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15 smart passive income ideas in Canada this 2024

Passive income ideas aren’t just a dream; they can be a tangible path to financial security. From online side hustles and real estate investments to alternative assets like mortgage funds, explore 15 diverse passive income ideas in Canada and jumpstart your way to earning more in 2024. 

Amur Capital offers a simple way to preserve your capital and receive a stable and consistent return. Contact us now, and we’ll help you start in a few minutes.  

Key Takeaways:  

  1. Passive income is regular income earned without substantial effort to maintain it. 
  2. There are various ways to generate passive income in Canada, from investment-based ideas like dividend stocks and mortgage funds to creativity-based options such as blogs and digital products. 
  3. Amur Capital offers a simple way to earn a stable passive income stream by investing in Mortgage Investment Corporations (MICs). 

What is passive income?  

Passive income is regular income derived beyond the typical 9 to 5 job that requires minimal effort to maintain. It includes earnings from capital properties such as real estate property (rental homes and cottages), investments (dividend-paying stocks and bond funds), and personal assets (digital products). 

Unlike active income, which requires active work, e.g. putting in daily hours to get paid, passive income only needs an upfront investment – time, energy, or money – and then some minimal labour along the way. For example, earning dividends from owning a dividend-paying stock requires an initial investment of money with an option to increase the earning potential by reinvesting in more shares later on. 

It’s important to remember that passive income is not: 

  • A second job: Passive income is about creating a consistent income stream without needing a lot of daily work. A second job would still require you to be materially involved in earning wages, just like your primary job. 
  • Non-income-producing assets: Passive income investments should give you consistent returns. Non-income-producing assets such as art, antiques, and cryptocurrencies are often used as a store of value instead, which means they can appreciate in value over time. To generate income, you still have to sell the assets. 

How do you make passive income in Canada?

There are plenty of ways to generate passive income. Some require little effort; others need substantial resources to start successfully. Regardless of what passive income ideas you choose, make sure that you plan your investments accordingly, leveraging your skills and time to maximize your returns. 

15 passive income ideas in Canada to earn more

Investment-based passive income ideas

Dividend stocks

Companies issue stocks to raise capital for their operations. When you purchase these stocks, you become a company shareholder. Some companies that issue these stocks share their profits with their shareholders as dividends, which is based on a set price per share. This means that the more shares you own, the more dividends you’ll receive. Dividends may be paid out monthly, quarterly, or annually.  

It’s worth noting that not all dividend stocks are created equal. Some may offer high dividend yields in more volatile industries, while others prioritize stability and consistent payouts. The key is to evaluate the right company and stocks to invest in. 

Bonds

Rather than having stake ownership in a company, bonds allow you to lend money to companies, including the federal government, and earn regular interest income. When the bond becomes due, the issuer is supposed to pay back the face value of the bond in full, including the interest. 

Bonds may give you lower returns than stocks. Still, they can provide a more predictable investment portfolio income than the latter. 

Money market funds 

Money market funds are mutual funds that invest in highly liquid securities, such as cash, cash equivalents, and certificates of deposits (CDs). Like high-yield savings accounts, money market funds can generate high-interest earnings. Depending on the types of securities the fund invests in, income generated from money market funds is taxable or tax-exempt. 

Real Estate Investment Trusts (REITs) 

Real Estate Investment Trusts (REITs) are considered a passive way of real estate investing. REITs are like mutual funds wherein investors pool their money to purchase income-generating properties such as warehouses, apartment complexes, and hotels. Most REITs are publicly traded like stocks. 

Mortgage Investment Corporations (MICs) 

Mortgage Investment Corporations (MICs) are a special type of investment vehicle that lump investors’ funds together to invest in a pool of mortgages. The managing entity generates income from the mortgage payments, and a part of the income is passed on to investors as dividends.  

With Amur Capital MICs, investors can get consistent and stable returns from mortgages secured by Canadian real estate. Since the dividends are paid out monthly, investors can use the funds as a source of consistent passive income. Each MIC has its dedicated fund managers who manage and curate the portfolio to include different mortgage types across urban locations in Canada, priming your investment for steady growth and resilience in any market conditions. 

Interest-based passive income ideas  

High-yield savings accounts 

Most Canadian banks offer high-interest savings accounts with higher interest rates (around 1 to 2 percent) than traditional savings accounts. These accounts are insured by the Canada Deposit Insurance Corporation (CDIC) for up to $100,000 per account.  

While a high-interest savings account is considered one of the safest passive income sources, you can quickly lose the purchasing power of your money due to inflation if rates are too low.  

Certificate of Deposits (CDs) 

Similar to high-yield savings accounts, certificates of deposit (CDs) offer higher interest rates than regular savings accounts. However, they have fixed interest rates, unlike the former. Since CDs require you to lock up your money for a limited time, generating passive income can be done by purchasing several CDs with staggering maturity dates, also known as CD laddering. 

Property-based passive income ideas  

Rental property (home, parking spaces) 

To earn passive income through rental properties, you either buy a dedicated property to rent out or use your existing home or parking space. Either way, you must put up more work initially, ranging from small renovations to regular upkeeping. But once established, you’ll have an asset capable of giving you short or long-term passive income. 

Equipment rental 

Like a rental property, earning passive income through equipment rental involves leasing equipment such as machinery and tools, photography cameras and lights, or other assets to individuals or businesses in exchange for regular payments. This can be a lucrative way to generate passive income, as the equipment can continue to generate revenue while requiring minimal effort on the owner’s part. 

Vehicle rental 

Vehicle rental can work as a source of passive income by utilizing car-sharing platforms, which do all the booking, refueling, payouts, and customer support for you. An added benefit to vehicle rental is the flexibility of it; you can share your car and earn money while vacationing or whenever you don’t need to drive it. 

Creative passive income ideas  

Digital products 

Whether it’s e-books, online courses, or mobile apps, digital products are an excellent passive income stream because they generate revenue with minimal ongoing effort. Once the initial work of creating and marketing the digital product is done, it can continue to bring in income while you focus on other projects or activities. 

Blog or YouTube channel 

Similar to creating digital products, you have to do a lot of frontload work in blogging and starting a YouTube channel. To succeed in both, you must have interesting content to share and build authority in what you do. Affiliate sales, sponsorships, and ad income are some passive income streams that can come from this method. 

Licensing intellectual property 

Licensing intellectual property is another powerful way to create passive income. Intellectual property (IP) such as patents, trademarks, copyrights, and trade secrets can be licensed to third parties for use in various ways. 

Licensing IP allows you to earn passive income without actively producing or selling products. For example, copyrighted works like music, books, or software can be licensed to others in exchange for licensing fees or royalties. 

Alternative investment passive income ideas

Peer-to-Peer lending 

Peer-to-peer lending is a personal loan made by an individual (peer) to a borrower (another peer) through a third-party platform. With peer-to-peer lending, you’ll earn passive income through the interest being paid back. However, you’ll also risk losing your investment if the borrower defaults on their payments. 

Private Equity 

Private equity refers to investments in companies to acquire ownership stakes, build them up to increase their value, and ultimately sell the company at a profit. Accredited investors who meet specific income or net worth requirements are often the primary participants in private equity due to regulatory restrictions. Private equity can be a source of passive income through dividends or distributions, depending on the company in which it is invested. 

Benefits of passive income 

The primary benefit of passive income is to supplement your other earnings. Other benefits include: 

  • Scalability: While passive income streams require an initial investment, they can grow without proportional increases in time or effort, offering the potential for increased earnings. 
  • Resilience: Multiple passive income streams can make you less vulnerable to economic downturns or unexpected job changes. 
  • Legacy Building: Once you’ve established an asset generating passive income, you can pass it on to your family, creating a lasting financial legacy. 

Start your passive income stream with Amur Capital’s MICs 

Since 1984, Amur Capital has enabled Canadian investors to unlock the full potential of real estate and earn stable, robust returns with mortgage investing.  

With access to multiple funds that can earn a consistent annual return and a team of experts at each MIC fund ensuring a consistent stream of high-quality mortgages, Amur Capital offers a unique opportunity to diversify your portfolio and generate passive income. Dividends are paid monthly with an option to automatically reinvest as additional shares for compounded returns. 

Take the first step towards building a consistent and stable source of income with Amur Capital MIC. Contact us today to get started. 

Frequently Asked Questions

Renting properties or possessions, investing in dividend-paying stocks, creating digital products, and investing in real estate through mortgage investment corporations (MICs) are some ways to make passive income in Canada. 

You can have as many streams as you want to generate income. However, suppose you don’t have the resources to develop and maintain multiple income streams. Starting and keeping only a few may make sense. 

Each passive income idea is unique, which is why there is no best or most profitable way to earn passive income. You need to consider your resources, such as time, energy, money, and skills, to pick the most appropriate passive income streams for you. 

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