Passive income visas, sometimes called retirement visas, allow non-citizens to move to another country without the need for employment. In return, you get the opportunity to enjoy an excellent quality of life, explore new cultures, enjoying a better climate, greater safety and countless more benefits.
I have lost count of my trips to Portugal and Spain. I have enjoyed each and everyone one of them, but when I went to Barcelona two years ago it changed my life. I came back recharged and refreshed and realized that there is more to working until I am 65 and living out the rest of my days in Canada.
Over the last two years I have been exploring two passive income visas. The D7 Visa for Portugal and the Non-Lucrative Visa for Spain. Both countries require proof of financial means to be able to be successful in obtaining the visa.
What is Passive Income?
Passive income is income earned working for an employer, your own company, freelancing, etc. The types of passive income generally accepted for visas include:
- Pensions
- Rental incomes
- Investments
- Dividends
How Can I Retire Early?
I am grateful to have pension plan that if I work until 65 I will be very well set up for retirement, especially when I combine it with my savings, the Canada Pension Plan and Old Age Security.
But what if I don’t want to wait that long to move to Europe? How can I made up the difference from my reduced pension to qualify for a visa?
Minimalist Investing
After years of trying to pick the right stocks, being on the winning side sometimes and on the losing side on others I embraced what is called minimalist investing.
According to Morningstar, the goal of a minimalist investing is to use the fewest number of holdings to create a diverse portfolio. Think index funds and exchange-traded funds that can give you access to entire national and international markets at very low cost.
With this approach, you’ll still need to monitor your portfolio, with quarterly or annual checkups and you likely won’t need to make many changes if any.
Covered Call Exchange Traded Funds
Investing in covered call Exchange Traded Funds (ETFs) can be an attractive option for generating passive income. The strategy provides the benefit of stock market gains while also providing some downside protection through the way the fund is managed. It is important to note that all investing does mean taking on risk.
One key advantage of covered call ETFs is the regular income they can generate, which can be particularly appealing when you are trying to meet the passive income requirements. Investors can potentially earn monthly or quarterly distributions from these ETFs, providing a steady income stream.
Currently I am invested in three ETFs that are giving me a rate of return between 12 and 15 per cent a year. This is allowing me to make up the difference between my early pension and the requirement to allow me to apply for a visa in about a year’s time.
There are many covered call ETFs available, each covering entire indexes or specific sectors. If you are considering this type of it’s very important to do your research and speak with your financial advisor.
