Search
Search for an ETF or holding
Search for an ETF or holding
Updated 2mo ago.
Updated 2mo ago.
Passive income is regular income that doesn't require ongoing active work. In investing, it mainly comes from stock and ETF dividends, bond interest, and real estate investment trust (REIT) distributions.
If you hold $100,000 in VDY.TO (Vanguard FTSE Canadian High Dividend Yield Index ETF) with a distribution yield of about 4%, you receive ~$4,000 per year (about $333 per month) in distributions without selling any shares. In a TFSA, these distributions are completely tax-free. ETFs like XEI.TO or ZDV.TO are also popular for generating passive income.
Passive income is the ultimate goal for many investors — eventually replacing or supplementing your salary. But be careful: high-distribution-yield ETFs aren't always the best investments. A high yield can mean less capital growth. For a beginner, an all-in-one ETF like VEQT.TO that reinvests growth is often preferable in the short term.