Income Investing 101: Do Investors in Their 20s and 30s Need Income?

by | Mar 31, 2026

Income Investing 101: Do Younger Investors Need Income?

We spent the past couple of months talking about income investing.

Now, let’s explore the answer to the question that is at the heart of this article. The answer is more nuanced than a “Yes” or “No”. Let’s take this journey together to uncover those nuances. After all, most things in life work that way. In the end, I hope that you, the reader, can come away with something valuable. Let’s get started.

What Does Income Investing Do?

We’ve already talked about what income investing is – it is what it says, which is investing in such a way that you earn a regular stream of income. Most people take that to mean interest from bonds or savings accounts or GICs, but it is equally true if you invest in investment properties that provide rental income, or dividend stocks, or covered call ETFs.

The other interesting question is, what does getting income from investments actually do. To my mind, having that additional stream of income is insurance – if for whatever reason I lose my primary source of income, then this stream can help supplement that income loss. For others it could mean freedom. For many people, this could be a primary source of income, meaning they use it to pay their bills. Or it could provide a sense of stability and predictability in increasingly uncertain times.

Tax is another factor to consider. A young investor can utilize a Tax-Free Savings Account (TFSA)to make the most of income investing. The income they draw from their investments is completely tax-free, unlike the taxed income from a job. Of course, we recommend that our readers speak to a tax professional to refine their financial strategy.

Younger Investors Want Growth – Sometimes

One key issue that is oftentimes missing in simple black or white questions like, “Do younger investors need income” is the question of why. Put another way, what is the younger investor investing for. If she wants to invest in her 20s for retirement in her 70s, then absolutely, she should focus on growth. But if she is investing to buy a house in the next 12-36 months, it would be foolish to put all her money into high risk investments.

Which brings us to another key issue – risk. Investors have to consider a number of factors that go into their risk assessments, including their financial goals, comfort during downturns, life stages, previous experience with risk, investment knowledge, and many other factors. There are several online questionnaires that can help with this, such as this one from the Government of Canada, or this one from Canadian Investment Regulatory Organization. If someone is not comfortable with risk, pushing them towards a 100% growth portfolio might not be the best idea.

Gen Z Investors Want Passive Income

Fact of the matter is that younger investors, especially Gen Z, seem to want passive income. A 2023 BMO survey found that Gen Z (ages 18 to 24) and Millennials (ages 25 to 44) are most interested in learning how to grow the money they have and diversify their sources of income.

In 2025, a Globe and Mail article reiterated the point, noting that passive income is particularly in vogue, partly stoked by social-media “finfluencers” for a subset of millennial and Gen-Z Canadians trying to get ahead in an economy that increasingly feels stacked against them. However, the article warned that, “Financial advisers and passive income proponents say that those hoping for a shortcut to wealth generation may find themselves disappointed: There’s a whole lot of active work, time and investment that goes into creating passive income.”

Covered Call ETFs: Passive Income That’s Actually Passive

There is an option that investors can consider getting both growth and income in their portfolios – Covered Call Exchange Traded Funds (ETFs). Covered Call ETFs aim to generate income for investors through owning a portfolio of stocks and then selling call options on those stocks and collecting the option premiums which are paid out to investors as income. You can find out more about covered calls here.

Harvest Portfolios has a wide range of covered call ETFs for investors of all stripes. Harvest income ETFs have  generated over $2.5 Billion in total cash distributions since inception. We have equity portfolios that focus on established businesses, leading themes, and secular trends across sectors, combined with an active covered call strategy to provide a dual approach of generating high monthly income and long-term capital growth. Whether you prefer Canadian single stocks, or US, balanced asset allocation funds, or diversified income ones, there’s something for everyone.

Disclaimer

This communication should not be considered as advice and/or a recommendation to purchase or sell the mentioned securities or used to engage in personal investment strategies. Tax, investment and all other decisions should be made with guidance from a qualified professional.

The information is meant to provide general information for educational purposes. Any security mentioned herein is for illustration purposes and should not be taken as an invitation to purchase or sell such security.

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