How to Earn $2,005 in Passive Income With No Start-Up Costs

Passive income doesn’t need to be difficult work. In fact, by definition, it shouldn’t be! Here’s an easy way to get started at zero cost.

| More on:

If you’re looking to create some passive income for the holidays or at least to pay off holiday spending, I don’t blame you. Sure, the market and economies are showing signs of improvement. However, unless you’ve come into a large amount of cash, it’s very likely you’re one of millions of Canadians who are still struggling.

There are certainly ways of creating passive income quickly. Moreover, once you discover a method that works for you, you can turn that passive income into massive cash — cash that can be invested again and again to create the most amount of passive income possible.

So, let’s get started.

An option right for you

The key to passive-income streams is that you can do them no matter what else you’re doing. Whether it’s driving, sleeping, or travelling, you’ll still be making passive income. Because of this, it’s important to be clear that passive income is not a side hustle.

Instead, look for things that you can do all the time, no matter your age or how busy you are. For instance, consider renting out your parking spot at a monthly price that’s lower than nearby levels. You could “carvertise,” putting advertisements on your car while you simply drive around. Or you could rent out storage space in your attic, garage, or apartment storage unit.

These are all methods that could bring in hundreds in passive income each and every month. Do all of them, and after the initial setup, you won’t have to worry about a thing — especially as most of these options also can be used through applications such as Rover or SpotHero, which will do the heavy lifting.

Start making money!

You can start making passive income pretty much right away with these methods. But once you do, don’t spend it all at once. If you have debts that need to be paid, pay them! Interest is going to keep hurting until you pay those down.

However, if you’re able, put the money aside. Treat that money as extra income and not part of your budget. After all, those contracts could come to an end suddenly, so you don’t want to start depending on that cash.

Instead, put that cash right into a Tax-Free Savings Account (TFSA). That way, you can start creating an emergency fund, working towards your long-term goals — even retirement! However, if you need that cash suddenly, you can take it out cash free. Meanwhile, you can make even more passive income by investing.

Go safe

The key to investing and creating huge passive income is by investing with long-term goals in mind. You can still do this without hardly lifting a finger. Simply start by creating automated contributions to the right companies, exchange-traded funds, and Guaranteed Investment Certificates.

For example, let’s say you put cash towards Royal Bank of Canada (TSX:RY). Royal Bank stock has shown an increase in profits over the last year as of its latest earnings report. So, it’s a great time to get into the bank stock, as it continues to recover toward 52-week highs.

Meanwhile, let’s say you make $300 per passive income stream each month doing parking rental, storage rental, and carvertising. That’s a total of $900 each month, which works out to $10,800 annually, to invest. Should RBC stock see shares return to highs, here is what that could look like.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYPORTFOLIO TOTAL
RY – now$12288$5.52$485.76quarterly$10,800
RY – highs$14088$5.52$485.76quarterly$12,320

You’ve now created $1,520 in returns and $485.76 in dividend income. That’s passive income totalling $2,005.76! All with zero start-up costs. And that will certainly help pay next year’s holiday expenses.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in Royal Bank Of Canada. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

exchange traded funds
Dividend Stocks

3 Canadian ETFs to Buy and Hold in a TFSA for a Lifelong Relationship

These three ETFs are a match made in dividend heaven, especially when put into a TFSA!

Read more »

sale discount best price
Dividend Stocks

A Bargain Dividend Stock With a Nearly +8% Yield

Telus (TSX:T) stock stands out as an interesting bargain as the yield approaches 8% again.

Read more »

Canadian dollars in a magnifying glass
Dividend Stocks

TFSA: Invest $15,000 in This TSX Stock and Create $5,960 in Annual Passive Income

Down 50% from all-time highs, Brookfield Renewable is a top TSX dividend stock that trades at a sizeable discount to…

Read more »

happy woman throws cash
Dividend Stocks

Never Miss a Payment: 2 Stocks That Send You Cash 12 Times a Year

These two top monthly dividend stocks, with up to 8.3% yield, could help you generate reliable passive income for years.

Read more »

stocks climbing green bull market
Dividend Stocks

1 Canadian Stock Ready to Surge in 2025 and Beyond

If you can identify the right time when a bearish stock is turning bullish, it’s possible to generate decent returns…

Read more »

Muscles Drawn On Black board
Dividend Stocks

Supercharge Your Stocks With These High-Yield Winners

These two top Canadian dividend stocks not only provide high yields today but also strong long-term growth potential.

Read more »

clock time
Dividend Stocks

Clock’s Ticking, Canada: The RRSP Deadline Is March 3

If you want to contribute money to an RRSP and buy iShares S&P/TSX 60 Index Fund (TSX:XIU) shares with it,…

Read more »

Canadian Dollars bills
Dividend Stocks

Invest $5,000 in This Dividend Stock for $242.73 in Passive Income

Not all energy stocks are in the oil and gas industry, and providing some diversification can bring in cold hard…

Read more »