How Much Do You Need to Invest to Make $600 Every Month?

A Scotiabank poll released back in February revealed that Canadians were worrying about their finances for 15 hours a week, which was up from 10 hours a week in the previous year. Moreover, concerns about paying for day-to-day expenses took up 44% of those reported thoughts. This should not come as a huge surprise. Canadians have been squeezed by soaring inflation and an aggressive interest rate policy from the Bank of Canada to combat that very issue.

The 2023 Canada Food Price Report estimated that an average family of four would see their food expenses rise by $1,065 compared to the prior year. After that, Canadians must contend with higher prices at the pump, price hikes from other retailers, and higher interest rates leading to a jump in mortgage payments.

Rather than despair, Canadians should seek out solutions in this environment.

Today, I want to discuss how you can make more than $600 every month in your Tax-Free Savings Account (TFSA). In this hypothetical, we are going to max out our cumulative room of $88,000. Let’s jump in.

Here’s the first monthly dividend stock we can target to reach our goal

Freehold Royalties (TSX: FRU) is a Calgary-based company that is engaged in acquiring and managing royalty interest in the crude oil, natural gas, natural gas liquids, and potash properties in Western Canada and the United States. Shares of this energy stock have dropped 10% month over month as of close on June 23. The stock is down 13% so far in 2023.

This stock closed at $13.07 per share on June 23. For our first purchase, we can snatch up 2,300 shares of Freehold Royalties for a total price of $30,061. This stock offers a monthly dividend of $0.09 per share. That represents a superb 8.2% yield. This investment will allow us to generate monthly passive income of $207 going forward.

Don’t sleep on this dividend beast in the long-term-care space

Extendicare (TSX: EXE) is a Markham-based company that provides care and services for seniors in Canada. This TSX stock has dropped 1.9% month over month as of close on June 23. Its shares are still up 7% in the year-to-date period.

This company released its first-quarter (Q1) fiscal 2023 earnings on May 4. It delivered revenue growth of 6.2% to $3242 million on the back of long-term-care (LTC) flow-through funding increases as well as higher LTC occupancy and home healthcare average daily volume growth. Moreover, Extendicare posted adjusted earnings before interest, taxes, depreciation, and amortization of $30.9 million — up from $20.2 million in the previous year.

Shares of Extendicare closed at $6.99 on June 23. In our scenario, we can grab 4,000 shares of the stock for a purchase price of $27,960. This stock offers a monthly distribution of $0.04 per share, which represents a very tasty 6.8% yield. We will now be able to churn out monthly passive income of $160.

One more super monthly dividend stock I’d target for our portfolio

Timbercreek Financial (TSX: TF) is a Toronto-based mortgage investment company that provides shorter-duration structured financing solutions to commercial real estate investors in Canada. This stock has dipped 1.8% over the past month. That pushed Timbercreek stock into negative territory in the year-over-year period.

This dividend stock closed at $7.25 on Friday, June 23. For our final purchase, we can snag 4,130 shares of Timbercreek for a total price of $29,942.50. Timbercreek offers a monthly dividend of $0.058 per share, representing a monster 9.5% yield. This investment will allow us to generate monthly passive income of $239.54.

Conclusion

These investments mean we can churn out monthly passive income of $606.54 in our TFSA. On an annual basis, that works out to passive income of $7,278.48. That should help put more than dent in your increased expenses in 2023 and beyond.