Passive Income: How Much Do You Need to Invest to Make $750 Per Month?

Investors will need a sizable chunk of cash to get to $750/month in passive income with stocks like Sienna Senior Living Inc. (TSX:SIA).

| More on:
edit Businessman using calculator next to laptop

Image source: Getty Images.

Passive income is cash that you can generate without exerting effort through employment or contract work. Some examples of passive income include an online retail website, income generated through a rental property, or cash brought in from a creative endeavour, such as a published novel or even a YouTube channel.

Today, I want to explore how Canadian investors can look to generate $750 per month from this point onward. For this hypothetical, we are going to play with $110,000. Theoretically, we could max out a Tax-Free Savings Account (TFSA) and stash the remaining $22,000 in a regular cash account. Let’s jump in.

Here’s the first monthly dividend stock I’d target for our passive-income portfolio

TransAlta Renewables (TSX:RNW) is the first dividend stock I want to zero in on as we look to construct a passive-income portfolio. This Calgary-based company owns, develops, and operates renewable and natural gas power-generation facilities and other infrastructure assets in Canada, the United States, and Australia. Shares of this dividend stock have dropped marginally so far in 2023.

This company released its first-quarter (Q1) fiscal 2023 earnings on May 5. TransAlta reported earnings before income taxes of $53 million — up from $49 million in Q1 fiscal 2022. EBITDA stands for earnings before interest, taxes, depreciation, and amortization. The company posted adjusted EBITDA of $128 million in Q1 2023 — down from $139 million in the previous year.

Shares of TransAlta closed at $11.30 on Wednesday, July 5. We can snatch up 3,366 shares of TransAlta for a purchase price of $38,035.80. This stock offers a monthly distribution of $0.078 per share. That represents a monster 8.3% yield. We can now generate monthly passive income of $262.54.

This undervalued REIT also offers a super dividend yield

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 major Canadian cities and network-dense urban data centre (UDC) space in Toronto. This REIT dipped marginally during the trading session on July 5. Its shares are down sharply in the year-over-year period.

Shares of this REIT closed at $21.96 on Wednesday, July 5. For our hypothetical, we can purchase 1,500 shares of Allied Properties REIT for a total price of $32,940. This REIT offers a monthly dividend of $0.15 per share, which represents a superb 8.1% yield. The investment will allow us to make monthly passive income of $225 going forward.

One more stock that can round out our passive-income strategy

Sienna Senior Living (TSX:SIA) is the third and final dividend stock I want to snatch up to complete our passive-income portfolio. This Markham-based company provides senior living and long-term-care (LTC) services throughout Canada. Its shares have increased 2.2% so far in 2023.

This stock closed at $11.29 on July 5. Our scenario allows us to purchase 3,456 shares of this dividend stock for a total price of $39,018.24. Sienna Senior Living offers a monthly distribution of $0.078 per share, representing a massive 8.2% yield. We can now generate monthly passive income of $269.56.

Bottom line

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCY
RNW$11.303,366$0.078$262.54Monthly
AP.UN$21.961,500$0.15$225Monthly
SIA$11.293,456$0.078$269.56Monthly

These investments mean we can generate monthly passive income of $757.10. That works out to an annual income of $9,085.20.

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 Dividend Stocks

Dividend Stocks

Buy 3,000 Shares of This Super Dividend Stock For $3,300/Year in Passive Income

Are you looking for a super dividend stock to buy now and generate a whopping passive-income stream? Here's an option…

Read more »

Question marks in a pile
Dividend Stocks

Where Will Brookfield Infrastructure Partners Stock Be in 5 Years?

BIP (TSX:BIP) stock fell dramatically after year-end earnings, but there could be momentum in the future with more acquisitions on…

Read more »

Utility, wind power
Dividend Stocks

So You Own Algonquin Stock: Is It Still a Good Investment?

Should you buy Algonquin for its big dividend? Looking forward, the utility is making a lot of changes.

Read more »

stock data
Dividend Stocks

Passive Income: How Much Should You Invest to Earn $1000/Year

Dependable income stocks like Enbridge can help you earn worry-free passive income regardless of market and commodity cycles.

Read more »

Money growing in soil , Business success concept.
Dividend Stocks

2 Stocks Ready for Dividend Hikes in 2024

Building a passive income is one way to keep up with and even beat inflation. These two stocks can help…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

3 Ways Canadian Investors Can Save Thousands in 2024

If you've done the budgeting and are still coming out with less money than you'd like, consider these three ways…

Read more »

Dividend Stocks

Best Dividend Stock to Buy for Passive Income Investors: TD Bank or Enbridge?

Which dividend stock is best – the Big Six Bank or the energy giant? Both stocks have reliable, growing dividends.

Read more »

data analyze research
Dividend Stocks

3 Top Dividend Stocks to Buy Hand Over Fist

Are you looking for dividend stocks to buy today? Here are my three top picks!

Read more »