How did I make my first $500 with passive investments?

Coin picture by Chris Briggs
Coin picture by Chris Briggs
Photo by Chris Briggs

Imagine planting a tree that grows money instead of leaves. Too good to be true right? Well not quite. Let me tell you my story; how I generated my first 500$ in passive income. If you have somewhere between 100$ to 2000$ lying around that you don’t need anytime soon then you too can invest that money and generate a healthy passive income.

Disclaimer: Only invest the amount that you know you don’t need anytime soon (at least within the next 3 months).

Alright, so how do we do this?

Dividend Stocks, the oldest trick in the book!!

I know what you are thinking. As a risk averse person I too was skeptical about the stock market at first. The stock market is a jungle of numerous opportunities and risks. There are many like Warren Buffett who made a fortune in the market; however, beware if you are not careful you can very well lose a lot of money. In general dividend stocks are low risk investments with little overhead.

For starters a dividend stock is usually a stock of a well established company that distributes a small amount of their profit to the shareholders. For example if I buy 1 stock of Canadian Bank of Commerce (approximately 100$) then I am eligible to receive 4.5$ every 3 months. On top of that the stock value goes up as well over time. Maybe in 3 months the value of my stock will grow to 110$. Moreover, the well established companies with a good track record of paying dividends barely sees a downturn. Over a longer period of time the value for these stocks always goes up.

Here’s a list of some of my favourite dividend stocks in Canada

  1. CIBC
  2. BMO
  3. Scotia Bank (BNS)
  4. Enbridge (ENB)
  5. Royal Bank of Canada (RY)
  6. Suncor

Investing in dividend stocks is not going to make you filthy rich overnight but it is a good way to start generating passive income. Almost every investor has investments in dividend stocks.

Start Small and grow

Start small and minimize the risk. I started my trading account with $100 with Wealth Simple Trade. I then started contributing 200$ from every paycheck I received from my day job. 3 months later my initial contribution was $1300 and my account value grew to $1900.

Be cautious as a new investor, choose an online broker that has $0 commission. I picked wealthsimple trade for this very reason.

Research!

Don’t just pick a stock in random. Research what stock to buy. Here’s couple good sites where you can research

Simplywall.st

DividendGuyBlog

marketwatch

Software Craftsman | Entrepreneur | Freelancer. Always on the look for opportunities to make the world a little bit better with technology.

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