How to Build a Bulletproof Monthly Passive Income Portfolio With $25,000 and WCP Stock

If you want monthly passive income, consider this stock. Here’s how to achieve all that income in the first place. It can be done!

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Creating a passive income portfolio in your Tax-Free Savings Account (TFSA) is a great way to build wealth over time. However, it can be pretty hard to do if you don’t have cash to invest in the first place. Which is why today we’re going to focus not only on a way to create passive income, but also how to build up that cash in the first place.

Making money

If you want to create a passive income portfolio starting with $25,000, you’ll actually need $25,000. So to do that there are a few steps you can take. First, start saving. Do this by creating a budget and monitoring your spending carefully to identify areas to cut back. There are many apps and tools from your financial institutions that can help you with this.

Then, you could try and increase your income! This could be asking for a raise, taking on a side hustle, freelancing your expertise, or other passive income streams. This might include renting out parking, for instance.

Then, create an automatic savings plan. This will include setting up automatic transfers from your account to your TFSA on payday. This will help you avoid any temptation to spend and lead to quickly acquiring that $25,000.

Level achieved!

You now have $25,000 ready to invest! That’s great, but now there are some other points to consider. That involves identifying your risk tolerance and investment timeframe, as well as investment options.

If that $25,000 is all you have, I would certainly consider putting a lot of it towards stable long-term options such as guaranteed investment certificates (GIC), bonds or other fixed income streams. However, if it’s an addition, there are other options.

Look for investments that involve low commission and management fees. This would likely include dividend stocks in your TFSA. Then find stocks in this category that offer long-term growth as well as dividend payouts.

Consider WCP stock

If you’re looking for a strong option for at least the next few years, Whitecap Resources (TSX:WCP) is a good option on the TSX today. Analysts give WCP stock a strong buy rating, believing the oil producer’s stock currently has even more room to grow.

What’s more, the energy stock has a long history of paying dividends, contributing to your passive income over time. The energy sector may eventually become volatile, heavily influenced by oil prices. But for now, WCP stock looks undervalued at these levels. It trades at just 6.5 times earnings, with a 6.7% dividend yield to boot! Shares are down 5% in the last year, but have more than doubled in the last five years. So let’s see what could happen if that happens again!

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYPORTFOLIO TOTAL
WCP-now$9.552,648$0.64$1,694.72monthly
$25,000
WCP-5 years$20.152,648$0.64$1,694.72monthly
$53,357.20

Now you have returns of $28,357.20, plus $1,694.72 in annual dividends. And that’s dished out monthly! So all together you have passive income of $30,051.92 in just five years. Monthly, that would come to $2,504.33!

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 Whitecap Resources. The Motley Fool has a disclosure policy.

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