We could all use some extra cash these days, and passive income is a great way to achieve that. But let’s be clear what passive income is and what it isn’t.
Passive income isn’t a part-time job. It’s not selling products online. It’s not even your passion project. Passive income is passive. It’s making money without even thinking about it, working on it, or lifting a finger. It’s done while you sleep, while you walk, and while you eat. That is why investing is a great way to create passive income.
Yet if you’re looking to create daily cash flow from passive income, you need the right investment. That’s why today, I’m recommending buying TSX stock Slate Grocery REIT (TSX: SGR.UN).
A strong stock in value territory
Slate stock has been a strong choice for a while now. Really, attention became wider to this grocery-anchored real estate chain in the United States during the pandemic. The company was able to continue seeing cash flowing in, as its properties all belonged to the essential services industry.
Yet there were quite a few pandemic TSX stocks that did well and then, well, didn’t. Slate stock isn’t one of those. During its latest earnings report, Slate management reported US$424 million in acquisitions through 2022. Further, its balance sheet remains strong, with management reporting that they plan to be “flexible and act quickly to capture attractive opportunities.”
Yet despite all this great news, and more expected in the near future, Slate stock remains of incredible value. Slate stock currently trades at 5.27 times earnings at the time of writing. Shares are up 2% in the last year, but have come down in the last month. So, it’s a great time to consider the stock.
Consider the dividend, too!
Of course, if you’re looking for daily passive income, that means looking to the company’s dividend. And in terms of this, Slate stock is an excellent option with a yield at 7.8% as of writing! While that dividend has only risen at a compound annual growth rate (CAGR) of 2.25% in the last six years, we can see that the other cash is going towards acquisitions. Therefore, once this slows, we could see higher growth in the future.
But we’re here discussing today: today’s dividend and today’s passive income. Therefore, let’s look at how much you would need to create double-digit passive income on a daily basis.
Let’s say you want to bring in $12 per day for the entire year. Now, we’ll look at how much you would need to invest in this stock to get there.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND (ANNUAL) | TOTAL PAYOUT (ANNUAL) | FREQUENCY | TOTAL INVESTMENT |
| SGR.UN | $14.86 | 3,809 | $1.15 | $4,380 | Monthly | $56,597 |
Bottom line
As you can see, it would take an investment of $56,597 to create $12 in passive income each and every day (please note, this stock pays out monthly; this is just an example of how much that payout works out to on a daily basis). That’s certainly a large investment and shouldn’t be considered your only investment. But this just goes to show that it is possible. What’s more, with the right investment, you can create income that lasts a lifetime and will continue to climb out of even the most dire of economic downturns.
