Passive Income: How Much do You Need to Invest to Make $750/Month

Passive income doesn’t need to just include dividends. In fact, this top stock proves that again and again!

| More on:
Pile of Canadian dollar bills in various denominations

Source: Getty Images

Investing for passive income can be a thrilling journey, combining the excitement of watching your wealth grow with the satisfaction of seeing those dividend payments roll in. When you’re eyeing investments for passive income, it’s crucial to consider both the returns and the dividends.  And that’s just what we’re going to do today.

Look at both

First off, returns are like the engine that drives your investment vehicle. They include capital gains (the increase in the value of your investments over time) and dividends (the regular income you receive from your investments). When you choose investments with solid returns, you’re setting yourself up for a lucrative ride. 

But here’s the fun part: you don’t have to be a financial wizard to spot good returns. Look for companies with a track record of steady growth and sound financial health. If the stock price steadily climbs, you’re likely in good hands.

Now, let’s talk dividends—the cherry on top of your investment sundae. Dividends are regular payments made by companies to their shareholders, typically from profits. They’re like a thank-you note with a cheque inside. When selecting dividend stocks, aim for companies that not only pay dividends but also have a history of increasing them. This increase shows they’re doing well and likely to keep those payments coming.

Balancing these two elements—returns and dividends—can create a robust passive income stream. Think of it like planting a garden. The returns are your plants growing taller and stronger, while the dividends are the fruits and vegetables you get to harvest regularly. To make the most of this garden, diversify your investments. Mix in some high-return growth stocks with reliable dividend payers. This blend helps cushion against market volatility and ensures you have a steady flow of income.

A stock that does it all 

A fantastic option for investors would be goeasy (TSX:GSY) for both returns and dividends. The company specializes in providing non-prime leasing and lending services through its easyhome and easyfinancial divisions. This focus on non-prime customers means goeasy taps into a unique market segment that’s underserved by traditional banks. It’s like being the hero for those who need financial help but don’t fit the conventional mould.

Over the past few years, goeasy has consistently delivered double-digit revenue growth. For instance, in 2023, the company reported a revenue of approximately $1.2 billion, up from $962 million in 2022. In the most recent fiscal year, goeasy reported a net income of around $230 million, which represents a healthy increase from $190 million the previous year. This growth in net income shows that goeasy is not just growing its top line but also effectively managing its costs and improving its profitability.

Revenue is expected to grow at a compound annual growth rate (CAGR) of around 15% over the next few years. This anticipated growth is driven by both an increase in customer numbers and higher loan balances per customer.

Bottom line

Now goeasy stock should continue to do well. So let’s say that we continue to see it grow by its historic compound annual growth rate (CAGR) of 35% over the last decade. To achieve passive income of $750 a month you’ll need $9,000! Here is how that might shake out.

GSY – now$188.50130$4.68$608.40quarterly$24,505
GSY – 35%$254.49130$4.68$608.40quarterly$33,083.70

You would now have returns of $8,578.70 and dividends of $608.50! That’s total passive income of $9,187.20 or $765.60 every month.

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 positions in goeasy. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Cogs turning against each other
Dividend Stocks

How Interest Rate Cuts Affect REITs

Now is a good time to investigate Canadian REITs and take a position in the form of stocks or exchange…

Read more »

Simple life style relaxation with Asian working business woman healthy lifestyle take it easy resting in comfort hotel or home living room having free time with peace of mind and self health balance
Dividend Stocks

3 Affordable Passive-Income Stocks That Pay Monthly

These three monthly-paying dividend stocks could boost your passive income.

Read more »

Dividend Stocks

Retirees: 2 High-Yield Dividend Stocks to Buy in July

Retirees can rely on these dividend stocks for steady passive income and high yields.

Read more »

A Canada Pension Plan Statement of Contributions with a 100 dollar banknote and dollar coins.
Dividend Stocks

CPP Benefits Not Enough? This Top Dividend Stock Can Help Fund Your Retirement

Dividend stocks like Fortis Inc (TSX:FTS) have funded many a retirement.

Read more »

A steel grain silo storage tank with solar panel in a yellow canola field in bloom in Alberta, Canada.
Dividend Stocks

The Ultimate TSX Stock to Buy With $1,000 Right Now

Once at triple-digit prices, Nutrien stock (TSX:NTR) now offers a steal of a deal for long-term growth as well as…

Read more »

Paper Canadian currency of various denominations
Dividend Stocks

Set and Forget: 1 Dividend Stock That Could Create $1,000 in Tax-Free Passive Income in 10 Years

Enbridge operates a low-risk business that has allowed the TSX dividend giant to raise its payout by 10% annually since…

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

Passive Income: How to Make $106 Per Month Tax Free

Holding quality, high-yield dividend stocks such as Freehold Royalties in a TFSA can help you earn tax-free income for life.

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How to Earn a TFSA Paycheque Every Month and Pay No Taxes on it

Stocks like First National Financial (TSX:FN) pay you monthly. You can also earn monthly dividends through portfolio diversification.

Read more »