Passive-Income Investing: How to Make $110/Week TAX FREE on Your Couch!

Canadians looking to churn out big tax-free passive income in 2022 should look to dividend stocks like Keyera Corp. (TSX:KEY) today.

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 March 11, 2022 3:45 pm EST

When this year started, I’d discussed how Canadian investors could look to generate impressive passive income going forward. The cumulative contribution room in a Tax-Free Savings Account (TFSA) rose to $81,500 in 2022. Investors hungry to generate passive income should consider starting in a TFSA. The only thing better than a monthly dividend payout is a tax-free monthly dividend payout. Today, I want to discuss how you can churn out $110 in passive income on a weekly basis in your TFSA. Let’s jump in.

Here’s an energy stock that offers huge passive income

In our hypothetical, we’ll use all the cumulative contribution room in our TFSA of $81,500. The first dividend stock I want to target is Keyera (TSX: KEY). This Calgary-based company is engaged in the energy infrastructure business. Its shares have climbed 4.9% in 2022 as of early afternoon trading on March 11.

This past year, Keyera delivered net earnings of $324 million — up from $62.0 million in the previous year. Meanwhile, adjusted EBITDA rose to $955 million compared to $873 million in 2020. This is a dividend stock worth snatching up in this oil and gas bull market.

Keyera closed at $30.09 per share on March 10. In our hypothetical, we’ll snatch up 900 shares of Keyera at a purchase price of $27,081. This dividend stock offers a monthly distribution of $0.16 per share, representing a tasty 6.3% yield. Those shares will allow us to generate monthly passive income of $144. That works out to weekly passive income of $32.23.

This housing stock can generate big dividends for your TFSA

Back in October 2021, I’d suggested that passive-income investors should target a dividend stock like Bridgemarq Real Estate (TSX: BRE). This company provides services to real estate brokers and realtors in Canada. Bridgmarq has performed well, as Canada’s housing market has soared to kick off this decade. Its shares have dipped 2.3% so far in 2022.

This dividend stock closed at $15.87 per share on March 10. That will allow us to scoop up 1,710 shares of Bridgemarq for a total purchase price of $27,137.70. Bridgemarq last announced a monthly dividend of $0.1125 per share, which represents a monster 8.5% yield. We can now churn out monthly passive income of $192.37 in our TFSA. That works out to weekly passive income of $44.39.

One more passive-income stock to snag today

Extendicare (TSX: EXE) is the third and final dividend stock I’d look to add to our TFSA to generate passive income in 2022. This company provides care and services for seniors in Canada. Shares of this dividend stock are up 4.1% so far this year.

Investors should be eager to snatch up stocks that are geared up for big growth due to aging demographics. Extendicare certainly belongs in that elite company. The stock closed at $7.74 per share on March 10. In this scenario, we’ll snag 3,510 shares of Extendicare for $27,167.40. The dividend stock offers a monthly distribution of $0.04 per share. That represents a 6.2% yield. Our trove of shares will enable us to generate monthly passive income of $140.40 in our TFSA. This translates to a weekly payout of $32.40.

Bottom line

The dividend stocks we have bought in our TFSA in this hypothetical will see us generate passive income of $110 on a weekly basis. That means we will churn out just under $5,800 in tax-free passive income on an annual basis.