The gig economy in Canada is thriving: 40% of the people who are part of this economy are millennials. According to a study by Angus Reid Institute (ARI), about two in every five millennials have done freelance work or have been in informal employment since 2014.
ARI Executive Director Shachi Kurl commented that these younger workers tend to have an uncertain outlook about their financial future. While the situation isn’t bleak, but the time has come to embrace investing.
Eye for savings
About 50% of the survey respondents are taking on informal work to have more money for spending or saving cash. If you’re part of the gig economy, you can invest your earnings or least allocate a portion for investments. Your money can make more money through dividend-paying stocks.
Canadian millennials have an eye for savings but are not overconfident investors. It’s good that this younger generation is dumping credit cards and looking to improve financial well-being.
Save early and often
The best strategy for beginners is to aside money regularly, even in small amounts. Once you get used to the habit, you can start your investing activity.
In order to soothe your fear of investing, your initial investment could be in a safe blue-chip stock like Royal Bank of Canada (TSX:RY)(NYSE:RY).
The key steps are to save what you can, save early and often. If you have enough seed capital, invest in the largest bank in Canada.
RBC has a market capitalization of $150.5 billion. Aside from its enormous size, the bank belongs to the most mature and stable banking system in the world.
RBC has been operating since 1864 and started paying dividends since 1870. Since 2017, it’s been raising dividends twice times in a year with a compound annual growth rate of 7%.
The stock pays a 3.92% dividend. A $5,000 investment will deliver $196 in annual passive income. The higher your investment, the higher your income.
Fulfill your dream
Among the aspirations of a millennial is to own real estate property. Realizing your goal is not impossible if you invest in one of the top Canadian real estate investment trusts (REIT).
You can be a pseudo-landlord of office properties through Dream Office (TSX:D.UN). This $1.72 billion REIT focuses on the office market in Toronto. Of the total four million square feet of leasable office space, 89% of rental payments come from the Greater Toronto Area (GTA).
Dream chose the Toronto office market because the location is excellent. Vacancy rates are low, with a constant occupancy rate of 98% range. Furthermore, rental rates are rising. It seems that every business wants to set up shop in Toronto.
With its timely shift to office rental space, the balance sheet of Dream improved tremendously. Its debt-to-assets ratio is below 40%, and the debt balance for refinancing next year is just over $150 million. Dream can grow its portfolio except that there are limited assets for sale in downtown Toronto.
For $30.60 per share, this REIT stock will reward you with a 3.26% dividend.
Multiply your savings
Whether you’re a regular employee or a gig economy worker, your savings can multiply in 2020 by investing in Royal Bank of Canada and Dream REIT today.
