How Much to Invest to Get $500 in Dividends Every Month

Are you looking for dividends each and every month? This stock is the right “choice” for you, providing stable passive income over and over again.

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Canadian investors might be a bit sick of seeing their returns, or lack thereof, fall lower and lower. One minute, it looks as though the market is back for good! The next, one headline causes the entire market to fall again.

This is likely why passive income through dividends continues to be highly interesting for investors. So, if you’re looking for stable passive income from a dividend stock, you’ve come to the right place. Let’s see how much you would have to invest and where to create $500 in dividend income each and every month.

What to consider

First off, before you even pick up a stock consider the sector, and consider the fundamentals. Yet one of the most popular areas to look are with real estate investment trusts (REITs). REITs are popular among income-focused investors because they are required by law to distribute at least 90% of their taxable income to shareholders in the form of dividends.

However, just because you choose a REIT doesn’t mean your work is done. Before you buy any stock, you’ll need to do your research. In this case, evaluate the yield offered by the REIT and assess the sustainability of its dividends based on cash flow and payout ratios. Understand the types of properties the REIT invests in and how diversified its portfolio is.

Furthermore, consider the geographic distribution of the REIT’s properties, both within Canada and internationally, to gauge exposure to regional market conditions. Finally, research the REIT’s management team and their track record in terms of property acquisitions, leasing, and dividend stability.

One strong option

If you’re hoping to create $500 in dividend passive income, then you’re going to want a higher dividend yield but also a stable one. This is why, in this case, we’re looking at Choice Properties Real Estate Investment Trust (TSX:CHP.UN). 

Choice Properties REIT has a robust and stable tenant base, with a significant portion of its revenue coming from long-term leases with high-quality tenants. The anchor tenant is Loblaw, Canada’s largest retailer, which provides a stable and reliable source of income. This relationship reduces the risk of vacancy and ensures consistent cash flow.

What’s more, Choice Properties REIT owns a diversified portfolio of properties, including retail, industrial, and office spaces. This diversification helps mitigate risks associated with any single property type or geographic location. The diverse property mix ensures that the REIT is not overly reliant on one sector, which can provide more stable income during economic fluctuations. These properties also provide long-term lease agreements, providing growth and financial strength.

Bottom line

So, how much would you need to invest to make that monthly $500? This would mean creating $6,000 per year in passive income. So, let’s see how that would shake out in the table below.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYPORTFOLIO TOTAL
CHP.UN$12.807,895$0.76$6,000Monthly$101,056

Now, that is a significant investment. However, if you were to instead consider both passive income in returns and dividends, your investment would be much smaller. Even so, if you’re looking to create $500 in dividends, then Choice is a great choice in any scenario.

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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