TFSA Couples: How to Make $890/Month in Tax-Free Passive Income

TFSA investors who have room with their partner can invest in these three stocks and create incredible monthly passive income that lasts.

| More on:
Business people shaking hands

Image source: Getty Images

If you have a Tax-Free Savings Account (TFSA), you have the perfect means of creating passive income each and every month. But if you are your partner both have one? This can suddenly turn into practically a part-time job.

The combined total of your TFSA would come to $176,000 of investment room in 2023. With that in mind, today, I’m going to look at how TFSA couples can create passive income on a monthly basis, starting right now — and a lot of it.

First, the stocks

If you’re going to invest in a TFSA, then you want to have a diversified stream of income coming in. For me, that comes down to finding passive-income payers that are essential to our daily life. This would include infrastructure, utilities, and even Canadian banks are a solid choice.

Let’s start off with Canadian bank Canadian Imperial Bank of Commerce (TSX:CM). While it doesn’t provide a monthly dividend, as it pays out quarterly, you can still bring in a lot of it. It currently has the highest dividend of the Big Six banks and trades at a great price — especially after its stock split last year.

Then I would look for a real estate investment trust (REIT) as many of these pay out each month. However, I would recommend NorthWest Healthcare Properties REIT (TSX:NWH.UN), as it’s in the essential healthcare sector. We need hospitals and doctor’s offices. And with a 14-year average lease agreement, you can lock up a solid dividend that isn’t going anywhere.

Finally, do yourself a favour and just get a great monthly dividend exchange-traded fund (ETF). This is like picking up a bunch of stocks all at once but having a professional do it for you. And a great option is BMO Monthly Income ETF (TSX:ZMI). It holds about 59% in stocks and 25% in bonds, making it a great choice in times of trouble as well.

Adding it up

Let’s look at the yields of all of these companies. CIBC stock currently has a dividend yield at 5.47%, with that dividend coming in at $3.40 per share annually. NorthWest stock offers a whopping 8.21% dividend yield as of writing, which comes in at $0.80 per share annually. Finally, ZMI has a 4.62% dividend yield, coming in at $0.72 per share annually.

Now, I would never recommend you put everything you have in your TFSA towards just these choices. But for the sake of this article, let’s use those numbers as an example to see what you could bring in at this point. We’ll take that $176,000 and divide it by three, putting the same amount towards each investment.


That investment comes to a total of $10,670.24 in annual passive income! Dished out monthly, that would be about $890 per month! What you and your partner choose to do with it from there is up to you. But suffice it to say, that will certainly help during times of trouble and help you reach your goals.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in Canadian Imperial Bank Of Commerce and NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.

More on Dividend Stocks

retirees and finances
Dividend Stocks

Retirees: 3 Ideal Stocks to Buy in a Bearish Market

Given their low-risk businesses and stable cash flows, these three Canadian stocks are ideal buys for risk-averse retirees.

Read more »

data analyze research
Dividend Stocks

3 Dividend Powerhouses to Buy for Reliable Passive Income

Are you seeking passive income? These three Canadian stocks are reliable investments for generate steady income.

Read more »

dividends grow over time
Dividend Stocks

For a Shot at $6,000 in Yearly Passive Income, Buy These 2 TSX Stocks

Canadian investors can make some nice passive income from parking money they don't need for a long time in high-yield…

Read more »

Man making notes on graphs and charts
Dividend Stocks

2 No-Brainer TSX Stocks to Buy (Especially if There’s a Market Correction)

No matter what is happening in the stock market, these two blue-chip stocks could be reliable investments to own.

Read more »

money cash dividends
Dividend Stocks

1 of the Smartest Stocks to Buy for Dividends and Share Repurchases in 2023

Dividend stocks like Power Corp of Canada will have an excellent year.

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

3 Canadian Dividend Stocks I’d Buy Hand Over Fist This Month

Three high-quality dividend stocks can overcome the current headwinds and negative market sentiment in March 2023.

Read more »

Happy diverse people together in the park
Dividend Stocks

TFSA: 2 Stocks to Create Lasting Generational Wealth

Stock investing can help Canadians accumulate and grow generational wealth that they can pass on to their children and grandchildren.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Sitting on Cash? Invest $20,000 in This Dividend Stock for $96,588 in 10 Years

This top dividend stock has quadrupled in share price in just a decade, and that could very well happen again!

Read more »