How Much Do You Need to Invest to Make $1,000 Per Month?

Investors hungry for passive income will need a lot of cash and stocks like Freehold Royalties Ltd. (TSX:FRU) to reach $1,000 per month.

| More on:
man touches brain to show a good idea

Source: Getty Images

The cost of living for the average Canadian has steadily increased in recent years. Canadians were tested during the COVID-19 pandemic, but the years that have followed the historic health crisis have brought a series of new challenges. The Bank of Canada (BoC) elected to hike the benchmark interest rate another 25 basis points to 5% on July 12. That brings the benchmark rate to its highest point in over 20 years. In this environment, Canadian investors may want to seek out passive income to supplement their growing expenses. Today, I want to discuss how we can look to generate $1,000 every month.

To reach this goal, we are going to have to make a significant cash investment. Theoretically, we can mix some of the investment in a Tax-Free Savings Account (TFSA) and stash the remainder in a cash account. To move forward, we will need to start with $138,000. As a side note, investors should seek to diversify their registered and cash accounts rather than make such large commitments to a handful of equities. This piece seeks to explore what it takes to reach a large monthly income goal rather than serving as an exact blueprint.

This is the first monthly dividend stock I’d target to help meet our lofty goal

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. Shares of Timbercreek have dipped marginally month over month as of close on July 17. The stock is up 2.6% so far in 2023.

Shares of Timbercreek closed at $7.48 on Monday, July 17. We are going to target Timbercreek for the first of two purchases in our TFSA. You can snatch up 5,897 shares of Timbercreek for a total price of $44,109.56. This stock offers a monthly distribution of $0.058 per share. That represents a superb 9.2% yield. We can now generate a tax-free monthly income of $342.02 going forward.

Here’s an undervalued REIT that offers a super yield

BTB REIT (TSX:BTB.UN) is a Montreal-based real estate investment trust (REIT) that owns and manages industrial, off-downtown core office and necessity-based commercial properties across Canada. Its shares moved up 0.61% on Monday, July 17. The REIT has dropped 9% in the year-over-year period.

This REIT closed at $3.30 on Monday, July 17. For our second TFSA purchase, we can snatch up 13,300 shares of BTB REIT for $43,980. The REIT currently offers a monthly dividend of $0.025 per share, which represents a monster 9% yield. That means we can now make a tax-free monthly passive income of $332.50.

One more monthly dividend stock that will help put the stamp on our passive-income portfolio

Freehold Royalties (TSX:FRU) is the third monthly dividend stock I’d look to snatch up to reach our $1,000/month goal. We have maxed out our hypothetical TFSA, so we will stash Freehold Royalties in a standard cash account. Shares of Freehold Royalties have increased 8.6% so far in 2023. The stock is still up 4.7% year over year.

This dividend stock closed at $13.77 on Monday, July 17. We can snag 3,631 shares of Freehold Royalties for a total price of $49,998.87. The stock last paid out a monthly distribution of $0.09 per share, representing a fantastic 7.8% yield. We can now generate a monthly passive income of $326.79.

Bottom line


The investments in our hypothetical TFSA work out to total monthly passive income of $674.52. When we add our cash account proceeds of $326.79, that works out to a monthly payout of $1,001.31.

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 recommends Freehold Royalties. The Motley Fool has a disclosure policy.

More on Investing

A plant grows from coins.
Dividend Stocks

3 Cheap Canadian Stocks That Offer 7% Dividend Yields

Retirees looking to build pension portfolios have an opportunity to buy great TSX dividend-growth stocks at discounted prices.

Read more »

Man making notes on graphs and charts

3 Magnificent Stocks That I’m “Never” Selling

These three stocks have struggled as of late, but there’s no chance I’m selling anytime soon.

Read more »

dividends grow over time
Dividend Stocks

2 Dividend Stocks That Can Generate $2,000 in Passive Income by 2025

Investing in high-dividend stocks such as Whitecap can help you generate $2,000 in annual passive income by 2025.

Read more »

tsx today
Stock Market

TSX Today: Why Canadian Stocks Could Fall on Thursday, May 30

Falling commodity prices, rising bond yields, and economic risks may continue to weigh on TSX stocks today as investors watch…

Read more »

Simple life style relaxation with Asian working business woman healthy lifestyle take it easy resting in comfort hotel or home living room having free time with peace of mind and self health balance

2 No-Brainer Stocks to Buy With $5,000

These two stocks could be excellent buys amid this uncertain outlook.

Read more »

Stocks for Beginners

5 Canadian Stocks to Hold in Your TFSA For Decades

The TFSA is the perfect place to compound wealth over decades. Don't pay any tax on these top five growth…

Read more »

edit Woman calculating figures next to a laptop
Dividend Stocks

Should You Invest in BCE Stock for its Dividend?

BCE stock is not yet out of the woods. But this article could change your perspective about the stock and…

Read more »

sale discount best price
Dividend Stocks

Bargain Hunting for Dividends: 3 High-Yield Stocks Haven’t Been This Cheap in Years

Enbridge (TSX:ENB) stock's key enterprise value multiple reached a new multi-year low recently. BCE remains a high-yield dividend play while…

Read more »