How I’d Invest $600 a Month to Target a $490 Yearly Income

Canadian investors can start a $600 monthly investment in stocks like Bird Construction Ltd. (TSX:BDT) to hit a solid yearly income target.

| More on:
Target. Stand out from the crowd

Image source: Getty Images

The S&P/TSX Composite Index was up 187 points in early afternoon trading on Monday, June 26. Despite the nice start to this week, the TSX Index has steadily lost value over the past six months. In this environment, investors may want to switch to an income-oriented strategy. However, many Canadians do not have a lot of cash on hand right now.

Today, I want to explore how you can look to invest $600/month to eventually reach an attractive annual income target. After 12 months of those $600 contributions, we will have reached $7,200. This will be our baseline to generate yearly income. Let’s jump in.

This monthly dividend stock is one of the first I’d invest in

First National Financial (TSX:FN) is a Toronto-based company that originates, underwrites, and services commercial and residential mortgages in Canada. Shares of this dividend stock have dropped 6.4% month over month as of early afternoon trading on June 26. The stock is still up marginally in the year-to-date period.

This stock was trading at $37.57 at the time of this writing on Monday, June 26. For our hypothetical, we can snatch up 60 shares of First National for a purchase price of $2,254.20. The stock currently offers a monthly distribution of $0.20 per share. That represents a tasty 6.3% yield. We can now generate monthly income of $12 with our shares of First National. That works out to annual income of $144.

Here’s a REIT that offers super income right now

Allied Properties REIT (TSX:AP.UN) is a Toronto-based real estate investment trust (REIT) that is a leading operator of distinctive urban workspace in Canada’s major cities and network-dense urban data centre space. Its shares were up 1.60% in early afternoon trading on Monday, June 26

The REIT was trading at $20.88 at the time of this writing. In this scenario, we can grab 120 shares of Allied Properties REIT for a purchase price of $2,505.60. Allied Properties REIT currently offers a monthly dividend of $0.15 per share, which represents a monster 8.7% yield. That means we can churn out monthly income of $18, which works out to annual income of $216.

One more monthly income stock to help reach our goals

Bird Construction (TSX:BDT) is a Mississauga-based company that provides construction services in Canada. This dividend stock has dropped 5.6% month over month at the time of this writing. That has pushed Bird Construction into negative territory in the year-to-date period.

In the first quarter of fiscal 2023, Bird Construction delivered revenue growth of 12% to $536 million. The company also set new records for its backlog. Shares of this dividend stock currently possess a very favourable price-to-earnings ratio of 8.8.

This stock was trading at $8.06 in early afternoon trading on June 26. For our final purchase, we can snatch up 302 shares of Bird Construction for a total price of $2,434.12. The stock offers a monthly distribution of $0.036 per share, representing a strong 5.3% yield. This purchase allows us to generate monthly income of $10.87. That works out to annual income of $130.44.

Bottom line


These investments will allow us to generate monthly income of $40.87 once we have reached 12 months of making our $600 monthly contributions. Moreover, we will now be able to count on annual income of $490.44.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Investing

potted green plant grows up in arrow shape

2 Growth Stocks to Buy With $1,000 Right Now

Shopify (TSX:SHOP) stock is just one growth stock to buy after last week's market plunge!

Read more »

Stocks for Beginners

WSP Stock at 52-Week Highs, But More to Come

WSP (TSX:WSP) stock continues to surge past 52-week highs, but there could certainly be more to come for this great…

Read more »

tsx today
Tech Stocks

TSX Today: What to Watch for in Stocks on Wednesday, September 27

An overnight bullish movement in oil and gas prices could lift TSX energy stocks at the open today.

Read more »

TFSA and coins
Dividend Stocks

2023 TFSA Contribution Time: 2 Dividend Stocks to Buy With $6,500

Are you interested in using some of your 2023 TFSA contribution room? Here are two dividend stocks to buy with…

Read more »

money cash dividends
Dividend Stocks

2 Stocks Under $100 You Can Buy and Hold Forever

While many stocks continue to trade cheaply, here are two of the best in Canada to buy today and hold…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

Retirees: 2 High-Yield Dividend Stocks to Buy for Passive Income

Given their solid underlying businesses and high dividend yields, these two dividend stocks are an excellent buy for retirees.

Read more »

Early retirement handwritten in a note
Dividend Stocks

2 TSX Dividend Stocks to Buy Today to Help You Retire Early

Buying these two reliable TSX dividend stocks today can help you retire early if you hold them for the long…

Read more »

Doctor talking to a patient in the corridor of a hospital.
Dividend Stocks

Is Northwest Healthcare Stock Oversold?

Northwest Healthcare stock has plummeted 41% so far this year on concerns over its financial health as interest rates shot…

Read more »