31 Passive Income Ideas in Canada (2024): Earn Money While You Sleep

Want to generate passive income while you kick back and relax? If so, I have some good news and some bad news.

The good news is that there are countless ways that you can earn passive income.

The bad news is that there is no get-rich-quick path to passive income. You will either need to invest your money or your time.

Build multiple passive income streams because many of the income ideas listed below are not guaranteed to last forever. Here are some passive income ideas in Canada to make extra money.

Investing Passive Income Ideas

Once you have some cash, you can make smart investments to generate passive income. Here are some of my favourite ways to earn passive income in Canada by investing:

1. Robo-Advisor Investing

  • How to earn passive income: Through dividends and capital appreciation
  • Money needed to get started: Low
  • How to get started: Get $10,000 managed for free with Questwealth here
  • Time needed: Low
  • Risk Level: Low-Medium

As futuristic as robo-advisor investing sounds, how it works is straightforward and is well-suited for both beginner and experienced investors.

In a nutshell, the way robo-advisors work is when you deposit money into their investment account, you will be invested into a low-fee portfolio based on your risk tolerance. You will also get access to advisors 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 over the long term.

Your money will be managed and rebalanced automatically at a low fee. Over the long term, lower fees can lead to much higher returns than a high-fee solution because of compounding returns.

Questwealth has the lowest fees in Canada for a robo-advisor, which can potentially lead to excellent long-term returns.

2. Build Your Own ETF Portfolio

  • How to earn passive income: Through dividends and capital appreciation
  • Money needed to get started: Low
  • How to get started: Get a signup bonus with Wealthsimple here
  • Time needed: Low
  • Risk Level: Medium

If you’re a do-it-yourself investor, you can build your own ETF portfolio and manage it with a low time commitment. The main advantage of this approach is that it is cheaper than even a robo-advisor, as there are no management fees. Here are some steps to get started:

  1. There are many resources on how to build an ETF portfolio. You can start by reading about how to buy ETFs in Canada.
  2. By taking an investor questionnaire, determine what asset allocation matches your goals and risk tolerance.
  3. Choose your ETF: Check out this post on the best ETFs in Canada for some ideas.
  4. After you get educated and figure out what ETFs you want to buy, use a trading platform that allows free ETF purchases. Check out my list of best trading platforms here.

3. Dividend Stocks

  • How to earn passive income: Through dividends and capital appreciation
  • Money needed to get started: Low
  • How to get started: Buy stocks with Wealthsimple Trade
  • Time needed: Low
  • Risk Level: Medium

Dividend stocks can be a very effective way to earn passive income. Finding a dividend stock that pays between 3-5% is easy. Some stocks pay 10-13% dividends but are much riskier and usually unsustainable.

Dividends are not guaranteed, and a company can cut dividends anytime. Your stocks can also lose value and has all the risks of investing. A company with a long history of providing and increasing dividends could be a reliable dividend earner if it performs well.

I invest about 10% of my portfolio in dividend stocks and the rest in ETFs. I used to invest more in stocks but found it too time-consuming.

If ever you’re in doubt about dividend stocks, stick with ETFs instead to get diversification at a very low cost. Here’s a link to my top picks for Canadian dividend stocks.

4. Passive Interest With A High-Interest Savings Account

Category One: Chequing and Savings Accounts

Sometimes, boring passive income is the best solution. If you know you don’t want to lose any money on your investments at all, a high-interest savings account (HISA) could be an excellent choice for you to earn passive-interest income.

I use HISAs if I know I will need my money in the next one or two-year period. This ensures that I will have the funds once I need them.

You won’t earn nearly as high of returns in the long run as investing. With a high-interest savings account, you can get high interest on your money, which attempts to keep pace with inflation, meaning the real value of your money isn’t shrinking much as it would be in a regular account.

For long-term investing, I like to stick to dividend stocks or ETFs; for the short-term, I will use a HISA to have my cash readily available.

I use EQ Bank, which has a current savings rate of 2.50%. You can open an EQ Bank account here.

5. Earn Interest With Cryptocurrency Staking

What are Cryptocurrencies?
  • How to earn passive income: Through interest payments
  • Money needed to get started: Medium-High
  • How to get started: Invest and hold eligible cryptocurrency tokens
  • Time needed: High
  • Risk Level: Very High

Cryptocurrency day trading can be profitable but requires a lot of time, research, and market knowledge.

However, there’s another way to earn passive income from your crypto holdings. Some of the top crypto tokens on the market offer generous APY interest rates for holding onto tokens long-term.

This is called cryptocurrency staking and can be a profitable passive income idea.

All you have to do is invest and hold your tokens, and you can earn interest on it. Cryptocurrency companies offer these rates to encourage stakeholders to stay invested in the technology, which helps to stabilize the rapid price fluctuations.

That being said, cryptocurrency investment (including staking) is a very high-risk activity. If the coin you’re invested in drops dramatically over the course of a year, you could still lose money on your investment, even if you’re being rewarded interest as a stakeholder.

There is also a high chance that the company running the staking will turn out to be fraudulent, and you can lose all your money. There’s been a lot of crypto staking scams happening in the recent past. Buyer beware, and be extremely cautious with this strategy.

6. Invest In Start-Up Companies

Invest In Start-Up Companies
  • How to earn passive income: Through revenue sharing and eventual exit
  • Money needed to get started: High
  • How to get started: Invest capital in a start-up business in exchange for shares of the company
  • Time needed: Low
  • Risk Level: Very high

There are lots of great entrepreneurs with million-dollar business ideas out there. All they need is capital to bring their business to life and start earning money.

The only problem is that many of these start-ups can’t get the financing they need from traditional banks, as they represent a higher risk than banks are willing to take. So, many entrepreneurs turn to private investors instead.

If you have cash on hand and are willing to take a risk, investing your money in a start-up company can be a great way to earn passive income once the company starts doing well and generating profits.

You can invest in small local companies using your personal connections, or you can invest in start-ups online through sites like FrontFundr and SeedInvest. Be aware that this is a very risky strategy with a high failure rate, so you could end up losing a lot money as well.

7. Invest In Guaranteed Investment Contracts (GICs)

  • How much can you earn: Up to 5% or more on your investment
  • Money needed to get started: Around $1,000
  • How to get started: Ask your bank about their GIC options
  • Time needed: At least one year
  • Risk Level: Very low

Another great passive income idea is to invest in Guaranteed Investment Contracts (GICs). Most major banks and financial institutions offer these products, and they’re a great option for patient individuals looking to earn a reliable return on their investment.

GICs are, by far, one of the safest investment options, offering minimal risk and a guaranteed return, which you won’t always get investing in the stock market. As long as you’re patient, the return is guaranteed, which means it’s essentially free money.

With a GIC, an investor (you) lends money to a financial institution for a fixed period of time at a predetermined interest rate.

This term can range from a few months to up to ten years.

The return on investment can vary depending on the term length and type of GIC. EQ Bank, for example, is currently offering a one-year GIC with a sizeable 5.50% return.

That being said, it’s important to note that withdrawing your investment early may result in penalties, reducing or eliminating the overall return.

Creative Passive Income Ideas

Creating things that can entertain and inform people is fun and rewarding. Here are some of the top ways to turn that creative passion into money:

8. Write A Book Or E-Book

Write A Book Or E-Book
  • How you can earn passive income: Royalty and licensing fees
  • Money needed to get started: Low
  • How to get started: Take a writing class and start writing!
  • Time needed: Medium
  • Risk Level: Low

You don’t have to write the next Harry Potter series to make money writing a book. The options about what you can write about are unlimited. These days, anybody can write a book and have it published on Amazon, either by Kindle or a physical copy.

If you’re not a fan of fiction writing, you can write about 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 will get paid for each time it’s sold.

9. Start A Blog

Blogging
  • How you can earn passive income: Ad, affiliate, and sponsorship revenue
  • Money needed to get started: Low
  • How to get started: Figure out your niche and start writing
  • Time needed: High
  • Risk Level: Low

If you start a successful blog with many loyal readers, the opportunities to make passive income are endless. Here are just a few ways you can make money by starting a blog:

  • Online ads
  • Affiliate programs
  • Sell an online course
  • Release a useful software mobile or online app
  • Sponsored blog content
  • Freelancing – while not passive, having a successful blog opens up opportunities to freelance.

Depending on your niche, you can break down how much you can make per pageview. It can range anywhere between $0.01 – $0.20 per pageview, but more likely, it will wind up between $0.02 – $0.07 per pageview. This means that for every 10,000 pageviews, you can make roughly between $200 – $700.

Check out this article on how I make money blogging in Canada to learn more.

10. Outsource Your Work

Outsource Your Work
  • How to earn passive income: By building a large client base and outsourcing the work
  • Money needed to get started: Medium – High
  • How to get started: Get clients and sell them a service
  • Time needed: Medium
  • Risk Level: Low

Outsourcing your work can be beneficial in making passive income for business owners.

Many freelancers have built a trustworthy business and reputation as a one-person shop, then turned into a full-fledged agency with multiple outsourced workers who work for them.

For example, say you are a freelancing web developer. You build up your business to the point where you get more work than you can handle.

At this point, you can start hiring and training workers, either online or in-person, to help you with your work. This will free up more time to add additional projects and increase your income.

I’ve met many people who have built up agencies this way and oversee their workers and only work 10-20 hours per week. There are countless fields where this could work, such as accounting, digital marketing, social media managers, or virtual assistants, to name a few.

11. Create An Online Course

Create an online course 
  • How you can earn passive income: Create a course and get paid for years
  • Money needed to get started: Low – Medium
  • How to get started: Script a course then create one
  • Time needed: Medium
  • Risk Level: Low

Think you know a lot about a topic and want to teach others? A great way to earn passive income is by creating online courses. You can start creating some for practice and release it onto YouTube to start. Then, you can try to release them onto paying platforms such as Udemy or Skillshare.

It will take an extensive upfront time commitment, but if you can release some successful courses, it can pay you for years to come.

There is a chance that you can spend a lot of time creating a course that nobody wants. The best way to avoid this is to do intensive market research before creating the course and ensure there is a demand for it.

12. Become A Youtuber

  • How you can earn passive income: Ad, affiliate, and sponsorship revenue
  • Money needed to get started: Low – medium
  • How to get started: Buy recording equipment and start making videos
  • Time needed: Medium
  • Risk Level: Low

Have you ever dreamed about 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 are passionate about, you can create a Youtube series about that and start attracting ad revenue, affiliate partners, and sponsors. If you become famous, you could start charging for appearances.

You need 1,000 subscribers and 4,000 public watch hours in order to make money by running ads on Youtube. I started the Wealth Awesome Youtube channel and hit that requirement in about five months.

I started generating passive income after that on the channel. I find it fun, and it’s great interacting with my audience face-to-face.

Learn more about how I make money on Youtube here.

13. Create A Mobile App

  • How you can earn passive income: Ad and sales revenue
  • Money needed to get started: Medium – High
  • How to get started: Come up with an idea, then build the app
  • Time needed: High
  • Risk Level: High

If you know how to code, building a mobile app can be a way to make passive income without having to pay anything.

If you don’t know how to code, you can hire someone to help build the mobile app. Hiring someone can get very expensive as mobile app developers are in high demand and pricey.

14. Launch A Startup

  • How you can earn passive income: Sales revenue, and an eventual exit
  • Money needed to get started: High
  • How to get started: Come up with an idea, then launch a product
  • Time needed: High
  • Risk Level: Very high

Do you have what it takes to launch a hot startup? Building a successful startup is one of the most lucrative but also one of the riskiest and most time-consuming ways to make a passive income stream.

Having a great idea and being able to execute that idea is crucial for success. It’s certainly not passive initially and will require a lot of work. But after you have a successful startup, you can start to generate passive income through sales.

16. Earn Royalties From Stock Photos, Videos, and Sounds/Music

Earn Royalties From Stock Photos, Videos, and Sounds/Music
  • How you can earn passive income: Royalty revenue
  • Money needed to get started: Low
  • How to get started: Take photos, videos, or make music and earn royalties from digital creators
  • Time needed: Medium
  • Risk Level: Low

Digital creators and websites constantly need high-quality stock photos, videos, and background music to use in their content. If you like to take photos and videos or you make your own music, you can earn royalties from your creations.

One of the most popular sites for photos is Shutterstock. Once you apply and start hosting photos, Shutterstock will pay you $0.25 to $0.40 every time your photo is downloaded.

It may not seem like much, but if you make great content that’s downloaded often, it can easily add up over time. Plus, it’s 100% passive. After you submit the content, sit back and collect your royalties.

Other popular royalty sites available to Canadians include:

  • Artlist.io (Lease your music tracks, photos, and video clips)
  • Storyblocks (Earn royalties from your video clips)

I recommend using a high-quality camera, as these sites only accept high-resolution images and videos.

17. Leverage Your Social Media Accounts

  • How you can earn passive income: Monetize your followers
  • Money needed to get started: Low
  • How to get started: Create content, offer free value, build your email list, and then monetize followers
  • Time needed: Medium to long
  • Risk Level: Low

Although YouTube has developed a reputation for paying the most to creators, other social media platforms like TikTok, Instagram, and Twitter can also be very profitable in their own way.

If you can build a page and an audience around your content, then there are a number of ways to monetize it, including:

  • Affiliate commissions
  • Brand deals
  • Paid promotions
  • Selling courses, ebooks, and personal access

For example, you could build an Instagram page that offers free gardening tips. Once you build your following up to at least 10k followers, you could then offer a free ebook as an email lead capture.

Once you build your email list, you can then send newsletters or promotional messages inviting the members to sign up for a mastermind event or purchase physical gardening products from your website (or whatever else you want to sell).

Instagram Threads recently launched in early-July 2023. Whenever a new social media platform launches, there’s always a great opportunity to be one of the first to participate and grow your following before the platform becomes over-saturated.

Use Your Assets For Passive Income

Sometimes it takes money to make money. Here are some ways you can put your assets to work for you:

18. Sell Physical Products Online

  • How you can earn passive income: Sales revenue from your product
  • Money needed to get started: High
  • How to get started: Start a Shopify store and learn how to drive traffic to it
  • Time needed: High
  • Risk Level: High

There are many ways you can sell products online. Here are a few of them:

  • Dropshipping – You can sell a product without ever holding any physical inventory, usually done on Amazon. Although it’s a lower risk because you don’t buy any upfront inventory, there are also lower margins because of all the competition.
  • Amazon wholesaling – You can buy items in large quantities and resell them online.
  • Private labelling – You can order products from a Chinese provider such as Alibaba and white label them with your brand.
  • Build your 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.

Learn more about how to sell on Amazon on Canada here.

19. Rent Your Car On Turo

Rent Out Your Car
  • How much can you earn: $100 – $1,000/month
  • Money needed to get started: High
  • How to get started: Have a vehicle to rent
  • Time needed: Low
  • Risk Level: Low

You’ve probably heard that owning a car is the worst investment you can make because it is a depreciating asset. Well, now you can turn it into a money-making asset with Turo.

Turo is like Airbnb but for your vehicle instead of your home. You can rent out your car while you’re not using it. Turo is only currently available in Alberta, Nova Scotia, Ontario, and Quebec.

20. Start A Vending Machine Business

Start A Vending Machine Business
  • How much can you earn: $100-$300/month per vending machine
  • Money needed to get started: Medium
  • How to get started: Buy a vending machine, set it up, keep it stocked, and earn
  • Time needed: Low
  • Risk Level: Medium

Vending machines are a great way to make passive income, as they require very little effort. Once set up, you only need to worry about restocking items in the machine and collecting money periodically.

Brand-new vending machines cost around $5,000. However, you can also find used vending machines for under $1,000. Then, you need to stock it with bulk snacks that you can buy from a wholesaler.

Snack machines are a cheaper investment (and require less maintenance) than drink machines, as they don’t have any refrigeration.

The hard part is finding somewhere to set up your vending machine. Some businesses will charge rent or a percentage of your income to host the vending machine.

However, you can also negotiate free vending machine placement by explaining how the machine will add value to the business and make its customers happier.

A snack vending machine can earn up to $300 monthly or more.

21. Setup A Bitcoin ATM

Bitcoin ATMs
  • How you can earn passive income: Transaction fees
  • Money needed to get started: Low-High
  • How to get started: Buy a Bitcoin ATM or host another company’s Bitcoin ATM in your store
  • Time needed: Low
  • Risk Level: Medium

Bitcoin ATMs are popping up in small stores all over the world. As cryptocurrency is growing in popularity, many people use Bitcoin ATMs to easily access their own crypto accounts or send and receive money.

There are two ways to approach this business model:

  • Buy your own Bitcoin ATM and set it up
  • Host a Bitcoin ATM at a business that you own

The first is the most expensive but also the most profitable. You’ll need to purchase or finance a brand-new Bitcoin ATM, which can cost upwards of $15,000 or more. Then, you’ll need to stock it with cash (usually $5,000 or more) for anybody making withdrawals.

A Bitcoin ATM in the right location can earn a decent amount in transaction fees.

Conversely, you can host somebody else’s Bitcoin ATM in your business location in exchange for a percentage of their profits or a monthly rental fee. This is completely free for you since you’re just providing a space for them.

22. Rent Out Your Parking Space

  • How much can you earn: $100 – $300 per month
  • Money needed to get started: Low
  • How to get started: Offer your parking space for rent on social media
  • Time needed: Low
  • Risk Level: Low

With limited parking spaces available in the middle of a busy city, your unused parking spot could be a small gold mine.

If you live in a busy city centre like Toronto or Vancouver, you may be able to rent out your assigned parking space to visitors, students, and other short-term residents.

Often, visitors are willing to pay up to $100 per month or more to access a good parking spot that’s close to their work or school.

The easiest way to find people is to make a social media post in a Facebook group with an audience of travellers or students.

Alternatively, you could also rent out your home parking space to van-life travellers who need somewhere safe to park for the night. You can even charge them extra for electricity or water.

23. Rent Out Your Equipment

  • How much can you earn: $150 per day or more
  • Money needed to get started: Low
  • How to get started: Offer your equipment for rent on social media
  • Time needed: Low
  • Risk Level: Medium

If you have specialized equipment, such as camera gear, audio equipment, skis, snowboards, camping gear, cleaning equipment, or even landscaping equipment, you can rent it out for money.

For example, when I was in Bali, I rented out a dirt bike for the day so that I could adventure through the jungle.

Providing you have the equipment, your financial risk is relatively low. The main risk you’ll need to worry about is damage to your equipment. This is why it’s always a good idea to have your customers sign a damage waiver that holds them responsible.

If you want to start a full-time equipment rental business, you may also consider purchasing insurance on the items.

Real Estate Investing Passive Income Ideas

Nine out of ten millionaires all have one thing in common – they’re invested in real estate. Real estate investing is a time-tested and reliable way to earn passive income.

24. Airbnb Rental

Airbnb Your Property
  • How you can earn passive income: Rental income
  • Money needed to get started: High
  • How to get started: Have a property to rent
  • Time needed: Medium
  • Risk Level: Medium

Airbnb is a revolutionary company. You can take your home and turn it into a money-making machine.

The best part is the flexibility of Airbnb. You can rent out extra rooms. You can rent out your whole house. You can rent out a basement. The possibilities are endless. You can find short-term tenants or long-term. If you know you’re going away for a weekend trip, you can rent out your property.

The liability insurance Airbnb provides protects you from any bad tenants.

When starting my Airbnb property, I lived in it while at the same time renting out the Airbnb to get the experience of how to properly manage it. Now it’s being rented out full-time, and I’ve set it up so that it requires almost no time to manage at all.

25. Rent Out Homes & Condos

Look for one-week deals on Airbnb or one month on Airbnb
  • How you can earn passive income: Rental income
  • Money needed to get started: High
  • How to get started: Purchase a home or condo, rent it out to tenants
  • Time needed: Medium
  • Risk Level: Medium

One of the oldest real estate investing methods is to purchase a home or condo and then lease it out to residential tenants.

If you want a truly hands-off approach, you can hire a property manager to handle the tenants and property maintenance.

The easiest way to get into this business is to purchase a home or condo in cash. However, if you don’t have the funds for this, you can mortgage the property with a loan from the bank.

Aim to have your monthly mortgage payment much less than the monthly rent you’re charging your tenants. Evaluate metrics such as the price-to-rent ratio before purchasing to see if you can recoup your costs quickly.

26. REIT Stock Investing

REIT ETFs
  • How you can earn passive income: Monthly dividend income
  • Money needed to get started: Low
  • How to get started: Invest in and trade REIT stocks on a public exchange
  • Time needed: Low-Medium
  • Risk Level: Medium

A REIT is a real estate investment trust. These are large publicly-traded real estate companies that often own hundreds of millions of dollars worth of homes, apartments, or commercial developments.

You can invest in REIT stocks for free on public exchanges like WealthSimple Trade or through a traditional stockbroker. REIT stocks can be bought and sold just like any other stock on the market.

Investing in a REIT stock is a great way to invest in real estate without having to go through the headache of buying, owning, and leasing property yourself.

The nice things about REITs are they offer monthly dividend payments. You can learn more about the best REITs in Canada here.

27. REIT ETF Investing

Best REIT Stocks and Real Estate Stocks In Canada
  • How you can earn passive income: Monthly dividend income
  • Money needed to get started: Low
  • How to get started: Invest in publicly-listed REIT ETF portfolios, earn dividends
  • Time needed: Low
  • Risk Level: Medium

A REIT ETF is a portfolio that consists of multiple REIT stocks. The REIT stocks within the portfolio may change throughout the year as the ETF managers make changes.

REIT ETFs can be bought and sold similarly to the way that traditional stocks are traded. Questrade is a great platform for investing in ETFs, as they have no trading fees, allowing you to maximize your investment.

REIT ETFs also offer dividends, which you can use to build passive income. However, the one thing I don’t like about REIT ETFs are it’s high fees, which might make it better to purchase REIT stocks instead.

Learn more about the top REIT ETF choices in Canada here.

28. Rent Out Commercial Property

  • How you can earn passive income: Rental income
  • Money needed to get started: Very high
  • How to get started: Purchase commercial property and rent it out to businesses.
  • Time needed: Low
  • Risk Level: Medium

Purchasing or developing commercial land that you own and renting it out to businesses is a great way to earn residual income in the form of rent from tenants.

Take strip malls, for example. All the shops you see in a strip mall pay a monthly rental and utility fee to the landlord who owns the shopping complex.

As long as you plan to fill the commercial space, it’s generally a lower-risk investment. Most shop owners sign annual leases (at the minimum) and supply their own insurance, which limits your personal risk.

There are several ways to go about renting commercial property:

  • Purchase pre-built retail complexes, warehouses, and commercial real estate. These deals may come with existing tenants, which means you’ll already have a steady stream of income.
  • Buy commercially-zoned land and develop it with new construction. This often requires lots of planning, permits, and higher upfront investment.

The main downside to this approach is that most investors will never be able to afford to purchase and rent out commercial spaces.

29. Rent Your Land To Farmers

  • How much can you earn: $100 – $20,000/month plus
  • Money needed to get started: High
  • How to get started: Purchase farmland and rent it out to farmers
  • Time needed: Low
  • Risk Level: Medium

Many farmers don’t own their own land. Instead, they rent farmland from landowners and use the land to plant and harvest their crops. This is known as “tenant farming.”

The nice thing about this business model is that it’s almost completely hands-off. The farmers are responsible for supplying their own equipment and maintaining the land. Depending on the property and your arrangement, you can also lease irrigation and water to farmers as well.

The location of your farm is usually the biggest factor in how much rent you can charge per acre. In Alberta, for instance, farmland costs an average of $4,200 per acre and typically rents for $95 per acre.

Ontario has some of the highest-valued farmland in Canada, with land going for upwards of $15,000 per acre and renting for over $215 per acre.

Some farmers may prefer to pay with crop share, which is where they’ll give you a percentage of their farm’s profits after the harvest season.

30. Open A Franchise Restaurant

Open A Franchise Restaurant
  • How much can you earn: $10,000 – $15,000/month plus
  • Money needed to get started: High
  • How to get started: Pay franchise fees and build your restaurant
  • Time needed: Medium
  • Risk Level: Medium

Opening a franchise restaurant is often a safer (if more costly) alternative to opening your own restaurant. To open a franchise, you’ll need to pay franchising fees and pay for all of the upfront costs of constructing your restaurant.

Some of the benefits of opening a franchise include the following:

  • A proven, time-tested business model
  • Pre-existing brand awareness and trust
  • Access to the franchise’s food supply chain (and pricing)
  • Marketing materials
  • You don’t have to worry about creating menu items
  • Manager and employee training programs

For example, franchising fees for a McDonald’s can easily cost upwards of $1 million before construction costs. However, this fee can often be paid over time, out of your profits.

This may seem like a lot until you consider the fact that the average McDonald’s franchise generates a net profit of $150,000 per year. Franchises also give business owners a more hands-off business model, making them a better passive income investment.

31. Open A Convenience Store

  • How much can you earn: $20,000 – $30,000 per month or more
  • Money needed to get started: High
  • How to get started: Lease a store space, purchase shelves and coolers, stock the store, and hire a register clerk
  • Time needed: Medium
  • Risk Level: Medium

People always need snacks, cold drinks, and everyday necessities. Opening a convenience store is simple and reliable. You’ll primarily sell everyday necessities, like t-shirts, lighters, drinks, snacks, motor oil, and even small trendy gadgets.

If you really want to improve your sales, you can also consider obtaining a beer and wine license and applying to sell lottery tickets.

The initial investment to open a convenience store can be costly. Once it’s up and operating, though, you only need to find a few reliable cashiers and clerks to handle register sales and re-stocking.

Bonus: Open A Self-Service Business (Car Wash, Ice Machine)

Open A Self-Service Business (Car Wash, Ice Machine)
  • How much can you earn: $2,500 – $10,000/month plus
  • Money needed to get started: Medium-High
  • How to get started: Create a self-service business that doesn’t require employees
  • Time needed: Low
  • Risk Level: Low

Self-service businesses are those that don’t require any full-time employees on the site. Examples of these include:

  • Ice machines
  • Car washes
  • Laundromats

The upfront costs of building a self-service business can vary, depending on the size of your operation. Once they’re set up, though, they’re a relatively simple, hands-off business.

For example, you can set up cash and card payment options at a car wash. Customers come and wash their own cars. All you have to do is refill the cleaning chemicals (which can be outsourced), collect your money, and handle occasional equipment repairs that come up.

Large commercial ice machines are another great idea; they take up very little space. You can either lease the land from an existing business (for example, a shopping mall parking lot) or buy the land outright.

Cultivating A Money Mindset

If you want to generate passive income ideas, it’s important to cultivate a money mindset. You need to learn how to identify the flow of money and where there’s a potential for money to be earned.

Here are some tips to help you along the way

Identify the “Why” Behind Your Buy

Next time you spend money, try to figure out why you spent it. Whether it’s a simple cup of coffee, a used car, or a piece of furniture, ask yourself questions like:

  • What attracted me to this store?
  • Why did I select this particular product or brand?
  • Did I really need the item, or did I buy it on impulse? If so, why?
  • Would I buy this product again?

Answering these questions will help you gain perspective and encourage creativity for your own business ideas and products.

Find Creative Solutions To Problems

We all have problems that we have to deal with. What makes them a problem, to begin with is that we don’t have an easy solution for them (or haven’t been offered a solution).

As you begin to identify problems and difficulties in your own life, try to develop creative, cost-effective strategies to solve them.

If you can solve people’s problems in a creative manner, you may be able to create a product or service that will make you wealthy.

Tax Considerations for Passive Income

In Canada, different types of passive income are taxed differently. For instance, dividend income from Canadian companies is subject to the Dividend Tax Credit, which can be advantageous compared to other forms of income.

However, interest income from savings accounts or GICs is taxed at your marginal tax rate, which could be higher.

For real estate investors, rental income is taxable, but they can also deduct expenses such as mortgage interest, property taxes, and maintenance costs. Capital gains, whether from selling stocks or property, are also taxable, but only 50% of the gain is included in your income, which can be a tax-efficient way to earn.

Final Thoughts on Building Passive Income

Passive Income Ideas Canada Infographic

If you want to earn passive income and make extra money in Canada, it will take either hard work or money, but it’s achievable for anybody. The key is to experiment and continue with the things that work.

The other way of seeing an increase in your bank account every month is by saving money. For example, as a constant traveller, there were other things I cut down on, such as spending less on bank fees and having no foreign exchange transaction fees.

Hopefully, this list gave you some good ideas to start making passive income today. If you are new to investing and want to learn, check out this blog post on how to start investing in Canada.

I also created this master list of ways to make money online in Canada that you can read.

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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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