Considering Income (2)

After a lot of thinking (and probably overthinking), I’ve finally settled on an income sleeve that I’ll build over time, but a bit more aggressively up front.

It probably doesn’t look like many of the passive income portfolios on Blossom. I don’t own a collection of high yield covered call ETFs or single stock option ETFs, and that’s intentional. My goal isn’t to maximize income today, it’s to build a portfolio that can produce a meaningful and growing income stream over the years.

The sleeve has an estimated yield of ruffly 4.8%, with what I hope is a good balance of current income, dividend growth, and diversification.

Current target allocations:

* $BAM (14%) – The long term compounder. Exceptional capital allocation and dividend growth.
* $CAR-UN (13%) – High quality residential REIT with resilient rental demand and the potential for rental income and distributions to grow over time.
* $POW (13%) – Financial powerhouse with a growing dividend and diversified earnings.
* $EIF (11%) – One of Canada’s better dividend growth stories with an attractive starting yield.
* $TGRE (10%) – Global REIT exposure to diversify beyond Canadian real estate.
* $XDG (10%) – Global dividend growers to complement my Canadian holdings.
* $FRU (8%) – Royalty model providing attractive income with minimal operating risk.
* $ZPR (7%) – Preferred shares for stable income and diversification.
* $USCC (6%) – U.S. covered call strategy to enhance income while maintaining equity exposure.
* $WCP (4%) – Energy exposure backed by disciplined capital allocation and shareholder returns.
* $DIV (2%) – Diversified royalties to add another source of monthly income.
* $BEP-UN (2%) – Renewable infrastructure with long term contracted cash flows.

This isn’t meant to be the highest yielding income portfolio on Blossom. It’s designed to complement the rest of my portfolio, which is already tilted toward factor investing and quality compounders.

Will it be perfect? Absolutely not. Investing never offers a perfect answer. But at some point you have to stop optimizing spreadsheets and start investing.

My hope is that, over time, this sleeve grows into something meaningful for the people that really matter to me in my life. If it can help offset even a small part of the cost of living on Van. Island while continuing to grow its income over the years, I’ll consider it a success.

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32 Comments

Michael Conroy@conroy119 · 5d

A much more traditional "income" approach.

My initial impression is "wow thats a lot of funds for a small sleeve". Many of which sre indicisl stock/REIT picks.

Im not sure how small the sleeve is. But 2% allocation to a sleeve might mean a 0.1% overall allocation or something.

Just an observation on the complexity. As someone who has been down a similar dividend growth rabbit hole years ago.

Le Corb@lecorb · 5d

@ian_s is this income sleeve in your non-registered account?

Many of your picks do not qualify for the eligible dividend tax credit which is highly valuable. Eligible dividend income in a non-registered account is an incredible value for Canadians. Your dividends are essentially tax free up to around $60k in dividends.

Another point, long term most regret ever holding REITs and Preferred Share ETFs because they don’t ever meaningfully appreciate in capital and neither do their dividends. They are better for shorter time frames or those who are highly risk averse and don’t mind the loss of capital and yield to inflation.

If you’re going the path of dividends, there’s some great content to support your thinking I can reference for you.

J E J@kingdolla · 5d

Just a couple of notes - BAM holds interest in BEP.UN. For income, having both is great, but pressure on one is most likely felt by the other.
Also, BEP.UN distributions may be exposed to foreign withholding tax, just to keep in mind.
I'm thinking of using Brookfield assets for my income in my retirement. I will monitor your progress. Good luck!

Robert S@mookie88 · 4dEdited

Here is one with the 4.8% yield, 5 are distributions growing above 15%. SPFD is for increased yield & defense, the PMZ.un is there for more TR.

Clantosa

@clantosa · 5d

What account are you holding this in? Have you considered taxes?

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