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1 Easy Way to Make $300 of Passive Income a Month

That old saying is a good one: it takes money to make money.

While that remains true in most cases, it’s certainly true when it comes to investing. And that can be a pretty daunting task when it comes to where to put your money — what savings account should you use, and what stocks should you invest in?

The Tax-Free Savings Account (TSFA) is the perfect place to start working towards your goals. While it does take money to make money, even just putting in whatever you can manage can snowball into quite the ample sum if you let it increase over the years. And the best part with the TFSA is all your earnings remain tax free.

One easy way to see your shares increase while also receiving a monthly cheque that comes in like clockwork is to invest with Inter Pipeline (TSX:IPL).

If you want that passive income to come in at $300 per month, Inter Pipeline offers you the perfect opportunity. The company, on the surface, may seem to just be another pipeline company, but it’s so much more than that. Inter Pipeline is a diversified business with petroleum and petrochemical storage facilities across Europe — one of the largest NGL businesses in Canada, and that’s on top of its 7,800 km pipeline network.

Inter Pipeline has long-term contracts lined up to see cash coming in for decades that will support share and dividend growth. But beyond that, there’s also the growth of its petrochemical complex currently under construction. Once completed, this Heartland project will add additional recurring revenue for shareholders. And that’s in addition to the other $4.4 billion Inter Pipeline has set aside for additional projects.

This diversification also means the company isn’t completely dependent on oil and gas prices, so when those prices fall, it has a hand in other means of revenue. That also means the company’s current dividend yield of 8.3% remains safe, as it has been for years. For the last 10 years in a row, the company has increased its dividend — most recently by 7.2%.

Once the current Heartland project is completed by 2021, shareholders can expect significant growth in shares and dividends with that project in service.

How to get that passive income

Now that you know Inter Pipeline is a great long-term investment, with a steady stream of cash coming in that should only increase, and a solid dividend that should increase over the years, how can you make that $300 per month?

As of writing, shares are currently being traded at $20.21, meaning you would need to invest $42,548 to receive $300 of passive income from dividends per month. Considering that’s not even your entire contribution room for your TFSA, that’s a pretty great opportunity.

But beyond that, over the next 12 months, analysts expect the stock to rise to $28 per share, meaning you could be looking at a profit of $16,392 in just one year. That’s in addition to the $3,600 you’ll have from dividends at the end of that year.

What you do with that money is up to you, but if you’re looking for a retirement fund, I would take that money and reinvest it in this stock. Down the road, you could be looking at one investment of five figures turning into one of six figures.

It’s that easy.

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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned.

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