How We Get Paid $233/Day From Our Investments

Why I stopped investing the way 90% of people do and no longer rely on work to make us money.

On my 19th birthday, I spent part of the day at a bank appointment that I had been looking forward to for YEARS.

Why? Well, for one, I could get my own credit card. But that wasn’t what I was really there for.

I was there to dump my hard earned money from my job as a cashier at IKEA into my very first mutual fund.

I loved the idea that money could grow if you knew what to do with it. Little did I know that I happened to put about $20,000 into a tax free savings account at the end of 2008 and would ride price appreciation up to $34,000 in just a few years.

It was starting to make sense - buy a stock or put money in a mutual fund at $10 and wait until it grew to $11. Then $12 and so forth.

But one thing I could never figure out - if you take your money out, didn’t that stop the compounding effect?

Or maybe even more important, how the heck do you know WHEN to take it out?

Do you leave it forever? Take some out when it’s up a bit? But what about when I needed the cash to buy my first town house? What if the market was DOWN when I needed to cash out?

This was the extent of my investing knowledge until I was 31 years old - kind of a “put it in and pray” style of investing.

I knew that if I left the money alone until 65 (or longer!?), I’d be a millionaire and be able to cash in and retire…

…but who wants to wait until 65 years old to quit your job and really start LIVING?

Why did I want to spend my best, most energized, healthy years glued to a computer in the hopes that my husband, my kids and I would all still be around to ENJOY the remaining years of my life?

Screw that.

Enter passive income investing. (Or, PII as I’d come to call it.)

PII. Instead of investing for the growth of a fund or stock in the future, I learned how to invest for income today.

Instead of waiting for $100 to grow to $110, I started selectively choosing funds that gave me an 8-12% return in cash, every single year.

The market goes up, I earn.

The market goes down, I earn.

The market holds steady, I earn.

With a bit of strategy, grit and scrappiness, Flynn (my husband) and I were able to figure out how to earn $233 per DAY, or just over $85,000 per year from this PII strategy.

That means every single month, we get an average cash distribution of $7,086.98 deposited into our account to spend however we’d like.

We used this monthly income to retire early and have the option to choose to work or not because this distribution fully covered our monthly living expenses (~$5,900.00/mo).

That’s why at 33 we became financially independent, scaled way back on the amount of work we do and are choosing to travel with our family.

All instead of waiting for our money to grow in hopes that we can retire "one day”.

Here is an example of how it works:

We own a fund with the ticker symbol HDIV.TO on the Canadian stock market.

It’s an ETF, but you can just think of this as a giant basket with a bunch of balls in it.

Each ball is made up of different funds.

This is cool, because instead of just picking one stock and praying it grows or hoping that it doesn’t drop in price, my risk is spread out among all of these other stocks inside the basket.

Here’s where we make our money:

For every 1 share of HDIV.TO that we own, they give us a “thank you” payment for investing in their fund. For each share we own, they pay us $2.05 per year, or $0.171 per month.

We own 3147 shares, which means each month, we earn $538.14 in what are called “distributions”, or “thank you for investing!” payments.

It started small. Our first month we only made $185.17.

Since January 2021, we’ve earned (and mostly reinvested to compound!) $182,194.62 in distribution payments.

Wild, because we didn’t have to go to work to earn a single dollar of that.

Critics of PII that favour index funds and investing for long term growth will happily point out that by age 65, they’ll have amassed more money and a larger net worth than we will.

To that, we agree. You will make more with buying, holding and investing for growth.

But for me? You can’t buy back time with your kids.

You can’t buy back your health or your youth.

You can’t buy back time with your partner. Missed trips. Hours spent stressing over a job.

They can keep their bigger pile of money.

I’ll be over here, living slowly, soaking up every moment with my family and living life financially independent and completely on my own terms.

Work optional at 35.

That life sounds good to me.

Tanessa