Let’s be honest that in this time of the pandemic, everyone has taken a toll financially one way or the other way. Many people have lost their job, many are struggling to meet their ends meet, and many have also faced salary drops. In such situations earning extra money is always welcomed. Even if you have a stable income it is good to create a passive income. It can be helpful to fund your dreams or even to start something on your own. But the question is how to create passive income? If you are also wondering the same, I have got you covered. Let’s get started.
Read: Understanding Guaranteed Income Supplement (GIS) Canada
Top 10 Ideas for How to Create Passive Income
This is the income that you get apart from your main job in order to save for your retirement or just to create more wealth. Here are the top 10 ideas that can help you meet this goal.
1. The Rental Income
This business can be a little bit tricky with the COVID-19 pandemic as a lot of people cannot afford to rent a house anymore. But if you have an extra place and you want to make use of the same, renting it is always a good idea. It can also help you cover your mortgage loan. If you are paying a mortgage on your place for $3,000 and if you’re renting the place for $8000, your profit is $5000 which is a really good start when you are trying to learn how to create passive income.
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2. The Flipping Business
This idea involves you buying an item from Amazon or eBay at a bulk discount and repackaging and reselling it by changing the price or providing some value added services. The price difference here is what you will earn. For example, if you are buying a watch for $10 and if you are selling it for $15 after deducting the shipping cost, the rest is the profit.
The main thing here is to find products that you can resale and get customers on board with you. This strategy would require you to pay more attention and effort because it’s hard to find products from which you can take advantage of price discrepancies.
3. Sell Products Related to Education
When you educate people you add some value to their life whether it’s about teaching them how to bake a cake or teaching how to write a blog. You can sell such services through e-books or videos. Different platforms such as Coursera, Skillshare, etc. are good options to sell your course. You can also start building your audience by providing them with some free goodies and once you have caught their attention and interest, you can start charging them little by little. This is a great passive income strategy.
Read: Tax For Self-Employed In Canada: How Much To Set Aside For CPP & EI?
4. Try your hand at affiliate marketing
When you promote goods and services of a third party, it is called affiliate marketing. You may have seen a lot of influences or celebrities endorsing products of various brands. It is basically affiliate marketing. When people click on the link provided by you, you’re gonna get a percentage of it as a commission which can be anywhere from 3% to 25%. It is basically you are helping someone and getting paid in return.
5. Buy Stocks that Pays a Dividend
This is a bit of a risky passive income strategy because it involves equity market investment and if you are a noob, then you would need an understanding of the financial market before diving in. When you buy a stock that pays a regular dividend or higher dividend, it increases your income bi-annually or yearly depending on how many times the company pays the dividend.
The challenging part here is to select a stock that falls under your risk and return appetite. You can also consider investing in Exchange Traded Funds (ETFs) that invest in not only stocks but also in bonds and commodities. The risk factor is high here and thus you should consult an expert before investing.
Read: How Much Money Do You Need to Save for Retirement in Canada?
6. Real Estate Investment Trusts (REITs)
This is similar to investing in real estate but with lesser money. If you go out to buy a piece of land, it is going to cost you thousands of dollars but when you invest in REITs, it gives you the same advantage of investing in real estate but it works like ETFs.
REITs invest in various real estate properties and make units that are sold to investors. As the price of real estate increases, investors get returns just like dividends from stocks. Though you have to be patient and think of it as a long-term passive income strategy.
7. Try Peer to Peer Lending
This is an amazing option when you are learning to create passive income. Here, you give money to the one in need, and in return, you get interest rate income. There are third-party applications such as LendingClub or Prosper that lets you loan money to people and you get paid every month. It is just like you giving a loan to someone but more in an unconventional way.
Read: How To Pay Off Credit Card Debt When You Have No Idea Where to Start!
8. Make Your Own Mobile Application
You can easily learn to make an app on educational platforms such as Udemy or Skillshare. It will not only give you passive income but will also teach you something new. You can also add advertisements or put a minimum charge when people download the app. You can also create a gaming app that may attract a lot of youth. The risk factor here is that a lot of time such apps have short lives and people easily get bored. So your stream of income can be stopped.
9. High yield Savings Account or Certificate of Deposits
CDs or a savings account is also a good option for creating a passive income. CDs known as Certificates of Deposits or in an online saving account, you can earn good interest on your idle money. Though you need to research which bank provides the highest interest rate on CDs or savings accounts and what are the terms and conditions!
Also, look for banks that pay compounding interest instead of simple interest so that you can get interested on your interest. These banks are also guaranteed by the FDIC and thus you can rest assured of your money.
Read: How to Open A CRA Account? (Updated 2021)
10. Car Advertisement
You don’t have to make any effort in this way to earn the money. All you have to do is get in touch with an advertising agency and based on your driving appetite and habits like how many hours you drive, where you drive, you will get an advertisement printed on your car. So whenever you are out and you drive your car, people are going to see it. And that will lead you to earn money. Though be aware of who you are choosing to advertise because a lot of companies can be a fraud and you may indirectly be advertising for them.
Read: 9 Crucial Steps To Finding & Buying Your First Home
The Bottom Line
It is a debatable topic that how many passive income streams should you have once you learn how to create passive income. The answer can be different because no one wears the same shoe size around the world, right?
The factors involved here are – how financially secure you are, how much time you have, what tools you like, a laptop or mobile phone, a car, etc. Based on that, you should make a decision of how much you can handle as additional work and still, have a good and healthy work-life balance. So, hustle hard and live your life!
Read: Why Is Investing Important? 7 Reasons For You to Know!
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