocks to dividend.

    I’m one of the people in his facebook groups, currently $300 a month the PII way. I truly love both of your channels, free knowledge is definitely priceless. Thank you both!!

  11. Watched and liked, thanks Brandon! I’ve really enjoyed following Adriano, and much of my portfolio is his strategy.

  12. You two are really awesome each in your own right.

    I personally have pursued Adrians strategy simply because of its simplicity and hands off approach but do like Brandon’s insights and broader approach to the market.

  13. I started a 100% covercall etf strategy earlier this year. Zwc, xyld and hyld. Love the strategy $850 a month is buying more of itself all the time.

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