Establishing a passive-income stream that covers all expenses in retirement is the dream of every investor. Among the milestones in meeting that eventual goal is the coveted $500-per-month level. But how much do investors need to invest to get $6,000 each year?
Perhaps surprisingly, it’s not as hard as you may think. Here’s a look at how you can invest to get $6,000 each year (or even more).
Step #1: The disclaimer
The first thing prospective investors need to understand is that it will take time, and there will be bumps and falls along the way.
Most investors, particularly those with a few decades still before retirement, don’t have a few hundred thousand dollars lying around to invest $50,000 across four stocks today. That’s OK!
Investing is a long-term play that needs plenty of patience and discipline.
And finally, no stock, even the most defensive one, is without some risk. That’s precisely why investors should establish a diversified portfolio across several segments of the market.
Step #2: Start with the right stocks for income growth
With expectations established, the next step is to find the perfect stocks to invest in. These should be well-diversified picks that provide both growth and income-earning potential for decades.
The first stock to invest to get $6,000 each year will be Enbridge (TSX:ENB). Not only does Enbridge offer investors some defensive appeal, but it also boasts a crazy 7.78% dividend.
Adding to that appeal, Enbridge has provided annual upticks to that dividend for three decades and plans to continue that annual cadence.
To start, let’s consider a $30,000 investment in Enbridge. At the current stock price, that amounts to 645 shares, which provides an income of $2,360.70. That’s still far from our goal, but long-term investors need to keep in mind that this is a long-term play comprising multiple stocks.
In short, investors should be looking to invest in Enbridge today and let reinvestments provide growth over a decade or two. As a final bonus, Enbridge also happens to be trading at a 12% discount over the trailing 12-month period.
Step #3: Sprinkle in some defensive appeal
Another great stock to consider buying to invest to get $6,000 per year is Canadian Imperial Bank of Commerce (TSX:CM). CIBC is a stellar long-term pick that also boasts a dividend with a juicy 5.44% yield.
Given a $30,000 investment into the big bank, investors can expect to earn just over $1,645.02. And, as with Enbridge, investing early and allowing that investment to grow over time through reinvestments is key.
Despite its current inflation-induced pullback, Canada’s banks remain stellar long-term picks. They boast strong growth, reliable revenue streams, and very juicy dividends.
Step #4: Add a defensive titan that trades down a lot right now
Even the most defensive pick will respond to market volatility. That’s the case with the next stock to invest to get to $6,000: BCE (TSX:BCE).
As one of the largest telecoms in Canada, BCE is no stranger to volatility or defensive appeal. The company has been paying out dividends for well over a century without fail, which covers nearly every market crash, boom, and recovery in memory.
And thanks to rising interest rates and, more recently, BCE’s transformation initiative, the telecom now boasts an utterly insane 9.02% yield.
This means that investors who drop $30,000 into the telecom today will earn an income of $2,681.28. And like the other stocks mentioned above, BCE has provided annual upticks for over a decade without fail.
Step #5: Roll it all together and wait it out
All the stocks mentioned above have three common themes: they all offer growth and income-earning capabilities, they all provide some defensive appeal, and they are all trading at discounted levels.
Given the investments noted above, prospective investors who invest to get $6,000 will not only hit that milestone but pass it if they invest (over time) $30,000 into each stock.
| Company | Recent Price | No. of Shares | Dividend | Total Payout | Frequency |
| Enbridge | $46.46 | 645 | $3.66 | $2,360.70 | Quarterly |
| CIBC | $65.61 | 457 | $3.60 | $1,645.02 | Quarterly |
| BCE | $44.58 | 672 | $3.99 | $2,681.28 | Quarterly |
