In Canada, there are various avenues to generate passive income, each catering to different investment preferences and risk tolerance. Passive income allows you to earn money without active involvement after the initial effort or investment. Below are some proven methods to build a steady income stream.

1. Real Estate Investments

  • Rental Properties: Investing in residential or commercial properties can provide a continuous income through monthly rent payments. However, managing properties might require effort unless you hire a property manager.
  • Real Estate Investment Trusts (REITs): For those not keen on property management, REITs offer a way to invest in real estate without the hassle of direct ownership.

2. Stock Market Investments

  • Dividend Stocks: Investing in companies that pay regular dividends allows you to receive a portion of the company's profits at regular intervals.
  • Index Funds: A low-cost investment option that tracks the performance of a market index, providing long-term growth with minimal effort.

"Passive income requires an upfront investment of either time, money, or both. It is important to consider the risk and potential returns before committing."

Investment Type Initial Effort Potential Return
Real Estate High (property management, market research) Medium to High
Dividend Stocks Low (buying stocks, periodic monitoring) Medium
Index Funds Low (set and forget strategy) Medium to High