Passive Income Seekers: Invest $10,000 for $226.97 in Monthly Income

Passive income is great and all, but there are major downsides to some income streams. So consider this stock instead, and get monthly cash flow!

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Canadians continue to seek out passive income as much as they possibly can. That might be through passion projects. It might be through gigging. It might be through just selling your stuff whenever you can.

The thing is, there are two problems when it comes to passive income like this. So let’s get into those issues, and a way around it for your heard-earned cash to be put to better use.

Problem one: It’s not passive!

The most glaringly obvious problem with this method of creating passive income is that it’s actually not passive income. This income is most definitely active. You’re actively working in the evenings. You’re actively selling your items online. You’re actively working on a passion project that should be enjoyable, not another job.

Passive income is made when you’re doing literally anything else. You could be at work, and you’re making money. You’re sleeping, and making money. You’re travelling and making money off the money you made through passive income!

Yet this isn’t the only issue here. Instead, there is another huge problem for investors who try and make money through this gig method.

You’re a business

If you’re making enough money to really start to create cash flow, you’re suddenly going to turn into a small business. It might not feel that way, but if you’re selling enough stuff or creating some drop-shipping business or whatever, then suddenly you have to pay taxes.

In fact, even before you get there, do you think you will make enough one day to eventually pay taxes? That’s a job. That’s not passive income, that’s a job. And what’s more, it’s a job that’s taking you away from your actual job. The one that really pays the bills.

So if you really want to put your efforts to good use, try and get passive income from your current job! Yes, it can be passive. It’s called a raise. You get more income from just signing a paper for new income. So work harder, and you’ll get more income.

Now, for some cash

Now that I’m done being a Debbie downer, it’s time to get into how you can make real passive income. That comes from investing. Canadian investors don’t need a lot of cash to get started, and you can either use the monthly dividend income to reinvest, or to help pay your bills and gain cash flow.

A great option I would choose right now is monthly dividend producer Automotive Properties REIT (TSX:APR.UN). This stock has been rising steadily, up 10% since bottoming out in October. Now, you can grab a dividend yield of 7.43% while shares rise higher.

Now let’s say you have $10,000 you’re willing to invest in this passive income stock. Here is how much that could turn into through not just dividends, but returns as well should shares hit 52-week highs.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYPORTFOLIO TOTAL
APR.UN – now$10.85922$0.80$737.60monthly$10,000
APR.UN – highs$13922$0.80$737.60monthly$11,986

Investors now have $1,986 in returns and $737.60 in dividends. That’s total passive income of $2,723.60 annually! That comes to $226.97 each and every month.

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 has positions in and recommends Automotive Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.

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