Passive Income: How Much Do You Need to Invest to Make $750 Per Month?

There are ways to gain a bit of extra cash. But if you want a lot, dividend stocks can offer this up for very little effort!

Amy Legate-Wolfe ❯

@amylegatewolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest.

Published August 28, 2024 4:20 pm EDT

While side hustles can be an exciting way to earn extra income, statistics reveal that they don’t always deliver the expected results. In fact, a study by Bankrate found that about 44% of Americans who have tried a side hustle earn less than $500 a month. This suggests that for many, the effort and time invested don’t translate into significant passive income.

Moreover, juggling a side hustle alongside a full-time job can lead to burnout, making it hard to maintain the momentum needed for success. So, while side hustles can be a fun venture, they often fall short of becoming the reliable source of passive income many dream of. Investing in dividend stocks or other passive-income streams may offer a more consistent and lower-effort alternative! So, let’s look at how.

Time-tested dividend stocks

If you’re looking to boost your passive income without the hustle and bustle of side gigs, you’re in luck! One fantastic avenue is investing in dividend stocks. These delightful little investments pay you regular dividends just for holding onto them, turning your money into a money-making machine. With a solid portfolio of reliable dividend-paying stocks, you can sit back and watch your income grow while you focus on more fun activities.

Another excellent option is real estate investment trusts (REITs). These entities allow you to invest in real estate without the hassle of being a landlord. By purchasing shares in a REIT, you can earn a slice of the rental income generated by properties they manage, all while enjoying the perks of diversification. So, whether you’re in it for the dividends or the property profits, these options can help you build a steady stream of passive income without the need for a side hustle!

Consider Extendicare

If you’re on the lookout for a solid long-term investment, Extendicare (TSX:EXE) might just tick all the boxes! This company specializes in providing long-term-care and home healthcare services, which positions it well in a growing sector driven by an aging population. With its reliable demand, Extendicare can offer a steady income stream, making it an appealing choice for those seeking passive income through dividends. Plus, the company has a solid track record of increasing its dividends over time, which is like a cherry on top for income-focused investors!

What sets Extendicare apart is its commitment to quality care and improving the lives of its residents. This not only builds a loyal customer base but also enhances its reputation in the market. This focus on excellence can lead to consistent revenue growth and the ability to sustain its dividend payments. So, if you’re thinking about adding a dependable dividend stock to your portfolio, Extendicare could be a smart move for a future filled with passive income!

Looking ahead

Extendicare is shaping up to be a compelling investment option, especially after its impressive second-quarter results for 2024! The company reported a solid revenue increase of 13.3% year over year, driven by rate hikes in long-term-care and home healthcare services. With average daily volumes in home health care up by 10.8% and long-term-care occupancy reaching a robust 97.8%, Extendicare is clearly thriving in a market with increasing demand. The rise in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to $34.5 million, along with significant gains from asset sales, underscores its strong operational performance and financial health.

Moreover, Extendicare’s forward annual dividend yield of 5.6% at writing makes it an attractive pick for passive-income seekers. With a payout ratio of around 70.59%, the company appears committed to returning value to shareholders while still investing in growth. Combine that with a trailing price-to-earnings (P/E) ratio of 12.6, and it seems like a great opportunity for long-term investors—especially those looking for a solid stock with reliable income potential. So, if you’re considering bolstering your portfolio, Extendicare might just be the way to go!