For some, the yuletide season brings with it exciting times because they met their financial goals. For others, it’s disappointment. But the each new year is another chance to make amends. Financial security is something we hold most dear not just for ourselves, but for our family and loved ones.
Most Canadians need a paradigm shift in the way they think about money. It’s time to add smart work to hard work. Always actively working for money is similar to filling up a basket with water. It’d never get full. You’d find yourself in the vicious cycle of living from paycheck to paycheck. The fastest way to financial security is through passive income.
What is Passive Income?
Before you take advantage of the opportunities listed here, you should know the meaning of passive income so you don’t get in trouble with the law. Passive income is revenue that you earn from assets or businesses without active participation.
Eight times out of ten, passive income is taxable income according to Canadian law. It is therefore advisable to consult the services of a legal professional when looking to generate passive income.
Ideas abound on the internet as to various gimmicks to make money, but here, you’ll find 20 real passive income ideas that will improve your financial security in 2020 and beyond.
Let’s get started!
Passive Income Ideas for Canadians
Crowdfunded Real Estate
One of the best passive income strategies for 2020 is putting your money into property investments. There are a variety of cheap ways to invest money in real estate including:
Propnology is an investment trust that allows investors to assume low risk in multifamily housing units with a base entry-level of C$500 and a yield in the ballpark of 5% – 7%.
Crowdfunded property investment companies like RealStarter give you the chance to make money by investing as little as C$1500. There are many other eREIT with higher base entry fees with consistent dividends of up to 10% to investors since their inception.
Invest in Bonds
Though widely ignored, bond investments are among the best passive income ideas in Canada. Bonds remain a viable way to grow your wealth while you work at your 9 to 5. With as little as C$15, you can get an ROI of 5%, which isn’t bad for money that’s idling away in your bank account.
High Yield Savings
Just as with the prior passive income option, it’s imperative for your money to make you money. If you ever have to put money into a savings account, make sure it’s a high yield savings account. You won’t transform to David Thomson overnight, but it’s comfy to have a risk-free baseline north of 1%. A fixed deposit is another route to take, although the rates aren’t as attractive.
Real estate insurance trusts or REITS is the more conservative method of having passive income investments. REITs have the potential to bring you a higher return on your investment compared to bonds and stocks.
Dividend Growth Investments
Dividend growth investments are tried and trusted passive income strategies that allow the investor to concentrate on a dividend-paying stock with a rich pedigree of dividend growth. It is a low-risk method of growing passive income with an eye for the long-term.
Down payment on Property
It takes substantial cash reserves to put down 20% on a property or two, but if this is you, then it’s the right step to take to financial freedom. It is critical to forecast the expenses and income to project cash flow accurately. To cut down costs, you can assume the role of property manager rather than hiring one.
Write a book
e-Publishing companies like Amazon’s KDP and Apple’s iBooks make writing e-books a good passive income idea to make residual income. eBooks make good sales because of their low pricing. e-books are accessible to just about anyone who owns a Kindle, smartphone, PC, or tablet.
If you enroll your e-book on Amazon’s KDP program, your books will be read for free. However, you can make residual income based on the number of pages of your book that’s read by members of Amazon Prime and Kindle Unlimited. The members won’t pay you, but Amazon will.
Build an online course
If you have highly technical knowledge in a specialized niche, you can build an online course and teach interested students. For instance, quite a few people have an interest in Forex trading. If you know a lot about Forex, you can build Forex courses and teach others for a fee. The material you create to explain can also be sold as an e-book.
Make money doing activities you already do
If you enjoy giving out opinions, playing video games, taking pictures, or simply surfing on the internet, you can sign up with a host of websites that are willing to pay you to do what you love.
For a beginner, passive income may seem like a far off dream. Setting up a blog can turn that dream into reality with the right affiliate network. Google AdSense and Amazon Associates are two well-known companies that pay bloggers a commission for advertising their products. There are many other companies offering affiliate marketing opportunities such as:
- ShareASale Affiliates
- eBay Partners
- Shopify Affiliate Programme
- Rakuten Marketing Affiliates
- Lead pages Partner Program
- Affiliate Window (AWIN)
Exploit credit card sign-up offers
Many credit card institutions give out sign-up offers to entice new customers into opening an account with their company. As far as you aren’t blowing cash to meet the minimum balance, and the balance is paid promptly, you can maintain your credit score and earn thousands of dollars annually. Some travel credit cards offer as high as 100,000 points to newly opened accounts as long as spending requirements are within reasonable limits.
Exploit bank account promo offers
Messing with your credit score may be a step too far for some, but you can apply the passive income strategy towards bank account promo offers. There is a deluge of banks that are scrambling to offer you money just so you open an account with them. You can take advantage of these offers without the risk of messing up your credit score.
Lease out space in your home
You can monetize the extra space in your home by listing it on Airbnb. The average Canadian makes about C$420 every month letting out rooms in their homes for less than five nights in a month. Letting out your home is a way to pay off mortgage expenses without forking out extra money from your pocket.
Rent out your vehicles
If you have an extra car sitting in the garage, you can rent it out to companies like Turo, who will pay you for every hour it is in use. Passive income ideas like car rentals are picking up traction in Canada. You should explore this opportunity to grow your income.
Sign up with a Peer to Peer lending platform
Lending Loop is a P2P lending platform that is heavily backed by the Ontario government. It is one of the safest passive income ventures in Canada that is strictly regulated to meet international best practices. Investors receive returns when borrowers pay back money lent. And if you’re a borrower, you can rest assured no loan shark will be knocking on your door for their money.
Soft loans to family and friends or a home rehabber can grow your income. The interest rate can be agreed between parties and ratified into a contract. The downside to private lending is the acrimony that can arise where loans are not paid on time.
Dropshipping is a great passive income idea because it has no startup cost. With drop shipping, you connect the manufacturer to the consumer with your online store. It is easily scalable without any financial obligations on your part.
The best method to start drop-shipping is by signing up with the Shopify network or even getting someone to build your Woocommerce store. The profit you make will be heavily dependent on the type of product you’re selling and the volume of sales.
Not to be confused with cybersquatting, domain flipping involves buying a domain name to sell at a higher price. Because domain names are unique, there’s the probability of owning a domain that’s worth a significant sum. You can check out the availability of a domain name on GoDaddy
Rent out space on your vehicle for ads
One of the cheeky ways to make passive income is to let out space in your car for ads. Some companies are willing to pay hundreds of dollars to advertise on your vehicle, depending on the type of car you own. Apart from setup costs, there’s nothing else to do except drive around as you’d typically do in the course of your day.
Create an app
If you’re tech-savvy, with topnotch programming skills, then building an app can be your outlet to making passive income. With the right approach, you can make money from downloads as well as in-app purchases. Extensive research and marketing is required to put out an app that people want, and if you get that right, you can have a recurring stream of income that could last you a lifetime.