Increasing your passive income as a new grad
“If you don’t find a way to make money while you sleep, you will work until you die” — Warren Buffet
Having the right mindset
Entering the professional world comes with its fair share of stress for a freshly graduated student, but investing shouldn’t be a contributing factor. In fact, the risk tolerance of a new grad should be very high, and for many reasons. Of course, everyone is in a different financial situation when graduating and it is generally a great idea to pay off debt and student loans before placing your money. However, most young professionals do not have a lot of financial responsibilities and are certainly not looking for retirement a near future. Thus, it is ok to take risk, even if it means losing money at some point. Maximizing growth should be the priority, not minimizing risk.
Investing your savings
This strategy is probably the obvious one but certainly not to be overlooked. Investing in your TFSA or RRSP account at a young age can drastically help you build great passive income. It is important however to select the best tool for your needs. Because the contributions made to a TFSA are not deductible from the individual’s income, it is usually more fitted for a more short-term oriented goal, like having a cash down on a property for example. An RRSP account which is tax deductible and taxable upon withdrawal is considered a long-term retirement savings product. Without diving too much in the details, both products offer their own advantages. What matters is that it is a great way for anyone, especially a new grad, to earn interest income from your savings. It is important for anyone who is entering the professional market, to look at what your employer is offering, especially concerning employee savings plan. These can very valuable since many employers are offering something called a company match, meaning that the company is matching the amount of money you are putting in, up to a certain percentage of your salary. Simply put, that is free money.
Launch online teaching courses
The popularity of online courses made a significant jump over the last few years. In fact, a lot of people are looking for cheaper alternatives to broader their knowledge online, especially with COVID-19 still deeply affecting our daily lives. A great way to increase passive income is to start an online teaching class. While this might sound like a lot of work, it is not. Most of the learnings a student acquired during university will not apply to a daily job and most of it will be forgotten eventually. Thus, it is a great opportunity, to launch an online course, about any topic learned at school. Can you teach people statistics or basic programming? You don’t need to be on top of everyone to teach something, you just need to verbalize concepts well enough that people can understand it quickly and promote your product. This strategy does require some initial work to choose the right platform, film the courses and uploading it, but the return can be substantial. Many popular platforms are available on the internet but Teachable might be the best option right now.
Writing and selling eBooks
An eBook is, in most cases, very misunderstood. It is not necessarily the pdf of a book sold through amazon. It doesn’t need to be professional; it can only be a rough draft and is most likely imperfect. Writing an eBook does not need to be hard. In fact, students are writing a lot of content during university that could well serve for multiples eBooks (make sure you own the rights). If you are passionate about something like UX design of creating websites, then it is a great way to earn extra cash. Additionally, there are tons of online marketplaces for eBook, Amazon Kindle, Blurb, Lulu are just a few examples.
Building an affiliate website
For those not familiar with the concept, an affiliate program is a relationship in which a merchant pays the “affiliate” for links for the products bough by a customer that was directed from your website to the merchant’s website. An affiliate programs can be a great way for you to earn money. There are so many platforms nowadays to setup your own website that you don’t even need to have the required IT skills. What it is important here, is to effectively promote the products you are writing about. Accurate reviews combined with a bit of marketing can often increase web traffic and therefore the number of people using those affiliate links to buy products. Adding content, like videos can be even more helpful.