1 Passive-Income Stream and 1 Dividend Stock for $235.30 in Monthly Cash

The easiest way of creating passive income comes from from something you have to do anyway. Add in dividend income, and you’re set.

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There’s a bit of a problem when it comes to investors considering passive income. Many believe that they have to make an effort to create passive income, when it certainly is not true. In fact, absolutely no effort needs to be made beyond filing your taxes, which, to remind you, you have to do anyway.

Today, we’re going to look at a passive-income stream that can create even more cash for investors.

Climate action

Back in 2019, the federal government introduced the Canada Carbon Rebate (CCR), formerly the Climate Action Incentive program. This program was meant to address climate change and reduce greenhouse gas emissions. Its purpose is to incentivize individuals and families in provinces that do not have their own carbon-pricing system in place.

Under CCR, Canadians receive a tax-free amount to help eligible individuals and families offset the cost of federal pollution pricing. There is a basic amount, along with a supplement for residents in small and rural communities.

The amount is different depending on where you are, but if you live in a small location, you receive an additional 20% of the base amount. Here is the information on how much you could receive depending on where you live.

ProvinceBase Amount (Individual)Base Amount (Spouse)Base Amount (Child under 19)Base Amount (First Child in Single-Parent Family)Rural Supplement (Individual)Rural Supplement (Spouse)Rural Supplement (Child under 19)Rural Supplement (First Child in Single-Parent Family)
New Brunswick$95$47.50$23.75$47.50$19$9.50$4.75$9.50
Newfoundland & Labrador$149$74.50$37.25$74.50$29.80$14.90$7.45$14.90
Nova Scotia$103$51.50$25.75$51.50$20.60$10.30$5.15$10.30
Prince Edward Island$110$55$27.50$55N/AN/AN/AN/A

Add on even more

So, now, you have your information based on where you live, it’s time to start investing. And for that I would certainly consider a dividend stock — one that perhaps will also find advantages of climate action.

For that I would consider a really cheap monthly dividend stock in Northland Power (TSX:NPI). This infrastructure stock focuses on renewable energy, with a diversified set of assets in various locations across the world.

Right now, it offers a dividend of 5.31%, with shares up about 21% since October lows. However, it’s still down 35% in the last year for even more growth opportunities. Adding this to your CCR could then create massive passive income.

What you could achieve

So, let’s say you live in Alberta with a spouse and two kids. We won’t add on the rural supplement in this case. In that case, you would receive $450 at this rate each quarter! You can then invest in NPI stock. Here is what you could then achieve in passive income.

NPI – now$2378$1.20$93.60monthly$1,800
NPI – highs$3578$1.20$93.60monthly$2,730

As you can see, you would get $1,800 in the next year from passive income from the CCR. You then have an additional $93.60 in dividends. After growth, you’ll have a total of $2,730 from investing should the stock hit 52-week highs once more. Add on dividends, and that’s $2,823.60, coming to $235.30 monthly! And that’s all by just filing your taxes.

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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