Here’s how to take your income to the next level. By applying some or all of these ideas, you can increase and improve your income!

Build a passive income

Other than earning income from your job, you can also earn income on the side. No, I’m not talking about getting a side job. Instead, you can save and invest your money, so that it works hard for you.

Sure, you can get $100 from your bank for lending it $10,000 of your money by placing it in a guaranteed investment certificate for one year. However, that’s only 1% interest; it can be higher and better than that.

Build a high passive income

You can turn a low passive income into higher income by becoming an owner instead of a creditor. So, instead of lending your money to the bank, you can buy bank shares and own a piece of the banks!

Like many other Canadians, I dread paying my high banking fees. By owning bank shares, I can get my banking fees back in the form of dividends–cash that the banks pay out every three months.

Today, the Big Five banks, including Royal Bank of Canada (TSX:RY)(NYSE:RY), Toronto-Dominion Bank (TSX:TD)(NYSE:TD), Bank of Nova Scotia (TSX:BNS)(NYSE:BNS), Bank of Montreal (TSX:BMO)(NYSE:BMO), and Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM), yield between 3.9% to 4.8%.

So, investors could get up to an income of $480 per year by investing $10,000 in the banks today. That said, if any of the banks yield close to 5%, that’d be a great entry point.

Build a secure passive-income stream

It won’t do to just buy one bank (or all five banks for that matter) to build a passive-income stream. It’s too concentrated.

If anything happened to the industry, even if it’s only short term, it could be devastating. In the financial crisis of 2008 and 2009 the bank shares fell as much as 50%!

They froze their dividends at the time. Not only was it scary for shareholders who were afraid that a dividend cut would be next (many U.S. banks cut their dividends), but the 50% drop in the capital was also horrific.

By buying top companies from different stable sectors, you can build a more secure passive-income stream and income portfolio. And in any downturn, your passive-income stream and income portfolio will be better protected.

Build income that grows

Dividend-growth companies collectively outperform companies that maintain or pay no dividend. So, why not build a secure income stream from dividend growers?

Other than banks, utilities such as Brookfield Renewable Partners LP (TSX:BEP.UN)(NYSE:BEP) and Canadian Utilities Limited (TSX:CU) also pay growing dividends. Today, you can get a yield of 6.1% and 3.6%, respectively, from them. Brookfield pays a U.S. dollar–denominated dividend, so its yield will change as the U.S. dollar fluctuates against the Canadian loonie.

The banks and utilities have been increasing their dividends by 5-10% per year, and they should be able to continue to do so.


Build a diversified passive-income stream from the top companies of stable industries. Such a portfolio with a 4% yield can be easily built in today’s market. So, a $10,000 portfolio can generate at least a $400 in income per year.

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Fool contributor Kay Ng owns shares of Brookfield Renewable Energy Partners LP, CANADIAN UTILITIES LTD., CL.A, NV, Royal Bank of Canada (USA), Bank of Nova Scotia (USA), and Toronto-Dominion Bank (USA).