The TRUTH About PII (Passive Income Investing) | High Yield Dividend Investing Canada

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Today we'll cover the pros & cons of high-yield passive earnings investing in Canada. We'll discuss whether high passive earnings streams outweigh the capital depreciation and lots of other aspects to consider.

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The TRUTH About PII (Passive Income Investing) | High Yield Dividend Investing Canada

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About the Author: Richard Money

34 Comments

  1. I’ve got a portion in PI, portion in dividend stocks and portion in growth. This recession taught me that one strategy only can get you wrecked.

    1. @Jason Etherington Same here. My portfolio is holding up ok in 2022 because of VDY, EIT.UN and i plan to add HYLD come the new year. My other tech portfolio is wrecked lol.

    2. @Black Monk I hear you on the tech it has been stupid painful. I added some JEPI but see its now part of HYLD which I keep adding to. DCA all the way. Income makes that easier too. I like SCHD for the growth side and still get some divs.

  2. Excellent job. There is also the benefits Canadian eligible dividend stocks when it comes to taxation, and writing off interest on money borrowed to be used to invest in dividend income (although that can be very problematic with recent interest increases now).

  3. Nice work Brandon! I do follow Adriano’s PII strategy but I am in my early 50’s and semi-retired. It is an excellent source of income for sure. I do agree with you on the principle of having enough to put in to to use this strategy. I am not pulling out income yet as I am currently investing it back in while my wife is still working.

    I am just waiting to deploy roughly another $130,000 or so to be fully invested and am doing this as I buy the dip or find a better deal out there. I do have a few individual stocks but am moving to be all INCOME invested in the next year using ETF’s, Covered Calls and funds like HYLD as an example to build my monthly income up. I realize my situation would be different if I were in my 20’s or 30’s likely. Great job! Love your channel as well.

    1. @R D .. My strategy would likely reflect more of a combined asset approach including growth stocks and Div/growth stocks to go with the PII stuff.

  4. Thanks Brandon. I’ve spent the past several days learning about the pros and cons of covered call ETFs. This video and many of your others have been helpful.

  5. Hey Brandon, been watching your videos for a long while now, and I think this video was spot on to shed some light on the negative assumptions on PII. I am 22-years-old and personally have a mixed 60-40 growth/PII investing approach, and I think this suits me fine for now. This obviously will probably change as time goes on, you never know!

    1. Smart choice, the rising interest rates are pulling money out if the equities market into risk free assets. Growth stocks and PII stocks only go up if there is more and more money entering the market. The opposite of what’s happening in 2023.

  6. Pro #3 is my main reason to use PII. All my gains are “realized” every month. These gains are reinvested and the snowball continues to grow until the revenue stream is needed.

  7. Nice round up. One con that you missed is that the distributions of PII funds often do not grow, so the real income may shrink with inflation over the years. It is not a deal breaker, but it is something that needs to be planned for.

    1. @Alexander Kunin Exactly. That’s the best way to plan for it. But I’ve seen FIRE types who get so excited about living off a relatively small nest egg with a high yield investment that they don’t take inflation (or sometimes even taxes) into account.

  8. I think con #3 is actually a pro for PII vs dividend growth stocks where you need a one or two million dollar portfolio to retire.

  9. Good video. I invest in both growth and PII. With the PII strategy , some amount of reinvestment of your monthly income is necessary to help reduce the capital depreciation. And in most cases, those using this strategy also have another source of income that will cover their living expenses so they are able to reinvest a high percentage.

  10. This is a fantastic video. I’m 59, switched to PII two years ago. It’s refreshing to see you young dudes getting it 🙂 Adrian was the catalyst, Younger people should perhaps go for growth. I need steady income, I don’t want to sell in a down market, as you mention. No wife and no kids, no mortgage nor car payment, so capital depreciation doesn’t matter to me, I’ll be DEAD

  11. Very good video Brandon! I am now almost fully dedicated to PII but of course I am near my retirement. Another good point to some high yield income focused investments is the benefit they get from taxation. Sometimes much better than just interests and eligible dividends, so always a plus obviously.

  12. Thanks Brandon for making this video! Blossom is a great place to state your own investing strategy and not every investing strategy is a one size fits all. I like seeing different way of investing as they evolve. i was part of the passionate discussion in Blossom and stand by what i said

    I am a PII Investor, i dont care about capital gains/loss honestly, they arent realized until you sell them. i also enjoy averaging down on my ETFs or stocks. I intend to hold long term 5+ yrs and get a total return that benefits me better than a dividend growth or appreciation strategy. 

    Like anything in the investing world or life in general is due your own due diligence. Love your honest approach and look forward to more videos!

  13. Good Job on this video buddy! – LBS has destroyed XIC even if it “missed” 18 monthly dividends. Excellent point about focusing on total returns instead of stock price returns. Also thanks for the shout out! I say this all the time: Investing (for us), is not just about numbers or total return (for many people it is and that’s OK) its about using it to have a better quality of life and save time. Time is the most valuable asset in the end, not an extra 3 % return when i am 80 years old. Take care buddy! talk soon. P.S. no plans for kids that ship has sailed…. but we have over 55k kids to take care of now and growing everyday 🙂

    1. I think I was witness to the two of you guys becoming “buddies” over the past year…I wouldn’t be surprised if the Canadian in a T-shirt is the next person to comment here.. lol

    2. @Passive Income Investing so true.. I need to dive deeper into this strategy as it is foreign to me but intriguing.

  14. I think this was an excellent video, you seemed transparent and fair to both sides, and explained things clearly.

  15. Great video and very timely for my portfolio. I’m in my 50s and have 20-30 percent of my portfolio in PII holdings. I have yet to see if the pros outweigh the cons, but I’m definitely open to the idea. Adriano’s channel kind of blew my mind when I started hearing about all of these 10-plus percent yielding funds, but I think I I’ve slowly begun to understand the tradeoffs.

  16. Hey buddy, that was very, VERY well done. Brandon white board explained 😎 I hope this helps to stop some of the PII is bad, Growth investing is bad, DzgI is bad, only ‘this’ strategy is good nonsense that is out there. Every investment strategy has its pros and cons and risk with it. I think you captured it all in a relatively short video for how big a topic this is. 💪

  17. Another Con to PII is that taxes are due because you are paid dividends throughout the year – for us monthly.

    I use a hybrid style and semi-growth style of investing. The income my spouse and I generate is twice our monthly take-home pay that I generate from my current, well-paying job.

    I consider our dividend income as a test run as we plan to retire in a couple of years. We take the income generated and selectively reinvest the dividends, and we average about 8.75% dividends growth each year… So far, so good!

  18. I prefer to grow the dollar value, while receiving income – but tax efficiency also plays an important role – and I’m also retired / so a bank – telco and reit fulfils my needs – I’m also mortgage free and live a frugal low stress life – so that’s me in a nut shell – I enjoyed this type of lecture very much – thank you Brandon 😊

  19. I love income investing, i was a growth investor for 10 years then sold everything and transition to DIVO, JEPI, JEPQ and i am living the dream of passive income

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