I often get questions from people who are starting later than I did — maybe at 35, maybe even later — and they ask: “With my shorter time window, is something like XEQT still right for me?” In most cases, the answer is yes. Because the real question isn’t whether you can still hit some vague or ambiguous “retirement target” — it’s about making the best possible move today. You can’t change when you started, but you can still put your money where it has the best chance to work for you going forward. Where people often go wrong is looking at their timeline, realizing they’ll never hit the “standard” compounding target, and concluding the only option is to swing for the fences. That mindset leads to lottery-ticket bets, extreme risk, or pinning your hopes on a windfall. I’ve been there. I started buying BTC around $20k CAD, and crypto ended up being part of my ascent. A friend, @riggs, kept his money invested instead of paying down debt, and those investments appreciated enough to wipe out his balance faster than he otherwise could have. Those outcomes look smart in hindsight — but the truth is we just got lucky. For balance, I’ve also had close real-life friends — not random people on the internet — who saw five-figure losses during that same stretch, often in high-yield altcoins that looked promising at the time. Survivorship bias hides their stories, but they’re just as real. If I had bought right before a massive dip, I might be telling their story instead of mine. This same dynamic shows up in other strategies too. A common thesis I hear is, “I need steady cash flow for big expenses, so I’m in covered calls.” But tying big expenses to stock-market income doesn’t make the risk go away. A CC-based strategy doesn’t magically give you safe extra income — it’s the same exposure, just packaged differently. In fact, it’s not that different from what Riggs did, or from someone who borrows against their mortgage to invest. These approaches can work, but only if you’re honest about the risks. That’s why I push back when people assume they can retire just because their portfolio hits a certain yield, or when they say, “I’ll never reach a million, so I’ll just switch to income instead.” Changing strategies doesn’t change the math. Yield targets and payout numbers can feel comforting, but they don’t answer the real question: can your portfolio actually sustain you? This is why I agree with income investors that NAV erosion by itself doesn’t matter. What ultimately matters is whether the total value of your portfolio and the returns it produces are enough to carry your plan. That’s true whether you started at 25 or 45, whether you lean growth or income. The fundamentals don’t change. Portfolio value, total returns, and the rate you draw from them are what determine if your plan will last. Desperation or oversimplified strategies won’t bend that reality. Even if you’re starting later, the right move is still the same: make the best decision today, and let the numbers that actually matter do the work.
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36 Comments
Mr Financial
@mr.financial · 1yr
The power of influence is strong here Kar. Sound logic. Maths. Historical returns. Fundamental truths. The power of 'its this easy'. I've spoken to a few CFPs. Not one ever used the words covered call ETF in an entire conversation. It's interesting that the fund providers can't get the industry selling these products for them... influencers or cringe ads
Michael Conroy
@conroy119 · 1yr
Good insights, level headed as always. I'll push back a bit, sure NAV erosion doesnt matter if compensated by enough income. But all the available data points to these income focused high yields being unsustainable. There is a real lack of long term data, especially for bear markets. Its forever been agreed upon that its common knowledge that high yield funds, say above 7%, always come with risk. Red flags everywhere. So how on earth are you supposed to have any sort of garuntee on your income 15 years into retirement for example with a CC strategy?
Twenty-five And Invested
@25andinvested · 1yr
No amount of fancy strategies gets away from the total return... and the best chances of an appropriate total return
Ade O
@kingadey · 1yr
Well said, Kar! I like your gentle approach with the CC-based strategy. I do worry about younger investors following this approach without fully understanding the risks involved.
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