Developing a viable income stream is something that every investor strives to accomplish. Fortunately, meeting that goal doesn’t need to be as difficult as it sounds. In fact, you could invest your way to $500 income each month with just a handful of investments.
Here’s how to meet that goal.
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First, a disclaimer
Suffice to say, all investments carry some risk, including even the most defensive stocks. That’s why it’s important to diversify your portfolio across a broad section of the market.
Additionally, while meeting that $500-per-month threshold is the goal, it will take years to reach, and that’s OK. If anything, investing early and often can let you not only invest your way to $500 each month but surpass it handily.
So, then, what are those stocks to buy?
Meet the company you don’t know but now won’t forget!
Few investors are aware of Exchange Income Corporation (TSX:EIF), at least initially. Exchange owns a basket of subsidiary companies that fall under one of two broad categories: aviation and manufacturing.
The subsidiaries have two key points in common: they generate cash for Exchange, and they provide a necessary service for which there is strong demand yet limited competition.
This niche makes Exchange a great option for investors. In case you’re wondering, examples of those subsidiary niches include providing passenger and freight air service to Canada’s remote north and manufacturing window-wall installation systems.
Perhaps best of all is Exchange’s monthly dividend. As of the time of writing, the stock boasts a 4.89% yield and a solid history of 16 dividend increases in the past two decades.
In short, if you’re looking to invest your way to $500 each month, an investment in Exchange is a great way to start. A $40,000 investment will generate an income of approximately $160 each month.
Renewable energy will give your income a massive boost
Investors looking to invest their way to $500 cash each month but also have growth should look at the renewable energy field. Specifically, let’s take a moment to talk about TransAlta Renewables (TSX:RNW).
TransAlta boasts a portfolio of over 40 solar, hydro, wind, and gas facilities located across the U.S., Canada, and Australia. Additionally, like its fossil fuel-burning peers, TransAlta’s facilities are bound by long-term, regulated contracts that span decades.
That stability means that TransAlta can provide a tasty dividend to investors, which is distributed on a monthly cadence.
TransAlta’s dividend works out to an insane yield of 7.59%, making it one of the best-paying dividends on the market. It also means that investors looking to drop $40,000 on the stock can expect to generate a monthly income of approximately $250.
Perhaps best of all, like many stocks on the market right now, TransAlta trades down considerably over the trailing 12-month period.
Let’s talk mortgages…
One final option to consider is First National Financial (TSX:FN). First National is a mortgage provider that caters to both residential and business mortgages. With interest rates rising, First Financial has seen its earnings surge.
And that earnings growth translates into a juicer dividend for investors. Today, that monthly dividend works out to a yield of 6.24%. Even better, First Financial has provided a bump to that dividend in 15 of the last 17 years. This makes the stock yet another long-term option to invest your way to $500 each month.
You can invest your way to $500 each month
To invest your way to $500 in monthly income takes time, patience, and considerable investment. Fortunately, all three stocks mentioned above can provide a juicy monthly dividend that can be reinvested until needed to reach that goal quicker.
Speaking of goals, here’s how you can invest your way to $500 (or more) in monthly income:
| Company | Recent Price | Number of Shares | Dividend (Annual) | Monthly Payout | Frequency |
| Exchange Income Corporation | $51.56 | 775 | $2.52 | $162.75 | Monthly |
| TransAlta Renewables | $12.38 | 3,230 | $0.94 | $253.01 | Monthly |
| First National Financial | $37.22 | 1,070 | $2.40 | $214 | Monthly |
In my opinion, one or all of the above stocks should be part of any well-diversified portfolio.
