I’ve got bad news. If you’re hoping that this article is going to be about creating $350 in passive income each month right away for next to nothing, move on. There’s not going to be any article out there that can claim that much passive income, without investing an absurd amount.
And when it comes to the Tax-Free Savings Account (TFSA), you can’t invest an absurd amount to begin with. There is currently $88,000 in contribution room for the TFSA, yet that’s only if you were 18 when the program started in 2009.
Even if you could put all that money towards one stock, you certainly should not. That is why today I’m going to introduce you to a far more stable way of earning $350 per month in passive income.
Start small and stay consistent
First off, make a budget. See how much you can put towards investing on a regular basis. From there, figure out how much of that amount can be put towards riskier investments. Because when you’re investing in one stock alone, that’s quite risky.
To do that, you’re going to have to meet with your financial advisor. This person can figure out how much you should be putting away for long-term savings, and how much you can put away and have fun with hit. That would include riskier passive-income stocks, such as the one I’m going to discuss.
Again, riskier doesn’t mean bad. In fact, in the case of this stock, it certainly isn’t a risky option. That being said, it’s always a risky choice to invest in one stock alone.
From there, once you have the amount you and your advisor are comfortable with, invest on a consistent basis. Do it through thick and thin, but definitely through thin! Buy low and hold long, and you’ll reach long-term income in no time.
A stock to consider
Now, if you’re going to aim for passive income, then a stock to consider is NorthWest Healthcare Properties REIT (TSX:NWH.UN). NorthWest stock is a great option, as it invests in the healthcare sector, currently growing through acquisitions and with long-term lease agreements on average at 14 years.
The company also boasts a 97% occupancy rate and continues grow. That being said, its dividend has remained the same since coming on the market. Yet that’s still a great dividend — currently with a yield at 10.39%.
Som if you’re going to invest on a consistent basis, let’s see how long it would take and how much you could invest to create $350 in passive income each month. This would come to $4,200 per year.
| Year | Share Price | Shares Owned | Annual Dividend Per Share | Annual Dividend | After DRIP Value | Annual Contribution | Year End Stock Price | New Shares Purchased | Year End Shares Owned | New Balance |
| 1 | $8 | 2604 | $0.80 | $2,083.20 | $22,081.92 | $2,000 | $13.44 | 303.81 | 2907.81 | $26,165.13 |
| 2 | $13.44 | 2907.81 | $0.80 | $2,326.25 | $41,407.21 | $2,000 | $14.38 | 300.84 | 3208.65 | $45,733.53 |
| 3 | $14.38 | 3208.65 | $0.80 | $2,566.92 | $48,709.87 | $2,000 | $15.39 | 296.79 | 3505.44 | $53,276.72 |
| 4 | $15.39 | 3505.44 | $0.80 | $2,804.35 | $56,744.16 | $2,000 | $16.46 | 291.8 | 3797.24 | $61,548.52 |
| 5 | $16.46 | 3797.24 | $0.80 | $3,037.79 | $65,557.75 | $2,000 | $17.62 | 285.96 | 4083.2 | $70,595.53 |
| 6 | $17.62 | 4083.2 | $0.80 | $3,266.56 | $75,200.70 | $2,000 | $18.85 | 279.39 | 4362.59 | $80,467.28 |
| 7 | $18.85 | 4362.59 | $0.80 | $3,490.07 | $85,726.18 | $2,000 | $20.17 | 272.19 | 4634.78 | $91,216.20 |
| 8 | $20.17 | 4634.78 | $0.80 | $3,707.82 | $97,190.48 | $2,000 | $21.58 | 264.48 | 4899.26 | $102,898.41 |
| 9 | $21.58 | 4899.26 | $0.80 | $3,919.41 | $109,653.78 | $2,000 | $23.09 | 256.34 | 5155.6 | $115,573.29 |
| 10 | $23.09 | 5155.6 | $0.80 | $4,124.48 | $123,179.77 | $2,000 | $24.71 | 247.87 | 5403.47 | $129,304.37 |
If you were to put $20,000 into North West stock now, see it return to former 52-week highs, and then invest $2,000 each year while reinvesting dividends, at the end of 10 years, you would have 5,403 shares. This would bring in $4,322.40 for over $4,200 annually. What’s more, as shares rise higher at a compound annual growth rate (CAGR) of 7%, you could have a portfolio of $129,304.
