Passive Income: How Much to Invest to Get $800 Per Month

You can get up to $800 per month in passive income with stocks like Enbridge Inc (TSX:ENB).

| More on:
Canadian Dollars

Image source: Getty Images

Do you want to own investments that pay you passive income every single month?

It’s quite easy to get started, though getting a lot of passive income is pretty hard. In a recent series of articles, I showed how I was getting $1,701 per year in passive income from dividends and interest. That’s not a ton of money, and the portfolio I’m getting it from is worth about $92,000. If you only invest in dividend stocks, you can get a higher portfolio yield than I’m getting, although such a strategy means you miss opportunities in stocks that don’t pay dividends.

Nevertheless, it is worth exploring how much passive income a person could get if they went with all high-yield stocks. Some people have succeeded with the “high-yield” strategy. For example, the legendary bond investor Howard Marks achieved a 20% annualized career return mainly by buying high yield debt. So, clearly, there is money in high-yield investments.

In this article, I’ll explore how much money you need to invest in order to get $800 in passive income each and every month.


In my opinion, you need to invest at least $147,000 to get $800 in monthly passive income. If you invest $147,000 in Enbridge (TSX:ENB) stock, you’ll get $9,600 per year in dividend income, which averages out to $800 per month. If you want to get exactly $800 per month, on a literal monthly schedule, you could consider Pembina Pipeline, which has almost as high a yield as Enbridge, though is not as economically vital to North America’s energy industry. I’ll continue using ENB as the main example in this article, because I consider it a better company than Pembina overall.

Why that’s a reasonable amount to invest

$147,000 is a reasonable amount to invest in dividend stocks to get $800 a month in dividend income, because it doesn’t require an unreasonably high yield. Invest $147,000 in dividend stocks at a 6.5% yield, and you’ll get your $9,600 per year, or $800 per month.

I don’t think it’s wise to seek out yields much higher than 6.5%, which is what Enbridge offers. Enbridge is able to cover its dividend payout with distributable cash flow (i.e., cash left over after paying all cash expenses). When you start looking at stocks with 8% or 10% dividend yields, you risk buying into companies that don’t make enough money to pay their dividends. We saw that happen to people who bought Algonquin Power & Utilities at the wrong time, so watch out.

What to do if you don’t have a lot saved

If you think needing $147,000 to get to $800 in monthly passive income is a depressing prospect, don’t worry. The beauty of investing is that you don’t need to invest all at once. If you buy dividend stocks like ENB progressively over a long period of time, you may get to a $147,000 portfolio eventually. In fact, you could get a portfolio much larger than that! With investing, the sky is the limit. So, save diligently and keep going after 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 Andrew Button has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and Pembina Pipeline. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Dividend Stocks

Better Buy for TFSA Passive Income: Telus Stock or TD Bank?

Telus stock and TD stock look cheap today. Is one really oversold?

Read more »

funds, money, nest egg
Dividend Stocks

Income Stocks: A Once-in-a-Decade Chance to Get Rich

As a part of your diversified investment portfolio, solid dividend stocks on sale can help you get rich with growing…

Read more »

Hourglass projecting a dollar sign as shadow
Dividend Stocks

2 Superb TSX Stocks to Buy for Passive Income

All dividend stocks can help you start a passive-income stream, but relatively few offer a healthy combination of yield and…

Read more »

A golden egg in a nest
Dividend Stocks

TFSA Investors: 2 Growth Stocks to Build an Adequate Nest Egg

Two TSX growth stocks are ideal holdings for TFSA investors building a nest egg or retirement wealth.

Read more »

financial freedom sign
Dividend Stocks

How to Easily Make $1 Million in 20 Years

There's trying to time the market, and then there's the easy way of investing if you want to make $1…

Read more »

Dividend Stocks

Top TSX Stocks to Buy to Prepare for a Recession

Here are two TSX stocks to consider that could offer immense portfolio stability in an economic downturn.   

Read more »

A worker uses a double monitor computer screen in an office.
Dividend Stocks

2 of the Best Canadian Stocks That Pay Out Monthly

These two Canadian dividend stocks are some of the best to buy, offering yields upwards of 5.4% and returning cash…

Read more »

clock time
Dividend Stocks

How Investors Can Build a $1 Million Portfolio in 12 Years

If you can handle it, you can certainly create a million-dollar portfolio in just 12 years, especially considering this dividend…

Read more »