5 Steps for Making $500 a Month Passive Income by 2023


TIMER SAYING TIME FOR ACTION

Establishing a monthly passive income stream is something that every investor should consider, and not only when retiring. Fortunately, there is a way to establish an income stream before you stop working.

Here are some key steps to making $500 in monthly passive income a reality – even in 2023!

Step 1- First, understand it will take time

This may seem self-explanatory, but few investors, especially those who are new to investing, have $40,000 or more to drop on a handful of stocks. And that’s OK.

Establishing a monthly passive income stream of $500 or more is going to take time and plenty of patience. This is why it’s important to start early and give time for that income stream to build up.

Specifically, would-be investors who don’t need to draw on that monthly passive income yet can instead reinvest those monthly dividends until needed. Over a longer period, this will allow that income to grow on autopilot.

Step 2- Invest in this well-diversified gem

Exchange Income Corporation (TSX:EIF) is a great stock that should be on the radar of investors everywhere. Exchange owns over a dozen subsidiary companies that are grouped into either manufacturing or aviation segments.

The subsidiary companies all offer necessary services to niche areas of the market where there is little competition, but strong demand. This includes providing passenger and cargo services to Canada’s remote northern regions, as well as niche manufacturing projects serving the defence industry.

Turning to income, Exchange provides investors with a juicy monthly dividend that currently works out to a yield of 4.89%. Additionally, Exchange has provided a juicy uptick to that dividend 16 times over the past 18 years.

Step 3- Sprinkle in a REIT

REITs are great investments for income-seeking investors. They offer would-be landlords a viable alternative to buying and maintaining properties.

One REIT for investors looking to generate monthly passive income is RioCan Real Estate (TSX:REI.UN). RioCan is one of the largest REITs in Canada, with a growing portfolio of predominately retail-focused properties.

In recent years, RioCan has shifted its focus to mixed-used properties that comprise residential towers sitting above several retail floors. The properties are situated in high-traffic, high-demand locations across Canada’s major metros.

In short, RioCan offers a unique solution that not only offsets the decline in traditional mall traffic but also provides significant long-term growth potential.

Turning to income, RioCan offers a monthly distribution that carries a yield of 5.35% making it a respectable addition to any well-diversified portfolio.

Step 4 – Add some renewable energy

Renewable Energy remains one of the most significant long-term opportunities on the market for investors. And TransAlta Renewables (TSX:RNW) is the renewable energy company to consider adding to your portfolio.

TransAlta boasts a portfolio of over 40 facilities located across Canada, the U.S., and Australia. Those facilities generate a stable and recurring revenue stream that is bound by long-term regulated contracts that span decades.

Apart from the current defensive appeal and long-term growth potential, TransAlta also offers a very juicy monthly distribution. As of the time of writing, TransAlta’s dividend works out to a yield of 7.93%, making it one of the highest yields on the market.

Step 5- Watch your monthly passive income stream grow

No investment is without risk, and that includes the stocks mentioned above. Fortunately, the above stocks all offer some defensive appeal in addition to a juicy income. And that income can quickly add up to $500 or more in monthly income over the longer term.

In fact, allocating just shy of $40,000 to each of the three stocks mentioned above can provide over $600 in monthly passive income.

CompanyRecent PriceNumber of SharesDividendTotal PayoutFrequencyTransAlta Renewables$11.923,355$0.94$262.80MonthlyRioCan Real Estate$19.732,027$1.08$182.43MonthlyExchange Income Corp$50.94785$2.52$164.85Monthly

Prospective investors should keep in mind that reinvesting that passive income until needed will let it grow further.

In my opinion, one or all of the above stocks would be a great addition to any well-diversified portfolio.

The post 5 Steps to Making $500 in Monthly Passive Income in 2023 appeared first on The Motley Fool Canada.

Free Dividend Stock Pick: 7.9% Yield and Monthly Payments

Canada’s inflation rate has skyrocketed to 6.9%, meaning you’re effectively losing money by investing in a GIC, or worse, leaving your money in a so-called “high interest” savings account.

That’s why we’re alerting investors to a high-yield Canadian dividend stock that looks ridiculously cheap right now. Not only does it yield a whopping 7.9%, but it pays monthly!

Here’s the best part: We’re giving this dividend pick away for FREE today.

Claim your free dividend stock pick * Percentages as of 11/29/22

(function() { function setButtonColorDefaults(param, property, defaultValue) { if( !param || !param.includes('#')) { var button = document.getElementsByClassName("pitch-snippet")[0].getElementsByClassName("pitch-button")[0]; button.style[property] = defaultValue; } }

setButtonColorDefaults("#5FA85D", 'background', '#5FA85D'); setButtonColorDefaults("#43A24A", 'border-color', '#43A24A'); setButtonColorDefaults("#fff", 'color', '#fff');>

More reading

2 Unjustifiably Cheap Dividend Stocks in Canada 2 of the Best Canadian Stocks That Pay Out Monthly RRSP Investors: 3 Stocks for Decades of Passive Income Investing for Passive Income? Pick Up This Little-Known Dividend Stock Passive Income: How to Earn Nearly $500 Per Month in Your TFSA Portfolio

Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

https://www.fool.ca/2023/03/24/5-steps-to-making-500-in-monthly-passive-income-in-2023/

Comments

Post a Comment

Popular posts from this blog

Get Rich With These High-Yield Canadian Dividend Stocks

Image
Dividend stocks are one of the smartest ways to create wealth in the long term. By investing in dividend-paying stocks, one can generate returns in two ways: dividends and capital appreciation. As top dividend-paying companies generally have well-established businesses and a growing earnings base, they generate steady capital gains in the long term. Further, the reinvestment of dividends allows investors to accumulate more shares and create wealth in the long term.  With this background, let’s zoom in on three high-yield Canadian stocks that can help you get rich over time.  Enbridge  Enbridge (TSX:ENB) is a must-have dividend stock, and there are solid reasons behind that. Besides offering a lucrative yield of 6.7% (based on its closing price of $53.14 on May 10), the company has a resilient business that consistently delivers steady growth.  Enbridge owns extensive midstream assets and transports oil and gas. In addition, Enbridge has interests in renewable energy faci...
Read more

How much dividend income can you earn?

Image
Passive income. It’s one of the most common financial goals for Canadian investors. Everybody likes making money on a stock trade, but what could be better than a stock that pays you income year in and year out? Such are the kinds of stocks that Warren Buffett and other long-term investors made their fortunes on. This raises a question: Is it possible to make a truly substantial amount of money – let’s say $1,000 per month – with just dividend stocks? Such a thing would be very helpful if it could be done. Consider that, $1,000 per month is more than what the average Canadian gets from the Canada Pension Plan (CPP). If you take the average CPP payment ($811) and add $1,000 per month in dividend income to it, you get to a sum of money that could potentially pay all of your bills. In this article, I will explore the topic of making money with dividend stocks. I will show how much money you’d need to invest to get $1,000 a month in dividend income. I will reveal a stock that...
Read more

RRSP Wealth - Two Top TSX Dividend Securities to Buy Now or Own for 25 Year

Image
The market pullback is giving Registered Retirement Savings Plan (RRSP) investors a chance to buy top Canadian dividend stocks at undervalued prices for a self-directed portfolio focused on long-term total returns. TC Energy TC Energy (TSX:TRP)(NYSE:TRP) has raised its dividend in each of the past 22 years, and investors should see the distribution continue to grow at a steady pace. The energy infrastructure giant operates natural gas pipelines, oil pipelines, and power-generation facilities in Canada, the United States, and Mexico. The $28 billion capital program is largely focused on expanding the natural gas pipeline business, which already boasts 93,000 km of infrastructure. TC Energy has assets that connect the Marcellus and Utica shale plays in the United States to the Gulf Coast, where liquified natural gas (LNG) facilities cool the gas to the point where it becomes liquid and can be shipped to international buyers. In Canada, TC Energy is building the Coastal GasLink pi...
Read more