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

If you’re looking for passive income, this is by far the easiest and safest way to achieve it. But there is a bit of prep to do first!

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If you’re trying to invest in this market it can be quite difficult. The TSX today may be up right now, but the market notoriously goes up and down, which is why finding ways to create a bulletproof portfolio is key.

But what is a bulletproof portfolio? Today, we’re going to get into it, and how to create one that can generate passive income for life with just $10,000.

Have vision

When it comes to creating a bulletproof passive income monthly portfolio, the big question you need to ask is “why?” Why are you choosing this monthly passive income method? And what’s it going to be used for? Because “getting rich” isn’t enough.

Instead, investors need to be thinking about the end game. Are you saving for retirement? If so, how much are you going to need? That’s something you’ll need to figure out with your financial advisor. In fact, any goal requires planning!

That’s why the best first stop to make before creating a passive income portfolio is meeting with your financial advisor through your banking institution, or whomever you work with. This person will help you identify your goals and how much you’ll need to achieve them.

What you can afford

When you’re putting aside cash for investing as well, it means that you’re going to only put aside what you can afford. Before you even meet with your financial advisor then, a key to success is to go over your budget for the last three months. These last three months will tell you exactly what you’ve been spending on, and what you have at the end of it.

You can use many budgeting apps, or even artificial intelligence to help you easily create a budget! And the budget will then identify how much you have at the end of the month after bills, recreational activities, mortgages and anything else needing to be paid.

And the best step you can make? Make automated contributions. If you’re hoping to create a passive income portfolio, the only way to create more passive income is through investing. So put that cash aside automatically through contributions that are treated like bill payments. Payments towards your future.

Be diversified

Finally, for a truly bulletproof monthly passive income portfolio, you’ll need diversification. I do not mean just investing in a bunch of Canadian stocks across different sectors. You’re going to want bonds, guaranteed income certificates (GIC), equities sure but on a global scale as well!

This can feel overwhelming, but if it is, then perhaps start small with a monthly passive income exchange-traded fund (ETF). I’ve spoken a lot about the iShares Canadian Financial Monthly Income ETF (TSX:FIE) lately, and for good reason. Because it ticks all the boxes.

Shares of FIE ETF are up 17% since the market bottom on October 27, 2023. Shares may be climbing higher, but are still incredibly cheap at just under $7 per share as of writing. The ETF invests in a wide range of portfolio options, which also includes other ETFs for even more diversification.

Bottom line

The FIE ETF can produce an incredible amount of passive income if you were to hold it long term. And remember, passive income comes through both returns and dividends! And this ETF holds a 6.98% dividend yield as of writing. So here is what that could bring in from a $10,000 investment, with shares climbing back to its all-time high of $8.50.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYPORTFOLIO TOTAL
FIE – now$6.981,433$0.48$687.84monthly$10,000
FIE – highs$8.501,433$0.48$687.84monthly$12,180.50

There you have it – passive income from returns of $2,180.50, plus $687.84 in annual dividends. That’s total passive income of $2,868.34, coming monthly as $239.03! That’s one bulletproof portfolio for beginner investors producing massive income for life.

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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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