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

IAG stock (TSX:IAG) provides stability and growth for passive income investors, while momentum is surging on strong growth that could hit 52-week highs.

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So, you’ve been saving quite a lot over the last few years, have you? I could see why. There has been such a series of volatile situations for investors to wade through. Yet, it has potentially led to many of us putting cash aside instead of investing it.

So, let’s say you’ve invested that cash into a guaranteed investment certificate (GIC). That’s led you to a portfolio of $10,000. You now don’t want to put it back in a GIC, because there are some opportunities to be made. And one of them could be iA Financial (TSX:IAG).

So today, let’s look at how to get started creating a passive income portfolio with that $10,000 and an investment into IAG stock.

Getting started

There are a lot of points to consider before even getting started with buying up IAG stock. To get started, I would look at your risk tolerance and investment goals to see if IAG stock lines up. Are you looking for high growth with higher risk, or a more conservative approach?

Furthermore, you want to make sure the rest of your portfolio is diversified. So make sure you have a solid mix of bonds, exchange-traded funds (ETF), and more. This can help mitigate risk from your other investments.

Then, you’ll need to decide on where you’re going to invest. For me, I would consider the Tax-Free Savings Account (TFSA). Further consider one in which you can find low trading commissions and fees, especially if you believe you’ll need to buy and sell frequently.

Fund it

Now for this example we’re saying that you have $10,000 to invest. However, the TFSA limit resets every year. So make sure you’re continually adding to your TFSA over time. This can help you continue to grow your overall investments, as well as diversify further.

And if you’re not there yet, no worries! Simply start small and gradually invest more over time. Such disciplined investing can allow you to average out the cost per share and reduce volatility even further. It will also help you stay focused on long-term investing, as you’ll have a long-term plan in place on how much to invest and where.

From there, continue to rebalance and monitor your portfolio to make sure your investments are stacking up. If one company hasn’t received the gains you had hoped, you could do well putting that cash elsewhere. IAG stock is a strong option for this passive income portfolio.

Why IAG stock

IAG stock is a strong option for many reasons. The company has a long history of dividend payments, as well as increasing their payout. Obviously then if you want passive income, dividends will be a clear win. However, you still want strong returns as well. IAG stock is undervalued right now, with earnings forecasted to grow according to analysts. This could create even more passive income from returns.

What’s more, IAG stock is in the insurance sector, which is considered more stable and less volatile than other sectors. This could further provide stability within your passive income portfolio.

Shares are up 21% since hitting 52-week lows in 2023, and haven’t really slowed down by much. Yet IAG still trades at 11.8 times earnings, providing strong value. Here is what that investment of $10,000 could bring in for shares to hit 52-week highs.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYPORTFOLIO TOTAL
IAG – now$87115$3.28$377.20quarterly$10,000
IAG – highs$94115$3.28$377.20quarterly$10,810

Now you have $810 in returns and $377.20 in dividends. That’s total passive income of $1,187.20 just to hit former highs! And you are creating stellar long-term passive income in the process.

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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