If you’re looking to elevate your lifestyle, enjoy greater financial freedom, and have a more flexible work-life balance, creating passive sources of income can be the answer you’re looking for.
One of the ways to create wealth is to have several income sources. Sixty-five per cent of millionaires have at least three streams of income, according to author and accountant Tom Corley.
Passive income is a type of earnings that requires minimal ongoing effort to maintain. It’s often seen as a way to achieve financial freedom, as it can provide a steady stream of revenue without the need for constant work or direct involvement.
However, building passive income streams typically requires an initial investment of time, money, or both to establish and grow the source of earnings.
Let’s explore some of the top sources of passive income in Canada. Here are some valuable insights and tips to help you design a passive income strategy you can start today.
DIVIDEND STOCKS
When you invest in dividend stocks, you buy shares in companies that pay out part of their earnings to shareholders like you. Pick companies with a strong history of paying decent dividends. Dividends are usually paid quarterly, giving you a nice, steady cash flow.
REAL ESTATE INVESTMENT TRUSTS (REITs)
REITs let you invest in income-producing properties without actually owning or managing them. They make money through rent and property appreciation and pay out dividends monthly.
A good way to research dividend stocks and REITs is by using stock screeners. You can filter the stocks based on specific criteria, such as dividend yield, dividend growth rate, market capitalization and payout ratio. Examples of stock screeners include Finviz and Yahoo Finance. Stock screeners usually have news sections about the stock so you can stay current with it.
BONDS AND FIXED-INCOME INVESTMENTS
These investments, like government or corporate bonds and Guaranteed Investment Certificates (GICs), pay you regular interest and return your principal when they mature. By building a diverse portfolio, you’ll get a predictable passive income with less risk.
RENTAL PROPERTIES
When you buy rental properties, you’re making money by renting them to tenants. You’ll get a steady stream of passive income through rent, and your property may even grow in value. You can choose to manage everything yourself or hire a property management company to take care of it.
ONLINE BUSINESSES
This category includes ventures like e-commerce stores and affiliate marketing websites. Once you’ve set up your online business, you can earn passive income through sales, ads, or commissions. It takes some effort to start, but the earning potential and flexibility can be worth it.
HIGH-INTEREST SAVINGS ACCOUNTS
These accounts, offered by banks and credit unions, pay you higher interest rates than regular savings accounts. Just deposit your money and watch your passive income grow through interest earnings while keeping your funds accessible and low-risk.
ROYALTIES
When you create something like a book, music, software, or patent and then license it to others, you’ll earn royalties. These are payments made each time your work is used or sold, giving you a nice source of passive income.
BLOGGING
When you start a blog, you’ll be writing about a topic you love and sharing your knowledge with others. As your blog gains traction, you can monetize it through ads, sponsored content, or affiliate marketing. It will take some time to build an audience, but a successful blog can provide a solid source of passive income. I started a Canadian personal finance blog several years ago that generates passive income for me.
ANNUITIES
Annuities are financial products from insurance companies that guarantee you a stream of income for a certain period or even for life. You can buy annuities with a lump-sum payment or a series of payments and choose between immediate or deferred options based on your needs.
EXCHANGE-TRADED FUNDS (ETFs)
ETFs are investment funds that hold a mix of stocks, bonds, or other assets. They trade on stock exchanges just like regular stocks. By investing in ETFs, you can easily diversify your portfolio and earn passive income through dividends and potential capital appreciation.
ROBO ADVISORS
These automated investment platforms use algorithms to build and manage a diversified portfolio for you based on your risk tolerance and financial goals. By investing with a robo-advisor, you’ll earn passive income through dividends, interest, and capital appreciation while benefiting from professional portfolio management and low fees.
VENDING MACHINES
If you own and operate vending machines, you’ll buy or lease machines, stock them with products, and take care of maintenance. As people purchase items from your machines, you’ll earn passive income from the sales.
YOUTUBE CHANNEL
Starting a YouTube channel means creating and sharing videos on a topic you’re passionate about. As your channel gains viewers and subscribers, you can monetize it through ads, sponsorships, or even affiliate marketing. It takes time and effort to grow, but a successful YouTube channel can generate a nice stream of passive income. I have a small YouTube channel that is still generating revenue on videos I made years ago.
STOCK PHOTOGRAPHY AND VIDEOGRAPHY
If you have a talent for photography or videography, you can sell your images or footage on stock photo and video platforms. Each time someone downloads or purchases your work, you’ll earn royalties, creating a passive income stream. It may require an initial effort to build your portfolio, but as your collection grows, so does your earning potential.
FINAL THOUGHTS
Passive income is a powerful tool that can truly transform your financial landscape, providing you with the freedom and flexibility to pursue your passions and live life on your terms. By taking advantage of the top sources of passive income in Canada, you’ll be well on your way to securing a brighter, more prosperous future.
Remember, the journey to financial independence is a marathon, not a sprint, and it requires dedication, patience, and smart decision-making.
Christopher Liew is a CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers on his Wealth Awesome website.
VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.
The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.
The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.
The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.
The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.
MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.
In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.
“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.
“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”
In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.
“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.
The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.
“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”
The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.
The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.
A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.
This report by The Canadian Press was first published Nov. 9, 2024.
The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.
Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.
Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.
Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.
“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.
“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”
Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.
“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.
Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.
“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”
But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.
Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.
“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.
Paddon said the initiative is a great idea, but she would like to have known more about it.
The legion also sells a larger collection of items at poppystore.ca.
This report by The Canadian Press was first published Nov. 9, 2024.
