Advertisement
What actually counts as earning passive income? Does your side hustle count? Find out.
Passive income is income earned without significant effort on the part of the earner. Two common sources of passive income are rental properties and investments that provide you with dividends, interest and capital gains.
For both, you need capital to invest and a willingness to take on risks like market declines and tenants who damage your property or fail to pay their rent. You also have to manage your assets on an ongoing basis.
Most side hustles, like driving for Uber, delivering food or online tutoring, are really part-time jobs, not sources of passive income. Similarly, creating online content is sometimes described as a source of passive income, once you have developed the audience necessary to earn affiliate or advertising revenue, but it can be hard work generating a following, adding content regularly, and marketing yourself as an influencer.
Because the idea of earning money without much effort is highly attractive, many scams are disguised as passive income earning opportunities. Common examples include some drop-shipping businesses, educational courses, car wrapping, mystery shopping and investment schemes.
Example: “Experian, a major consumer credit reporting company, warns consumers to watch for red flags like promises of passive income, high-pressure sales tactics and opportunities to earn fast, easy money.”
Share this article Share on Facebook Share on Twitter Share on Linkedin Share on Reddit Share on Email
Should you be paid as a power of attorney? Learn about the compensation rules in Ontario and how to...
Inflation is down, wages are up. But the economic recovery has been uneven, with “two contradictory trends” shaping Canadians’...
Parents, here are the CCB payment dates for 2024 and 2025, along with how much you can expect to...
Here’s how Canada’s retirement pension plan works, who’s eligible for CPP, when you can start receiving CPP, and CPP...
Canadians have reporting requirements for foreign assets, income and tax paid. Here’s how to claim each of these on...
If you are struggling with the higher cost of living in Canada and you need more income, you could...
A Certified Financial Planner provides perspective on the TFSA vs. RRSP question for a couple in their late 50s...
Driving for Uber or writing on Fiverr? Here’s what you need to know about filing your taxes.
How high inflation affects investments, and what you can do to minimize the impact on your retirement savings.
