Bring in Monthly Income of $162 Without Lifting a Finger

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It’s amazing to me how many Canadians don’t realize just how easy it is to create passive income each month — passive income they can set up and forget about and never touch again! And that cash is sorely needed right now, with the market still performing as it has.

That’s why today we’re going to look at how Canadian investors can start creating monthly income right now and a dividend stock to get you there.

Getting started

The key here is two steps. First, you’re going to want to have a Tax-Free Savings Account (TFSA). There are two main reasons to have the TFSA as opposed to other investment accounts. The TFSA cannot be taxed, as it states. This means any income that you receive, including dividend income, isn’t taxed by the government.

Furthermore, you can withdraw as much or as little as you want at any time. Should you need your monthly passive income to pay bills, buy a car, or just get some groceries, it will be right there waiting for you.

The next step is to make automated contributions. This is key. By setting up contributions and just forgetting about them, then creating automatic investments to boot, you can create a strong and growing portfolio without lifting a finger!

Why now?

I get it. Right now is a very tricky time to get into investing. And I definitely don’t think you should start sinking all your cash into some risky stocks. First, meet with your financial advisor, align your goals with your income, and consider Guaranteed Investment Certificates (GIC) and other fixed-income assets.

From there, you can still have cash left over to make these automated contributions. And honestly, right now is a great time to get into value stocks. What makes them valuable? These would be considered blue-chip companies that are down but have cash provisions to allow them to bounce back. And here is one I would consider right now.

A top monthly passive-income provider

If you’re looking for top passive income that lasts, consider Canadian Apartment Properties REIT (TSX:CAR.UN). CAPREIT stock is a solid choice as investment in apartment properties continues to grow. However, it also has a strong history of growth over the last few decades.

The thing is, CAPREIT stock is quite valuable right now — especially as a monthly passive-income stock. It offers a 3.52% dividend yield as of writing, coming out as $1.45 per share annually. It also trades at a valuable 0.71 times book value, and shares are down just 3.5% in the last year, providing an easy boost.

What’s more, the company’s dividend yield is far higher than the five-year average of 2.79%! So, you’re getting a higher dividend, a discount on the stock, and superb passive income. And if you’re worried about a cut, don’t be. The company also boasts a debt-to-equity (D/E) ratio of just 73.4%. Therefore, there is more than enough cash on hand to pay down debts.

Bottom line

Now, let’s say you invested in CAPREIT stock for the next year, putting aside $500 per month. Here is what you would have from that $6,000 investment into your TFSA by the end of the year if shares hit 52-week highs.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYPORTFOLIO TOTAL
CAR.UN – now$41146$1.45$211.70monthly$6,000
CAR.UN – highs$53146$1.45$211.70monthly$7,738

After reaching those highs, you would have made $1,738 in returns and $211.70 in annual income! That’s total passive income of $1,949.70, coming to about $162.47 per month! And that’s all without lifting more than a finger.

The post Bring in Monthly Income of $162 Without Lifting a Finger appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Canadian Apartment Properties?

Before you consider Canadian Apartment Properties, you’ll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in October 2023… and Canadian Apartment Properties wasn’t on the list.

The online investing service they’ve run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 25 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks
* Returns as of 10/10/23

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Fool contributor Amy Legate-Wolfe 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.