How To Earn Passive Income In Canada ($50 Bonus Inside!)

What Is Passive Income?

Passive income is money you earn without having to make an active effort. It means decoupling time from money, allowing you to earn additional income without investing additional time.

The term “passive,” though, is misleading; income streams become passive only after you put in a lot of hard work upfront. Once your system is in place, though, you can sit back and watch the dollars roll in.

Of course, you don't have to wait for retirement to start earning money passively. The Canada Pension Plan and Old Age Security plans are a great fallback, but if you can build multiple sources of passive income well before you retire, you'll get to witness the magic of compound interest, too.

If that sounds good to you, read on for some of the most profitable ways to earn passive income today.

10 Easy Ways To Earn Passive Income In Canada

Here are 10 great ways to earn passive income in Canada. I go into detail on each of them below:

#1 Invest In Cryptocurrencies	#6 Use Cash Back Apps
#2 Maximize Credit Card Rewards	#7 Invest In Farmland
#3 Open A High-Interest Savings Account	#8 Lend on Peer-to-Peer Lending Platforms
#4 DIY Investing	#9 Renting Out Your House
#5 Create An E-Commerce Store	#10 Invest With A Robo Advisor

#1 Invest In Cryptocurrency

Initial Time Required	None
Skills Required	None
Money Required	$100+
Risk Level	High
Reward Level	High
Best For	Risk-tolerant investors looking for quick gains

Over the past year or so, cryptocurrencies like Bitcoin and Ethereum have reached levels many thought to be impossible just a few years ago. They've been more profitable than virtually every other asset class, and many experts believe they will continue to increase through 2022 and beyond.

If you're not invested in crypto already, then, you're missing out on enormous amounts of passive income.

For example, if you had bought $10,000 worth of Bitcoin during its dip in March 2020 (coinciding with the COVID-19 stock market crash), you would have more than $100,000 today. If you had put $10,000 into Ethereum at the same time, you'd have more than $400,000 today.

This goes to show that the specific cryptocurrency you buy is much less important than buying into the crypto industry as a whole. And though cryptocurrency prices can rise and fall quickly, they've been remarkable long-term investment vehicles to date. Bitcoin has returned an average of 150% per year over the past 10 years.

If you're intrigued and want to give crypto investing a try, check out our top picks for the best crypto exchanges in Canada. I personally use and love both CoinSmart and Bitbuy, though any of these three exchanges will treat you well:

Best In Canada	Total Fees: ~0.16% Security: Best in class Customer Support: Excellent By far the lowest fees in Canada.	★★★★★ Rated 4.9/5
Very Secure	Total Fees: ~3% Security: 95% cold storage Signup bonus: $50 Great bonus but high fees.	★★★★ Rated 4.4/5
Strong Security	Trading fees: 2% (High) Security: 99% cold storage Signup bonus: $50 Higher fees, strong security.	★★★★ Rated 4.2/5

Investing in crypto is like a shortcut into earning passive income: rather than spending hours building a business that can earn you money, you just have to buy and hold. Of course, there are risks involved as well, but that's the nature of investments with the potential for high payouts: if you want to cash in big, you have to be willing to put some skin in the game.

#2 Capitalize On Credit Card Rewards

Initial Time Required	None
Skills Required	None
Money Required	$0 – $100
Risk Level	Low
Reward Level	High
Recommended For	Frequent travelers

I started collecting credit card rewards points as soon as I turned 18 and got my first credit card. My first card was the American Express Gold Rewards Card, which at that time gave me 25,000 welcome bonus points worth $500 – $750.

Once I received that first welcome bonus, I was hooked because I knew that with the right strategy, I could earn points worth thousands of dollars every single year. And that’s exactly what I did.

Over the next several years, I racked up more than a million points, which I’m still using to fly for next-to-nothing today. The best part of all of it is that it wasn’t as hard as you might think: all you need is a good roadmap. 

Here is that roadmap, explained in two simple steps.

1. Choose Your Rewards Program

There are several rewards programs to choose from in Canada, and the program you choose determines the type of rewards you earn and how you’re able to spend them. Some of the more common programs include RBC Avion, CIBC Aventura, BMO Rewards, and AIR MILES, though there are a handful more.

I highly suggest you choose American Express as your rewards program, both because their cards offer far better value (and higher welcome bonuses) than other Canadian credit cards and also because they’re a sort of meta-rewards program that allows you to transfer your points to other rewards programs like Aeroplan (from Air Canada) and Avios (from British Airways).

For example, you can currently get 140,000 welcome bonus points with the American Express Platinum Card, which is worth $2,800 – $4,200. No other non-Amex credit cards in Canada even come close to that sort of value.

2. Choose Your Cards

I will assume that you take my advice and go with the American Express program. Nice choice! 

I’m also going to assume that you haven’t done any sort of serious “credit card hacking” before and are looking for a good entry point that will earn you points of the highest value with the lowest possible annual fee. 

With that in mind, here are the exact cards I recommend.

#1 The Cobalt Card

What: The Cobalt Card comes with a welcome bonus of up to 15,000 points, worth $1,000 – $1,500, plus a $100 USD annual travel credit to boot.

Why: The Cobalt Card is the ideal entry point into the American Express ecosystem because it’s a low-fee card with high rewards. Nearly everyone gets approved for the Cobalt Card, so even if you have no credit history or aren’t getting approved for other cards, the Cobalt Card is definitely worth a short.

#2 The Marriott Bonvoy Card

What: The Marriott Bonvoy Card comes with a welcome bonus of up to 50,000 points, worth $1,000 – $1,500, plus a free 5-star hotel night every year.

Why: The Marriott Bonvoy Card will take your travels to new heights. This post explains how to turn your welcome bonus points into weeks’ worth of 5-star hotel stays, and with its annual fee of just $120, this card offers incredible bang for your buck.

#3 The Platinum Card

What: The Platinum Card comes with a welcome bonus of up to 140,000 points, worth $2,800 – $4,200, plus a $200 annual travel credit, worldwide airport lounge access, and additional travel benefits. 

Why: The Platinum Card is the best travel credit card in Canada, hands down. 

I suggest you sign up for these cards 6 months apart, starting with the Cobalt Card. Of course, you can skip right to the Platinum Card if you want, but don’t be surprised if your application gets denied: nearly everyone gets approved for the Cobalt Card, but the Platinum Card is not quite as easy to get.

#3 Open A High-Interest Savings Account

Initial Time Required	None
Skills Required	None
Money Required	Low
Anyone who wants to store their money and isn't interested in anything complicated and time-taking.	Low risk, low reward
Recommended For	Anyone who wants to store their money and aren't interested in anything complicated and time-taking.

Savings accounts are perhaps the most boring and least profitable (but safest) of all passive income investments. You put your money in a savings account and let it grow over the years.

We're not talking about regular savings accounts, of course. In this case, we're talking about a high-interest savings account that will help you earn more. But even then, a high-interest savings account won't get you the returns that most items on this list will.

On the bright side, you have almost no risk when using savings accounts and can rest in peace as your passive income grows slowly each year.

With that in mind, here are the high-interest savings accounts (HISA) we recommend.

#1 Neo Financial High-Interest Savings Account

What: The Neo Savings Account provides a 1.30% interest rate (not promotional) on a fee-free HISA, no monthly fees and unlimited transactions.

Why: The Neo Savings Account can be paired with the Neo Card to earn an average 5%+ unlimited cash back at thousands of local and national Neo partners. Neo is linked to Concentra Bank, a CDIC-regulated bank, so all of Neo's eligible deposits are protected up to $100,000.

#2 Oaken Financial Savings Account

What: The Oaken Savings Account offers a 1.25% interest rate (not promotional) on all their HISA accounts, no monthly fees, no minimum balance,

Why: The Oaken Savings Account allows you to transfer immediately from your savings account to an Oaken GIC and vice versa. You can choose either Home Bank or Home Trust Company (both CDIC-regulated) as the lender for your account. There are no fees or restrictions on transactions.

#3 EQ Bank Savings Plus Account

What: The EQ Bank Savings Plus Account has a non-promotion interest rate of 1.25%, allows for unlimited transfers, and has no monthly fees.

Why: The EQ Bank Savings Plus Account provides joint accounts, US dollar, TFSAs, RRSPs, and GICs. This hybrid account combines the advantages of savings with the convenience of chequing. Quebec residents are currently not eligible for EQ Bank accounts.

#4 Wealth ONE Bank of Canada High-Interest Savings Account

What: The Wealth ONE HISA provides an interest rate of 1.25%, unlimited transfers, ten free bill payments every month, and no fees.

Why: The Wealth ONE HISA can be included in TFSA, RRIF or other registered plans, offers instant access to your money through transfers, and requires no minimum balance. Eligible for CDIC insurance for up to $100,000, and includes an automated savings program.

#4 Investing

Initial Time Required	Low
Skills Required	None
Money Required	Low
Risk-to-Reward Ratio	Medium risk, medium reward
Recommended For	Anyone who wants to put their money to work and aren't interested in anything complicated and time-taking.

Building your investment portfolio from the ground up is another efficient way to generate passive income. Stocks, index funds, exchange-traded funds (ETFs), bonds, GICs, and other forms of investments are examples of passive investments.

Let's go briefly over them.

#1 Invest In Stocks

Dividend stocks are one of the most popular passive income ideas. You don't have to do anything else other than profit from this passive dividend income.

How it works: Shareholders in dividend-paying companies are entitled to periodic payments. Cash dividends are paid out of the company's profits quarterly, and all you have to do is own the stock. Dividends are calculated per share of stock, so the more shares you own, the greater your payment.

To maximize returns and minimize risks, I recommend subscribing to an investment newsletter to help you research potential investments. My top-rated financial newsletter is Capitalist Exploits because of its impressive track record and extremely good reviews, but there are others out there, too.

#2 Invest In Funds

When it comes to investing in funds, there are two great options for passive income generation: Index funds and Exchange-traded funds (ETFs).

How it works: When you invest in funds, you are not just investing in a single stock, bond, or other security but rather in a basket of them. Investing in funds is like investing a little bit in each security within the basket. If a market, company, or sector is having a downturn, you don't want to have all your eggs in one basket.

Funds in general, are an inexpensive way to gain exposure to different markets. There are two main ways you can invest in funds and start generating that passive income.

Funds, in general, are an inexpensive way to gain exposure to different markets. There are two main ways you can invest in funds and start generating that passive income. There are online brokers and robo advisors.

1. Online brokers

For the more hands-on approach, there are online brokers and intermediaries who have a license to trade securities in exchanges. A major drawback is that these entities are legally barred from giving financial advice; they can only act as intermediaries.

With that in mind, here are the exact online brokers we recommend.

#1 Qtrade Investor

What: Qtrade Investor is an online broker that has been operating since 2001, offering mutual funds, stocks, ETFs and bonds.

Why: Qtrade Investor comes with no fees for selected ETFs (over 100 to choose from) and low fees per trade ($8.75). It includes enough study material, ratings, and charts to help you make educated trading decisions. Its app is second-to-none in terms of simplicity, with a straightforward design.

#2 Capital

What: Capital is an online broker that was built in 2016 by a hybrid team of software developers and bankers.

Why: Capital offers the ability to trade stocks and crypto in a single place, plus the dedicated account manager every new user receives. Its streamlined, powerful interface makes trading easy, and its commitment to zero fees means you can make the trades you want within a fair trading environment.

2. Robo advisors

Robo advisors are computer algorithms; you feed them information about your current and past financial situation and your long-term goals. The robo advisor takes that information and builds a personalized financial plan, specially tailored with your goals in mind.

Here are the robo advisors we recommend.

#1 Wealthsimple

What: Wealthsimple is a well-equipped robo advisor that manages your money by employing a team of world-class financial experts and the best technology talent.

Why: Wealthsimple offers a no-minimum starting investment, low fees (0.20%) and MER (0.4%-0.5%), a highly-rated app, open access to financial advisors on-demand, SRI and Halal-compliant portfolios, and excellent customer service.

#2 Questwealth Portfolio

What: Questwealth Portfolios is a robo advisor offered by Questrade, Canada's oldest independent online brokerage, in operation since 1999.

Why: Questwealth Portfolios offers low fees (0.20%-0.25%) and MER (0.11%-0.4%); accounts offered include registered and non-registered, such as TSFA, RRSP and RIFS. Varied portfolio types, including SRI-compliant.

#5 Create An E-Commerce Store

Initial Time Required	High
Skills Required	None
Money Required	Low
Risk to Reward Ratio	Medium risk, high reward
Recommended For	Anyone who wants to start their own online store and is willing to put in the time.

Starting an online store and selling items that you or others have made is yet another effective way of making passive income.

You can sell a variety of items online, including clothes, art, handcrafted jewelry, online courses, shoes, books, consumer electronics, home décor, and healthcare supplies.

E-commerce sales are projected to increase to $6.54 trillion worldwide by 2022, so if you can start your store in these times, it will generate a passive income stream for you even if you're asleep.

Shopify is one of the most popular e-commerce platforms since it includes everything you need to get your business started. It's very user-friendly, so it can be used by just about anyone to start their online store.

#6 Use Cashback Apps

Initial Time Required	Low
Skills Required	Low
Money Required	None
Risk to Reward Ratio	No risk, low reward
Recommended For	Anyone who does the grocery shopping

Cashback apps are free money, and not using them is a huge blunder. If you aren't using any right now, just skim over the ones we're suggesting because they provide serious discounts on items that you're likely to buy anyway.

Note: If you want to earn some quick cashback right away, check out our Fetch referral code and Upside referral code.

These apps aren’t exactly magic. They make money because they get a commission for the products they help sell. Meanwhile, you get a good discount because the apps share part of that commission with you. So, the retail giants sell their items faster, the apps make money, and you save some.

#1 KOHO

What: The KOHO cashback app earns between 0.5%-2.0% each time you use it when coupled with the KOHO Visa Card.

Why: The KOHO app can be used to automate savings budgeting, access your paycheque early, gain insight into your spending and get free on-demand financial coaching. You can also earn a 1.20% interest rate on your whole balance if you deposit a direct payment to your KOHO account.

#2 Rakuten (Ebates)

What: Rakuten money-saving app offers cashback rates between 1%-40% (depending on the retailer) and a new account bonus of $10 after spending $25.

Why: Rakuten users can also receive a $20 referral bonus for introducing new users who spend $20. When using Rakuten, you’ll receive payments through PayPal or check every three months, and to qualify; you need over $5 in cash back to withdraw. Rakuten is currently partnered with over 750 popular stores in Canada. 

#3 Swagbucks

What: The Swagbucks app allows two ways to make extra money: tasks and cash backs. It also has a $10 starting bonus after spending $25.

Why: The Swagbucks app uses a rewards system, awarding Swagbucks (SB). Swagbucks can be redeemed for gift cards or PayPal transfers. The exchange rate is 100 SB = $1. You can earn Swagbucks by installing their browser plugin, the SwagButton, which converts Swagbucks into your default search engine and credits your account automatically.

#7 Invest In Farmland

Initial Time Required	Medium
Skills Required	None
Money Required	High
Risk to Reward Ratio	Risk-to-Reward Ratio
Recommended For	Anyone with long-term investment plans

Farmland is becoming one of the more popular passive income strategies because it is viewed as a tangible asset that can be bought and sold.

Moreover, the price of farmland has been on a steady increase over the past several decades due to increased global demand for agricultural products.

The return on farmland can also be very attractive. Farmland values have been known to appreciate at an annual rate of 10%, whereas the stock market only returns about 7% annually.

With that in mind, here are the three farmland funds we recommend.

1. AGinvest Farmland Funds

In 2016, AGinvest Farmland Funds was formed. They currently collaborate on 6,400 acres with 20 farm partners and have over $70 million in assets. The minimum investment is $150,000, and it's only available to accredited investors. Its management fees range from 1.25% to 1.75%.

2. Area One Farms

Area One Farms was established in 2012, and since then, it has amassed over 150 institutional and high-net-worth investors. Area One Farms is only open to accredited investors. It has over $460 million in assets and a yearly yield of 7.5%. They have a ten-year minimum holding period as well.

3. Bonnefield

Since 2009, Bonnefield has been developing long-term financial partnerships with Canadian farmers. It has more than $1 billion in assets, and only accredited institutions and private investors are allowed to invest. It has a very-high annual yield of 11.5% and low management fees (1%-2%).

Now that you have an idea about the best farmland funds, you only need the trading platform. Here are the exact platforms we recommend to maximize your income.

#1 AcreTrader

What: AcreTrader is a real estate investing platform founded in 2018 that specializes in Canadian farmland. It's only available to Canadian citizens.

Why: AcreTrader offers very low management fees (0.75%-1.00%) and is currently available to accredited investors only- meaning you have to have a net worth above $1 million or earn at least $200,000 annually to invest. It has a very low minimum investment (less than $15,000) and a mobile-optimized website that is accessible from any mobile device.

#2 FarmTogether

What: FarmTogether is a real estate platform that connects investors with farmers and specializes in agricultural real estate. It was founded in 2017.

Why: FarmTogether offers low management fees (1%-2%) and has low investment minimums ($15,000) compared to other platforms in the industry. The average annual return is 10%, and it's currently only available to accredited investors. It has a mobile-optimized website to realize all transactions and a low investment minimum ($15,000).

#8 Lend on Peer-to-Peer Lending Platforms

Initial Time Required	Low
Skills Required	None
Money Required	Medium
High-risk, medium reward	High risk, medium reward
Recommended For	Anyone with some starting money.

Peer-to-peer (P2P) lending involves lending money to businesses or other people through an online platform that matches lenders with borrowers.

The risk investors face when they lend money to people and companies on the marketplace is evaluated by the lending platform, which sets the potential returns the investor can get based on this risk.

In other words, the higher the risk that a borrower defaults on their loan repayments, the greater their interest rate.

Peer-to-peer lending gives investors a chance to make more money on their assets by eliminating any third parties (in this case, traditional banks) from taking part in transactions.

Lending Loop is Canada's leading peer-to-peer lending platform, and you can provide funds to entrepreneurs and small firms in it. More than 10,000 investors have invested more than $53 million in Canadian small businesses through Lending Loop.

#9 Renting Out Your House

Initial Time Required	Medium
Skills Required	Low
Money Required	None
Risk to Reward Ratio	Low risk, medium reward
Recommended For	Anyone with a spare house or room, pretty much.

If you own a spare house or have a spare room in your home, you could easily use either to gain more money without putting in considerable effort. There are several ways to go about it. You could simply rent out a single room to a tenant. This comes with its ups and downs, of course. Your tenant might be a difficult person, so you must have a good look at whom you're inviting to live on your property.

However, many people are usually looking for a room to live in, as it's cheaper than an apartment and simpler than living with roommates. It's one of the safest ways of making money. You have to do nothing, and maintenance will be minimal. 

Here is the complete process, explained in just four steps.

1. Find The Best Rental Listing Platform

The top rental listing sites are where tenants look for homes. Instead of concentrating on just one site, it's usually a good idea to list your property on several different ones.

2. Include Relevant Information

The title is the first thing you'll write. You should include information tenants want to know right away in the title. Start by listing essential data, such as the rent price, the number of bedrooms and bathrooms, the property type, the neighbourhood, and a few appealing amenities. The next step is to work on the description. I suggest writing a 4-6 sentence paragraph.

3. Add High-Quality Photos

The images in your listing are the most crucial component. They're the first thing a potential renter sees, and they spend the bulk of their time looking at a listing's photographs. We suggest having at least one photo of each room. It's well worth your while to invest some time into high-quality photos.

4. Set A Reasonable Price

Before pricing your rental, be sure to check the rates for comparable properties in your area to make sure your price is reasonable. If you're renting out your property during the summer, you can pretty much raise your rent rate as demand for rentals is greatest at that time of year. When you modify the components of your home, be sure to update the price.

#1 Airbnb

What: Airbnb has been an online marketplace operating since 2008. Airbnb's objective is to link people who want to rent out their houses with those looking for accommodations in a specific region.

Why: Airbnb hosts don't have to pay anything to put their homes on the platform. It's up to each host to determine how much to charge per night, per week, or per month. You can make your home available anytime and get some money while you're gone if you're going away for vacation.

#2 Vrbo

What: Vrbo is a rental listing platform available online. While not as well known as Airbnb, these guys have over a million homes on their books and have been in operation since 1996, almost 12 years longer than Airbnb.

Why: Vrbo has no costs associated with putting your property on their website. Once you list a property, it is automatically added to Vrbo's website. Hosts may either pay a 3% credit card processing fee, and an annual charge of $499, or they may pay a fee per booking.

#3 Agoda Homes

What: Agoda Homes is an apartment rental service founded in 2005. This site offers hosts a comprehensive list of potential properties, ranging from apartments to vacation rentals to private villas and bungalows.

Why: It's free to list your property on Agoda, which will put your property in the Agoda search engine.

#10 Invest With a Robo Advisor

Managing your investment portfolio can be a nightmare. If you're a beginner and have no idea how to invest, you will have a hard time. It's not just knowing where to invest but also the pressure that comes with trying to make a wise decision in the midst of stock prices rising and falling every day.

Initial Time Required	Low
Skills Required	None
Money Required	Low
Risk to Reward Ratio	Low risk, medium reward
Recommended For	Anyone who wants to start investing small amounts of money and get into investing.

We, humans, are naturally risk-averse creatures. Due to a lack of information, you might sell some stocks today that could come in handy years later, just because right now they weren't looking profitable. The obvious option for beginners is to let a professional handle their finances for them, but this comes at a cost. Additionally, fund managers usually have minimum amounts of money that they're willing to deal with.

The alternative is robo advisors. They do pretty much the exact job that fund managers do and have a clean interface to boot. Furthermore, robo advisors don't have high fees or minimum investments either.

With hundreds of thousands of clients and over $8.4 billion in assets under management, Wealthsimple is Canada's most popular robo advisor and it's a great starting point if you're interested in using one.

In Summary

Which method you select to earn passively depends on you. One thing's for sure, though. If you ever want to step out of your 9-5 job, you will either have to invest in passive income or wait for retirement.

It takes patience to earn passively, but later on, it's truly worth it. Unlike active jobs, passive jobs get easier and more rewarding as you stick with them over the years. If you ask us, having a source of passive income is definitely worth it.

Most people want to get wealthy. It's just natural. So, we highly suggest you get started with one of these activities or even come up with something creative on your own!