Do you want to earn money while you sleep?If so, I have good news and bad news.The good news is that there are countless ways to earn a passive income.
The bad news is that there is no path to get rich quickly to passive income.You will have to invest your money or your time.
Create multiple passive income streams because many of the income ideas listed below are not guaranteed to last forever.Here are 14 different ways to make extra money in Canada in 2020:
1. Robo-advisor investments
As futuristic as the robo-advisor investment sounds, the way it works is simple and is suitable for both beginners and experienced investors.
Simply put, the way robo-advisors work is when you deposit money into their investment account, you'll invest in a low-commission portfolio of funds based on your risk tolerance.You'll also have access to consultants online or by phone if you have any questions.
Robo-investing is the perfect passive income solution because it allows you to deposit money and forget about it in the long run.
Your money will be automatically managed and rebalanced at a reduced rate.In the long run, due to compound returns, having lower fees can lead to much higher returns than a high-fee solution.
Questwealth has the lowest fees in Canada for a robo-advisor.Because of its very competitive rates, I believe it could outperform its competitors in the long run.You can try it out and get $10,000 managed for free if you open an account here.
2. Build your ETF portfolio
If you're a DIY type of investor, you can build your ETF portfolio and manage it with a reduced amount of time.
There are many resources on how to build an ETF portfolio.You can start by reading about how to start investing in Canada. You'll need to understand which asset allocation matches your goals and risk tolerance.
So if you want to learn more about ETFs, check out this post on the best ETFs in Canada.
Once you've trained yourself and figured out which ETFs you want to buy, the cheapest way to buy ETFs in Canada is to use a trading platform like Questrade that allows free ETF purchases.
3. Dividend shares
Dividend stocks can be a very effective way to earn passive income.It's easy to find a dividend stock that pays out between 3-5%.There are even stocks that pay dividends of 10-13%, but those are much riskier and usually not sustainable.
Dividends are not guaranteed and a company can cut dividends at any time.Your shares can also lose value and have all the risks of investing.
If a company has a long history of providing and increasing dividends, it could be a reliable dividend recipient if it continues to perform well.
I invest about 10% of my portfolio in stocks with dividends and the rest in ETFs.I used to have more in stock, but I found it taking too long.If you are unsure about dividend stocks, stick to ETFs to achieve diversification at a very low cost.
Offer for Wealthawesome.com readers: Get $50 in free trades when you open an account with Questrade here.
4. Writing a book or e-book
You don't have to write the next Harry Potter series to make money writing a book.The options on what you can write about are limitless.Nowadays, anyone can write a book and have it published on Amazon, via Kindle or a physical copy.
If you are not a fan of fiction, you can write non-fiction.If you find the right niche and can help solve someone's problem, you can write a book about it and people would be willing to pay for it.
People could buy your book for decades, and you'll get paid for every time it's sold.
5. Start a blog
If you start a successful blog with many loyal readers, the opportunities for making passive income are endless.Here are some ways you can make money starting a blog:
- Online Classifieds
- Affiliate Programs
- Sell an online course
- Release useful mobile software or app online
- Sponsored blog content
- Freelancing: While not passive, having a successful blog opens up opportunities for freelancing.
Depending on your niche, you can break down how much you can earn per page view.It can range between $0.01 and $0.20 per page view, but more likely it will end up between $0.02 and $0.07 per page view.This means that for every 10,000 page views, you can earn about $200 to $700.
For a good hosting platform for beginners, Bluehost is very easy to set up.Siteground is the hosting provider that Wealth Awesome runs on, and it's useful when you start getting more visitors.
6. Outsource your work
Outsourcing work can be useful for realizing passive income for entrepreneurs.
There have been many freelancers who built a reliable business and reputation as a one-person store, then turned into a full-fledged agency with multiple outsourced workers working for them.
For example, suppose you are a freelance web developer.Build your business to the point where you're getting more work than you can handle.
At this point, you can start hiring and training workers, online or in person, to help you with your work.This will free up more time to add more projects and increase revenue.
I have met many people who have created agencies in this way and supervise their workers and only work 10-20 hours a week.There are countless fields where this could work, such as accounting, digital marketing, social media managers, or virtual assistants to name a few.
7. Passive interest with a high-interest savings account
Sometimes, boring passive income is your best bet.If you know yourself well and know that you absolutely don't want to lose money on your investments, a high-interest savings account (HISA) could be an excellent choice for earning an interest expense income.
I use HESA if I know I will need my money in the next period of one or two years.This ensures that I will have the funds once I need them.
You won't earn as high a return in the long run as investing.You can get between 2-3% interest on your money, which will more or less keep up with inflation, which means that the real value of your money doesn't shrink much.
For long-term investing, I like to stick to dividend stocks or ETFs, and in the short term, I will use a HISA to have my money readily available.I use EQ Bank which has a current savings rate of 1.50%.
8. Airbnb Rental
Airbnb is a revolutionary company.You can take your house and turn it into a money-making machine.
The best part is Airbnb's flexibility.You can rent extra rooms.You can rent your whole house.You can rent a basement.The possibilities are endless.You can find short-term or long-term tenants.If you know you're going on a weekend trip, you can rent your property.
The liability insurance provided by Airbnb protects you from any bad tenants.
When I started my Airbnb property, I lived there and at the same time rented Airbnb to have the experience of how to properly manage it.It is now rented full time and I have set it up so that it takes almost no time to deal with.
9. Rent your car on Turo
You've probably heard that owning a car is the worst investment you can make because it's a depreciating asset.Well, now you can turn it into a resource for making money with Turo.
Turo is like Airbnb, but for your vehicle instead of your home.You can rent your car while not in use.Turo is currently only available in Alberta, Nova Scotia, Ontario and Quebec.
10. Sell physical products online
There are many ways to sell products online.Here are some of them:
- Dropshipping – You can sell a product without ever keeping any physical inventory, usually done on Amazon.While it's a lower risk because you don't buy any upfront inventory, there are also lower margins due to all the competition.
- Amazon Wholesale: You can buy items in bulk and resell them online.
- Private labeling: You can order products from a Chinese supplier like Alibaba and label them with your brand.
- Create your own product: design and manufacture your product from scratch.Then sell them on a platform like Shopify, where you can easily create an online store.You would need some technical knowledge and build connections in manufacturing and commit a lot of money upfront.
11. Create an online course
Do you think you know a lot about a topic and want to teach others?A great way to earn a passive income is to create online courses.You can start creating some to practice and post them on Youtube to get started.Then, you can try to release them on paid platforms like Udemy or Skillshare.
It will take a long commitment upfront, but if you can release some successful courses, you can pay yourself for years to come.
12. Become a YouTuber
Have you ever dreamed of becoming a movie star?If you love being in front of a camera, becoming a YouTuber could be your path to passive income.
If there's a topic you're passionate about, you can create a YouTube series about it and start attracting ad revenue and sponsors.If you become famous, you may start charging for appearances.
13. Mobile Apps
If you know how to code, creating a mobile app can be a way to earn liabilities without having to pay anything.
If you don't know how to code, you can hire someone to help you create the mobile app.Hiring someone can become very expensive since mobile app developers are in high demand and expensive.
14. Launch a startup
Do you have what it takes to be the next Mark Zuckerberg?Building a successful startup is one of the most profitable but also the riskiest and most time-consuming ways to create a passive income stream.
Having a great idea and being able to realize it is critical to success.But after successfully starting, you can start generating passive income.
If you want to earn passive income and earn extra money in 2021, it will take hard work or money, but it is achievable for anyone.The key is to experiment and continue with the things that work.
The other way to see an increase in your bank account every month is to save money in simple ways.
For example, as a constant traveler, there were other things I reduced on such as spending less on bank fees and not having fees on foreign currency transactions.
Hopefully, this list has given you some good ideas to start making a passive income today.If you're new to investing and want to learn, check out another blog post on how to start investing in Canada.