Unlock Financial Security with Permanent Interest Bearing Shares

Permanent interest bearing shares (PIBS) offer investors a unique blend of income stability and capital appreciation potential. These shares provide regular interest payments, similar to bonds, but with the added benefit of potential equity upside.

Key Features of PIBS

Benefits of Investing in PIBS

Steady Income Stream:

PIBS provide a stable source of income, as the interest payments are fixed and guaranteed unless the company defaults. This makes them an attractive investment for those seeking regular cash flow.

| Historical PIBS Interest Rates |
|---|---|
| Bank of Canada: 0.25% |
| National Bank of Canada: 0.4% |

Potential for Capital Appreciation:

While PIBS primarily provide interest income, they also offer the potential for capital appreciation. If the company's stock price rises, the value of the PIBS will likely follow suit.

| Historical PIBS Market Returns |
|---|---|
| S&P 500 Index: 10% (2022) |
| Bloomberg Barclays U.S. Aggregate Bond Index: 5% (2022) |

Success Stories with PIBS

Example 1:

• Benefit: A retiree looking for a steady income stream invested in PIBS and generated a consistent 5% annual return.
• How to: Consult with a financial advisor to determine the right PIBS investment based on your income goals.

Example 2:

• Benefit: A young investor purchased PIBS in a growth company and benefited from a 15% capital gain when the company's stock price increased.
• How to: Research companies with strong fundamentals and growth potential to identify potentially rewarding PIBS investments.

Example 3:

• Benefit: A business owner took out a loan to expand their operations and used PIBS as collateral to secure a lower interest rate.
• How to: Leverage PIBS as a financing mechanism to access capital at more favorable terms.

Effective Strategies for Investing in PIBS

1. Diversify Your Portfolio: Allocate a portion of your portfolio to PIBS to reduce overall risk and enhance diversification.
2. Consider the Company's Creditworthiness: Invest in PIBS issued by companies with strong financial stability to minimize default risk.
3. Set Realistic Expectations: Understand that PIBS typically offer lower returns than stocks and higher returns than bonds.
4. Seek Professional Advice: Consult with a financial advisor who specializes in PIBS to make informed investment decisions.

Common Mistakes to Avoid

1. Investing Without Understanding: Do not invest in PIBS without fully understanding their features and risks.
2. Overinvesting in PIBS: Limit your PIBS investments to a reasonable portion of your portfolio to maintain a balanced asset allocation.
3. Failing to Monitor: Regularly review your PIBS investments to assess performance and make adjustments as needed.

FAQs About Permanent Interest Bearing Shares

1. What is the minimum investment required to purchase PIBS?
   Answer: The minimum investment amount varies depending on the PIBS issuer.
2. Are PIBS taxed differently than other investments?
   Answer: Interest income from PIBS is typically taxed as ordinary income.
3. What are the risks associated with PIBS?
   Answer: PIBS carry interest rate risk, credit risk, and market risk.