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What better way to earn money than to do so even when you’re not technically working? With passive income, you could make money while on vacation, out to dinner with friends, and even while sleeping. And the great thing is that there are several ways to earn passive income in Canada.
Let’s take a look at some creative ways to generate a passive income stream to maximize profits with minimal work.
“Passive income” is precisely what it sounds like: income that’s generated without much — if any — ongoing effort. With the right process in place, you can earn a steady stream of income without doing very much on a daily basis.
Instead, you simply check in on your system every so often to make sure it’s running smoothly, and make tweaks as required. All the hard work is typically done upfront when setting up your income-generating system, After that, you simply need to maintain your system.
There are several perks to earning a passive income, including the following:
There are so many different ways to earn a passive income in Canada. Here are a few ideas to help you get started.
One of the most basic and effortless ways to earn a passive income is to open a high-interest savings account. Granted, you won’t earn much, but you’ll still pocket a few bucks a month, depending on how much you’ve got deposited. Here are a few high-interest savings accounts and their current interest rates you can earn on your deposited funds:
|Best High-Interest Savings Accounts In Canada||Interest Rate|
|Neo Money Account||1.45%*|
|Tangerine Savings Account||0.10%|
|Alterna Bank High eSavings Account||1.5%|
|Oaken Savings Account||1.5%|
|EQ Bank Savings Account Plus||1.50%*|
|MAXA Financial High-Interest Savings Account||1.60%|
|Laurentian Bank Digital High-Interest Savings Account||1.5%|
*Interest is paid monthly and calculated daily on the total closing balance. Rates are subject to change without notice
There are several investment vehicles you can start investing in right away with just a few dollars. You can use registered or non-registered accounts such as TFSAs, RRSPs, RESPs, cash accounts, margin accounts and any other investment accounts to invest in various stocks, bonds, guaranteed investment certificates (GICs) and exchange-traded funds (ETFs).
While you can always call a broker to help you get started, you can use any number of online robo-advisors to start investing today. Robo-advisors allow you to invest according to your financial goals and risk tolerance for far lower fees than a traditional brokerage.
The following are just some of the more popular robo-advisors available to Canadian self-directed investors:
|Qtrade Direct Investing™||Learn More|
|CI Direct Investing||Learn More|
|RBC InvestEase||Learn More|
|Nest Wealth||Learn More|
|BMO Smartfolio||Learn More|
Real estate has long been a popular way for Canadians to invest and build wealth over time. And there are more ways than one to make money from real estate. While most real estate investments require significant capital upfront, there are some other ways that lower the barrier of entry for those who don’t have tens of thousands of dollars to invest.
Fixing and flipping involves purchasing a property that is priced low, renovating the property, then selling for a profit within a short period of time. The goal is to make sure you can sell the property for more than what the property cost for you to buy it, renovate it, and sell it. While this may sound simple, it requires a lot of research as renovations can cost a lot of money, and if you’re unable to sell the property for more than what you put in, you can incur a significant loss.
Renting out a property is a classic real estate investment strategy. When you rent out a space to a tenant, they’ll pay you rent every month while they live there. That money can then be used to help you cover the mortgage payments or simply provide some extra cash flow. To make this work, you’ll want to make sure you choose the right location and find good tenants.
Just be sure you’re prepared to be a landlord as there are certain responsibilities that come with renting to tenants. If not, you can spend a few extra bucks paying a property management company to do this job for you.
An easier and more affordable way to get into real estate investing is to invest in REITs, which are companies that own or operate properties that generate income. You don’t actually own any property, which means there’s no maintenance involved.
The profits earned are then distributed to all shareholders in the form of dividends. You can buy REITs just as you would buy a stock on major exchanges. REITs can also be added to your investment portfolio for diversification.
Instead of buying a property on your own — which requires a ton of capital upfront — you can still claim partial ownership through fractional ownership.
Addy and BuyProperly are two Canadian companies that crowdfund property purchases by attracting investors. You can claim your stake in a property using these platforms, and the amount you own is directly proportional to how much you invest.
If you’ve got a few hundred or thousand dollars to invest, you might consider lending it to those who need a loan. As an alternative to borrowing from a traditional lender, individuals can borrow money from regular people like you. This is known as “peer-to-peer” lending, and it can be a great way to earn interest on your capital.
Peer-to-peer lending platforms, such as Lending Loop, evaluate the risk for investors when they loan money to individuals and businesses and establish potential returns based on risk levels. The higher the risk, the higher the interest rate the borrower will be charged, which can lead to higher returns for you, the investor.
Why not earn a little money on purchases you’re already making? With cashback apps, that’s exactly what you’ll do.
Cashback apps give you rebates on purchases or coupons for an additional discount. You might also be able to earn points that you can redeem later on. This is a great way to earn extra cash with little to no effort.
Here are a few cash-back apps to consider:
If you own your home, you might have some extra space to rent out. Whether it’s the basement suite or an extra bedroom, renting out part of your home can be a great way to earn passive income. The rent you charge could even help you cover your mortgage payments.
But other than this traditional rental arrangement, there are other spaces you might want to consider renting out if you have them available to you:
Rather than renting out part of your home on a long-term lease, you might want to consider renting it out on a short-term basis when you’re not using it, such as when you’re on holidays. You can advertise your home on vacation rental sites like Airbnb.com to earn a few extra bucks.
If your home is located in a touristy location — such as near the waterfront or city center — or has features that travellers might like — like a pool or balcony with a view — you’ll have an easier time booking your home and charging a pretty penny for short-term stays.
Believe it or not, homeowners with swimming pools can earn a side income by letting others use their pool for a fee. In fact, you can earn as much as $100 an hour, depending on the size of the pool and the surrounding amenities.
You can use platforms like Swimply to advertise your pool for rent. Just be sure to take the necessary precautions, as allowing others to use your pool could come with potential risks that may expose you to litigation if someone is injured.
In city centers and suburbs, parking can be a real issue for many residents. The busier and more congested the area, the more problematic it can be for residents to access parking.
If you have an extra parking spot on your driveway or in your garage, you may be able to rent it out. You can charge by the hour in cases where parking is just needed for a few hours, or you can rent it out on a monthly basis for those who are looking for a spot to park overnight on a daily basis.
If you own a car, you could earn money just for driving around town with advertisements affixed to it. You literally don’t have to do anything except drive to wherever you are already going. The advertisements will do the work for you.
In fact, you could earn as much as $450 per month, depending on how much coverage is involved with the ads.
Some of the platforms that can help you get started advertising with your car include the following:
During times when you’re not using your vehicle, you could loan it out to someone to drive for a fee. Rather than rent out a car from a conventional rental company, people can rent your car directly from you.
Turo is a popular car-renting marketplace to consider. You can list your car for free on the platform, and earn anywhere from 65% to 90% of the trip price. You’ll also get insurance coverage and 24/7 roadside assistance.
In addition to the above-mentioned strategies to earn a passive income, there are other tactics you might want to consider, including the following.
If you have some writing chops and enjoy taking pen to paper, perhaps you might consider writing a book. It could be fiction or nonfiction, depending on your skills and interests.
And you don’t have to get your copy approved by a publisher, either. These days, you can easily and quickly publish an eBook and advertise it for sale on online platforms like Amazon.
The great thing about writing an eBook is that you create it once, then enjoy recurring sales. As long as you have some form of advertising in place, you can expect passive income from your book.
Just about everyone has some sort of skill, whether it’s gardening, drawing, advertising, fitness, writing, etc. Whatever skill or interest you may have, you may be able to create a course around it and sell it to those interested in learning this skill-set.
Once you’ve created your online course, you can market and sell it on platforms like Udemy, Teachable, or Thinkific. Again, once your course is created, you can enjoy residual income with every sale. You’ll just have to monitor your sales, which you can hire a virtual assistant to do for you.
Investing in cryptocurrencies has become incredibly popular among investors. But you don’t necessarily have to buy and sell Bitcoin, Ethereum, or another coin to make money from crypto. You can also mine it.
Mining crypto involves creating new digital currencies. You’ll need to invest in your own mining rig to mine digital coins, which can cost you a few thousand dollars to get started.
Once you have a mining computer or rig, you can create a wallet to store digital coins, then join a mining pool to connect with miners like yourself and combine resources to get more output. The coins created are then divided among users.
Since your device does all the work, you can enjoy a passive income.
If you use credit cards for the majority of your purchases, consider getting one that helps you earn points with every expenditure. The trick is to maximize these rewards and savings as much as possible. Before taking out a rewards-based credit card, consider the earnings rate and the types of retailers that earn you the highest rates.
For instance, if you tend to spend a lot of money at a specific grocery store chain, consider taking out a credit card that pays out a high earn rate to shop there. Then, you can redeem your points for free groceries and other goods.
Consider your strengths, available capital, interests, and the earning potential of different passive income streams before choosing one to invest in. You might start off with one, then gradually work your way up to multiple income streams, all of which can make you money without you putting too much work or effort into them.
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
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