Invest $500 Each Month to Create $1,960.50 in Passive Income in 2024

If you manage to find a strong stock that can create long-term passive income, grab it and reinvest for huge income in 2024!

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If you’re hoping to make more cash in 2024, whether the market rebounds or not, now is the time. The market may be climbing back upwards, and it may drop again in the near future. But overall, the market rises higher, which is why any time is a good time to invest.

But you want your investments to do well, which is why today we’re going to look at how to make strong passive income. That comes from investing in a strong Dividend Aristocrat.

Today, let’s look at how to create that passive income starting from scratch.

Make it automatic

If you really want to get ahead with your investments, I would consider automated contributions. These are contributions to an investment account, such as a Tax-Free Savings Account (TFSA), that are made without even thinking about them.

How? You simply create a contribution through your banking institution and mark it to come out on a monthly basis, for example. It’s already something many people do for bill payments. So, consider this as a bill payment to your future self!

From there, however, you’re going to need to invest. Another strong method of investment I would then consider is the dollar-cost averaging method. This involves investing on a regular basis, no matter what. Over time, the price you pay averages out, climbing higher and higher as time goes on. That way, you don’t miss out on lower prices but see your share price climb as well.

Reinvest dividends!

Now that you’ve started investing on a regular basis, another strong option is to reinvest dividends throughout the year as well. It can be super tempting to use that cash, I know. And to be honest, if you’re struggling with debt or need it for an emergency, don’t put yourself into credit card debt when the cash is on hand!

However, if you’re not struggling, then certainly consider reinvesting those dividends. This is free cash from the company that can be reinvested right back into the stock. That will create even more dividends in the future as you buy more shares!

This is the easiest and strongest way to create long-term passive income through both returns and dividends. So, now, which dividend stock should you consider today?

Consider Telus stock

TELUS (TSX:T) stock is a great option if you’re looking for a cheap stock with long-term growth ahead. The company does have some short-term bearish results in the near future. This comes from its competitors merging to create powerhouses of telecommunication companies.

Yet TELUS stock remains on top as one of the premier wireline providers in the country. It and its two largest peers hold 90% of the market in Canada. That’s unlikely to slow down, and subscribers will continue to increase as the years go on.

Let’s say you’re able to put aside $500 per month towards TELUS stock. That would total $6,000 towards the stock in 2024. Here is what that could turn into should the stock hit 52-week highs once more with a 6.33% dividend yield.

T – now$23261$1.50$391.50quarterly$6,000
T – highs$29261$1.50$391.50quarterly$7,569

There you have it. Invest $500 per month, and you could create $391.50 in dividends and $1,569 in returns! That comes to a total of $1,960.50 in passive income.

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy.

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