The market may be improving, but it hasn’t been enough that all of a sudden we’re all drowning in cash. Honestly, I doubt that will ever happen. But even so, many of us are struggling with the holidays just around the corner.
While it’s probably too late to create enough passive income to pay for your shopping outright, there is certainly a way to pay back all that holiday shopping. Moreover, you can set yourself up to never worry about paying for the holidays again.
Create more cash
The first way to help pay for your holiday shopping is by seeking out passive-income streams. However, do not think I mean a side hustle. Side hustles are basically taking the hobbies you should be enjoying and trying to make money on them. That’s a part-time job, not a passive-income stream.
Passive income should be easy — so easy you can make money no matter what you’re doing. Yet many take money to start up, but not all of them do. For instance, consider renting out items you already have! Storage continues to be needed, so renting out an apartment storage space, or a shed on your property can bring in hundreds of dollars per month.
Also consider passive-income streams such as renting your parking spot, or driving your car around with advertisements on it, known as carvertising. These all together could create hundreds if not thousands in passive income!
Invest it!
Before you spend that cash all at once, consider investing it to create even more. From here I would consider two options. Instead of blowing it all on holiday shopping, put some aside for the future. This can help with long-term goals and emergencies.
If you’re going to do this, then consider a Guaranteed Investment Certificate (GIC) right now. There are many banks offering 5% interest rates on five-year terms. And that won’t last forever. So, you can look forward to 5% each and every year!
Then, consider dividend stocks for more immediate passive income. For example, a great option would be bank stocks such as Canadian Imperial Bank of Commerce (TSX:CM). Shares are down about 17% in the last year, but the stock has a history of recovering within a year of hitting 52-week lows. So, you can get a deal knowing it will come right back, with passive income from returns and a 6.48% dividend yield.
Use it and invest again
So, let’s say you created $2,000 from a combination of these passive income streams, all of which can be set up quickly and easily through online applications. You then invest $1,000 in a GIC, creating 5% on that each year. You also invest in CIBC stock, creating 6.48% in dividend income and seeing shares return to 52-week highs. Here is what that could look like in just a year!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | PORTFOLIO TOTAL |
| CM – now | $53 | 19 | $3.48 | $66.12 | quarterly | $1,000 |
| CM – highs | $65 | 19 | $3.48 | $66.12 | quarterly | $1,235 |
And here is what you could get from that GIC in just a year, though you could not take it out until the term is over.
| YEAR | INTEREST | PORTFOLIO TOTAL |
| 0 | 0% | $1,000 |
| 1 | 5% | $1,050 |
| 2 | 5% | $1,102.50 |
| 3 | 5% | $1,157.63 |
| 4 | 5% | $1,215.51 |
| 5 | 5% | $1,276.28 |
Bottom line
With this method, you could make $2,000 from passive-income streams. You could then make $50 in just a year from GICs. Then you could earn $235 in returns and $66.12 in passive income. From just that first month of passive income and investing, you could have a passive income of $2,351.12! If you keep it up, you’ll have far more than you need for just holiday shopping.
