How to Build a Bulletproof Monthly Passive-Income Portfolio With Just $10,000

If you’re looking to create a monthly passive-income portfolio, that’s great! You certainly can create a lot of monthly passive income. But remember: passive income is more than just dividends.

Today, we’re going to look at what investors should consider if they hope to create a bulletproof monthly passive-income portfolio.

How to prepare

I know that we’ve put down $10,000 to start with and create a passive-income portfolio. However, how can you suddenly come up with $10,000? To do this, I would look at your budget and start putting aside money every single month.

A great idea is to consider the net-zero budget. This is where you assign a dollar amount to every single item of your budget, whether that’s the coffee you buy every morning or the property taxes you pay. Make sure it’s assigned and do not spend anything else.

Then, whatever is left of your net income, that’s what you assign to investments. Do this again and again, and you’ll be surprised how quickly you’ll make it to $10,000!

Then, consider an ETF

I know that it can be exciting to find the next great stock or even a monthly dividend stock. But I would instead consider finding a solid exchange-traded fund (ETF). There are many options out there, but if you want monthly income, find a monthly income ETF.

But add to this that you want two other things. First, you want your dividend income to last. Therefore, look to Dividend Aristocrats, ones that have increased their dividend each year over the last five years. However, also consider returns! That’s another part of the passive income you’ll want to bring in as well.

Look at the history of the ETF you consider, and it should therefore offer you returns, dividends, a low management expense ratio (MER), as well as a high dividend yield that comes out monthly. So, here’s one to consider.

Buy this ETF

If you’re looking for monthly passive income, consider iShares Canadian Financial Monthly Income ETF (TSX: FIE). The FIE ETF offers you monthly income but invests about 10% in bonds and 70% in equities. So, you get a nice mix of more than just stocks.

Then, not only does the company invest in financial companies such as banks, but it also invests in other iShares ETFs. That way, you get an even more diverse set of equities and bonds coming in — all for the low price just $6.85 as of writing.

Add to this monthly dividends at a yield of just 7.35%, as well as returns of 11% in the last year, and you have a superior winner! In fact, here is what you can bring in with that $10,000 investment and see another 11% increase in share price in the next year.

And there you are! If you use this method, you could be looking at passive income of $1,796.80. That comes to $149.73 monthly! Reinvest, and you could bring in more and more monthly passive income as the years go on.