Passive-Income Power: How to Earn Over $17/Day Tax Free in 2022

Dividend stocks like Chemtrade Logistics Income Fund (TSX:CHE.UN) can play a big role in your passive-income portfolio.

Ambrose O'Callaghan

Ambrose O'Callaghan graduated with a BA in Political Science from McMaster University. After that, he jumped into the banking world. He worked from the front line to an investment associate role. After that, he found a way to marry his experience and knowledge in the world of banking and finance to his love and passion for writing. Ambrose is a passionate believer in Warren Buffett's value investing model.

Published January 18, 2022 10:30 am EST

Last week, I’d looked at how Canadians could look to generate weekly income with a passive-income strategy. Today, I want to look at three more income-generating assets that can help investors churn out over $17 a day. Better yet, if you hold these vehicles in your Tax-Free Savings Account (TFSA) you can produce that income tax free. In our hypothetical, we’ll use the $81,500 in cumulative TFSA room that is now available in 2022. Let’s jump in.

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This REIT with a monster dividend is perfect for a passive-income portfolio

True North REIT (TSX: TNT.UN) is the first real estate investment trust (REIT) I want to zero in on today. It operates a portfolio of commercial properties in urban areas across Canada. REITs are an excellent source of passive income. Shares of True North have climbed 15% in the year-over-year period as of close on January 17.

The REIT closed at $7.35 on that same day. In our hypothetical, we can add 3,700 shares of True North REIT, which works out to a purchase price of $27,195. This REIT offers a monthly dividend of $0.05 per share. That represents an 8% yield at the time of this writing.

With this investment, we can generate $185 in monthly income in our TFSA. That works out to $6/day tax-free over the course of the year. This is a solid start for our passive-income portfolio.

Here’s an income fund that you can rely on in your TFSA

Chemtrade Logistics (TSX: CHE.UN) is a Toronto-based income fund that offers industrial chemicals and services in Canada, the United States, and South America. Its shares have increased 11% from the previous year.

In Q3 2021, the company saw cash flows from operating activities drop $10.4 million year over year to $81.4 million. However, distributable cash per unit was still up from 2020. Passive-income investors should be encouraged by its solid cash position.

The stock closed at $7.70 on January 17. For our hypothetical, we’ll snatch up 3,525 shares of Chemtrade. That adds up to a purchase price of $27,142.50. Chemtrade also offers a monthly dividend of $0.05 per share. This represents a 7.7% yield. The shares we purchased allows us to generate $176.25 in monthly dividend income. Moreover, that works out to $5.79/day in tax-free passive income going forward.

One more REIT that can power your passive income

Slate Office REIT (TSX:SOT.UN) is another REIT that is worth targeting for passive-income investors. This Toronto-based REIT offers exposure to North American office real estate. The REIT has climbed 18% in the year-over-year period.

This REIT closed at $5.12 on January 17. For our last purchase, we’ll snatch up 5,300 shares of Slate Office for a purchase price of $27,136. Meanwhile, it last paid out a monthly distribution of $0.033 per share. That represents a monster 7.8% yield.

The shares we picked up will allow us to generate $174.90 in monthly income in our TFSA. That works out to $5.75 per day in tax-free income.

Bottom line

These investments will allow passive-income investors to churn out a total of $17.54 in daily tax-free income. Moreover, that works out to over $6,400 in annual income.