Invest $200 Each Month to Create $331.56 in Passive Income in 2024

So, you’re looking for passive income in 2024. Well, that’s great! But if you want to start investing, you’re going to need cash. And that means taking a few steps before sinking a bunch of money into a few investments. Today, we’re going to look at how to start investing cash on a regular basis that you can afford and how to make significant passive income for 2024 and beyond.

Net zero

If you haven’t already created a budget, then now is certainly the time. Forget about creating passive income through investing; you can create passive income just by cutting back! In fact, there’s a tried and true method that will leave you feeling like you got a raise.

Enter the net-zero budget method. This is where you identify every single line item of your budget and put it against your net income. If you bring in $4,000 per month, then each item of your budget should take up that $4,000 until it’s down to zero.

No, I do not mean that you’re spending that amount each month — far from it. Instead, you will apply every essential item to your budget, from bills to debts. Then, non-essentials with a maximum amount you’re able to spend on each item. You should certainly have cash left over, and that should be placed right into your savings through automated contributions.

Now, let’s say you have $200 to put aside each month by the end. By the end of the year, that can add up to $2,400! But we can do even better than that.

Diversify

From there, you can start investing right away. Now, $2,400 isn’t a lot of cash to have in the case of an emergency, so I wouldn’t consider a few high-growth stocks. Instead, create a diversified portfolio you can drip feed into — one that offers more conservative investments to start.

Don’t worry! You can still make a lot of cash in 2024 alone. In fact, Guaranteed Investment Certificates (GICs) are a great place to start right now. These can offer 5% interest by the end of the year! Therefore, consider putting at least $1,000 into GICs.

From there, you’ll want to create a diversified set of holdings that can create even more growth and stability in the future — ones you can drip feed into while also providing you with dividend income. Here are two I would consider.

Two stocks to consider

First, consider an exchange-traded fund (ETF). Over time, the market rises. We’ve seen this as the TSX today recently passed all-time highs, providing a great time to jump in and receive more growth. Therefore, BMO S&P/TSX 60 Index ETF (TSX:ZIU) is a great place to start.

The ZIU ETF offers the best-performing top 60 stocks on the TSX today. It tracks these companies, making it an easy buy but a far better price than buying each stock individually. Plus, it’s managed by a team of portfolio managers, so you can buy it and forget it! And with 16% growth in the last year, it can certainly add to your income.

Then there’s a dividend stock such as Canadian Imperial Bank of Commerce (TSX:CM). Granted, the stock is down from all-time highs. This is in part to its exposure to the Canadian housing market. But over time, it’s demonstrated massive growth. You can therefore grab a 5.28% dividend yield while it continues to rise, offering strong value at current prices and rising 19% in the last year.

Bottom line

Together, here is what you could achieve by investing that $2,400 into these three options.

In total, your original $2,400 investment could turn into $2,695.56 in your portfolio. Add on the $36 in dividend income, and you’ve got safe passive income of $331.56 in 2024 alone.