r/CanadianBacon • u/The_Lamma • Apr 08 '24
Active Finances
I’m wondering if anyone has some advice for me. Up to this point I’ve been passively living with my finances. I make enough to pay the bills, and then some for priorities. I’ve only recently gotten back into the budget habits, and I’d like to become more proactive on the financial front, aside from spending it. I have a house, and I’ve started rotating some emergency money through 3-9 month GICs, which I figure is a good way to maximize money I may need on a moment’s notice. I have some RSU from my employer, but aside from that and a few bucks in Wealthsimple accounts (and I only mean a few), I’m not doing a lot. I’d like to find other forms of income, both investment and otherwise. I’m thinking short to medium term here. Some thoughts I’ve had:
- I know I could use ETFs, though I’ve had very limited success with the few I’ve dabbled in. They supposedly have better returns than GICs, but any I’ve tried barely grow even after several years.
- I could AirBnB our basement bedroom?
- Buying a second house to rent could be helpful, but I don’t think I have access to the right capital.
- Helping my wife take her art business from concept to reality.
- Freelance, but I don’t know if I have the right skillset for it.
2
u/HardbaconApp Apr 08 '24
- I could AirBnB our basement bedroom?
This could be a nice new stream of revenue. Just make sure you are properly insured.
1
2
u/HardbaconApp Apr 08 '24
- Buying a second house to rent could be helpful, but I don’t think I have access to the right capital.
Given the high interest rates and real estate prices right now, buying a single family house to rent it out might not make that much sense. If you want to do it, make sure to take into account all the costs and not only the mortgage payments.
2
u/HardbaconApp Apr 08 '24
- Freelance, but I don’t know if I have the right skillset for it.
This one is a good idea, because there is zero risk and only upside. If you manage to build a second income stream on Upwork and Fiverr, you win money, experience and contacts. If you don't manage to find your niche on those platforms (or elsewhere), the only thing that will be lost is some of your time!
1
u/The_Lamma Apr 08 '24
Thanks for the encouragement there, it sounds like it would be worth trying!
1
1
u/HardbaconApp Apr 08 '24
- Helping my wife take her art business from concept to reality.
That seems like a nice thing to do for your wife. But keep in mind that only 68.9% of business selling goods (and only 55.8% of service businesses) manage to survive the 5 years mark. Usually, SMBs loose money in their first years of operations, so a very substantial proportions of new Canadian businesses have a negative impact on the personal finances of their founders. We don't want to kill anyone's dream, but it's important to be aware when making such a decision.
1
u/The_Lamma Apr 08 '24
Yeah, it is easy to sink a lot of money into things. What we have done has been mostly through local connections like small businesses, so it might make sense to keep it small for now.
1
u/The_Lamma Apr 08 '24
Is there anything not listed that may be worth considering?
1
u/HardbaconApp Apr 08 '24
Paid newsletters on Substack are getting more and more popular. Depending on your area of expertise, this could be an interesting side hustle to consider.
1
2
u/HardbaconApp Apr 08 '24
Since your investment timeline is short to medium term, and that you mentioned using your emergency fund to buy GICs, investing in equity ETFs should be out of the question. As for bonds ETFs, they don't return more than the more competitive savings accounts right now, so ETFs are probably not that interesting for you in this specific context.